10-K 1 forcannualreport10k_10k.htm FORM 10-K Converted by EDGARwiz

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________


FORM 10-K

______________


(Mark One)


[X]

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


For the Fiscal Year Ended November 30, 2013


[  ]

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

For the transition period from ________ to ________


FORCE MINERALS CORP.

(Exact name of registrant as specified in its charter)





Nevada

000-52494

98-0462664

(State or other jurisdiction of Incorporation)

(Commission File Number)

(IRS Employer Identification Number)


6302 Mesedge Drive, Colorado Springs, CO 80919

(Address of principal executive offices)







(970) 660-8197

(Registrants Telephone Number)






Securities registered under Section 12(b) of the Exchange Act:


Title of each class  Name of each exchange on which registered

None

Not Applicable


Securities registered under Section 12(g) of the Exchange Act:

Title of class


Common Stock, Par Value $0.001


Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes [  ] No [X]


Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes[  ] No [X]


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.




0


Yes [X] No [  ]


Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes [X] No[]


Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  [X]


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






Large accelerated filer

[  ]

Accelerated filer

[  ]

Non-accelerated filer

[  ] (Do not check if a smaller reporting company)

Smaller reportingcompany

[X]





Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).


Yes [  ] No [X]


The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant as of May 31, 2013was $632,864.97 based upon the price ($0.290) at which the common stock was last sold as of the last business day of the most recently completed second fiscal quarter, multiplied by the approximate number of shares of common stock held by persons other than executive officers, directors and five percent stockholders of the registrant without conceding that any such person is an affiliate of the registrant for purposes of the federal securities laws. Our common stock is traded in the over-the-counter market and quoted on the Over-The-Counter Bulletin Board.


As of February 21, 2014, there were4,393,194shares of the registrants $0.001 par value common stock issued and outstanding.


Documents incorporated by reference: None

























1


Table of Contents







Page


PART I






Item 1

Business

5

Item 1A

Risk Factors

8

Item 1B

Unresolved Staff Comments

8

Item 2

Properties

8

Item 3

Legal Proceedings

8

Item 4

Mine Safety Disclosures


8





PART II






Item 5

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

8

Item 6

Selected Financial Data

9

Item 7

Management's Discussion and Analysis of Financial Condition and Results of Operations

9

Item 7A

Quantitative and Qualitative Disclosures about Market Risk

14

Item 8

Financial Statements and Supplementary Data

F-1-F-19

Item 9

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

15

Item 9A

Controls and Procedures

15

Item 9B

Other Information


16





PART III






Item 10

Directors and Executive Officers and Corporate Governance

16

Item 11

Executive Compensation

18

Item 12

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

19

Item 13

Certain Relationships and Related Transactions

20

Item 14

Principal Accountant Fees and Services


21





PART IV






Item 15

Exhibits

   21























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FORWARD-LOOKING STATEMENTS


This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act) and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). These forward-looking statements are not historical facts but rather are based on current expectations, estimates and projections. We may use words such as anticipate, expect, intend, plan, believe, foresee, estimate and variations of these words and similar expressions to identify forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, some of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted. These risks and uncertainties include the following:



·

The availability and adequacy of our cash flow to meet our requirements;


·

Economic, competitive, demographic, business and other conditions in our local and regional markets;


·

Changes or developments in laws, regulations or taxes in our industry;


·

Actions taken or omitted to be taken by third parties including our suppliers and competitors, as well as legislative, regulatory, judicial and other governmental authorities;


·

Competition in our industry;


·

The loss of or failure to obtain any license or permit necessary or desirable in the operation of our business;


·

Changes in our business strategy, capital improvements or development plans;


·

The availability of additional capital to support capital improvements and development; and


·

Other risks identified in this report and in our other filings with the Securities and Exchange Commission or the SEC.


This report should be read completely and with the understanding that actual future results may be materially different from what we expect. The forward-looking statements included in this report are made as of the date of this report and should be evaluated with consideration of any changes occurring after the date of this Report. We will not update forward-looking statements even though our situation may change in the future and we assume no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.






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Use of Term


Except as otherwise indicated by the context, references in this report to Company, FORC, Force Energy Corp.,we, us and our are references to Force Minerals Corp.All references to USD or United States Dollars refer to the legal currency of the United States of America.








PART I


ITEM 1. BUSINESS


Corporate History

 

We are currently engaged in the business of identifying, evaluating, and qualifying potential natural gas and oil wells; investing in interests in those wells with the goal of producing commercially marketable quantities of oil and natural gas. We have recently expanded our business model to include the exploration of mineral claims for rare earth minerals.


The Company was incorporated in the state of Nevada, United States of America on November 1, 2006. The Company was formed for the purpose of acquiring exploration and development stage natural resource properties.

 

Effective December 28, 2006, the Board of Directors authorized a 3 for 1 forward stock split of the common shares. The authorized number of common shares increased from 90,000,000 to 270,000,000 common shares with a par value of $0.001. All references in the accompanying financial statements to the number of common shares have been restated to reflect the forward stock split.

 

On February 12, 2008, the Company acquired 100% of the common shares of Force Energy Corp. an inactive company incorporated in Nevada on July 19, 2005, for $100, to effect a name change of the Company. On February 12, 2008, the Company and Force Energy Corp filed articles of merger with the Secretary of State of Nevada to effectuate a merger between the two companies. The surviving entity of the merger was the Company. Immediately thereafter the Company changed its name to Force Energy Corp.


Effective June 28, 2013, the Company with the approval from the Financial Industry Regulatory Authority (FINRA), the Company has among other things (i) changed its name from Force Energy Corp. to Force Minerals Corporation, and (ii) authorized and approved a reverse stock split of One for One Hundred (1:100) of our total issued and outstanding shares of common stock (the "Stock Split"). The Stock Split decreased our total issued and outstanding shares of common stock from 230,992,890 to 2,309,928 shares of common stock. The common stock will continue to be $0.001 par value. The shareholder record date was June 14, 2013. The Stock Split shares are payable upon surrender of certificates to the Company's transfer agent. Fractional shares will be rounded upward.


On October 28, 2013, the Board of Directors of the Company with the approval of a majority vote of its shareholders, designated four million (4,000,000) shares of the ten million (10,000,000) authorized preferred stock of our company as Series A Preferred Stock by filing a Certificate of Designation with the Secretary of State of the State of Nevada. The Series A Preferred Stock has 100 votes per share and is convertible into shares of our common stock. The Holders of the Series A Preferred Stock, may not convert and hold more than 9.9% of the common stock outstanding at any one time.


The Hayter Well

 



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We presently hold a 50% working interest of the County Line Energy Corp. interest in the Hayter Well located in Alberta, Canada.

 

County Line Energy Corp. is the operator of the Hayter well. The Hayter well has been cased and cemented in anticipation of the completion of the drill program. County Line plans to enter the Hayter well, perforate the potential pay zones and conduct regular production testing of the zones. Should the testing confirm adequate oil reserves and potential economic flow rates, County Line is expected to install adequate pumping equipment and other surface facilities in anticipation of the projected flow rates. Currently, there are no known oil reserves on the Hayter well.

 

We have not incurred any development costs on the Hayter Well for the year ended November 30, 2013.

 



La Predilecta Properties


On May 30, 2013, the Companyentered into a Mineral Property Acquisition Agreement (the "MPAA") with Highlander Overseas, Inc., a West Indies corporation (Highlander). Pursuant to the terms and conditions of the MPAA, Highlander shall grant the Company with the right to acquire one hundred percent (100%) of the mining interests in those certain four concessions known as La Predilecta, La Predilecta II, La Crus, and La Cascada (the Property) which is comprised of a total of approximately Three Thousand One Hundred Eighty One Hectares (3,181 ha) and is located in Miahuatlan District, in the Southern portion of Valles Centrales Region within Oaxaca State, Mexico. In exchange, the Company is required to: (i) pay two cash payments of Fifty Thousand dollars ($50,000) to Highlander for a total of One Hundred Thousand dollars ($100,000), the first payment of $50,000 is to be paid within 60 days after both parties have executed the MPAA, and the second payment is to be paid 90 days after both parties have executed the MPAA, and (ii) issue an aggregate of four million (4,000,000) restricted shares of the Companys preferred common stock to Highlander, per the terms and conditions of the MPAA.

 

The Hayter Well

 

Purchase of Interest in the Hayter Well

 

On August 1, 2006, County Line Energy Corp. (County Line) signed a participation agreement with Black Creek Resources Ltd. (BCR) in which County Line acquired the right to become the operator and drill the Hayter well (10D Hayter 10-8-40-1 W4M) located in Alberta, Canada. In order to exercise that interest and acquire the rights to drill the Hayter well, County Line agreed to pay 100% of all costs associated with the seismic option agreement and pay 100% of the funds required to purchase rights to any existing seismic on the property which may be for sale and or shoot additional 2D and 3D on the property as required, pursuant to standard industry costs and practices.

 

Pursuant to a Participation Agreement dated December 21, 2006 between Black Creek Resources Ltd (BCR) and Nuance Exploration Ltd. (NEL), a wholly owned subsidiary of the Company, we acquired a 100% ownership in the interpretation of 3D seismic data covering four sections of certain land located in the province of Alberta, Canada by paying $82,650 for the purpose of acquiring and interpreting the seismic data. On October 15, 2007, prior to the evaluation of the 3D seismic data, County Line sold to BCR its 100% interest in the subject property and received as consideration a non-interest bearing promissory note for $111,144 (CDN$110,000) to be repaid by November 30, 2007.

 

On November 30, 2007, County Line did not repay the amounts owing pursuant to the promissory note and NEL and County Line entered into a Participation Agreement whereby NEL accepted a 20% interest of the Grantors working interest in the County Line 10D Hayter 10-8-40-1 W4M well as full and final settlement of the promissory note. Pursuant to the terms of the Participation agreement NEL agreed to assume 20% of all revenues, costs and expenses associated with the project.

 

During our first fiscal quarter of 2009 we advanced $23,938 (CDN$29,000) to County Line Energy Corp for costs and expenses associated with the Hayter Well as an unsecured loan. On October 16, 2009 we entered into an amendment to our participation agreement with County Line pursuant to which we acquired an additional 30% working interest in the Hayter Well in consideration of a release by Force from all amounts owed by County Line to Force. Following our entry



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into the amended participation agreement we now hold a 50% working interest in the County Line Energy Corp. interest in the Hayter Well.

 

We have not incurred any development costs on the Hayter Well for the year ended November 30, 2013.


Location of Hayter Well

 

Force Energy Corp. has a 50% working interest of the County Line Energy Corp. interest in the Hayter Well (10D Hayter 10-8-40-1 W4M) located in Alberta, Canada. The well was spudded in January 2007 and drilled to a total depth. The well logs revealed a gas zone of 4 to 5 meters of thickness in a shallow zone and a heavy oil pay zone of 2 meters of thickness in the target Dina Sand zone.

 

[forcannualreport10k_10k001.jpg]

 

County Line completed a $650,000 3D seismic program covering nine sections of land in pursuit of a potential multi well heavy oil drilling opportunity. The geological model was based on interpretation from a previous well, which produced 16,000 barrels of heavy oil. The seismic program was designed to determine whether the structure found in this well existed to a larger extent on the subject property. The 3D seismic revealed an extremely large anomaly with similar characteristics. The nature of this large anomaly suggested that a multi well drilling opportunity might exist.

 

County Line Energy Corp. is the operator of the Hayter well. The Hayter well has been cased and cemented in anticipation of the completion of the drill program. County Line plans to enter the Hayter well, perforate the potential pay zone(s) and conduct regular production testing of the zone(s). Should the testing confirm adequate oil reserves and potential economic flow rates, County Line is expected to install adequate pumping equipment and other surface facilities in anticipation of the projected flow rates. Currently, there are no known oil reserves on the Hayter well.

 

Oil and Gas Properties and Wells

 

On March 9, 2009, Force received a report on reserves data for the Hayter Well prepared by its independent engineers, Chapman Petroleum Engineering Ltd.


The following table sets forth the number of wells in which the Company held a working interest as at November 30, 2009:



6


 

[forcannualreport10k_10k002.jpg]

 

The Company has not since the beginning of its most recently completed fiscal year, filed any annual estimates of proved oil and gas reserves with any federal agencies. As at November 30, 2012, the 50% working interest of the Hayter Well was recorded at $135,427.

 


Competition

 

The mineral exploration and oil and gas industries, in general, are intensely competitive and even if commercial quantities of reserves are discovered, a ready market may not exist for the sale of the reserves.

 

Most companies operating in this industry are more established and have greater resources to engage in the production of mineral or oil and gas claims (the claims). Our resources at the present time are limited. We may exhaust all of our resources and be unable to complete full exploration of our claims. There is also significant competition to retain qualified personnel to assist in conducting mineral exploration activities. If a commercially viable deposit is found to exist and we are unable to retain additional qualified personnel, we may be unable to enter into production and achieve profitable operations. These factors set forth above could inhibit our ability to compete with other companies in the industry and enter into production of the claims if a commercial viable deposit is found to exist.

 

Numerous factors beyond our control may affect the marketability of any substances discovered. These factors include market fluctuations, the proximity and capacity of natural resource markets and processing equipment, government regulations, including regulations relating to prices, taxes, royalties, land tenure, land use, importing and exporting of minerals and environmental protection. The exact effect of these factors cannot be accurately predicted, but the combination of these factors may result in not receiving an adequate return on invested capital.

 

Compliance with Government Regulation

 

We are required to obtain licenses and permits from various governmental authorities. These permits or licenses may include water and surface use permits, occupation permits, fire permits, timber permits,drilling and abandonment bonds, reports concerning operations, the spacing of wells, and pooling of properties and taxation. Prior to being issued the various permits or licenses, the applicant must file a detailed work plan with the applicable government agency. Permits are issued on the basis of the work plan submitted and approved by the governing agency. Additional work on a given mineral property or a significant change in the nature of the work to be completed would require an amendment to the original permit or license.

 

As part of the permit or licensing requirements, the applicant may be required to post an environmental reclamation bond in respect to the work to be carried out on the mineral property. The amount of such bond is determined by the amount and nature of the work proposed by the applicant. The amount of a bond may also be increased with increased levels of development on the property.

 

We anticipate that we will be able to obtain all necessary licenses and permits to carry on the activities which we intend to conduct, and that we intend to comply in all material respects with the terms of such licenses and permits.As we have not proceeded to the development of our properties, we have not incurred any expenditures related to complying with such laws, or for remediation of existing environmental contamination. The requirements imposed by such laws and regulations are frequently changed and subject to interpretation, and we are unable to predict the ultimate cost of compliance with these requirements or their effect on our operations.


Subsidiaries



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We have two wholly owned subsidiaries, FRC Exploration Ltd. (a British Columbia Corporation) and Nuance Exploration Ltd. (a British Columbia Corporation).   


Employees

 

Currently our only employee is Tim DeHerrera. We do not expect any material changes in the number of employees over the next twelve month period. We anticipate that we will be conducting most of our business through agreements with consultants and third parties.We plan to outsource independent consultant engineers and geologists on a part time basis to conduct specific corporate business and exploration programs on our properties in order to carry out our plan of operationsfor the foreseeable future.  Consultants will be retained on the basis of ability and experience.

 

WHERE YOU CAN GET ADDITIONAL INFORMATION


We file annual, quarterly and current reports, proxy statements and other information with the SEC. You may read and copy our reports or other filings made with the SEC at the SECs Public Reference Room, located at 100 F Street, N.E., Washington, DC 20549. You can obtain information on the operations of the Public Reference Room by calling the SEC at 1-800-SEC-0330. You can also access these reports and other filings electronically on the SECs web site, www.sec.gov.


ITEM 1A. RISK FACTORS


We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.


An investment in the Company's common stock involves a high degree of risk. One should carefully consider the following risk factors in evaluating an investment in the Company's common stock. If any of the following risks actually occurs, the Company's business, financial condition, results of operations or cash flow could be materially and adversely affected. In such case, the trading price of the Company's common stock could decline, and one could lose all or part of one's investment. One should also refer to the other information set forth in this report, including the Company's consolidated financial statements and the related notes.


Our common stock is considered a "penny stock". The application of the "penny stock" rules to our common stock could limit the trading and liquidity of the Common stock, adversely affect the market price of our common stock and increase the transaction costs to sell those shares.


Our common stock is a "low-priced" security or "penny stock" under rules promulgated under the Securities Exchange Act of 1934, as amended. In accordance with these rules, broker-dealers participating in transactions in low-priced securities must first deliver a risk disclosure document, which describes the risks associated with such stocks, the broker-dealer's duties in selling the stock, the customer's rights and remedies and certain market and other information. Furthermore, the broker-dealer must make a suitability determination approving the customer for low-priced stock transactions based on the customer's financial situation, investment experience and objectives. Broker-dealers must also disclose these restrictions in writing to the customer, obtain specific written consent from the customer, and provide monthly account statements to the customer. The effect of these restrictions will likely decrease the willingness of broker-dealers to make a market in our common stock, will decrease liquidity of our common stock and will increase transaction costs for sales and purchases of our common stock as compared to other securities.


The company continues to use significant amounts of cash for its business operations, which could result in us having insufficient cash to fund the company's operations and expenses under our current business plan.


The Company's liquidity and capital resources remain limited. There can be no assurance that the Company's liquidity or capital resource position would allow us to continue to pursue our current business strategy. Any fluctuations or downturn in the securities market could adversely affect the value of our outstanding securities. As a result, without achieving growth in our business along the lines we have projected, we would have to alter our business plan or further augment our cash flow position through cost reduction measures, sales of assets, additional



8


financings or a combination of these actions. One or more of these actions would likely substantially diminish the value of its common stock.


Because of the unique difficulties and uncertainties inherent in the mineral exploration business, we face a high risk of business failure.


Potential investors should be aware of the difficulties normally encountered by new mineral exploration companies and the high rate of failure of such enterprises.  The likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays encountered in connection with the exploration of mineral properties.  These potential problems include, but are not limited to, unanticipated problems relating to exploration, and additional costs and expenses that may exceed current estimates.  The search for valuable minerals also involves numerous hazards.  As a result, we may become subject to liability for such hazards, including pollution, cave-ins and other hazards against which we cannot insure or against which we may elect not to insure.  At the present time, we have no coverage to insure against these hazards.  The payment of such liabilities may have a material adverse effect on our financial position.  In addition, there is no assurance that the expenditures to be made by us in the exploration of the mineral claims will result in the discovery of mineral deposits.  Problems such as unusual or unexpected formations and other conditions are involved in mineral exploration and often result in unsuccessful exploration efforts.  

 

If we are unable to successfully compete within the mineral exploration business, we will not be able to achieve profitable operations.


The mineral exploration business is highly competitive.  This industry has a multitude of competitors and no small number of competitors dominates this industry with respect to any of the large volume metallic minerals.  Our exploration activities will be focused on attempting to located commercially viable mineral deposits on our claims.  Many of our competitors have greater financial resources than us.  As a result, we may experience difficulty competing with other businesses when conducting mineral exploration activities on our claims.  If we are unable to retain qualified personnel to assist us in conducting mineral exploration activities on our claims; if a commercially viable deposit is found to exist, we may be unable to enter into production and achieve profitable operations.


There is substantial uncertainty about the ability of Force Minerals Corp. to continue its operations as a going concern.

 

In their audit report, our auditors have expressed an opinion that substantial doubt exists as to whether we can continue as an ongoing business. Because our officers may be unwilling or unable to loan or advance any additional capital to Force Minerals Corp., we believe that if we do not raise additional capital within 12 months, we may be required to suspend or cease the implementation of our business plans. As such we may have to cease operations and you could lose your entire investment.


Because the Company has been issued an opinion by its auditors that substantial doubt exists as to whether it can continue as a going concern it may be more difficult to attract investors.


Risks Related To Our Financial Condition

   

Because we anticipate our operating expenses will increase prior to our earning revenues, we may never achieve profitability.


Prior to completion of our exploration stage, we anticipate that we will incur increased operating expenses without realizing any revenues.  We expect to incur continuing and significant losses into the foreseeable future.  As a result of continuing losses, we may exhaust all of our resources and be unable to complete the exploration of our properties.  Our accumulated deficit will continue to increase as we continue to incur losses.  We may not be able to earn profits or continue operations if we are unable to generate significant revenues from the exploration of our mineral claims.  There is no history upon which to base any assumption as to the likelihood that we will be successful, and we may not be able to generate any operating revenues or ever achieve profitable operations.  If we are unsuccessful in addressing these risks, our business will most likely fail.




9


If we do not obtain adequate financing, our business will fail, resulting in the complete loss of your investment.

 

If we are not successful in earning revenues once we have started our planned sales activities, we may require additional financing to sustain business operations. Currently, we do not have any arrangements for financing and we may be unable to obtain financing when required. Obtaining additional financing would be subject to a number of factors, including the Companys ability to attract customers. The Company may be unable to access to capital markets in the future or that financing, adequate to satisfy the cash requirements of implementing our business strategies, will be available on acceptable terms. The inability of the Company to gain access to capital markets or obtain acceptable financing could have a material adverse effect upon the results of its operations and upon its financial conditions.


The companys management could issue additional shares, since the company has 5,000,000,000 authorized common shares, diluting the current shareholders equity.


The Company has 5,000,000,000 common shares, of which 4,393,194are currently issued and outstanding.  The Companys management could, without the consent of the existing shareholders, issue substantially more shares, causing a large dilution in the equity position of the Companys current shareholders. Additionally, large share issuances would generally have a negative impact on the Companys share price. It is possible that, due to additional share issuance, you could lose a substantial amount, or all, of your investment.


Our board of directors has the authority, without stockholder approval, to issue preferred stock with terms that may not be beneficial to common stockholders and may grant voting powers, rights and preference that differ from or may be superior to those of the registered shares.

 

Our articles of incorporation allow us to issue 10,000,000 shares of preferred stock without any vote or further action by our stockholders. Our board of directors has the authority to fix and determine the relative rights and preferences of preferred stock. Our board of directors also has the authority to issue preferred stock without further stockholder approval, including large blocks of preferred stock. Furthermore, TimDeHerrera serves as our sole director and, therefore, has the ability to issue preferred stock without shareholder approval. As a result, our sole director could authorize the issuance of a series of preferred stock that would grant to holders the preferred right to our assets upon liquidation, the right to receive dividend payments before dividends are distributed to the holders of common stock and the right to the redemption of the shares, together with a premium, prior to the redemption of our common stock.


Future sales of our common stock could put downward selling pressure on our common stock, and adversely affect the per share price. There is a risk that this downward pressure may make it impossible for an investor to sell share of common stock at any reasonable price, if at all.


Future sales of substantial amounts of our common stock in the public market or the perception that such sales could occur, could put downward selling pressure on our common stock and adversely affect its market price.


We do not anticipate paying dividends in the foreseeable future.

 

We do not anticipate paying dividends on our common stock in the foreseeable future, but plan rather to retain earnings, if any, for the operation, growth and expansion of our business. Because the Company does not anticipate paying cash dividends in the foreseeable future which may lower expected returns for investors, and as such our stockholders will not be able to receive a return on their investment unless they sell their shares of common stock.


Because we expect to incur losses in the future, failure to generate revenues will cause us to go out of business and your entire investment could be lost.

 

Based upon current plans, we expect to incur operating losses in future periods because we will be incurring expenses and not generating revenues. We cannot guarantee that we will be successful in generating revenues in the future. Failure to generate revenues will cause us to go out of business.

 

Our operating results may prove unpredictable, which could result in the complete loss of your investment.



10


 

Our operating results are likely to fluctuate significantly in the future due to a variety of factors, many of which we have no control. Factors that may cause our operating results to fluctuate significantly include: our ability to generate enough working capital from future equity sales; the level of commercial acceptance by the public of our services; fluctuations in the demand for secure online storage; the amount and timing of operating costs and capital expenditures relating to expansion of our business, operations, infrastructure and general economic conditions.

 

If realized, any of these factors could have a material adverse effect on our business, financial condition and operating results, which could result in the complete loss of your investment.

 

As the companys sole officer and director has other outside business activities, he may not be in a position to devote a majority of his time to the company, which may result in periodic interruptions or business failure.

 

Mr. DeHerrera our sole officer and director, has other business interests and currently devote approximately 20 hours per week to our operations. If the demands of the Companys business requires more business time of our sole officer and director, he is prepared to adjust his timetable to devote more time to the Companys business. However, he may not be able to devote sufficient time to the management of the Companys business, which may result in periodic interruptions in implementing the Companys plans in a timely manner. Such delays could have a significant negative effect on the success of the business.

 

Key management personnel may leave the company, which could adversely affect the ability of the company to continue operations.


The Company is entirely dependent on the efforts of its sole officer and director. The Company does have an employment agreement in place with its sole officer and directors. Their departure or the loss of any other key personnel in the future could have a material adverse effect on the business. The Company believes that all commercially reasonable efforts have been made to minimize the risks attendant with the departure by key personnel from service. However, there is no guarantee that replacement personnel, if any, will help the Company to operate profitably. The Company does not maintain key person life insurance on its sole officer and directors.


In the case if the company is dissolved, it is unlikely that there will be sufficient assets remaining to distribute to the shareholders.


In the event of the dissolution of the Company, the proceeds realized from the liquidation of its assets, if any, will be distributed to the shareholders only after the claims of the Companys creditors are satisfied.


ITEM 1B. UNRESOLVED STAFF COMMENTS


None.


ITEM 2. PROPERTIES


Our principal executive offices are located at 6302 Mesedge Drive, Colorado Springs, Denver, CO 80919.A description of our oil and gas properties is set forth above in this Annual Report under the heading Business. As of the date of this filing, the Company has not sought to move our office. Additional space may be required as the Company expands its operations. Management does not foresee any significant difficulties in obtaining any required additional space. The Company currently does not own any real property.


ITEM 3. 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 our director, officer or any affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.


ITEM 4. MINE SAFETY DISCLOSURE




11


None.









PART II


ITEM 5. MARKET FOR THE COMPANYS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES


Common Stock


Our common stock is currently quoted on the OTC Markets. Our common stock has been quoted on the OTC Markets since October 3, 2007 trading under the symbol NUNC. On February 25, 2008, our symbol was changed to FORC to reflect our Companys name change Because we are quoted on the OTC Markets, our securities may be less liquid, receive less coverage by security analysts and news media, and generate lower prices than might otherwise be obtained if they were listed on a national securities exchange.


The following table sets forth the high and low bid prices for our Common Stock per quarter as reported by the OTCQB for the period from December 1, 2012, through November 30, 2013,based on our fiscal year end November 30. These prices represent quotations between dealers without adjustment for retail mark-up, markdown or commission and may not represent actual transactions.  

 















  

 

First Quarter

 

 

Second Quarter

 

 

Third Quarter

 

 

Fourth Quarter

2013 High

 


 

 

 

1.60

 

 

 

.35

 

 

.12

2013 Low

 


 

 

 

0.21

 

 

 

.059

 

 

0.025

2012 High


2.00












2012 Low


0.25













Record Holders


As of February 21, 2014, there were 4,393,194shares of the registrants $0.001 par value common stock issued and outstanding and were owned by approximately 31 holders of record, based on information provided by our transfer agent.


Penny Stock Regulation


Shares of our common stock will probably be subject to rules adopted the SEC that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in those securities is provided by the exchange or system). The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from those rules, deliver a standardized risk disclosure document prepared by the SEC, which contains the following:


-

a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading;

-

a description of the brokers or dealers duties to the customer and of the rights and remedies available to the customer with respect to violation to such duties or other requirements of securities laws;

-

a brief, clear, narrative description of a dealer market, including "bid" and "ask prices for penny stocks and the significance of the spread between the "bid" and "ask" price;

-

a toll-free telephone number for inquiries on disciplinary actions;

-

definitions of significant terms in the disclosure document or in the conduct of trading in penny stocks; and

-

such other information and is in such form (including language, type, size and format), as the SEC shall require by rule or regulation.


Prior to effecting any transaction in penny stock, the broker-dealer also must provide the customer the following:


-

the bid and offer quotations for the penny stock;

-

the compensation of the broker-dealer and its salesperson in the transaction;

-

the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and

-

monthly account statements showing the market value of each penny stock held in the customer's account.


In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchasers written acknowledgment of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a written suitability statement. These disclosure requirements may have the effect of reducing the trading activity in the secondary market for a stock that becomes subject to the penny stock rules. Holders of shares of our common stock may have difficulty selling those shares because our common stock will probably be subject to the penny stock rules.


Description of Registrants Securities


We have authorized capital stock consisting of 750,000,000 shares of common stock, $0.001 par value per share (Common Stock) and 10,000,000 shares of preferred stock, $0.001 par value per share (Preferred Stock).


Preferred Stock   


On October 28, 2013, the Board of Directors of the Company with the approval of a majority vote of its shareholders, designated four million (4,000,000) shares of the ten million (10,000,000) authorized preferred stock of our company as Series A Preferred Stock by filing a Certificate of Designation with the Secretary of State of the State of Nevada. The Series A Preferred Stock has 100 votes per share and is convertible into shares of our common stock. The Holders of the Series A Preferred Stock, may not convert and hold more than 9.9% of the common stock outstanding at any one time.


Equity Compensation Plans


We do not have any equity compensation plans in place, whether approved by the shareholders or not.


Warrants, Options and Convertible Securities


We do not have any outstanding warrants, options or convertible securities.


Recent Sales of Unregistered Securities


Between December 12, 2012 and February 28, 2013, we issued an aggregate of 17,884,615 common shares with an aggregate fair value of $76,202, upon the conversion $38,000 of a convertible note which was due upon demand.

 

On January 12, 2013, we issued 5,000,000 common shares with an aggregate fair value of $24,200, upon the conversion $12,000 of a convertible note which falls due on March 14, 2013.




13


Between December 12, 2012 and May 31, 2013, we issued an aggregate of 245,868 common shares with an aggregate fair value of $100,200, upon the conversion of $50,000 of a convertible note which was due upon demand.

 

Between January 12, 2013, and May 31, 2013, we issued 192,576 common shares with an aggregate fair value of $86,500, upon the conversion of accrued interest of $1,700 and $42,500 principal of a convertible note which falls due on March 14, 2013.

 

Between May 2, 2013 and May 31, 2013, we issued 189,679 common shares with an aggregate fair value of $51,300, upon the conversion of $25,900 of a convertible note which fell due on May 21, 2013.

 

We issued 500,000 shares to our officer and director, Tim DeHerrera, to settle amounts owing under a prior contract of $22,125 and 278,750 shares are to be earned over the period of his employment agreement.

 

On June 26, 2013, we issued 4,000,000 shares of preferred stock to Highlander Overseas, Inc. in connection with a Mineral Property Acquisition Agreement.

 

From August 31, 2013 until November 30, 2013, we issued 586,139 common shares with an aggregate fair value of $16,826 upon the conversion of $10,900 of a convertible note which fell due on June 14, 2013.


Subsequent Issuances


From December 1, 2013 to February 14, 2014, the holders of a convertible notes converted a total of $21,023 of principal into 1,388,584shares of our common stock.


Other than as previously disclosed, none.


Re-Purchase of Equity Securities


None.


Dividends


We have not paid any cash dividends on our common stock since inception and presently anticipate that all earnings, if any, will be retained for development of our business and that no dividends on our common stock will be declared in the foreseeable future. Any future dividends will be subject to the discretion of our Board of Directors and will depend upon, among other things, future earnings, operating and financial condition, capital requirements, general business conditions and other pertinent facts. Therefore, there can be no assurance that any dividends on our common stock will be paid in the future.


Securities Authorized for Issuance Under Equity Compensation Plans


None.


ITEM 6. SELECTED FINANCIAL DATA


We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.


ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION


This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act) and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). These forward-looking statements are not historical facts but rather are based on current expectations, estimates and projections. We may use words such as anticipate, expect,



14


intend, plan, believe, foresee, estimate and variations of these words and similar expressions to identify forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, some of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted. You should read this report completely and with the understanding that actual future results may be materially different from what we expect. The forward-looking statements included in this report are made as of the date of this report and should be evaluated with consideration of any changes occurring after the date of this Report. We will not update forward-looking statements even though our situation may change in the future and we assume no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.



Working Capital






November 30, 2013

$

November 30, 2012

$

Current Assets

-

25,465

Current Liabilities

523,739

530,216

Working Capital (Deficit)

(523,739)

(504,751)


Cash Flows






November 30, 2013

$

For the Period from

November 1, 2006

(date of inception) to

November 30, 2013

$

Cash Flows from (used in) Operating Activities

(279,920)

(1,820,610)

Cash Flows from (used in) Investing Activities

(1,160,000)

(1,162,268)

Cash Flows from (used in) Financing Activities

1,404,991

3,476,336

Net Increase (decrease) in Cash During Period

(35,442)

0


Results for the Year Ended November 30, 2013Compared to the Year Ended November 30, 2012


Revenues:


The Companys revenues were $nil for the year ended November 30, 2013compared to $nil in 2012.  


Cost of Revenues:


The Companys cost of revenue was $nil for the year ended November 30, 2013, compared to $nil in 2012.  


General and Administrative Expenses:


General and administrative expenses for the year ended November 30, 2013, and November 30, 2012, were $527,555 and $660,180, respectively.  General and administrative expenses consisted primarily of consulting fees, management fees, office expensesand preparing reports and SEC filings relating to being a public company. The increase was primarily attributable to an increase in management fees for normal operations.


Other Income (Expense):


Other income (expense) consisted of gain on derivative valuation and interest expense.  The gain on derivative valuation is directly attributable to the change in fair value of the derivative liability from date of issuance during 2012 through November 30, 2013.  Interest expense is primarily attributable to the initial interest expense associated with the valuation of derivative instruments at issuance and the accretion of the convertible debentures



15


over their respective terms.  Interest associated with the derivative instruments for the year ended November 30, 2013 amounted to approximately $(306,706), compared to $(341,484) in 2012.  The change in value on derivative valuation expense for the year ended November 30, 2013 was $(107,920), compared to $(40,600) in 2012.


Net Loss:


Net loss for the year ended November 30, 2013, was $(898,106) compared with a net loss of $(1,072,264) for the year ended November 30, 2012.  The decreased net loss is due to a decrease in consulting fees, general and administrative expenses and convertible note expenses.





Results for the Period from November 1, 2006 (Inception of Exploration Stage) through November 30, 2013


Revenues:


The Companys revenues were $nil for the year ended November 30, 2013, compare to $nil for the period from inception to November 30, 2013.


Cost of Revenues


The Companys cost of revenue was $nil for the year ended November 30, 2013, compared to $nil for the period from inception to November 30, 2013.


General and Administrative Expenses:


General and administrative expenses consisted primarily of consulting fees, rent, travel, meals and entertainment, and preparing reports and SEC filings relating to being a public company. For the year ended November 30, 2013, general and administrative expenses was $527,555 compared to $4,002,564 for the period from inception to November 30, 2013.


Other Income (Expense):


Other income (expense) for the period November 1, 2006 (Inception of Exploration Stage) through November 30, 2013was $(849,094). Other income (expense) consisted of gain on derivative valuation and interest expense.  The gain on derivative valuation is directly attributable to the change in fair value of the derivative liability from date of issuance during 2012 through November 30, 2013.  Interest expense is primarily attributable to the initial interest expense associated with the valuation of derivative instruments at issuance and the accretion of the convertible debentures over their respective terms. Interest associated with the derivative instruments amounted to approximately $(728,879).


Net Loss.


Net loss for the period November 1, 2006 (Inception of Exploration Stage) through November 30, 2013,was $(4,809,844). The net loss for this period was primarily related to general and administrative expenses exceeding the amount of revenues for the period indicated.


Impact of Inflation


We believe that the rate of inflation has had a negligible effect on our operations.


Liquidity and Capital Resources




16


The ability of the Company to continue as a going concern is dependent on the Companys ability to raise additional capital and implement its business plan. Since its inception, the Company has been funded by related parties through capital investment and borrowing funds.


As of November 30, 2013, total current assets were $nil, which consisted primarily of cash, inventory and deposits.


As of November 30, 2013, total current liabilities were $523,739, which consisted primarily of accounts payable and accrued expenses and convertible debentures. We had negative net working capital of $(523,739) as of November 30, 2013.


During the period from November 1, 2006 (Inception of Exploration Stage) through November 30, 2013, operating activities used cash of $(1,820,610). The cash used by operating activities related to general and administrative expenses, the purchase of inventory for resale and non-cash items related to derivative instruments. Except for cash in the amount of $nil from sales of our products, all of the cash during this period was provided by related party transactions, capital contributions and convertible debentures.


Intangible Assets


The Companys intangible assets were $nil as of November 30, 2013.


Material Commitments


The Companys material commitments were $nil as of November 30, 2013.


Going Concern


We have not attained profitable operations and are dependent upon obtaining financing to pursue any extensive acquisitions and activities. For these reasons, our auditors stated in their report on our audited financial statements that they have substantial doubt that we will be able to continue as a going concern without further financing.


Future Financings


We will continue to rely on equity sales of our common shares in order to continue to fund our business operations. Issuances of additional shares will result in dilution to existing stockholders. There is no assurance that we will achieve any additional sales of the equity securities or arrange for debt or other financing to fund planned acquisitions and exploration activities.


Off-Balance Sheet Arrangements


We have no significant 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, capital expenditures or capital resources that are material to stockholders.


Critical Accounting Policies


Our financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.


We regularly evaluate the accounting policies and estimates that we use to prepare our financial statements. A complete summary of these policies is included in the notes to our financial statements. In general, management's



17


estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.


Recently Issued Accounting Pronouncements


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.





Contractual Obligations


We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.


ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.











0


ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA



FORCE MINERALS CORP.

(F/K/A Force Energy Corporation)

( AN EXPLORATION STAGE COMPANY )


Index to Consolidated Financial Statements







Table of Contents


Page




 

Report of Independent Registered Public Accounting Firm

 

F-2

 

Consolidated Balance Sheets as of November 30, 2013and 2012

 

F-3

 

Consolidated Statements of Operations and Comprehensive Loss

for the Years Ended November 30, 2013and 2012

 

F-4

 

Consolidated Statement of Changes in Stockholders' Equity for the Years Ended

November 30, 2013and 2012

 

F-6

 

Consolidated Statements of Cash Flows for the Years Ended November 30, 2013and 2012

 

F-8

 

Notes to Consolidated Financial Statements

 

F-10

 























F- 1



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



March 17, 2014

To the Board of Directors:


We have audited the accompanying consolidated balance sheet of Force Minerals Corp-An exploration stage Company  (the Company) as of November 30, 2013 and the related consolidated statements of operations, stockholders equity, and cash flows for the year then ended. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.  The financial statements of Force Minerals Corporation as of November 30, 2012 were audited by other auditors whose report dated February 28, 2013 included an explanatory paragraph as to the Companys ability to continue as a going concern.


We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Companys internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provide a reasonable basis for our opinion.


In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of November 30, 2013 and 2012-audited by the predecessor independent registered accounting firm, and the results of its operations and changes in stockholders deficit and its cash flows for the years ended November 30, 2013 and 2012, in conformity with accounting principles generally accepted in the United States of America.



/s/W. T. Uniack & Co. CPAs P.C.

Woodstock, Georgia








RCE MINERALS CORPORATION

 

 (formerly Force Energy Corp)

 

 (An Exploration Stage Company)

 

 Condensed Consolidated Balance Sheets

 








 





 November 30,


 November 30,

 





2013


2012

 

 ASSETS

 (Unaudited)


 (Audited)

 

 Current assets

 

 

 

 



 Cash


 $                      -


 $            35,442

 

 

 Total Current Assets

 

                         -

 

               35,442


 Mineral property option

          1,500,099


             340,099

 

 Total Assets

 

 $       1,500,099

 

 $          375,541








 

 LIABILITIES

 

 

 


 Current liabilities





 

 

 Bank overdraft

 

 $                   23

 

 $                      -

 



 Accounts payable and accrued liabilities

               97,942


               43,713

 

 

 Advances payable

               20,000

 

               20,000



 Convertible notes payable, net of discount

             313,884


             315,518

 

 

 Derivative liabilities

               90,297

 

               58,200



 Due to related parties

                 1,593


                 4,625

 

 Total Current liabilities

             523,739

 

             442,056








 

 

 Asset retirement obligation

               18,861

 

               16,845


 Total Liabilities


 $          542,600

 

 $          458,901

 

 

 

 

 

 

 

 


 STOCKHOLDERS' DEFICIT




 

 Preferred stock, $0.001 par value; 10,000,000 shares

 

 

 

 

 authorized, 4,000,000 issued

                 4,000

 

                         -


 Common stock, $0.1 par value; 750,000,000 shares





 authorized; 3,004,610 shares issued (November 30, 2012 -  





 1,054,169 shares issued) (1)

             300,461


             105,417


 Additional paid in capital

          5,520,454

 

          3,812,334


 Deferred stock compensation

              (64,112)


              (95,400)

 

 Accumulated other comprehensive income

                 6,540


                 6,027


 Deficit accumulated during the development stage

         (4,809,844)


         (3,911,738)

 

 Total Stockholders' Deficit

             957,499

 

              (83,360)


 Total Liabilities and Stockholders' Deficit

 $       1,500,099


 $          375,541

 



(1) All common share amounts and per share amounts in these financial statements, reflect the one hundred-for-one reverse stock splits of the issued and outstanding shares of the common stock of the Company, effective June 14, 2013 respectively, including retroactive adjustment of common share amounts. See Note 11.

 

See accompanying notes to the Condensed Consolidated Financial Statements





FORCE MINERAL CORPORATION

 (formerly Force Energy Corp)

 (An Exploration Stage Company)

 Condensed Consolidated Statements of Operations and Comprehensive Loss









 





November 1, 2006



 Years ended


 (Date of Inception)



 November 30,


 to November 30,



2013


2012


2013

 

 Expenses






 

 

 Accounting and audit fees

 $             39,928

 

 $          22,825

 

 $                  349,874

 


 Accretion of ARO

                  2,529


               2,238


                         9,686

 

 

 Advertising and promotion

                78,000

 

                       -

 

                       78,000

 


 Bank charges

                     223


               1,176


                         5,666

 

 

 Consulting fees

                19,900

 

           213,439

 

                     641,839

 


 Depreciation

                         -


                       -


                         4,651

 

 

 Investor relations

                         -

 

                       -

 

                       61,443

 


 Legal fees

                13,288


             28,514


                     234,607

 

 

 Management fees

              314,162

 

           234,825

 

                  1,696,762

 


 Mineral property exploration costs

                50,000


               8,639


                     114,250

 

 

 Office expenses

                     247

 

               4,771

 

                       44,441

 


 Oil and gas exploration costs

                         -


                       -


                       15,000

 

 

 Rent

                  2,116

 

               3,113

 

                       48,930

 


 Tax penalties and interest

                         -


                  421


                       42,910

 

 

 Transfer and filing fees

                  7,162


               2,657

 

                       88,564

 


 Travel

                         -


               2,135


                       12,476

 

 

 Write-off of oil and gas costs

                         -

 

           135,427

 

                     553,466

 


 Total expenses

              527,555


           660,180


                  4,002,564

 

 

 

 

 

 

 

 

 

 Net Loss from Operations

 $         (527,555)


 $      (660,180)


 $             (4,002,564)

 

 

 

 

 

 

 

 

 

 Other Income and Expenses






 

 

 Debt forgiveness

                         -

 

                       -

 

                       15,286

 


 Loss on settlement of advance payable

                         -


           (30,000)


                     (30,000)

 

 

 Change in fair value of derivative liability

            (107,920)

 

           (40,600)

 

                   (107,920)

 


 Interest expense

            (306,706)


         (341,484)


                   (728,879)

 

 

 Interest income

                  2,261

 

                       -

 

                         2,419

 

 Net loss before income taxes

            (939,920)

 

      (1,072,264)

 

                (4,851,658)

 

 

 

 

 

 

 

 

 


 Benefit (loss) from income tax

                41,814

 

                       -

 

                       41,814

 

 

 

 

 

 

 

 

 

 Net loss

 $       (898,106)

 

 $ (1,072,264)

 

 $          (4,809,844)

 

 

 

 

 

 

 

 

 


 Foreign currency translation adjustments

                     513


             (1,364)


                         6,540

 

 

 

 

 

 

 

 

 

 Comprehensive loss for period

 $       (897,593)

 

 $ (1,073,628)

 

 $          (4,803,304)

 

 

 

 

 

 

 

 

 

 Basic loss per share

 $               (0.39)


 $            (0.01)



 

 

 

 

 

 

 

 

 

 Weighted average number of shares






 

 outstanding; basic and diluted (2)

           2,275,120


      70,979,728



 




 

(2) All common share amounts and per share amounts in these financial statements, reflect the one hundred-for-one reverse stock splits of the issued and outstanding shares of the common stock of the Company, effective June 14, 2013 respectively, including retroactive adjustment of common share amounts. See Note 11.

 

See accompanying notes to the Condensed Consolidated Financial Statements





FORCE MINERALS CORPORATION

(formerly Force Energy Corp)

(An Exploration Stage Company)

Consolidated Statement of Stockholders' Equity















Deficit



 















Accumulated



 











Additional


Deferred


during the


Total

 



Common Stock


Preferred Stock


Paid-In


Stock


Development


Shareholders'

 



Shares


Amount


Shares


Amount


Capital


Compensation


Stage


Deficit

 

Capital stock issued for cash at $.005

 

    23,000,000

 

$23,000

 

                -

 

           -

 

 $    92,000

 

 $             -

 

 $              -

 

 $  115,000

 

Less: commissions


                     -


            -


                -


           -


       (8,000)


                -


                 -


       (8,000)

 

Net (loss) for the year

 

                     -

 

            -

 

                -

 

           -

 

                 -

 

                -

 

        (8,944)

 

       (8,944)

 

Balance November 30, 2006


    23,000,000


   23,000


                -


           -


       84,000


                -


        (8,944)


       98,056

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pursuant to agreement of merger and

















 

plan of reorganization


    21,354,000


   21,354


                -


           -


     (24,058)


                -


                 -


       (2,704)

 

Capital stock issued for cash at $0.25

 

         240,000

 

        240

 

                -

 

           -

 

       59,760

 

                -

 

                 -

 

       60,000

 

Capital stock issued for cash at $0.50


         100,000


        100


                -


           -


       49,900


                -


                 -


       50,000

 

Net (loss) for the year

 

                     -

 

            -

 

                -

 

           -

 

                 -

 

                -

 

      (79,859)

 

     (79,859)

 

Balance November 30, 2007


    44,694,000


   44,694


                -


           -


     169,602


                -


      (88,803)


     125,493

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital stock issued for cash at $0.75


      1,000,000


     1,000


                -


           -


     749,000


                -


                 -


     750,000

 

Pursuant to consulting service

 




 


 


 


 


 


 


 

agreements at $1.35

 

         300,000

 

        300

 

 .

 

           -

 

     404,700

 

                -

 

                 -

 

     405,000

 

Net (loss) for the year


                     -


            -


                -


           -


                 -


                -


    (786,407)


   (786,407)

 

Balance November 30, 2008

 

    45,994,000

 

   45,994

 

                -

 

           -

 

  1,323,302

 

                -

 

    (875,210)

 

     494,086

 


















 

Capital stock issued for cash at $0.28

 

         900,000


        900


                -


           -


     251,100


                -


                 -


     252,000

 

Capital stock issued for oil and gas

















 

property


         450,000


        450


 .


           -


     143,550


                -


                 -


     144,000

 

Net (loss) for the year

 

                     -

 

            -

 

                -

 

           -

 

                 -

 

                -

 

    (403,082)

 

   (403,082)

 

Balance November 30, 2009


    47,344,000


   47,344


                -


           -


  1,717,952


                -


 (1,278,292)


     487,004

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital stock issued for cash at $0.20


         500,000


        500


                -


           -


       99,500


                -


                 -


     100,000

 

Capital stock issued pursuant to

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

management services agreement at $ 0.22

      2,500,000

 

     2,500

 

                -

 

           -

 

     547,500

 

   (264,000)

 

                 -

 

     286,000

 

Capital stock issued for debt settlement

















 

at $0.25


         643,267


        643


                -


           -


     160,174


                -


                 -


     160,817

 

Capital stock issued for cash at $0.20

 

         250,000

 

        250

 

                -

 

           -

 

       49,750

 

                -

 

                 -

 

       50,000

 

Amortization of deferred compensation


                     -


            -


                -


           -


                 -


      93,800


                 -


       93,800

 

Net (loss) for the year

 

                     -

 

            -

 

                -

 

           -

 

                 -

 

                -

 

 (1,051,852)

 

      (1,051,852)

 

Balance November 30, 2010


    51,237,267


   51,237


                -


           -


  2,574,876


   (170,200)


 (2,330,144)


     125,769

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital stock issued for cash at .25


         200,000


        200


                -


           -


       49,800


                -


                 -


       50,000

 

Capital stock issued pursuant to

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                 -

 

mineral property agreement at .08

 

      1,000,000

 

     1,000

 

                -

 

           -

 

       79,000

 

                -

 

                 -

 

       80,000

 

Capital stock issued pursuant to
















                 -

 

management services agreement at .05


      2,500,000


     2,500


                -


           -


     122,500


   (125,000)


                 -


                 -

 

Amortization of deferred compensation

 

                     -

 

            -

 

                -

 

           -

 

                 -

 

    215,600

 

                 -

 

     215,600

 

Net (loss) for the year


                     -


            -


                -


           -


                 -


                -


    (501,939)


   (501,939)

 

Balance November 30, 2011

 

    54,937,267

 

   54,937

 

                -

 

           -

 

  2,826,176

 

     (79,600)

 

 (2,832,083)

 

     (30,570)

 


















 

Intrinsic value of the beneficial conversion
















 

feature of the convertible notes payable


                     -


            -


                -


           -


       97,000


                -




       97,000

 

Conversion of promissory notes to stock

      2,486,549

 

     2,487

 

                -

 

           -

 

       62,813

 

                -

 

                 -

 

       65,300

 

Conversion of promissory notes to stock

      6,956,813


     6,957


                -


           -


       68,643


                -


                 -


       75,600

 

Conversion of promissory notes to stock

    14,344,432

 

   14,344

 

                -


           -


     246,056


                -


                 -


     260,400

 

Capital stock issued upon conversion of

















 

advance payable to common stock at $0.02

      3,000,000


     3,000


                -


           -


       57,000


                -


                 -


       60,000

 

Capital stock issued pursuant to consultancy


 


 


 


 


 






 

agreement at $0.02

 

      2,691,926

 

     2,692

 

                -

 

           -

 

       51,146

 

                -

 

                 -

 

       53,838

 

Capital stock issued pursuant to consultancy
















 

agreement at $0.028


      6,000,000


     6,000


                -


           -


     118,500


                -


                 -


     124,500

 

Capital stock issued pursuant to management


 


 




 


 


 


 


 

services contract at $0.02

 

      7,500,000

 

     7,500

 

                -

 

           -

 

     142,500

 

   (150,000)

 

                 -

 

                 -

 

Capital stock issued for mineral property
















 

option agreement at $0.02


      7,500,000


     7,500


                -


           -


     142,500


                -


                 -


     150,000

 

Amortization of deferred compensation

 

                     -

 

            -

 

                -

 

           -

 

                 -

 

    134,200

 

                 -

 

     134,200

 

Net (loss) for the year


                     -

 

            -

 

                -

 

           -

 

                 -

 

                -

 

 (1,073,628)


(1,073,628)

 

Balance November 30, 2012

 

  105,416,987

 

 105,417

 

                -

 

           -

 

  3,812,334

 

     (95,400)

 

 (3,905,711)

 

     (83,360)

 


















 

Intrinsic value of the beneficial conversion
















 

feature of the convertible notes payable


                     -


            -


                -


           -


     248,000


                -


                 -


     248,000

 

Conversion of promissory notes to stock


 


 


 


 


 


 

 

 


 

December 1, 2012 - February 28, 2013

 

    22,884,615

 

   22,885

 

                -

 

           -

 

       27,115

 

                -

 

                 -

 

       50,000

 

Conversion of promissory notes to stock
















 

March 1, 2013 - May 31, 2013


    39,927,652


   39,927


                -


           -


       30,172


                -


                 -


       70,099

 

Conversion of promissory notes to stock


 


 












 

June 1, 2013 - August 31, 2013

 

    23,610,236

 

   23,610

 

                -

 

           -

 

       (6,110)

 

                -

 

                 -

 

       17,500

 

Conversion of promissory notes to stock
















 

September 1, 2013 - November 30, 2013

    58,613,900


   58,614


                -


           -


     (46,874)


                -


                 -


       11,740

 

Elimination of derivative liabilities

 

                     -


            -


                -


           -


     234,823


                -


                 -


     234,823

 

Stock for property option


                     -


            -


 4,000,000


   4,000


  1,156,000


                -


                 -


  1,160,000

 

Stock for management fees

 

    22,125,000

 

   22,125

 

                -

 

           -

 

       28,764

 

                -

 

                 -

 

       50,889

 

Stock for deferred remuneration


    27,875,000


   27,875


                -


           -


       36,237


     (64,112)


                 -


                 -

 

Amortization of deferred compensation

 

                     -

 

            -

 

                -

 

           -

 

                 -

 

      95,400

 

                 -

 

       95,400

 

Rounding from partial to full shares


             7,610


            8


                -


           -


              (8)


                -


                 -


              (0)

 

Reverse stock split 100:1

 

(297,456,390)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) for the year


                     -


            -


                -


           -


                 -


                -


    (897,593)


   (897,593)

 

Balances for November 30, 2013

 

      3,004,610

$

 300,461

 

 4,000,000

$

   4,000

$

  5,520,454

$

     (64,112)

$

 (4,803,304)

$

     957,499

 








See accompanying notes to the Condensed Consolidated Financial Statements
















FORCE MINERALS CORPORATION

 (formerly Force Energy Corp)

 (An Exploration Stage Company)

 Condensed Consolidated Statement of Cash Flows

 (Unaudited)










November 1, 2006

 






 Years Ended


 (Date of Inception)

 






 November 30,


 to November 30,

 






2013


2012


2013

 



 Operating activities






 

 

 

 

 Net loss

       (897,593)

 

  (1,073,628)

 

                   (4,803,304)

 




 Adjustments to reconcile net loss to net






 




 cash used in operating activities:






 

 

 

 


 Non-cash interest expense

         159,956

 

       244,484

 

                       485,129

 





 Interest expense - beneficial conversion feature






 





 of convertible note and advance payable

         146,750


       127,000


                       273,750

 

 

 

 

 

 Loss from change in fair value of derivative

 

 

 

 


 

 

 

 

 

 liability

         107,920

 

         40,600

 

                       107,920

 





 Consulting/management fees paid in stock

           22,125


       178,338


                         22,125

 

 

 

 

 

 Gain from settlement of related party balance

           28,764

 

                  -

 

                       612,102

 





 Share based compensation

           95,400


       134,200


                       825,000

 

 

 

 

 

 Debt forgiveness

                     -

 

                  -

 

                        (15,286)

 





 Accretion of ARO

             2,529


           2,238


                           9,686

 

 

 

 

 

 Depreciation

                     -

 

                  -

 

                           4,651

 





 Impairment of oil and gas costs

                     -


       135,427


                       553,466

 

 

 

 

 

 Other

                     -

 

                  -

 

                             (148)

 




 Changes in assets and liabilities:






 

 

 

 

 

 Prepaid expenses

                     -

 

           1,119

 

                                   -

 





 Advance payable

                     -


                  -


                         50,000

 

 

 

 

 

 Accounts payable and accrued liabilities

           54,229

 

         (5,158)

 

                         54,299

 



 Net cash used in operating activities

       (279,920)


     (215,380)


                   (1,820,610)

 

 

 

 

 

 

 

 

 

 

 

 



 Investing activities






 

 

 

 

 Acquisition of property and equipment

                     -

 

                  -

 

                          (4,651)

 




 Acquisition of mineral property option

    (1,160,000)


       (50,499)


                   (1,270,099)

 

 

 

 

 Acquisition and development costs of

 

 

 

 


 

 

 

 

 oil and gas properties

                     -

 

                  -

 

                      (387,517)

 



 Net cash flows used in investing activities

    (1,160,000)


       (50,499)


                   (1,662,267)

 

 

 

 

 

 

 

 

 

 

 

 



 Financing activities






 

 

 

 

 Bank overdraft

                  23

 

                  -

 

                                23

 




 Capital stock issued

                     -


                  -


                    1,419,000

 

 

 

 

 Preferred stock issued

      1,160,000

 

                  -

 

                    1,160,000

 




 Proceeds from convertible note payable

         248,000


       337,500


                       755,500

 

 

 

 

 Due to related parties

           (3,032)

 

           4,000

 

                       162,410

 




 Repayment convertible note payable

                     -


       (57,655)


                        (57,655)

 

 

 

 

 Proceeds from reverse acquisition

                     -

 

                  -

 

                         37,058

 



 Net cash provided by (used in) financing activities

      1,404,991


       283,845


                    3,476,336

 

 

 

 

 

 

 

 

 

 

 

 



 Effect of foreign exchange on cash

              (513)


           1,083


                           6,540

 

 

 

 

 

 

 

 

 

 

 

 



 Change in cash

         (35,442)


         19,049


                                 (0)

 

 

 

 Cash at beginning of period

           35,442

 

         16,393

 

                                   -

 



 Cash at end of period

 $                 0


 $      35,442


                                 (0)

 





See accompanying notes to the Condensed Consolidated Financial Statements




































 
















F- 10



Note 1 Interim Reporting

 

The unaudited condensed consolidated financial information furnished herein reflects all adjustments, which in the opinion of management are necessary to fairly state the Companys financial position and the results of its operations for the periods presented. All adjustments are of a normal recurring nature. These interim condensed consolidated financial statements should be read in conjunction with the Companys consolidated financial statements and notes thereto included in the Companys audited consolidated financial statements for the fiscal year ended November 30, 2012. The Company assumes that the users of the interim consolidated financial information herein have read or have access to the audited financial statements for the preceding fiscal period and that the adequacy of additional disclosure needed for a fair presentation may be determined in that context. Accordingly, footnote disclosure, which would substantially duplicate the disclosure contained in the Companys audited consolidated financial statements for the fiscal year ended November 30, 2012, has been omitted. The results of operations for the nine-month period ended August 31, 2013 are not necessarily indicative of results for the entire year ending November 30, 2013.

 

Note 2 Nature of Operations and Going Concern

 

The Company was incorporated in the state of Nevada, United States of America on November 1, 2006. The Company was formed for the purpose of acquiring exploration and development stage natural resource properties.

 

Effective December 28, 2006, the Board of Directors authorized a 3 for 1 forward stock split of the common shares. The authorized number of common shares increased from 90,000,000 to 270,000,000 common shares with a par value of $0.001. All references in the accompanying financial statements to the number of common shares have been restated to reflect the forward stock split.

 

On February 12, 2008, the Company acquired 100% of the common shares of Force Energy Corp., an inactive company incorporated in Nevada on July 19, 2005, for $100, to effect a name change of the Company. On February 12, 2008, the Company and Force Energy Corp filed articles of merger with the Secretary of State of Nevada to effectuate a merger between the two companies. The surviving entity of the merger was the Company. Immediately thereafter the Company changed its name to Force Energy Corp.

 

On June 6, 2013, the Board of Directors changed the name of the Company to Force Minerals Corporation. Also on June 6, 2013, the Board of Directors authorized a 100:1 reverse stock split of the common shares. The name change and reverse stock split received regulatory approval on June 28, 2013. The record date for the reverse stock split was June 14, 2013. The authorized number of common shares remained unchanged. All references in the accompanying financial statements to the number of common shares have been restated to reflect the reverse stock split.

 

These consolidated financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which assumes that the Company will be able to meet its obligations and continue its operations for its next twelve months. Realization values may be substantially different from carrying values as shown and these consolidated financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern.

 

At November 30, 2013, the Company has a working capital deficit of $523,739. The Company has yet to achieve profitable operations, has accumulated losses of $4,809,844 since its inception and expects to incur further losses in the development of its business, all of which casts substantial doubt about the Companys ability to continue as a going concern. The Companys ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management has no formal plan in place to address this concern but considers that the Company will be able to obtain additional funds by equity financing and/or related party advances, however there is no assurance of additional funding being available or on acceptable terms, if at all.

 







F- 11



Note 3 Recent Developed Accounting Pronouncements

 

Effective January 2013, we adopted FASB ASU No. 2011-11, Balance Sheet (Topic 210):  Disclosures about Offsetting Assets and Liabilities (ASU 2011-11).  The amendments in ASU 2011-11 require the disclosure of information on offsetting and related arrangements for financial and derivative instruments to enable users of its financial statements to understand the effect of those arrangements on its financial position.  Amendments under ASU 2011-11 will be applied retrospectively for fiscal years, and interim periods within those years, beginning after January 1, 2013.  The adoption of this update did not have a material impact on the consolidated financial statements.

 

Effective January 2013, we adopted FASB ASU No. 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive (ASU 2013-02).  This guidance is the culmination of the FASBs deliberation on reporting reclassification adjustments from accumulated other comprehensive income (AOCI).  The amendments in ASU 2013-02 do not change the current requirements for reporting net income or other comprehensive income.  However, the amendments require disclosure of amounts reclassified out of AOCI in its entirety, by component, on the face of the statement of operations or in the notes thereto.  Amounts that are not required to be reclassified in their entirety to net income must be cross-referenced to other disclosures that provide additional detail.  This standard is effective prospectively for annual and interim reporting periods beginning after December 15, 2012.  The adoption of this update did not have a material impact on the consolidated financial statements.

 

New Accounting Pronouncements Not Yet Adopted

 

In February 2013, the FASB issued ASU No. 2013-04, Liabilities (Topic 405): Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation Is Fixed at the Reporting Date. The amendments in ASU 2013-04 provide guidance for the recognition, measurement, and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this Update is fixed at the reporting date, except for obligations addressed within existing guidance in U.S. GAAP. The guidance requires an entity to measure those obligations as the sum of the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors and any additional amount the reporting entity expects to pay on behalf of its co-obligors. The guidance in this Update also requires an entity to disclose the nature and amount of the obligation as well as other information about those obligations. The amendments in this standard is effective retrospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013. We are evaluating the effect, if any, adoption of ASU No. 2013-04 will have on our consolidated financial statements.

 

In March 2013, the FASB issued ASU No. 2013-05, Foreign Currency Matters (Topic 830): Parents Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity. The amendments in ASU No. 2013-05 resolve the diversity in practice about whether Subtopic 810-10, ConsolidationOverall, or Subtopic 830-30, Foreign Currency MattersTranslation of Financial Statements, applies to the release of the cumulative translation adjustment into net income when a parent either sells a part or all of its investment ina foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business (other than a sale of in substance real estate or conveyance of oil and gas mineral rights) withina foreign entity. In addition, the amendments in this Update resolve the diversity in practice for the treatment of business combinations achieved in stages (sometimes also referred to as step acquisitions) involving a foreign entity. The amendments in this standard is effective prospectively for fiscal years, and interim reporting periods within those years, beginning December 15, 2013. We are evaluating the effect, if any, adoption of ASU No. 2013-05 will have on our consolidated financial statements.

 

Note 4 Financial Instruments and Risk Management

 

Fair value is defined as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity. In addition, the fair value of liabilities should include consideration of non-performance risk including our own credit risk.




F- 12



 

In addition to defining fair value, the standard expands the disclosure requirements around fair value and establishes a fair value hierarchy for valuation inputs is expanded. 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. Each fair value measurement is reported in one of the three levels and which is determined by the lowest level input that is significant to the fair value measurement in its entirety

 

These levels are:

Level 1 - inputs are based upon unadjusted quoted prices for identical instruments traded in active markets.

Level 2 inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

 

Level 3- inputs are generally unobservable and typically reflect managements estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques.

 

Financial assets and liabilities measured at fair value on a recurring basis:

 


FAIR VALUE


NOVEMBER 30, 2013


NOVEMBER 30, 2012


INPUT


CARRYING ESTIMATED


CARRYING ESTIMATED

 

 

 

 

 

 

 

 

 

 


LEVEL


AMOUNT


FAIR VALUE


AMOUNT


FAIR VALUE

Derivative Liability

3

 

    90,297

 

         90,297

 

    58,200

 

         58,200

Total Financial Liabilities

 


 $ 90,297


 $     90,297


 $ 58,200


 $     58,200

 

In managements opinion, the fair value of convertible notes payable and advances payable is approximate to carrying value as the interest rates and other features of these instruments approximate those obtainable for similar instruments in the current market. Unless otherwise noted, it is managements opinion that the Company is not exposed to significant interest, exchange or credit risks arising from these financial instruments.

 

Note 4 Financial Instruments and Risk Management


The carrying value of cash balances, accounts payable and accrued liabilities and due to related party approximates the fair value due to their short-term maturities.

 

Risk management is carried out by the Board of Directors. The Company's risk exposures and their impact on the Company's financial instruments are summarized below:

 


a)

Credit risk

 

Credit risk is the risk of a financial loss to the Company if a counterparty to a financial instrument fails to meet its contractual obligations.

 

The Companys cash and cash equivalents and are primarily held in large financial institutions.. Management believes that the credit risk with respect to cash and cash equivalents, is remote.


 


b)

Liquidity risk

 

The Company tries to ensure that there is sufficient capital in order to meet short-term business requirements, after taking into account the Companys holdings of cash. As at November 30, 2013, the Company had cash totaling $nil




F- 13



(November 30, 2012 - $35,442) to settle current liabilities of $523,739 (November 30, 2012 - $442,056). The Company believes it will be able to raise financing in order to settle its current liabilities as they fall due.

 


c)

Market risk

 

Market risk is the risk of loss that may arise from changes in market factors such as interest rates, foreign exchange rates, and commodity and equity prices.

 


i)

Interest rate risk

 

The Company has cash balances and no interest-bearing debt. The Companys current policy is to invest excess cash in investment-grade short-term deposit certificates issued by its banking institutions. The Company periodically monitors the investments it makes and is satisfied with the credit ratings of its banks.

 


ii)

Foreign currency risk

 

The Companys functional currency is the Canadian dollar as substantially all of the Companys operations are in Canada. The Company uses the United States dollar as its reporting currency for consistency with registrants of the Securities and Exchange Commission (SEC).

 

During the year ended November 30, 2013, the Company entered into a Property option agreement to acquire a mineral property in Mexico. Accordingly, future costs may be incurred in currencies other than its functional currency, which may result in increased exposure to foreign exchange risk.

 

The Company does not participate in any hedging activities to mitigate any gains or losses, which may arise as a result of exchange rate changes.

 


iii)

Commodity Price risk

 

The Company is exposed to price risk with respect to commodity and equity prices. Equity price risk is defined as the potential adverse impact on the Company's earnings due to movements in individual equity prices or general movements in the level of the stock market. Commodity price risk is defined as the potential adverse impact on earnings and economic value due to commodity price movements and volatilities. To mitigate price risk, the Company closely monitors commodity prices of precious metals, individual equity movements, and the stock market to determine the appropriate course of action to be taken by the Company.

 


d)

Mineral Property Risks

 

The Company has diligently investigated rights of ownership of all of its mineral property interests and, to the best of its knowledge, all agreements relating to such ownership rights are in good standing. However, all properties/concessions may be subject to prior claims, agreements or transfers, and rights of ownership may be affected by undetected defects.

 

Mineral exploration and development is highly speculative and involves inherent risks. While rewards if a feasible ore body is discovered might be substantial, few properties that are explored are ultimately developed into producing mines. There can be no assurance that the current exploration programs by the Company will result in the discovery of economically viable quantities of ore.

 


e)

Environmental Risk

 

Environmental legislation is becoming increasingly stringent and costs and expenses of regulatory compliance are increasing. The impact of new and future environmental legislation of the Companys operation may cause additional expenses and restrictions.

 

If the restrictions adversely affect the scope of exploration and development on the mineral properties, the potential for production on the property may be diminished or negated.




F- 14



 

The Company is subject to the laws and regulations relating to environmental matters in all jurisdictions in which it operates, including provisions relating to property reclamation, discharge of hazardous materials and other matters. The Company may also be held liable should environmental problems be discovered that were caused by former owners and operators of its properties and properties in which it has previously had an interest, if any. The Company attempts to conduct its mineral exploration activities in compliance with applicable environmental protection legislation. The Company is not aware of any existing environmental problems related to any of its current or former properties, if any, interests that may result in material liability to the Company.

 


f)

Geopolitical Risk

 

Certain of the Companys property interests may from time to time be located in countries outside of Canada, and mineral exploration and mining activities may be affected in varying degrees by political stability and government regulations relating to the mining industry. Any changes in regulations or shifts in political attitudes may vary from country to country and are beyond the control of the Company and may adversely affect its business. Such changes have, in the past, included nationalization of foreign owned businesses and properties. Operations may be affected in varying degrees by government regulations with respect to restrictions on production, price controls, export controls, income and other taxes and duties, expropriation of property, environmental legislation and mine safety. These uncertainties may make it more difficult for the Company and its joint venture partners to obtain any required production financing for its mineral properties.


Note 5 Mineral Properties

 

a) La Predilecta; La Predilecta II; La Crus and La Cascada Properties Mexico

 

On May 30, 2013, the Company entered into a Property Option Agreement to acquire an option to purchase a 100% interest in four mining concessions known as La Predilecta; La Predilecta II; La Crus and La Cascada comprising approximately 1,181 hectares in the Miahuatlan District, in the southern portion of Centrales Region within Oaxaca State Mexico. The Company will hold its interest via a wholly owned Mexican subsidiary, which is yet to be incorporated when the Optionor receives the $100,000 cash.

 

In order to exercise the option, the Company must pay cash or issue stock to the Optionor by the following dates:

 


i)

$50,000 within 60 days of signing the agreement.



ii)

$50,000 within 90 days of signing the agreement.



iii)

Issue an aggregate of 4,000,000 shares of Preferred stock.

 

Each preferred share shall have an underlying voting right equivalent to 100 shares of Common stock and shall be convertible into 100 shares of Common stock.

 

As of this reporting period the initial $50,000 payment had been made and is being paid by an outside investor. The remaining $50,000 is past due as of August 31, 2013.


First payment of $50,000.00 has been paid.  The Company is now waiting for Seller to verify the current standing with all taxes on the property.  As soon as this is confirmed the Company will authorize second payment. Once the tax verification comes from the country of Mexico the Mexican subsidiary will be established and ownership of property will be held within the Mexican subsidiary.


 

Note 6 Advance Payable

 

On March 21, 2011, the Company received a cash advance of $20,000. The advance is unsecured, non-interest bearing and has no fixed repayment terms.







F- 15



Note 7 Related Party Transactions

 

Amounts due to related parties comprise:







2013


2012

Amounts due to Director




  Tim DeHerrera

 $                           250

 

 $                     4,625

  Syndication Capital

                           1,343


                               -


 $                        1,593

 

 $                     4,625


All amounts due to related parties are unsecured, non-interest bearing and have no specific terms for repayment.

 

On July 23, 2010, the Company entered into an employment contract with the Company President, which expires July 22, 2011. Pursuant to the contract, the President received 25,000 common shares having a fair value of $550,000. Should the contract be terminated prior to completion the President will return 1,000 shares to treasury for each unfulfilled month of the contract. The President will also receive $2,500 per month for months 1-3; $4,000 per month for months 4-6 and $5,000 per month for months 7-12 of the contract.

 

The fair value of 13,000 shares issued which were earned immediately and have been expensed as stock based compensation of $286,000. The fair value of the remaining 12,000 shares issued which are to be earned over the term of the contract will be charged to operations over the life of the employment contract. This portion of the stock award is accounted for as deferred compensation whereby the fair value of the award is recorded as a component of stockholders equity until earned.


Pursuant to this stock award during the year ended November 30, 2013, the Company recorded management fees of $nil (year ended November 30, 2012 $nil).


  On July 18, 2011, the Company entered into a new employment contract with the Company President, which expires July 18, 2013. Pursuant to the contract, the President received 25,000 common shares having a fair value of $125,000. The President will receive $7,500 per month for months 13-24 of the contract. Unless the contract is terminated by either party giving 45 days written notice the contract will automatically renew. Should the contract be renewed then the President will receive 25,000 shares of common stock and an annual increase of $2,500 per month upon each renewal. If the Company does not have sufficient cash resources to settle the cash element of the contract, then at the request of the President any accrued unpaid fees may be converted into common stock at $0.025 per share.

 

The fair value of the 25,000 shares issued which are to be earned over the term of the contract will be charged to operations over the life of the employment contract. This portion of the stock award is accounted for as deferred compensation whereby the fair value of the award is recorded as a component of stockholders equity until earned.


Pursuant to this stock award during the year ended November 30, 2013 the Company recorded management fees of $nil (year ended November 30, 2012 - $79,600).

 

On July 16, 2012, the Company entered into an addendum to the contract, which expires July 15, 2014. Pursuant to the contract, the President received 75,000 common shares on July 2012, and will continue to receive 75,000 common shares upon each anniversary date of the addendum. The fair value of the shares received was $150,000. The President will receive $10,000 per month for months 25-36 of the contract and an annual monthly increase of $2,500 per month thereafter. Unless the contract is terminated by either party giving 45 days written notice the contact will automatically renew. If the Company does not have sufficient cash resources to settle the cash element of the contract, then at the request of the President any accrued unpaid fees may be converted into common stock at $0.01 per share.




F- 16



 


The fair value of the 75,000 shares issued which are to be earned over the term of the contract will be charged to operations over the life of the employment contract. This portion of the stock award is accounted for as deferred compensation whereby the fair value of the award is recorded as a component of stockholders equity until earned.


During the year ended November 30, 2013, the Company recorded management fees of $95,400 (year ended November 30, 2012 - $54,600) pursuant to this stock award.


On May 30, 2013, the Company entered into a second addendum to the contract, which expires May 30, 2015. Pursuant to the contract, the President received 500,000 common shares upon signing the agreement, 221,250 shares were issued to settle amounts owing under prior contract of $22,125 and 278,750 shares are to be earned over the period of the contract. As before the President will receive $10,000 per month for months 25-36 of the contract and an annual monthly increase of $2,500 per month thereafter. Unless the contract is terminated by either party giving 90 days written notice the contact will automatically renew. If the Company does not have sufficient cash resources to settle the cash element of the contract, then at the request of the President any accrued unpaid fees may be converted into common stock at $0.001 per share.

 

The fair value of the shares issued in settlement of amounts owing of $22,125 was $50,889. The difference between the recorded amount payable and the fair value of stock issued being $28,762 was charged to operations as management fees upon issuance.

 

The fair value of the 278,750 shares issued with a fair value of $64,113, which are to be earned over the term of the contract, will be charged to operations over the life of the employment contract. This portion of the stock award is accounted for as deferred compensation whereby the fair value of the award is recorded as a component of stockholders equity until earned. During the year ended November 30, 2013, the Company recorded management fees of $120,000 (year ended November 30, 2012 - $nil) pursuant to this stock award.



2013


2012

Amounts charged by Director




  Management fees

 $                    244,162

 

 $                 234,825


 

Note 8 Convertible Notes Payable

 




November 30,


November 30,




2013


2012

Promissory Note #6

 

20,000

 

                20,000

 

Promissory Note #7


                20,000


                20,000

 

Promissory Note #8

 

                20,000

 

                20,000

 

Promissory Note #10


                30,000


                30,000

 

Promissory Note #11

 

                          -

 

                42,500

 

Promissory Note #12


                          -


                42,500

 

Promissory Note #13

 

                64,060

 

                75,000

 

Promissory Note #14


                          -


                50,000

 

Promissory Note #15

 

                88,000

 

                          -

 

Promissory Note #16


                11,000


                          -

 

Promissory Note #17

 

                11,000

 

                          -

 

Promissory Note #18


                50,000


                          -

 

Promissory Note #19

 

                11,000

 

                          -

 

Promissory Note #20


                11,000


                          -

 

Promissory Note #21

 

                16,000

 

                          -

 

Promissory Note #22


                50,000


                          -

 



 

 $           402,060

 

 $           300,000


Debt discount


             (101,250)


                          -

 

Accrued interest

 

                13,074

 

                15,518




 $           313,884


 $           315,518

 

As at November 30, 2013 and November 30, 2012, convertible notes payable are recorded net of unamortized debt discount of $(101,250) and $nil respectively.

 

Promissory Note #6

On February 15, 2012, the Company received $20,000 cash and the Company issued a convertible promissory note in the amount of $20,000. The promissory note is unsecured, interest free and repayable upon demand.On October 11, 2013, the Company authorized and directed to amend and restate the noteinto a new promissory note to Direct Capital Group Inc. and to provide conversion features equal to the lower of (i) $0.001 per share or (ii) 60% of the lowest closing bid price of the last day of 5 trading days prior to conversion.


Promissory Note #7

On February 15, 2012, the Company received $20,000 cash and the Company issued a convertible promissory note in the amount of $20,000. The promissory note is unsecured, interest free and repayable upon demand.On October 11, 2013, the Company authorized and directed to amend and restate the noteinto a new promissory note to Direct Capital Group Inc. and to provide conversion features equal to the lower of (i) $0.001 per share or (ii) 60% of the lowest closing bid price of the last day of 5 trading days prior to conversion.


Promissory Note #8

On February 15, 2012, the Company received $20,000 cash and the Company issued a convertible promissory note in the amount of $20,000. The promissory note is unsecured, interest free and repayable upon demand. On October 11, 2013, the Company authorized and directed to amend and restate the noteinto a new promissory note to Direct Capital Group Inc. and to provide conversion features equal to the lower of (i) $0.001 per share or (ii) 60% of the lowest closing bid price of the last day of 5 trading days prior to conversion.


Promissory Note #10 

On March 20, 2012, the Company received $30,000 cash and the Company issued a convertible promissory note in the amount of $30,000. The promissory note is unsecured, interest free and repayable upon demand.

The note may be converted at the option of the holder into common stock of the Company. The fixed conversion price is $0.01 per share. Accordingly, the note may be converted into 3,000,000 common shares of the Company. The note also contains a provision whereby should the Company perform a stock split or reverse stock split, the conversion price of the note reverts to the lesser of 40% of market value at the time of conversion, or $0.01 per share. Accordingly, subsequent to the period end on June 14, 2013, this conversion provision was triggered.

The Company determined that Promissory notes # 6, 7, 8, and 10 should be accounted for in accordance with FASB ASC 470-20, which addresses Accounting for Convertible Securities with Beneficial Conversion Features". The intrinsic value of the conversion feature is calculated as the difference between the conversion price $0.01 and the fair value of the common stock into which the debt is convertible at the commitment date (being $0.05 for notes # 6, 7 and 8 and $0.02 for note 10), multiplied by the number of shares into which the debt is convertible. The valuation of the beneficial conversion feature is calculated as pro rata portion of the proceeds from issuance of the convertible debt, being equal to proceeds received multiplied by intrinsic value divided by the total value received (ie. the aggregate of proceeds and intrinsic value). This beneficial conversion feature is allocated to debt discount and additional paid in capital. Because the debt is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.




F- 18



 During the year ended November 30, 2013 interest expense relating to the beneficial conversion feature of convertible notes of $nil (year ended November, 2012 - $97,000) was recorded in the financial statements, with a corresponding increase to additional paid in capital.


Promissory Note #11 

On June 12, 2012, the Company received $42,500 cash and the Company issued a convertible promissory note in the amount of $42,500. The promissory note is unsecured, bears interest at 8% per annum, and matures on March 14, 2013. During the year ended November 30, 2013, the Company accrued $107 (year ended November 30, 2012 - $1,593) in interest expense.

After 180 days the note may be converted at the option of the holder into common stock of the Company. The conversion price is defined as 55% multiplied by market price where market price is determined as the average bid price for the shares as quoted on the OTCBB where the shares are traded for the three consecutive business days prior to the date of conversion. The Company determined that the embedded conversion feature would be a derivative liability based upon its variable conversion terms once the holders conversion rights were triggered.

In December 2012, upon the holders option to convert becoming active, the Company recorded debt discount and a derivative liability of $38,600 being the fair value of the conversion feature, which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term on the note or to the date of conversion. The derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period. 

During the year ended November 30, 2013, the Company recorded a loss of $4,300 (year ended November 30, 2012 $nil) due to the change in value of the derivative liability during the period, and debt discount of $38,600 (year ended November 30, 2012 - $nil) was accreted to the statement of operations. 

During the year ended November 30, 2013, the Company issued 192,576 common shares upon the conversion of $42,500 of the principal balance plus $1,700 accrued interest into common stock, and $42,300 of the derivative liability was re-classified as additional paid in capital upon conversion.

As at November 30, 2013, accrued interest of $nil (November 30, 2012 - $1,593), debt discount of $nil (November 30, 2012 - $nil) and a derivative liability of $nil (November 30, 2012 - $nil) was recorded.

Promissory Note #12

On August 17, 2012, the Company received $42,500 cash and the Company issued a convertible promissory note in the amount of $42,500. The promissory note is unsecured, bears interest at 8% per annum, and matures on May 21, 2013. During the year ended November 30, 2013 the Company accrued $722 (year ended November 30, 2012 - $978) in interest expense. 

After 180 days the note may be converted at the option of the holder into Common stock of the Company. The conversion price is defined as 48% multiplied by market price where market price is determined as the average bid price for the shares as quoted on the OTCBB where the shares are traded for the three consecutive business days prior to the date of conversion. The Company determined that the embedded conversion feature would be a derivative liability based upon its variable conversion terms once the holders conversion rights were triggered. 

In February 2013, upon the holders option to convert becoming active, the Company recorded debt discount and a derivative liability of $43,600 being the fair value of the conversion feature, which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term on the note or to the date of conversion. The derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.




F- 19



During the year ended November 30, 2013, the Company recorded a loss of $60,551 (year ended November 30, 2012 $nil) due to the change in value of the derivative liability during the period, and debt discount of $43,600 (year ended November 30, 2012 - $nil) was accreted to the statement of operations.

During the year ended November 30, 2013 the Company issued 425,781 common shares upon the conversion of $42,500of the principal balance and $1,700 of accrued interest into common stock, and $104,151 of the derivative liability was re-classified as additional paid in capital upon conversion. 

As at November 30, 2013, accrued interest of $nil (November 30, 2012 - $978), debt discount of $nil (November 30, 2012 - $nil) and a derivative liability of $nil (November 30, 2012 - $nil) was recorded.

Promissory Note #13

On September 12, 2012, the Company received $75,000 cash and the Company issued a convertible promissory note in the amount of $75,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on June 14, 2013. During the year ended November 30, 2013, the Company accrued $5,882 (year ended November 30, 2012 - $1,299) in interest expense. 

After 180 days the note may be converted at the option of the holder into Common stock of the Company. The conversion price is defined as 50% multiplied by market price where market price is determined as the average of the lowest three bid prices during the ten trading days prior to the date of conversion. The Company determined that the embedded conversion feature would be a derivative liability based upon its variable conversion terms once the holders conversion rights were triggered. 

In March 2013, upon the holders option to convert becoming active, the Company recorded debt discount of $75,000, charged $1,800 to interest expense and also recorded a derivative liability of $76,800 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term on the note or to the date of conversion. The derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period. 

During the year ended November 30, 2013, the Company recorded a loss of $33,869 (year ended November 30, 2012 $nil) due to the change in value of the derivative liability during the period, and debt discount of $75,000 (year ended November 30, 2012 - $nil) was accreted to the statement of operations. 

During the year ended November 30, 2013, the Company issued 558,167 common shares upon the conversion of $10,940 of the principal balance into common stock, and $20,372 of the derivative liability was re-classified as additional paid in capital upon conversion.

As at November 30, 2013, accrued interest of $7,181 (November 30, 2012 - $1,299) debt discount of $nil (November 30, 2012 - $nil) and a derivative liability of $90,297 (November 30, 2012 - $nil) was recorded. 

Promissory Note #14 

On October 24, 2012, Notes 5 and 9 were amalgamated and a new amended note was created, in the amount of $50,000. The promissory note is unsecured, bears interest at 10% per annum, and is due upon demand. During the year ended November 30, 2013 the Company accrued $1,588 (year ended November 30, 2012 - $507) in interest expense.

The note may be converted at the option of the holder at any time into Common stock of the Company. The conversion price is defined as 50% multiplied by the market price, where market price is determined as the lowest 3 closing bid prices during the ten trading day period ending the day prior to conversion. The Company determined that the embedded conversion feature would be a derivative liability based upon its variable conversion terms.

Upon inception the Company recorded a debt discount and a derivative liability of $45,200 being the fair value of the conversion feature, which was determined using the Black-Scholes valuation model. The debt discount has been charged immediately to the statement of operations as the note is due upon demand. The derivative liability is




F- 20



revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period. 

During the year ended November 30, 2013, the Company recorded a loss of $6,300 (year ended November 30, 2012 - $nil) due to the change in value of the derivative liability during the period. 

During the year ended November 30, 2013, the Company issued 245,867 common shares upon the conversion of $50,000 of the principal balance of the note into common stock, and $51,500 of the derivative liability was reclassified as additional paid in capital upon conversion.  The holder of the note waived the remaining interest balance and a credit of $2,095 was charged to the statement of operations.

As at November 30, 2013, accrued interest of $nil (November 30, 2012 - $507), debt discount of $nil (November 30, 2012 - $nil) and a derivative liability of $nil (November 30, 2012 - $45,200) was recorded.

Promissory Note #15

On June 1, 2013 the Company entered into a Convertible Promissory Note with Direct Capital in the sum of $88,000.  The promissory note is unsecured, bears interest at 8% per annum, and matures on December 1, 2013.  The Conversion Price shall mean par .001 multiplied by the number of Common Stock converted at the time.  The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933.  During the year ended November 30, 2013, the Company accrued $3,510 (November 30, 2012 - $nil) in interest expense.

A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital.  Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.


During the year ended November 30, 2013 interest expense relating to the beneficial conversion feature of this convertible note of $88,000 (November 30, 2012 - $nil) was recorded in the financial statements, with a corresponding increase to additional paid in capital.


Promissory Note #16

On July 1, 2013 the Company entered into a Convertible Promissory Note with Direct Capital in the sum of $11,000.  The promissory note is unsecured, bears interest at 8% per annum, and matures on January 1, 2014.  The Conversion Price shall mean par .001 multiplied by the number of Common Stock converted at the time.  The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933.  During the year ended November 30, 2013, the Company accrued $366.47 (November 30, 2012 - $nil) in interest expense.

A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital.  Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.


During the year ended November 30, 2013 interest expense relating to the beneficial conversion feature of this convertible note of $11,000 (November 30, 2012 - $nil) was recorded in the financial statements, with a corresponding increase to additional paid in capital.


Promissory Note #17

On August 1, 2013 the Company entered into a Convertible Promissory Note with Direct Capital in the sum of $11,000.  The promissory note is unsecured, bears interest at 8% per annum, and matures on February 1, 2014.  The Conversion Price shall mean par .001 multiplied by the number of Common Stock converted at the time.  The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933.  During the year ended November 30, 2013, the Company accrued $292 (November 30, 2012 - $nil) in interest expense.




F- 21



A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital.  Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.


During the year ended November 30, 2013 interest expense relating to the beneficial conversion feature of this convertible note of $11,000 (November 30, 2012 - $nil) was recorded in the financial statements, with a corresponding increase to additional paid in capital.


Promissory Note #18

On August 7, 2013 the Company entered into a Convertible Promissory Note with Syndication Capital in the sum of $50,000.  The promissory note is unsecured, bears interest at 8% per annum, and matures on February 7, 2014.  The Conversion Price shall mean par .001 multiplied by the number of Common Stock converted at the time.  The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933.  During the year ended November 30, 2013, the Company accrued $1,260 (November 30, 2012 - $nil) in interest expense.

A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital.  Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.


During the year ended November 30, 2013 interest expense relating to the beneficial conversion feature of this convertible note of $50,000 (November 30, 2012 - $nil) was recorded in the financial statements, with a corresponding increase to additional paid in capital.


Promissory Note #19

On September 1, 2013 the Company entered into a Convertible Promissory Note with Direct Capital in the sum of $11,000.  The promissory note is unsecured, bears interest at 8% per annum, and matures on March 1, 2014.  The Conversion Price shall mean par .001 multiplied by the number of Common Stock converted at the time.  The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933.  During the year ended November 30, 2013, the Company accrued $217 (November 30, 2012 - $nil) in interest expense.

A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital.  Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.


During the year ended November 30, 2013 interest expense relating to the beneficial conversion feature of this convertible note of $11,000 (November 30, 2012 - $nil) was recorded in the financial statements, with a corresponding increase to additional paid in capital.


Promissory Note #20

On October 1, 2013 the Company entered into a Convertible Promissory Note with Direct Capital in the sum of $11,000.  The promissory note is unsecured, bears interest at 8% per annum, and matures on April 1, 2014.  The Conversion Price shall mean par .001 multiplied by the number of Common Stock converted at the time.  The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933.  During the year ended November 30, 2013, the Company accrued $145 (November 30, 2012 - $nil) in interest expense.

A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital.  Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.





F- 22



During the year ended November 30, 2013 interest expense relating to the beneficial conversion feature of this convertible note of $11,000 (November 30, 2012 - $nil) was recorded in the financial statements, with a corresponding increase to additional paid in capital.


Promissory Note #21

On November 1, 2013 the Company entered into a Convertible Promissory Note with Direct Capital in the sum of $16,000.  The promissory note is unsecured, bears interest at 8% per annum, and matures on May 1, 2014.  The Conversion Price shall mean par .001 multiplied by the number of Common Stock converted at the time.  The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933.  During the year ended November 30, 2013, the Company accrued $102 (November 30, 2012 - $nil) in interest expense.

A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital.  Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.


During the year ended November 30, 2013 interest expense relating to the beneficial conversion feature of this convertible note of $16,000 (November 30, 2012 - $nil) was recorded in the financial statements, with a corresponding increase to additional paid in capital.


Promissory Note #22

On November 30, 2013 the Company entered into a Convertible Promissory Note with Direct Capital in the sum of $50,000.  The promissory note is unsecured, bears interest at 8% per annum, and matures on May 30, 2014.  The Conversion Price shall mean par .001 multiplied by the number of Common Stock converted at the time.  The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933.  During the year ended November 30, 2013, the Company accrued $102 (November 30, 2012 - $nil) in interest expense.

A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital.  Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.


During the year ended November 30, 2013 interest expense relating to the beneficial conversion feature of this convertible note of $50,000 (November 30, 2012 - $nil) was recorded in the financial statements, with a corresponding increase to additional paid in capital.


Note 9 Derivative Liabilities

 

The Company issued financial instruments in the form of convertible notes with embedded conversion features. Many of the convertible notes payable have conversion rates, which are indexed to the market value of the Companys stock price.

 

During the year ended November 30, 2013, the Company recorded derivative liabilities for embedded conversion features related to convertible notes payable of face value $159,000 (year ended November 30, 2012 - $117,100). During the year ended November 30, 2013, $49.340 (year ended November 30, 2012, $172,800) of convertible notes payable and accrued interest was converted into common stock of the Company. For the year ended November 30, 2013, the Company performed a final mark-to-market adjustment for the derivative liability related to the convertible notes of and the carrying amount of the derivative liability related to the conversion feature of $234,823 (year ended November 30, 2012 - $228,500) was reclassed to additional paid in capital on the date of conversion in the statement of shareholders deficit. During the year ended November 30, 2013, the Company recognized a loss of $107,920 (year ended November 2012 - $40,600) based on the change in fair value (mark-to market adjustment) of the derivative liability associated with the embedded conversion features in the accompanying statement of operations.




F- 23



These derivative liabilities have been measured in accordance with fair value measurements, as defined by GAAP ASC 815. The valuation assumptions are determined by Level 3 inputs. The following table represents the Companys derivative liability activity for the embedded conversion features discussed above:

 




November 30,


November 30,



2013


2012

Balance, beginning of year

 

 $                   58,200

 

 $               129,000

Initial recognition of derivative liability


                    159,000


                  117,100

Fair value change in derivative liability

 

                    107,920

 

                    40,600

Conversion of derivative liability to APIC


                  (234,823)


                (228,500)

Balance as of November 30, 2013

 

 $                   90,297

 

 $                 58,200


 

Note 10 Asset Retirement Obligations

 

During the period November 2007 to October 2009, the Company acquired in tranches a 50% working interest in the Hayter 10-8-40-1 W4M oil and gas well in Alberta Canada, known as the Hayter Prospect. During the year ended November 30, 2012, due to financial restrictions in the current capital markets, management determined the focus of the Company in the future would predominantly be the exploration and development of the Zoro Mineral Property, and as the Company had no current plans to further develop the Hayter property, the Company recorded an impairment provision of $135,427 during the fiscal year ended November 30, 2012, resulting in the book value of the Hayter prospect being $nil at November 30, 2012. As of November 30, 2013 and November 30, 2012, the Company determined the asset retirement obligation to be $18,861 and $16,845, respectively.

 

Total future asset retirement obligations were estimated by management based on the Companys net ownership interest, estimated costs to reclaim and abandon the wells and the estimated timing of the costs to be incurred in future periods. The Company has estimated the net present value of its total asset retirement obligations at February, 2013 to be $16,889 based on a total undiscounted liability of $17,057 (Cdn$17,500) in the Hayter Prospect, Alberta, Canada. These payments are expected to be made over the next seven years, with the majority of the cost incurred between 2016 and 2019.

 

The Companys credit adjusted risk free rate of 15% and an inflation rate of 8% were used to calculate the present value of the asset retirement obligation.

 



November 30,


November 30,



2013


2012

Balance, beginning of year

 

 $             16,845


 $                13,524

Liabilities incurred


                         -


                             -

Accretion expense

 

                  2,529


                     2,238

Effect of foreign exchange


                   (513)


                     1,083


 

 $             18,861


 $                16,845



Note 11 Capital Stock

 

Authorized

 

10,000,000 Preferred shares, par value $0.001 4,000,000 issued

(November 30, 2012 - none issued)

 

750,000,000 Common shares par value $0.10 3,004,610 issued

(November 30, 2012 1,054,169 shares issued)




F- 24



 

On June 6, 2013, the Board of Directors authorized a 100:1 reverse stock split of the common shares. The reverse stock split received regulatory approval on June 28, 2013. The record date for the reverse stock split was June 14, 2013. The authorized number of common shares remained unchanged. All references in the accompanying financial statements to the number of common shares have been restated to reflect the reverse stock split.

 

Issued

 

Preferred Stock

 

On May 14, 2013, the Company issued 4,000,000 preferred shares pursuant to the Mexican mineral property option agreement. Each share has an underlying voting right equivalent to 100 common shares, and is convertible into 100 common shares of the Company.

 

Common Stock

 

Between December 12, 2012 and November 30, 2013, the Company issued an aggregate of 245,868 common shares with an aggregate fair value of $100,200, upon the conversion of $50,000 of a convertible note, which was due upon demand.

 

Between January 12, 2013, and August 31, 2013, the Company issued 192,576 common shares with an aggregate fair value of $86,500, upon the conversion of accrued interest of $1,700 and $42,500 principal of a convertible note.

 

Between May 2, 2013 and August 31, 2013, the Company issued 189,679 common shares with an aggregate fair value of $51,300, upon the conversion of $25,900 of a convertible note.


Between June 1, 2013, and August 31, 2013, the Company issued 236,102 common shares upon the conversion of accrued interest of $900 and $16,600 principal of a convertible note.


Between September 1, 2013, and November 30, 2013, the Company issued 558,167 common shares upon the conversion of principal of $10,940 of a convertible note.


Note 12. Supplemental Disclosure with Respect to Cash Flows

 

During the year ended November 30, 2013, the following non-cash investing and financing activities occurred:

 


i)

4,000,000 preferred shares were issued with a fair value of $1,160,000 pursuant to a mineral property agreement.

 


ii)

An aggregate of 245,868 common shares were issued with a fair value of $100,200 upon the conversion into stock of $50,000 of the principal of a convertible note payable.

 


iii)

An aggregate of 192,576 common shares were issued with a fair value of $86,500 upon the partial conversion into stock of accrued interest of $1,700 and $42,500 principal of a convertible note payable.






iv)

An aggregate of 453,753 common shares were issued with a fair value of $70,532 upon the partial conversion into stock of accrued interest of $1,700 and $42,500 of the principal of a

convertible note payable.

 


v)

221,250 common shares were issued with a fair value of $50,888 to settle amounts owing to the President amounting to $22,125.

 


vi)

278,750 common shares were issued pursuant to a management fee contract with the President.




vii)


An aggregate of 558,167 common shares were issued with a fair value of $16,826 upon the partial conversion into stock of $10,940 of the principal of a convertible note payable.

 

During the year ended November 30, 2012, the following non-cash investing and financing activities occurred:

 


i)

26,919 common shares were issued pursuant to a consultancy agreement.

 


ii)

An aggregate of 24,865 common shares were issued with a fair value of $65,300 upon the conversion into stock of $33,800 of accrued interest and principal of a convertible note payable.


Note 13 Commitment

 



On May 5, 2012, the Company entered into a consultancy agreement with Primary Capital LLC. (Primary), whereby Primary would provide financial advisory and investment banking services to the Company for a period of two years commencing May 7, 2012. Pursuant to the agreement, the Company paid Primary a non-refundable signing fee of $10,000 and issued Primary common stock equivalent to 4.9% (the Applicable Percentage) of the common shares on a fully diluted basis after giving effect to the conversion of all outstanding derivative securities at the time of inception of the agreement.

 



Accordingly, on May 5, 2012, 26,919 common shares were issued with a fair value of $53,838.

 

Pursuant to the agreement should the Company issue further potentially dilutive derivative instruments, or issue stock from treasury at any time, then within 5 days of the end of the fiscal quarter in which such instruments or stock was issued, the Company will issue to Primary additional common shares (the Adjustment shares) such that Primary continues to hold common stock equivalent to the Applicable Percentage.

 

Should the Board of Directors grant options, warrants or other securities pursuant to a restricted stock purchase plan or stock option plan approved by the stockholders and Board of Directors of the Company, to employees or Directors such grants shall be considered Excluded Securities for the purposes of determining the Applicable Percentage and the calculation of Adjustment shares in future periods.

 

Also if the Company completes any financing during the engagement period and also within 2 years of the termination of the agreement with any party introduced to the Company by Primary, Primary will be entitled to:

 


i)

a cash fee of 8% of the gross proceeds of the financing,



ii)

a 5 year warrant to purchase that number of shares equal to 8% of the number of shares issued in the financing on the same terms as the financing. Any such warrant issued will be in a form provided by Primary and may include terminology allowing for full ratchet anti-dilution provisions, standard and cashless exercise provisions and the same registration rights as received by the original investors.

 

The agreement can be terminated by either party by providing written notice at any time after the first anniversary of the agreement if either party is in breach of the agreement and fails to cure such breach within 15 days after it receives notice of such breach. During the quarter ended May 31, 2013, the Company terminated the contract.

 

Note 14 Subsequent Events

 

 

Note 15 Prior Year Restatement

 


i)

Mineral Property Option Costs

 



The Company reviewed its accounting policy for the capitalization of mineral option costs, and has determined that the mineral option costs incurred in the year ended November 30, 2010, amounting to $59,600 were expensed, when they should have been capitalized and accordingly, the results for the year ended November 30, 2010, were restated. The effect of the restatement was to increase the value of the Mineral Property Option by $59,600 at November 30, 2010, 2011 and 2012 and to reduce the loss for the year ended November 30, 2010 by $59,600, resulting in the accumulated deficit being reduced by $59,600 at November 30, 2010, 2011 and 2012, respectively.

 




ii)

Convertible Notes Payable

 



The Company has determined that certain transactions relating to the convertible notes payable were not correctly accounted for in the three and six month periods ended May 31, 2012 and accordingly the results of the six and three month periods ended May 31, 2012 have been restated.

 

The Company did not recognize any embedded derivative liabilities arising upon the inception or during the term of certain convertible notes payable. As a result of this, at May 31, 2012, the value of the convertible notes on the balance sheet was overstated by $150,724 and derivative liabilities were understated by $170,900.

 

In the condensed consolidated statement of loss, for the six month period ended May 31, 2012 accretion of convertible debt and interest discount expense was overstated by $68,311, interest expense on beneficial conversion feature of convertible notes was overstated by $140,000 gain on elimination of convertible debt was overstated by $21,888 and interest expense was understated by $162,868. Finally, the loss on change in fair value of derivative liability was understated by $40,200.

 

In the condensed consolidated statement of loss, for the three month period ended May 31, 2012 accretion of convertible debt and interest discount expense was overstated by $30,630, interest expense on beneficial conversion feature of convertible notes was overstated by $50,000 gain on elimination of convertible debt was overstated by $21,888 and interest expense was understated by $66,434. Finally the loss on change in fair value of derivative liability was understated by $21,000.

 


iii)

Accumulated Other Comprehensive Income

 



The Company also determined the accounting for foreign exchange with respect to the translation adjustments arising on the translation of its Canadian subsidiary had been incorrectly recorded. Such gains or losses arising had been included in the operations of the year, rather than being treated as elements of other comprehensive income, which forms a separate part of equity.

 



As a result of the restatement, the Company has increased the balance of other comprehensive income at November 30, 2011 by $6,388 and also increased the accumulated deficit by a corresponding amount. During the six month period ended May 31, 2012, foreign exchange charged to the income statement was reduced by $830 and a corresponding reduction to accumulated comprehensive income was recorded. During the three month period ended May 31, 2012, foreign exchange credited to the income statement was reduced by $454 and a corresponding increase to accumulated comprehensive income was recorded.

 

The net effect of the above restatements at May 31, 2012 is to increase the carrying value of the mineral property by $59,600 to $139,600, reduce the carrying value of the convertible notes payable from $357,432 to $206,708 and to increase the derivative liability from $nil to $170,900. Accumulated other comprehensive income increased from $nil to $6,561. Also the previously reported loss for the six month period ended May 31, 2012, was increased by $16,095 to $416,491 and the previously reported loss for the three month period ended May 31, 2012 increased by $29,145 to $221,476. The previously reported accumulated deficit at May 31, 2012 increased by 44,176 from $3,300,141 to $3,255,965.






F- 14



ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.


CHANGES IN REGISTRANTS CERTIFYING ACCOUNTANT


(A)           PREVIOUS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 



(i)  

On October 21, 2013, Anton & Chia LLP (the Former Accountant) resigned as the independent registered public accounting firm of the Company.

 



(ii)  

The Companys Board of Directors participated in and approved the decision to accept the Former Accountants resignation.

 



(iii)  

The reports of Former Accountant on the Companys consolidated unaudited financial statements for the audit as of November 30, 2012, and for the interim periods through August 31, 2013, contained no adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principle except to indicate that there was substantial doubt about the Companys ability to continue as a going concern.

 



(iv)  

The Company has provided the Former Accountant with a copy of the disclosures it is making in response to this Item.  The Company has requested the Former Accountant to furnish a letter addressed to the Commission stating whether it agrees with the statements made by the Company and, if not, stating the respects in which it does not agree.  The Company has filed the letter furnished by the Former Accountant as an exhibit as part of its Current Report on Form 8-K that was filed with the SEC on October 25, 2013, and is incorporated by reference herein.


 (B)           NEW INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

On November 18, 2013, the Company engaged W. T. Uniack & Co. CPAs as its new independent registered public accounting firm.  During the two most recent fiscal years and through November 18, 2013, the Company had not consulted with W. T. Uniack & Co. CPAs regarding any of the following:


1.

The application of accounting principles to a specific transaction, either completed or proposed;


2.

2. The type of audit opinion that might be rendered on the Companys consolidated financial statements, and none of the following was provided to the Company (a) a written report, or (b) oral advice that W. T. Uniack & Co. CPAs concluded was an important factor considered by the Company in reaching a decision as to accounting, auditing or financial report issues; or


3.

Any matter that was the subject of a disagreement, as that term is defined in item 304(a)(1)(iv) of Regulation S-K.


ITEM 9A. CONTROLS AND PROCEDURES.


Disclosure Controls and Procedures


The Company has adopted and maintains disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in the reports filed under the Exchange Act, such as this annual report, is collected, recorded, processed, summarized and reported within the time periods specified in the rules of the SEC.  The Companys disclosure controls and procedures are also designed to ensure that such information is accumulated and communicated to management to allow timely decisions regarding required



15



disclosure.  As required under Exchange Act Rule 13a-15, the Companys management, including the Chief Executive Officer who also serves as our Principal Financial Officer, has conducted an evaluation of the effectiveness of disclosure controls and procedures as of the end of the period covered by this report.  Inasmuch as we only have one individual serving as our officer, director and employee we have determined that the Company has, per se, inadequate controls and procedures over financial reporting.


The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: domination of management by a single individual without adequate compensating controls, inadequate segregation of duties consistent with control objectives, and lack of an audit committee. These material weaknesses were identified by our Chief Executive who also serves as our Financial Officer in connection with the above annual evaluation.


Management believes that the material weaknesses did not have an effect on our financial results. However, management believes that the lack of a functioning audit committee and inadequate segregation of duties results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods.


Management recognizes that its controls and procedures would be substantially improved if we had an audit committee and two individuals serving as officers and as such is actively seeking to remediate this issue. Management believes that the material weakness in its controls and procedures referenced did not have an effect on our financial results.  Based on that evaluation, the Chief Executive Office who also serves as our Principal Financial Officer concluded that the disclosure controls and procedures are ineffective.


Managements Report on Internal Control over Financial Reporting


The Companys management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Exchange Act Rule 13a-15(f).  The Companys internal control over financial reporting is designed to provide reasonable assurance to the Companys management and board of directors regarding the preparation and fair presentation of published financial statements.  Management conducted an assessment of the Companys internal control over financial reporting based on the framework and criteria established by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control Integrated Framework.  Based on the assessment, management concluded that, as of November 30, 2013, the Companys internal control over financial reporting is ineffective based on those criteria.


The Companys management, including its Chief Executive Officer, who also serves as our Principal Financial Officer, does not expect that the Companys disclosure controls and procedures and its internal control processes will prevent all error and all fraud.  A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.  Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs.  Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of error or fraud, if any, within the Company have been detected.  These inherent limitations include the realities that judgments in decision-making can be faulty, and that the breakdowns can occur because of simple error or mistake.  Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control.  The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.  Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.  Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and may not be detected.  However, these inherent limitations are known features of the financial reporting process.  Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.


Managements Remediation Initiatives


In an effort to remediate the identified material weaknesses and other deficiencies and enhance our internal controls, we have initiated, or plan to initiate, the following series of measures:




16



We will create a position to segregate duties consistent with control objectives and will increase our personnel resources and technical accounting expertise within the accounting function when funds are available to us. And, we plan to appoint one or more outside directors to our board of directors who shall be appointed to an audit committee resulting in a fully functioning audit committee who will undertake the oversight in the establishment and monitoring of required internal controls and procedures such as reviewing and approving estimates and assumptions made by management when funds are available to us.


Management believes that the appointment of one or more outside directors, who shall be appointed to a fully functioning audit committee, will remedy the lack of a functioning audit committee and a lack of a majority of outside directors on our Board.


We will work as quickly as possible to implement these initiatives; however, the lack of adequate working capital and positive cash flow from operations will likely slow this implementation.


Changes in Internal Control


There have been no changes in internal controls over the financial reporting that occurred during the period ending November 30, 2013,  that have materially affected, or are reasonably likely to materially affect our internal controls over financial reporting.


This annual report does not include an attestation report of the Companys registered public accounting firm regarding internal control over financial reporting.  Managements report was not subject to attestation by the Companys registered public accounting firm pursuant to temporary rules of the SEC that permit the Company to provide only managements report in this annual report.


ITEM 9B. OTHER INFORMATION.


Name Change and Reverse Stock Split


Effective June 28, 2013, the Company with the approval from the Financial Industry Regulatory Authority (FINRA), the Company has among other things (i) changed its name from Force Energy Corp. to Force Minerals Corporation, and (ii) authorized and approved a reverse stock split of One for One Hundred (1:100) of our total issued and outstanding shares of common stock (the "Stock Split"). The Stock Split decreased our total issued and outstanding shares of common stock from 230,992,890 to 2,309,928 shares of common stock. The common stock will continue to be $0.001 par value. The shareholder record date was June 14, 2013. The Stock Split shares are payable upon surrender of certificates to the Company's transfer agent. Fractional shares will be rounded upward.


Certificate of Designation


On October 28, 2013, the Board of Directors of the Company with the approval of a majority vote of its shareholders, designated four million (4,000,000) shares of the ten million (10,000,000) authorized preferred stock of our company as Series A Preferred Stock by filing a Certificate of Designation with the Secretary of State of the State of Nevada. The Series A Preferred Stock has 100 votes per share and is convertible into shares of our common stock. The Holders of the Series A Preferred Stock, may not convert and hold more than 9.9% of the common stock outstanding at any one time.


Convertible Promissory Notes:


On September 1, 2013 the Company entered into a Convertible Promissory Note with Direct Capital Group Inc. in the sum of $11,000.00 with a March 1, 2014 maturity date.


On October 1, 2013 the Company entered into a Convertible Promissory Note with Direct Capital Group Inc. in the sum of $11,000.00 with an April 1, 2014 maturity date.




17



On October 11, 2013, the Company authorized and directed to amend and restate the $20,000.00 note originally issued to Geotech International, Ltd on February 15, 2012, Promissory Note #6, into a new promissory note to Direct Capital Group Inc. in the amount of $20,000.00 to provide conversion features equal to the lower of (i) $0.001 per share or (ii) 60% of the lowest closing bid price of the last day of 5 trading days prior to conversion.


On October 11, 2013, the Company authorized and directed to amend and restate the $20,000.00 note originally issued to Pea Soup Inc. on February 15, 2012, Promissory Note #7, into a new promissory note to Direct Capital Group Inc. in the amount of $20,000.00 to provide conversion features equal to the lower of (i) $0.001 per share or (ii) 60% of the lowest closing bid price of the last day of 5 trading days prior to conversion.


On October 11, 2013, the Company authorized and directed to amend and restate the $20,000.00 note originally issued to Watermark Holdings Inc. on February 15, 2012, Promissory Note #8, into a new promissory note to Direct Capital Group Inc. in the amount of $20,000.00 to provide conversion features equal to the lower of (i) $0.001 per share or (ii) 60% of the lowest closing bid price of the last day of 5 trading days prior to conversion.


On November 1, 2013, the Company entered into a Convertible Promissory Note with Direct Capital Group Inc. in the sum of $16,000 with a May 1, 2014 maturity date.


On November 30, 2013, the Company entered into a Convertible Promissory Note with Direct Capital Group Inc. in the sum of $50,000 with a May 30, 2014 maturity date.


On December 1, 2013, the Company entered into a Convertible Promissory Note with Direct Capital Group Inc. in the sum of $16,000 with a June 1, 2014 maturity date.


On January 1, 2014, the Company entered into a Convertible Promissory Note with Direct Capital Group Inc. in the sum of $16,000 with a July 1, 2014 maturity date.


On February 1, 2014, the Company entered into a Convertible Promissory Note with Direct Capital Group Inc. in the sum of $16,000 with an August 1, 2014 maturity date.


PART III


ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS.


Identification of Directors and Executive Officers


The following table sets forth the names and ages of our current directors and executive officers:






Name

Age

Position with the Company

Position Held Since

Tim DeHerrera

56

President, Secretary, Treasurer, Chairman,Director

July 21, 2010


The Board of Directors has no nominating, audit or compensation committee at this time.


Term of Office


Each director is elected by the Board of Directors and serves until his or her successor is elected and qualified, unless he or she resigns or is removed earlier. Each of our officers is elected by the Board of Directors to a term of one (1) year and serves until his or her successor is duly elected and qualified, or until he or she is earlier removed from office or resigns.


Background and Business Experience


The business experience during the past five years of the person presently listed above as an Officer or Director of the Company is as follows:




18



Tim DeHerrera:Mr. DeHerrera currently serves as a director of the publicly held corporation Grid Petroleum Corp. He was President of Bonfire Productions Inc. from September 2009 until May 2010. During January 2008 until January 2010, he was also President and Chairman of the Intervision Network Corporation. Intervision Network, was a technology business in IPTV broadcasting and related live Internet-based multimedia transmission technologies including a global content delivery network. From May 2006 until December 2007 he was President of Atlantis Technology Group a technology based company. Lastly, during the past several years he has been a consultant to several other companies.


Identification of Significant Employees


We have no significant employees, other than Tim DeHerrera, our President, Treasurer, Secretary, Director and Chairman.


Family Relationship


We currently do not have any officers or directors of our Company who are related to each other.


Involvement in Certain Legal Proceedings


During the past ten years no director, executive officer, promoter or control person of the Company has been involved in the following:

(1)

A petition under the Federal bankruptcy laws or any state insolvency law which was filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing;

(2)

Such person was convicted in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);

(3)

Such person was the subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from, or otherwise limiting, the following activities:

i.

Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity;

ii.

Engaging in any type of business practice; or

iii.

Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws;

(4)

Such person was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in paragraph (f)(3)(i) of this section, or to be associated with persons engaged in any such activity;

(5)



19



Such person was found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated;

(6)

Such person was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated;

(7)

Such person was the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of:

i.

Any Federal or State securities or commodities law or regulation; or

ii.

Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or

iii.

Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or

(8)

Such person was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

Audit Committee and Audit Committee Financial Expert

The Company does not have an audit committee or an audit committee financial expert (as defined in Item 407 of Regulation S-K) serving on its Board of Directors. All current members of the Board of Directors lack sufficient financial expertise for overseeing financial reporting responsibilities. The Company has not yet employed an audit committee financial expert on its Board due to the inability to attract such a person.


The Company intends to establish an audit committee of the Board of Directors, which will consist of independent directors. The audit committees duties will be to recommend to the Companys Board of Directors the engagement of an independent registered public accounting firm to audit the Companys financial statements and to review the Companys accounting and auditing principles. The audit committee will review the scope, timing and fees for the annual audit and the results of audit examinations performed by the internal auditors and independent registered public accounting firm, including their recommendations to improve the system of accounting and internal controls. The audit committee will at all times be composed exclusively of directors who are, in the opinion of the Companys Board of Directors, free from any relationship which would interfere with the exercise of independent judgment as a committee member and who possess an understanding of financial statements and generally accepted accounting principles.


Code of Ethics


We adopted a Code of Ethics applicable to all of our directors, officers, employees and consultants, which is a code of ethics as defined by applicable rules of the SEC. Our Code of Ethics was attached as an exhibit to our annual report filed on Form 10-K on March 15, 2009. If we make any amendments to our Code of Ethics other than technical, administrative, or other non-substantive amendments, or grant any waivers, including implicit waivers, from a provision of our Code of Ethics to our chief executive officer, chief financial officer, or certain other finance



20



executives, we will disclose the nature of the amendment or waiver, its effective date and to whom it applies in a Current Report on Form 8-K filed with the SEC.




Compliance with Section 16(a) of the Exchange Act


Section 16(a) of the Securities Exchange Act of 1934 requires our directors and executive officers and persons who beneficially own more than ten percent of a registered class of our equity securities to file with the SEC initial reports of ownership and reports of change in ownership of common stock and other equity securities of the Company. Officers, directors and greater than ten percent stockholders are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file. Based solely upon a review of Forms 3 and 4 and amendments thereto furnished to us under Rule 16a-3(e) during the year ended November 30, 2013, Forms 5 and any amendments thereto furnished to us with respect to the year ended November 30, 2013, and the representations made by the reporting persons to us, we believe that during the year ended November 30, 2013, our executive officers and directors and all persons who own more than ten percent of a registered class of our equity securities complied with all Section 16(a) filing requirements.


ITEM 11. EXECUTIVE COMPENSATION


The table set forth below summarizes the annual and long-term compensation for services in all capacities to us payable to our officers and directors for the fiscal year ended November 30, 2013. Our Board of Directors may adopt an incentive stock option plan for our executive officers that would result in additional compensation.


Summary Compensation Table


Name

and

Principal

Position

Fiscal

Year

Ended

11/30


Salary

($)



Bonus

($)



Stock

Awards

($)



Option

Awards

($)



Non-Equity

Incentive

Plan

Compensation

($)



Nonqualified

Deferred

Compensation

Earnings

($)



All Other Compensation

($)



Total

($)


Tim DeHerrera

Director (1)

2013

$


120,000




-0-




-95,400-




-0-




-0-




-0-




-$90,000-



$

305,400



2012

$


111,275




-0-




75,000




-0-




-0-




-0-




-0-




$186,275



(1)

The Companys officer and director currently devote approximately 30-40 hours per week to manage the affairs of the Company, including, but not limited to the upkeep of Force Minerals Corp., and the research and development associated with expanding the Company to new markets. Mr. DeHerrera is the President, Secretary, Treasurer, Director and Chairman of the Company.


(2)

Narrative Disclosure to Summary Compensation Table


On August 10, 2010, we entered into a written Employment Agreement (the Agreement) with Tim DeHerrera (DeHerrera). Pursuant to the terms and conditions of the Agreement:

 

·

For a 12-month period commencing as of July 23, 2010, DeHerrera will serve as our President and Chief Executive Officer and as a member of the Board of Directors.

·

During his tenure with us, DeHerrera responsibilities will include the following:

o

Development of Management Strategy and Corporate Vision

o

Review and Development of Business Strategies

o

Organizational and Personnel Development

o

General Review and Development of Corporate Material

o

Corporate and Client Restructuring

o

Review and assisting in preparation of corporate filing

·



21



DeHerrera will earn an annual salary of $99,500 payable as follows:

o

$2,500 per month for the first three months of employment; $4,000 per month for months 4-6 of employment; and $5,000 per month for the final six months of the employment term. If we do not possess the capital to make cash payments to DeHerrera, then the monies owed him shall accrue as insider debt, which DeHerrera will have the option to convert into shares of our common stock at $.10 per share; and

o

2,500,000 shares of our stock which was payable upon execution of the Agreement. If the Agreement is terminated by either DeHerrera or us, then DeHerrera shall owe to us an amount of shares equal to 100,000 shares multiplied by the number of months he failed to work for us during that time period from July 23, 2010 to July 22, 2011.

·

The Agreement may be terminated with 30 days notice by either us or DeHerrera.


On July 18, 2011, we entered into a new employment contract with DeHerrera as President, which expires July 18, 2013. Pursuant to the contract, DeHerrera received 2,500,000 common shares having a fair value of $125,000. DeHerrera will receive $7,500 per month for months 13-24 of the contract. Unless the contract is terminated by either party giving 45 days written notice the contact will automatically renew. Should the contract be renewed then DeHerrera will receive 2,500,000 shares of common stock and an annual increase of $2,500 per month upon each renewal. If the Company does not have sufficient cash resources to settle the cash element of the contract, then at the request of DeHerrera any accrued unpaid fees may be converted into common stock at $0.025 per share.

 

On July 16, 2012, we entered into an addendum to the contract which expires on July 15, 2014. Pursuant to the contract DeHerrera received 7,500,000 common shares and will continue to receive 7,500,000 common shares upon the anniversary of the addendum. DeHerrera will receive $10,000 per month for months 25-36 of the contract and an annual monthly increase of $2,500 per month thereafter. Unless the contract is terminated by either party giving 45 days written notice the contact will automatically renew. If we do not have sufficient cash resources to settle the cash element of the contract, then at the request of DeHerrera any accrued unpaid fees may be converted into common stock at $0.01 per share.


Outstanding Equity Awards at Fiscal Year-End


No executive officer received any equity awards, or holds exercisable or exercisable options, as of the year ended November 30, 2013.


OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

OPTION AWARDS

STOCK AWARDS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Name










Number of

Securities

Underlying

Unexercised

Options

(#)

Exercisable










Number of

Securities

Underlying

Unexercised

Options

(#)

Unexercisable






Equity

Incentive

Plan

Awards:

Number of

Securities

Underlying

Unexercised

Unearned

Options

(#)













Option

Exercise

Price

($)













Option

Expiration

Date








Number

of

Shares

or Units

of

Stock That

Have

Not

Vested

(#)




Market

Value

of

Shares

or

Units

of

Stock

That

Have

Not

Vested

($)


Equity

Incentive

Plan

Awards:

Number

of

Unearned

Shares,

Units or

Other

Rights

That Have

Not

Vested

(#)

EquityIncentivePlanAwards:Market orPayoutValue ofUnearnedShares,Units orOtherRightsThatHave Not Vested(#)

 

 

Tim DeHerrera

-

-

-

-

-

-

-

-

-

 

 








22



Long-Term Incentive Plans


There are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers.


Compensation Committee


We currently do not have a compensation committee of the Board of Directors. The Board of Directors as a whole determines executive compensation.


Compensation of Directors


Our directors receive no extra compensation for their service on our Board of Directors.


Indemnification


No director of the Company will have personal liability to the Company or any of its stockholders for monetary damages for breach of fiduciary duty as a director involving any act or omission of any such director since provisions have been made in the Articles of Incorporation limiting such liability.  The foregoing provisions shall not eliminate or limit the liability of a director (i) for any breach of the director's duty of loyalty to the Company or its stockholders, (ii) for acts or omissions not in good faith or, which involve intentional misconduct or a knowing violation of law, (iii) under applicable Sections of the Nevada Revised Statutes, (iv) the payment of dividends in violation of Section 78.300 of the Nevada Revised Statutes or, (v) for any transaction from which the director derived an improper personal benefit.


The Bylaws provide for indemnification of the directors, officers, and employees of the Company in most cases for any liability suffered by them or arising out of their activities as directors, officers, and employees of the Company if they were not engaged in willful misfeasance or malfeasance in the performance of his or her duties; provided that in the event of a settlement the indemnification will apply only when the Board of Directors approves such settlement and reimbursement as being for the best interests of the Corporation.  The Bylaws, therefore, limit the liability of directors to the maximum extent permitted by Nevada law (Section 78.751).


ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.


Security Ownership of Management


The following table sets forth certain information concerning the number of shares of our common stock owned beneficially as of February 21, 2013, by: (i) each of our directors; (ii) each of our named executive officers; and (iii) each person or group known by us to beneficially own more than 5% of our outstanding shares of common stock. Unless otherwise indicated, the shareholders listed below possess sole voting and investment power with respect to the shares they own.


Name and Address of Beneficial Owners of Common Stock

Title of Class

Amount and Nature of Beneficial Ownership1

Percentage of Common Stock2

 

 

 

Tim DeHerrera

6302 Mesedge Drive,

Colorado Springs, CO, 80919

Common Stock

614,383

20.49%

DIRECTORS AND OFFICERS TOTAL


614,383

20.49%

 




5% SHAREHOLDERS




None




 


1.

The number and percentage of shares beneficially owned is determined under rules of the SEC and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rules, beneficial ownership includes any shares as to which the individual has sole or shared voting power or investment power and also any shares which the individual has the right to acquire within 60 days through the exercise of any stock option or other right. The persons named in the table have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them, subject to community property laws where applicable and the information contained in the footnotes to this table.




2.

The percentage shown is based on denominator of 4,393,194 shares of common stock issued and outstanding for the company as of February 21, 2014.


Changes in Control


There are no present arrangements or pledges of the Companys securities, which may result in a change in control of the Company.


ITEM 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.


Related Party Transactions


None of the directors or executive officers of the Company, nor any person who owned of record or was known to own beneficially more than 5% of the Companys outstanding shares of its Common Stock, nor any associate or affiliate of such persons or companies, has any material interest, direct or indirect, in any transaction that has occurred during the past fiscal year, or in any proposed transaction, which has materially affected or will affect the Company.


With regard to any future related party transaction, we plan to fully disclose any and all related party transactions in the following manor:

 

·

Disclosing such transactions in reports where required;

·

Disclosing in any and all filings with the SEC, where required;

·

Obtaining disinterested directors consent; and

·

Obtaining shareholder consent where required.


Director Independence


For purposes of determining director independence, we have applied the definitions set out in NASDAQ Rule 5605(a)(2). The OTCBB on which shares of Common Stock are quoted does not have any director independence requirements. The NASDAQ definition of Independent Officer means a person other than an Executive Officer or employee of the Company or any other individual having a relationship, which, in the opinion of the Company's Board of Directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.


According to the NASDAQ definition,Tim DeHerrera is not an independent director because he is also an executive officer of the Company.


Review, Approval or Ratification of Transactions with Related Persons




24



We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.




ITEM 14.PRINCIPAL ACCOUNTING FEES AND SERVICES.









Year Ended

November 30, 2013


Year Ended

November 30, 2012

Audit fees

$

39,928

$

22,825

Audit-related fees

$

0

$

0

Tax fees

$

0

$

0

All other fees

$

0

$

0

Total

$

39,928

$

22,825


Audit Fees


During the fiscal years ended November 30, 2013, we incurred approximately $39,928 in fees to our principal independent accountants for professional services rendered in connection with the audit and reviews of our financial statements for fiscal years ended November 30, 2013.


During the fiscal year ended November 30, 2012, we incurred approximately $22,825 in fees to our principal independent accountants for professional services rendered in connection with the audit and reviews of our financial statements for fiscal year ended November 30, 2012.


Audit-Related Fees


The aggregate fees billed during the fiscal years ended November 30, 2013and 2012 for assurance and related services by our principal independent accountants that are reasonably related to the performance of the audit or review of our financial statements (and are not reported under Item 9(e)(1) of Schedule 14A was $nil and $nil, respectively.


Tax Fees


The aggregate fees billed during the fiscal years ended November 30, 2013and 2012 for professional services rendered by our principal accountant tax compliance, tax advice and tax planning were $nil and $nil, respectively.


All Other Fees


The aggregate fees billed during the fiscal years ended November 30, 2013and 2012 for products and services provided by our principal independent accountants (other than the services reported in Items 9(e)(1) through 9(e)(3) of Schedule 14A was $0 and $0, respectively.


PART IV

ITEM 15.EXHIBITS.


(a)Exhibits


Exhibit Number

Description of Exhibit


Filing

3.1

Articles of Incorporation


Filed with the SEC on June 5, 2006 as part of our Registration of Securities on Form SB-2.

3.1a

Amended Articles of Incorporation


Filed with the SEC on January 4, 2007, on our Current Report on Form 8-K.

3.1b

Amended Articles of Incorporation


Filed with the SEC on June 13, 2013, as part of our Current Report on Form 8-K.

3.2

Bylaws


Filed with the SEC on June 5, 2006 as part of our Registration of Securities on Form SB-2.

3.3

Certificate of Designation


Filed with the SEC on November 1, 2013 as part of our Current Report on Form 8-K.

10.1

Property Option Agreement by and amongst FRC Exploration, Ltd., Ram Exploration Ltd., and Mr. Dorian Leslie, dated May 24, 2006.


Filed with the SEC on June 5, 2006 as part of our Registration of Securities on Form SB-2.

10.2

Participation Agreement by and between County Line Energy Corp., and the Company, dated December 21, 2006.


Filed with the SEC on January 4, 2007, on our Current Report on Form 8-K.

10.3

Dilution Agreement by and between the Company and County Line Energy Corp.,dated December 22, 2006.


Filed with the SEC on January 4, 2007, on our Current Report on Form 8-K.

10.4

Participation Option Agreement by and between County Line Energy Corp., and the Company, dated November 30, 2007.


Filed with the SEC on December 19, 2007, on our Current Report on Form 8-K.

10.5

Letter Agreement by and between the Company and G2 Petroleum, LLC, dated March 11, 2008.


Filed with the SEC on April 4, 2008 as part of our Current Report on Form 8-K.

10.6

Promissory Note by and between the Company and G2 Petroleum, LLC, dated March 14, 2008.


Filed with the SEC on April 4, 2008 as part of our Current Report on Form 8-K.

10.7

Letter of Intent to Farmout by and between the Company and Desert Mining, Inc., dated April 17, 2008.


Filed with the SEC on April 4, 2008 as part of our Current Report on Form 8-K.

10.8

Advisory and Business Consulting Services Agreement by and between the Company and Robert B. Perry, dated April 16, 2008.


Filed with the SEC on May 1, 2008, as part of our Current Report on Form 8-K.

10.9

Advisory and Business Consulting Services Agreement by and between the Company and Leon Hinton, dated April 16, 2008.


Filed with the SEC on May 1, 2008 as part of our Current Report on Form 8-K.

10.10

Advisory and Business Consulting Services Agreement by and between the Company and Bourgeois Energy, Inc., dated April 16, 2008.


Filed with the SEC on May 1, 2008, as part of our Current Report on Form 8-K.

10.11

Loan Agreement by and between the Company and G2 Petroleum, LLC, dated March 11, 2009.


Filed with the SEC on March 17, 2009, as part of our Annual Report on Form 10-K.

10.12

Lease Agreement by and between the Company and TEG, Inc., dated September 11, 2008.


Filed with the SEC on March 17, 2009, as part of our Current Report on Form 8-K.

10.13

Assignment Agreement by and between the Company and G2 Petroleum, LLC, dated June 20, 2009.


Filed with the SEC on July 15, 2009 as part of our Quarterly Report on Form 10-Q.

10.14

Assignment Agreement by and between the Company and G2 Petroleum, LLC, dated September 16, 2009.


Filed with the SEC on September 24, 2009, as part of our Current Report on Form 8-K.

10.15

Addendum to Participation Agreement by and between the Company and County Line Energy, Corp., dated October 16, 2009.


Filed with the SEC on October 23, 2009, as part of our Quarterly Report on Form 10-Q.

10.16

Share Issuance Agreement by and between the Company and Villa Atmu S.A., dated November 16, 2009.


Filed with the SEC on November 24, 2009, as part of our Current Report on Form 8-K.

10.17

Amendment Agreement by and between the Company and County Line Energy, Corp., dated February 1, 2010


Filed with the SEC on March 15, 2010 as part of our Annual Report on Form 10-K.

10.18

Commodity-Industry Analyst Agreement by and between the Company and Michael Mathot, dated July 23, 2010.


Filed with the SEC on July 28, 2010, as part of our Current Report on Form 8-K.

10.19

Employment Agreement by and between the Company and Tim DeHerrera, dated August 10, 2010.


Filed with the SEC on August 16, 2010 as part of our Current Report on Form 8-K.

10.20

Mineral Property Option Agreement by and between the Company and Dalton Dupasquier, dated July 6, 2010.


Filed with the SEC on August 31, 2010 as part of our Current Report on Form 8-K.

10.21

Debt Settlement and Subscription Agreement by and between the Company and RCapital Management Ltd., dated August 3, 2010.


Filed with the SEC on September 10, 2010, as part of our Current Report on Form 8-K.

10.22

Separation Agreement by and between the Company and Michael Mathot, dated December 31, 2010.


Filed with the SEC on January 3, 2011, as part of our Current Report on Form 8-K.

10.23

Employment Agreement by and between the Company and Tim DeHerrera, dated July 18, 2011.


Filed with the SEC on February 23, 2012 as part of our Annual Report on Form 10-K.

10.24

Mineral Property Acquisition Agreement, by and between the Company, and Highlander Overseas, Inc. regarding the purchase of the La Predilecta Property, dated May 14, 2013


Filed with the SEC on June 4, 2013 as part of our Current Report on Form 8-K.

10.25

Second Addendum to Employment Agreement by and between the Company and Tim DeHerrera, dated May 30, 2013.


Filed herewith.

10.26

Promissory Note by and between the Company and Direct Capital Group, Inc., dated June 1, 2013.


Filed with the SEC on October 21, 2013, as part of our Current Report on Form 8-K.

10.27

Promissory Note by and between the Company and Direct Capital Group, Inc., dated July 1, 2013.


Filed with the SEC on October 21, 2013, as part of our Current Report on Form 8-K.

10.28

Promissory Note by and between the Company and Direct Capital Group, Inc., dated August 1, 2013.


Filed with the SEC on October 21, 2013, as part of our Current Report on Form 8-K.

10.29

Promissory Note by and between the Company and Syndication Capital, LLC., dated August 7, 2013.


Filed with the SEC on October 21, 2013, as part of our Current Report on Form 8-K.

10.30

Promissory Note by and between the Company and Direct Capital Group, Inc., dated September 1, 2013.


Filed with the SEC on October 21, 2013, as part of our Current Report on Form 8-K.

10.31

Promissory Note by and between the Company and Direct Capital Group, Inc., dated October 1, 2013.


Filed with the SEC on October 21, 2013, as part of our Current Report on Form 8-K.

10.32

Assignment of a Convertible Redeemable Note in the Company, dated February 15, 2012, by and between Geotech International Ltd., and Direct Capital Group, Inc., dated October 11, 2013.


Filed with the SEC on October 21, 2013, as part of our Current Report on Form 8-K.

10.33

Assignment of a Convertible Redeemable Note in the Company, dated February 15, 2012, by and between Pea Soup, Inc., and Direct Capital Group, Inc., dated October 11, 2013.


Filed with the SEC on October 21, 2013, as part of our Current Report on Form 8-K.

10.34





Assignment of a Convertible Redeemable Note in the Company, dated February 15, 2012, by and between Watermark Holdings, Inc., and Direct Capital Group, Inc., dated October 15, 2013.



Filed with the SEC on October 21, 2013, as part of our Current Report on Form 8-K.

10.35


Promissory Note by and between the Company and Direct Capital Group Inc., dated November 1, 2013.


Filed herewith.

10.36

Promissory Note by and between the Company and Direct Capital Group Inc., dated November 30, 2013.


Filed herewith.

10.37

Promissory Note by and between the Company and Direct Capital Group Inc., dated December 1, 2013.


Filed herewith.

10.38

Promissory Note by and between the Company and Direct Capital Group Inc., dated January 1, 2014.


Filed herewith.

10.39

Promissory Note by and between the Company and Direct Capital Group Inc., dated February 1, 2014.


Filed herewith.

16.01

Letter from John Kinross-Kennedy CPA Accountants, dated January 2, 2013.


Filed with the SEC on January 3, 2013 as part of Current Report on Form 8-K.

16.02

Letter from Anton & Chia LLP., dated October 25, 2013.


Filed with the SEC on October 25, 2013 as part of Current Report on Form 8-K.

21.1

List of Subsidiaries


Filed with the SEC on June 5, 2006 as part of our Registration of Securities on Form SB/2.

31.01

Certification of Principal Executive Officer Pursuant to Rule 13a-14


Filed herewith.

31.02

Certification of Principal Financial Officer Pursuant to Rule 13a-14


Filed herewith.

32.01

Certification of CEO and CFO Pursuant to Section 906 of the Sarbanes-Oxley Act


Filed herewith.

101.INS*

XBRL Instance Document


Furnished herewith.

101.SCH*

XBRL Taxonomy Extension Schema Document


Furnished herewith.

101.CAL*

XBRL Taxonomy Extension Calculation Linkbase Document


Furnished herewith.

101.LAB*

XBRL Taxonomy Extension Labels Linkbase Document


Furnished herewith.

101.PRE*

XBRL Taxonomy Extension Presentation Linkbase Document


Furnished herewith.

101.DEF*

XBRL Taxonomy Extension Definition Linkbase Document


Furnished herewith.


*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 Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.


SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


FORCE MINERALS CORP.


Dated: March17, 2014

/s/ Tim DeHerrera

By: Tim DeHerrera



28



Its: President, Principal Executive Officer & Principal Financial Officer (Principal Accounting Officer)


Pursuant to the requirement of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated:



Dated: March17, 2014

/s/ Tim DeHerrera

Tim DeHerrera Chairman and Director



29