XOTC:SVADE Annual Report 10-K/A Filing - 6/30/2012

Effective Date 6/30/2012

UNITED STATES

SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549


FORM 10-K/A-2


 [X]

ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended June 30, 2012


[   ]

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

For the transition period from _________________ to _________________


Commission file number 333-153626


SILVERTON ADVENTURES, INC.

(Exact name of registrant as specified in its charter)



Nevada

80-5072317

(State or jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)


6283-B South Valley View Boulevard

Las Vegas, Nevada 89118

(Address of principal executive offices)


(702) 876-1539

(Issuer's telephone number)


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


Securities registered under Section 12(b) of the Exchange Act: None


Securities registered under Section 12(g) of the Exchange Act:  Common Stock, Par Value $0.001


Indicate by check mark if the registrant is a well-season issuer, as defined in Rule 405 of the Securities Act. [  ] Yes    [X] No


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

[X] Yes [  ] No  


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 the reporting requirements for the past 90 days. [X ] Yes [   ] No


Indicate by check mark if disclosure of delinquent filers in response to Item 405 of Regulation S-K (Section 229.405 of this chapter) is not contained herein, and will not be contained, to the best knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K/A or any amendment to this Form 10-K/A-2. [X]


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


Large accelerated filer

 [  ]                      

Accelerated filer

[   ]

Non-accelerated filer

 [  ]

Smaller reporting company

[X]


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


State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrants most recently completed second fiscal quarter.



1


 

Note If a determination as to whether a particular person or entity is an affiliate cannot be made without involving unreasonable effort and expense, the aggregate market value of the common stock held by non-affiliates may be calculated on the basis of assumptions reasonable under the circumstances, provided that the assumptions are set forth in this Form.

 

The aggregate market value of the voting and non-voting common stock of the issuer held by non-affiliates as of October 23, 2012 (date of filing) was approximately $1,079,000.00 based upon the $0.97 price per share which was the price of the last trade on October 22, 2012. The current bid price is $0.80 per share and the current offer is $0.95 per share.


State the number of shares outstanding of each of the Issuers classes of common equity, as of the last practicable date:


·

11,250,000

June 30, 2010


·

10,750,000

October 12, 2010


·

17,800,000

June 30, 2011


·

17,800,000

June 30, 2012


·

17,800,000

October 12, 2012



DOCUMENTS INCORPORATED BY REFERENCE


List hereunder the following documents if incorporated by reference and the Part of the Form 10-K/A (e.g., Part I, Part II, etc.) into which the document is incorporated: (1) Any annual report to security holders; (2) Any proxy or information statement; and (3) Any prospectus filed pursuant to Rule 424(b) or (c) under the Securities Act of 1933. The listed documents should be clearly described for identification purposes (e.g., annual report to security holders for fiscal year ended December 24, 1980). None.




Explanation:

10K/A-2 is being filed due to revised pagination. No other changes have been made.



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TABLE OF CONTENTS


PART I


Item 1  Business          5   

Item 1A Risk Factors         11


Item 1B  Unresolved Staff Comments       11


Item 2  Properties         11


Item 3  Legal Proceedings        11


Item 4  Submission of Matters to a Vote of Security Holders    11


PART II


Item 5 Market for Registrants Common Equity, Related Stockholder Matters and  12

Issuer Purchases of Equity Securities


Item 6  Selected Financial Data        14


Item 7  Managements Discussion and Analysis of Financial Condition and   15

Results of Operations


Item 8  Financial Statements and Supplementary Data     17


Item 9 Changes in and Disagreements With Accountants and Accounting and   33

Financial Disclosure


Item 9A(T) Controls and Procedures       33


Item 9B Other Information        34


PART III


Item 10 Directors, Executive Officers and Corporate Governance    35


Item 11 Executive Compensation       36


Item 12 Security Ownership of Certain Beneficial Owners and Management   37

and Related Stockholder Matters


Item 13 Certain Relationships and Related Transactions and Director Independence 37


Item 14 Principal Accounting Fees and Service      37


PART IV


Item 15 Exhibits, Financial Statement Schedules      39


SIGNATURES           40



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CAUTIONARY STATEMENT ABOUT FORWARD-LOOKING STATEMENTS


All readers of this document and any document incorporated by reference herein are advised that this document and documents incorporated by reference into this document contain forward-looking statements and statements of historical facts. Forward-looking statements are subject to certain risks and uncertainties, which could cause actual results to differ materially for those indicated by the forward-looking statements. Examples of forward-looking statements include, but are not limited to (i) revenue projections, income (loss), earning (loss) per share, capital expenditures, dividends, capital structure and other financial items, (ii) statements of the plans and objectives of the Company or its management or Board of Directors, including the introduction of new products, or estimates or predictions with regards to customers, suppliers, competitors or regulatory authorities, (iii) statements of future performance, and (iv) statements of assumptions underlying other statements about the Company or its business.


This document and all documents incorporated herein by reference also identify factors which could cause actual results to differ materially from those indicated by the forward-looking statements.  Please refer to Management's Discussion and Analysis of Financial Condition and Results of Operations and Risk Factors.


The cautions outlined made in this statement and elsewhere in this document should not be construed as complete or exhaustive.  In many cases, we cannot predict factors which could cause results to differ materially from those indicated by the forward-looking statements.  Additionally, many items or factors that could cause actual results to differ materially from forward-looking statements are beyond our ability to control.  The Company will not undertake an obligation to further update or change any forward-looking statement, whether as a result of new information, future developments, or otherwise.



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PART I


ITEM 1.  BUSINESS


Business Summary

Silverton Adventures, Inc. ("SAI" or the "Company"), was originally incorporated in the State of Nevada on May 31, 2006 as Mor Travel, Inc. (Mor). On December 26, 2007, the Company changed its name to Silverton Adventures, Inc.

The Company recently formed a new wholly owned subsidiary named Silverton Printing, Inc. (Silverton Printing) whereby it operates its original printing and mailing services to companies nationwide. On December 30, 2010, the Company acquired 100% of the outstanding common stock of Worldwide Media Organization, Inc. making it a wholly owned subsidiary (Worldwide Media). Worldwide Media is a marketing, production and distribution company with its principal business objective being the production, acquisition (through exclusive licensing arrangements with independent producers worldwide), sale and distribution of special interest, family oriented, inspirational and childrens DVDs and programs. Video distribution is made by a non-theatrical home video retailer, catalog, mass-merchant and rack-jobber markets (including specialty markets such as gift and museum shops, premium and direct response markets). WMO also licenses to the television broadcast markets, as well as the educational, school and public library markets, both nationally and worldwide.  This distribution includes emerging venues such as digital downloads via Internet, video-on-demand (VOD) and download streaming on various platforms, among others.

Operation Summary

The Company operates two wholly owned subsidiaries. Through Silverton Printing, the Company has a principal business objective of providing printing and mailing services to companies nationwide. Through Worldwide Media, the Company has a principal business objective of the production, acquisition (through exclusive licensing arrangements with independent producers worldwide), sale and distribution of special interest, family oriented, inspirational and childrens DVDs and programs.

SILVERTON PRINTING, INC.


Business Segment Summary


Silverton Printing has a principal business objective of providing printing and mailing services to companies nationwide. The Company plans on completing the printing and mailing from its corporate offices depending on the size of the job. In other cases, the Company has developed accounts with wholesale printers who are more equipped to handle large print and mailing orders. Our mission is to provide the highest quality print and mail services to our clients.


Since inception, we have generated consistent revenues and have incurred a cumulative net loss as reflected in the financial statements. The Company has never been party to any bankruptcy, receivership or similar proceeding, nor has it undergone any material reclassification, merger, consolidation, purchase or sale of a significant amount of assets not in the ordinary course of business.




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Product Development


Silverton Printings mission is to provide small and large businesses a printing and mailing services of a wide variety of products (See list below). Also, the Company will provide a mailing service which will include Automated Presort and Insert and Address. This service will be primarily for companies that want to save money on postage. Instead of paying $0.42 for a first class letter, Silverton will sort the mail pieces by zip codes saving the customer almost 50% in postage costs. The following are print and mail services offered by the Company:


Business Cards

Carbonless Forms

Catalogs/Booklets

Flyers

Posters

Graphic Design

Automated Presort

Brochures

Copying

Envelopes

Letterhead

Postcards

Presentation Folders

Insert and Address


Marketing


Silverton Printing is gearing up to be a direct marketer of printing and mailing to businesses nationwide. The Company will be placing Yellow Page advertisements offering our services under the classification of printers and mailers in major cities throughout the United States. Even though the Company maintains its facility in Las Vegas, Nevada, the Company will ship all orders directly to the customer for a small shipping charge. Additionally, the Company plans to constantly mail postcards throughout the United States to new and upcoming businesses that have been recently approved for a business license.

WORLDWIDE MEDIA ORGANIZATION, INC.


Business Segment Summary


Worldwide Media is a marketing, production and distribution company with its principal business objective being the production, acquisition (through exclusive licensing arrangements with independent producers worldwide), sale and distribution of special interest, family oriented, inspirational and childrens DVDs and programs.  Distribution is made into the non-theatrical home video retailer, catalog, mass-merchant and rack-jobber markets (including specialty markets such as gift and museum shops, premium and direct response markets). Worldwide Media also licenses to the television broadcast markets, as well as the educational, school and public library markets, both nationally and worldwide.  This distribution includes emerging venues such as digital downloads via Internet, video-on-demand (VOD) and download streaming on various platforms, among others.




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Product Development


There are two key product development strategies for general market sale and distribution that Worldwide Media is involved in; inexpensive, but high quality and high-perceived value productions and, strategic partnership exclusive acquisition of other quality programs from outside producers.


First, Worldwide Media has established relationships with talented, highly experienced producers, writers and editors that contract with Worldwide Media to produce low-cost but high quality productions that are suitable for sale into Worldwide Medias market niches.  One strategy Worldwide Media has developed in this regard is what is called in the industry theatrical drafting wherein smaller independent producers under contract with Worldwide Media create low budget, ancillary and parallel programs that tie into subjects and/or events dealing with current major theatrical releases, thereby taking advantage of the consumer interest and buzz caused by the multi-million dollar budget advertising campaigns major studios spend to successfully market their big-budget films, by tapping into this interest without the enormous financial expenditures associated in creating this Buzz, hence drafting in the studios wake.  This was done with Worldwide Medias production of The Extraordinary Life of Amelia Earhart (following the Hillary Swank biopic, Amelia), The Mystery of Sherlock Holmes (following the Robert Downey blockbuster Sherlock Holmes) and the upcoming The True Legend of Robin Hood (in anticipation of the big budget 3D release of Russell Crowes Robin Hood later this year).  Worldwide Media is continually researching the upcoming film release announcements to anticipate these various potential hits.  Along with this, Worldwide Media is continually producing timely biographies and documentaries that would have interest in both the general consumer market, as well as the educational markets, including recent productions dealing with Great Women Leaders In World History, The Life of Albert Einstein, Famous Explorers, Joan of Arc (upcoming), the Korean War (upcoming) and a documentary on the life of, and conquest of Everest by, Sir Edmund Hillary (in anticipation of an upcoming feature film starring Liam Neeson, about the mysterious death and controversy surrounding George Mallory, who supposedly summited Everest 30 years before Hillarys attempt.).

      

Secondly, Worldwide Media is also strategically acquiring various films, programs and series that meet its market niches.  There is a vast source of quality programming produced by numerous independent producers worldwide, that simply do not have the resources, nor ability, to distribute their product and profitably into the market.  Worldwide Media negotiates distribution contracts with these producers for the distribution of their programs in niche markets, often with little or no advance monies paid up front, providing instead the producers royalties on actual per unit sales.  This is a favorable situation for both Worldwide Media (in providing the marketplace with a steady stream of finished quality programs at virtually no upfront costs, other than package design, that are fresh and appealing to the markets that Worldwide Media services), and to the producer (in that, they now have an effective distribution partner, allowing them to continue producing quality programming, while realizing a steady stream of royalty revenue from their productions).  A good example of this is Worldwide Medias recent acquisition of a series of entertaining inspirational feature films with a leading Christian producer, Eternal Pictures; and the imminent agreement with one of the industrys leading independent family friendly production companies, Grizzly Adams Productions, Inc.  These are but two examples.  There are numerous others either consummated or in-negotiation.  To better effect this critical growth strategy, and in conjunction with e-mail and direct mail solicitations for programs, Worldwide Media also attends several key international film



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conventions throughout the year featuring independent producers, and is bringing unique, family friendly, inspirational and educational programs to the market from these sources.


Marketing and Industry Analysis


Market research and analysis reveals that the population is gradually becoming older, thereby more conservative, with the aging of the baby boom generation.  With the increase in recreational and discretionary time that this maturing generation will have, along with their greater flexible spending ability, all indications point to even greater desire by the consumer for more family-friendly and special quality programming that is inexpensive and can be enjoyed by a wide demographic in society.  History has shown time and time again that G/PG and family films consistently do well at the box office both in audience attendance and revenue.  Furthermore, this programming has excellent shelf life in that these are generally films people want to watch over and over again, thereby driving greater sales (versus rental) of these types of DVDs for home DVD collections.  Childrens programming in general can do particularly well. Another area that can do well, is the special interest niche market, such as travel, history, military, art, biography, and of course, wildlife and nature programming.all genres that have unique and devoted viewers and collectors served by different catalogs, specialty stores, retail chains and internet sites.  Worldwide Medias product mix, both through acquisition and production, is specifically targeted for these marketsin content, packaging and retail pricing.


Worldwide Media has also pursued the inspirational DVD market, which is a vastly underserved market.  Surveys consistently show that over 85% of the population defines itself as spiritual in some way.  The usual Hollywood market has simply not addressed that market; which is numerous and broad-based, best described as mid-America having traditional family values, and highly desirous of programming that reflects those values.  Reasons for this lack of product content through traditional DVD venues may reside in the industrys lack of understanding, or perhaps dismissiveness in general, of the potential of the market.  Worldwide Media is positioned to serve that market with general quality light inspirational programming provided through the traditional home video distribution venues consumers generally frequent (such as home catalogs, retail stores and mass-merchants, warehouse chains), and feels that Worldwide Media can become a leading brand and label for that market.  Furthermore, current management has extensive experience in servicing that market niche through previous business affiliations, thereby further solidifying understanding the needs of that market and how best to serve it with proper content.


Worldwide Media management also has extensive experience in creating high-perceived value combo, specialty DVD packs for price conscious consumers, thereby serving the mass market, all the while maintain maximum gross and net profit margins.  These collection sets are very popular in the sell-thru, versus rent-thru, markets, which relates back directly to Worldwide Medias business model.


Worldwide Media is becoming an established brand in the educational, public library and home-school markets.  The principles have over 25 years experience in servicing the needs of that particular market, with quality documentary, special interest and educational programs suited for the K-12 grade levels.  Education is a consistent priority in terms of funding and curriculum quality on the local, state and federal levels.  There is a constant need in the market for relevant and new programming to meet those requirements.  Worldwide Media is uniquely positioned in that regard, having relationships with hundreds of independent producers worldwide that have



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relevant quality content for the educational market, but lack the means to distribute it on a wide scale.  Worldwide Media has the distribution means in place either directly through direct solicitation or through strategic relationships with several of the top wholesalers and re-sellers into the educational/library markets.  Worldwide Media has also entered into strategic alliances with several companies in providing educational programming for on-line streaming and closed circuit broadcast into digital libraries serving schools and libraries throughout North America, a technology growing exponentially.


Growth Strategy of the Company


The home video/DVD/educational markets are broad, complex and fragmented into different distribution channels and niches: retail, mass merchants (box stores), catalog, internet, resellers that purchase from wholesalers and producers, specialty chains and stores (gift stores, museum shops, airport stores, etc.), and, of course, individual consumers served directly by web advertising, schools, libraries, and school districts, among others.  The time required establishing profitable relationships with these various venues and buyers directly can be both time consuming and capital intensive, in terms of direct face-to-face meetings, attending trade shows and constantly forwarding market material and press releases to generate interest in particular programs and films.  Worldwide Medias management has made a strategic decision that, rather than expending the time, energy and resources in cultivating those markets, Worldwide Medias business interests and growth strategies are better served by leveraging key relationships with a handful of well-established, well respected and aggressive sub-distributors, resellers and sub-licensors that have established, personal and solid vendor relationships and established SKUs and vendor accounts with all of the key players and buyers in these various market niches and accounts.  By maintaining above average gross margins in the discount pricing provided to these resellers, Worldwide Media is able to penetrate the market more quickly, efficiently, cost effectively and deeply with its programs without the expenditures of time and resources noted above.  Examples of some of the key relationships are listed below:



Allegro Media Group - a direct premium independent distributor into the retail home video music CDs, and digital content market with over 25 years in representing a handful of labels into the general retail market and over 400 direct vendor/buyer account relationships; including but not limited to, Walmart, Target, Sams Clubs, Anderson Merchandising, Costco, Amazon, Netflix, Barnes & Noble, Baker & Taylor, Ingram (serving over 5,000 individual stores), Best Buy, Critics Choice, Movies Unlimited, AAFES (Navy PXs), Eurpac (military PXs worldwide), Waxworks, Library Video, Midwest Tape, Blockbuster, Borders, VPD, etc. (complete account list available).


Total Content a sub-licensor dealing with top catalogers with 20+ years experience; including, but not limited to:  Publishers Clearing House, Readers Digest, Avon, Carol Wright, Johnson Smith, Colombia House, Miles Kimball, Christian Book Distributors (serving over 25 million home schoolers), Discovery Catalog, Guideposts, Doubleday Direct, Harriet Carter, Wireless, Taylor Gifts, etc. (complete account list available).


Echo Bridge sub licensor with proprietary displays and end caps in a large number of grocery, retail, drugstores chains, mass merchants, specializing in very high volume (tonnage) discount videos/DVD sales for the consumer mass market; including, but not limited to Walmart, Safeway, a number of Midwest grocery chains and hardware/drug store chains, specialty



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catalogs, etc.  Echo Bridge is very focused and selective in product acquisition; and, when distributing, can generally move in excess of several thousand units per title.  Echo Bridge has licensed six family films from Worldwide Media and is considering a number of others.


Cerebellum markets leading distributor for educational media with 15+ years experience serving all major distributors and resellers into the educational, K-12, university, and public library markets; including but not limited to, Follett, Library Video, Barnes Noble, Christian Book Distributors (educational division), Brodarts, Midwest Tapes,  Mackin Distributors, Quality Books, Scholastic Media, Discovery, AIM, Learn 360 (digital downstreaming into individual classrooms nationwide), etc. (complete account list available).


John McLean Media major distributor and licensor into the international television and DVD markets, with over 20 years experience and relationships cultivated with all major players in all broadcast and media markets worldwide.  Worldwide Media has entered into an exclusive licensing arrangement to have JMM represent all current, and future, productions into this sizable and very lucrative market.  Our current mix includes five of Worldwide Medias productions, with a commitment for acquiring licensing rights to an additional twelve to thirteen productions, along with future productions still in developmental phase.


In addition to the above relationships, Worldwide Media has signed distribution agreements with major players in specialty markets, including:


Starcrest Catalog major specialty catalog with mailings to over 26 million homes 4 to 6 times a year.  This brand is popular with buyers of family/special interest programs.


5min Media an innovative 5 year-old company in the business as internet content provider that has established contracts with all major search engines whereby millions of users are directed to informational and themed streaming videos, based on their queries on-line, and whereby Worldwide Media is then paid a royalty for each hit on line.  Additionally links on the site are provided to drive the user directly to Worldwide Medias various websites, leading to further consumer direct sales.


To control outside costs with key vendors, Worldwide Media has entered into relationships with large, fully licensed and industry professional duplication/replication companies to manufacture, assemble, shrinkwrap and ship its DVD programs:  CDI Media in Salt Lake City, Utah and VEA Associates in Irvine, CA.  Worldwide Media has negotiated very favorable most-favored-nation pricing for its manufacturing and shipping needs.  Worldwide Media is negotiating with a third lab, RLX Media, in Coral Gables, FL. as well; in order to cover all US retail and catalog drop-ship locations in the most cost effective way possible.


Competitor Analysis


Direct competition for Worldwide Media is hard to pinpoint and fragmented.  Worldwide Medias management feels it is in a superior position to affectively seize market share in its niche over and above its competitors, due to Worldwide Medias unique business paradigm and diversification into a number of distribution venues; its ability to leverage relationships in a highly favorable and profitable way with both independent production companies and major distributors in the industry; its control of overhead by having key production and marketing support elements in-house, including the ability to produce and edit high quality programs for



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very low cost, and print and reconfigure all packaging and ancillary marketing material quickly; a warehouse and duplication capabilities in house to handle smaller incremental orders for product; and finally, and perhaps most importantly, extensive experience in the industry on a senior management and sales.


Competition

The Company will compete against established companies with significantly greater financial, marketing, research and development, personnel, and other resources than the Company. Such competition could have a material adverse effect on the Company's profitability.


Government Regulation


There are no government regulations regulating the business of printing and mailing services for business and other organizations or the educational and home video DVD sales.


ITEM 1A.  RISK FACTORS


Not applicable.


ITEM 1B.  UNRESOLVED STAFF COMMENTS


There are no unresolved staff comments.


ITEM 2.  PROPERTIES


Our principal Nevada executive offices are located at 6283-B South Valley View Boulevard Las Vegas, Nevada 89118 and our phone number is (702) 876-1539. This facility is currently being provided to the Company pursuant to a sub-lease from its officers and directors.  There are currently no proposed programs for the renovation, improvement or development of the facilities currently in use.


ITEM 3.  LEGAL PROCEEDINGS


We are not currently involved in any legal proceedings nor do we have any knowledge of any threatened litigation.


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS


No matters were submitted to a vote of security holders during the fiscal year ended June 30, 2012.





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PART II


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


On September 24, 2010, our common stock was approved for listing on the OTCBB® under the ticker symbol SVAD.  As of the date of this filing, there have been few trades for our common stock and it remains relatively illiquid. Below is a list of the trading high, low and quarter end of our common stock of our most recent three quarter ends:


Quarter then Ended

Low Price

High Price

Last Trade





September 30, 2012

$0.10

$0.17

$0.10





June 30, 2012

No Trades

No Trades

No Trades





March 31, 2012

$0.55

$0.83

$0.55





December 31, 2011

$0.55

$0.83

$0.83





September 30, 2011

No Trades

No Trades

No Trades





June 30, 2011

$0.70

$0.95

$0.70


Additionally, the Company does not anticipate that any significant trading will occur until our common stock has been approved by the Depository Trust Company (DTC) for clearing of transactions electronically. We do not know when such approval by DTC will occur. Additionally, once trading begins, the Company does not guarantee that a meaningful trading market will develop.  Silverton Adventures, Inc. and its management make no representation about the present or future value of our common stock. We have not registered our class of common stock for resale under the blue sky laws of any state and current management does not anticipate doing so. The holders of shares of common stock, and persons who may desire to purchase shares of our common stock in any trading market that might develop in the future, should be aware that, in addition to transfer restrictions imposed by federal securities laws, significant state blue sky law restrictions may exist which could limit the ability of stockholders to sell their shares and limit potential purchasers from acquiring our common stock. We are not obligated by contract or otherwise to issue any securities and there are not outstanding any securities that are convertible into or exchangeable for shares of our common stock.


Holders


As of June 30, 2012, we had 17,800,000 shares of common stock, par value $0.001, issued and outstanding held by approximately 40 shareholders of record. The stock transfer agent for our securities is Holladay Stock Transfer, 2939 North 67th Place, Scottsdale, AZ 85251-6015 - Telephone: (480) 481-3940 and Facsimile: (480) 481-3941.


Dividends


There are no restrictions in our Articles of Incorporation or Bylaws that prevent us from declaring dividends. The Nevada Revised Statutes, however, do prohibit us from declaring



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dividends where, after giving effect to the distribution of the dividend:


1.

We would not be able to pay our debts as they become due in the usual course of business; or

2.

Our total assets would be less than the sum of the total liabilities plus the amount that would be needed to satisfy the rights of stockholders who have preferential rights superior to those receiving the distribution.


The Company has not declared any dividends, and does not plan to declare any dividends in the foreseeable future.




Recent Sales of Unregistered Securities


The Company has authorized 75,000,000 shares of common stock with a par value of $.001, and no preferred stock.  Since inception, the Company has issued the following 17,800,000 shares of common stock that is restricted. The Company has issued the following shares of restricted common stock since the filing of its last annual statement for fiscal year ended June 30, 2012:


· On December 2, 2011, the Company issued 100,000 shares of Series A Convertible Preferred Stock (the Convertible Preferred Stock) to two (2) non-affiliated purchasers for an aggregate capital raise of $10,000 USD.  The Convertible Preferred Stock is convertible into common stock of the Company at a conversion rate of one (1) share of Convertible Preferred Stock for one hundred (100) shares of Common Stock. The proceeds of the sale of the Convertible Preferred Stock was used to pay for book keeping and audited financial statements for the fiscal year ended June 30, 2011.


Securities Authorized for Issuance under Equity Compensation Plans


We do not have any equity compensation plans and accordingly we have no securities authorized for issuance thereunder.


Purchases of Equity Securities by the Registrant and Affiliated Purchasers


We did not purchase any of our shares of common stock or other securities during the year ended June 30, 2012.





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ITEM 6.  SELECTED FINANCIAL DATA


The following table includes select data extracted from, and should be examined in conjunction with, the audited financial statements and footnotes for the year ended June 30, 2012 and 2011 found under Item 8 of this annual report.



 

Year Ended

Year Ended

 

June 30, 2012

June 30, 2011

 


 

Revenues

$                    329,228

$                  475,262




Cost of Sales

109,177

91,202




Gross Margin

220,051

384,060




Total Operating Expenses

494,612

385,105




Net Loss

(258,865)

(1,045)




Net Cash Provided by (Used in) Operating Activities

(87,811)

111,189




Net Cash Used by Investing Activities

(35,385)

(54,293)




Net Cash Provided by (Used by) Financing Activities

118,253

(52,728)




Cash on hand

-

4,943




Net loss per basic and diluted shares

(0.01)

(0.00)




Weighted average number of common shares outstanding:


17,800,000

14,299,725




Cash dividends declared per common share

-

-




Property and equipment, net

16,171

63,398




Stockholders deficit

(267,555)

(18,690)






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ITEM 7.  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


The following plan of operation should be read in conjunction with our financial statements and the notes thereto included elsewhere in this annual report. Statements contained herein which are not historical facts are forward-looking statements, as that term is defined by the Private Securities Litigation Reform Act of 1995, including statements relating to our plans, objectives, expectations and intentions. Although we believe that the expectations reflected in such forward-looking statements are reasonable, forward-looking statements are subject to risks and uncertainties that could cause actual results to differ from those projected. We caution investors that any forward-looking statements made by us are not guarantees of future performance and that actual result may differ materially from those in the forward-looking statements. Such risks and uncertainties include, without limitation: established competitors who have substantially greater financial resources and operating histories, regulatory delays or denials, ability to compete as a start-up company in a highly competitive market, and access to sources of capital.


Results of Operations


The following table provides selected financial data about our company for the year ended June 30, 2012 and 2011, respectively.  


Balance Sheet Data


June 30, 2012

June 30, 2011




Cash


$-


$4,943




Total Current Assets


$101,793


$100,423




Total Assets


$117,964


$163,821




Total Liabilities


$385,519


$182,511




Stockholders' Deficit


$(267,555)


$(18,690)


Plan of Operation


We have developed a plan of operation reflecting our objectives and anticipated growth for the next 12 months and beyond. In our plan, we identify our cash requirements, our new product development, and our required staffing and additional funding requirements to fulfill our business objectives.


Cash Requirements


We estimate that we require a minimum of approximately $250,000 and a maximum of approximately $500,000 to grow our operations for the next 12 months from the date of this annual report. The minimum of $250,000 is required for acquisition of educational and family titles, marketing of our printing services, operating expenses and general operational overhead.



15



The maximum will be required to fully implement our business plan which will include the following marketing of our services, new copiers, additional staff, purchase of educational and family video programs, and general working capital associated with the growth of the Company.





Revenues


The Company has recorded $329,228 and $475,262 in revenues from operations as of June 30, 2012 and 2011, respectively, which was generated from client printing (mainly color printing), mailing, sales of educational and family oriented DVD programs (through our acquired subsidiary Worldwide Media Organization, Inc.), and related services. Cost of sales for June 30, 2012 and 2011 respectively are $109,177 and $91,202, resulting in a gross margin of $220,051 and $384,060, respectively for such same time periods.


Operating and General & Administrative Expenses

The Companys operating expenses consisting of depreciation expense, advertising expense, bad debt expense, royalty expense, payroll, professional fees, and general and administrative expenses totaling $494,612 and $385,105, respectively, for June 30, 2012 and 2011 resulting in a net loss from operations of $258,865 and $1,045 for such same time periods.

Income Taxes

The Company does not anticipate having to pay income taxes in the upcoming years due to our absence of net profits.

Capital and Liquidity

As of June 30, 2012 and 2011, we had total current assets of $101,793 and $100,423 respectively, and total current liabilities of $385,519 and $182,511, respectively.  

We had cash on hand of $-0- and $4,943 as of June 30, 2012 and 2011, respectively. We do not have sufficient cash to meet our short-term expansion needs over the next 12 months, which are to sell our printing and mailing services on a more regional basis and acquire more DVD titles, and hire more employees and staff. We are currently upgrading our ecommerce web site at www.silvertoninc.com for our subsidiary Silverton Printing, Inc. and at www.mediahomevideo.com for our subsidiary Worldwide Media Organization, Inc. in order to increase our revenues. We intend to bring in new client through Internet and more traditional advertising means and attract customers by lowering our margins in hopes of increasing our capacity.


[Balance of Page Intentionally Left Blank]





16



ITEM 8 Financial Statements and Supplementary Data




















17



Silverton Adventures, Inc.


Consolidated Financial Statements


For the Years Ended June 30, 2012 and 2011
















18



Report of Independent Registered Public Accounting Firm

20


Consolidated Balance Sheets

21


Consolidated Statements of Operations

22


Consolidated Statements of Stockholders Deficit

23


Consolidated Statements of Cash Flows

24


Notes to the Consolidated Financial Statements

26



[june1210ka2silvertonvedga001.jpg]









 



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



To the Board of Directors

Silverton Adventures, Inc.


We have audited the accompanying consolidated balance sheets of Silverton Adventures, Inc. as of June 30, 2012 and 2011, and the related consolidated statements of operations, stockholders deficit and cash flows for the years then ended.  These consolidated financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.  


We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated 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 audits 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 audits 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 Silverton Adventures, Inc., as of June 30, 2012 and 2011, and the results of their operations and cash flows for the years then ended, in conformity with U.S. generally accepted accounting principles.


The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company had accumulated losses of $374,891 for the period from inception through June 30, 2012 which raises substantial doubt about its ability to continue as a going concern. Managements plans concerning these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.



/s/ Sadler, Gibb & Associates, LLC


Sadler, Gibb & Associates, LLC

Farmington, UT

October 23, 2012



20



 

SILVERTON ADVENTURES, INC.

Consolidated Balance Sheets









ASSETS












June 30,


June 30,




2012


2011




 


 

CURRENT ASSETS















Cash

$

                -


$

         4,943


Trade accounts receivable, net


        15,187



        64,003


Accounts receivable, related parties


        76,853



        26,445


Prepaid royalties


         9,753



         5,032




 

 


 

 



Total Current Assets

 

      101,793


 

      100,423









PROPERTY AND EQUIPMENT, net

 

        16,171


 

        63,398











TOTAL ASSETS

$

      117,964


$

      163,821









LIABILITIES AND STOCKHOLDERS' DEFICIT









CURRENT LIABILITIES















Accounts payable and accrued liabilities

$

      211,923


$

      145,579


Bank overdraft


        19,972



                -


Royalty payables


        23,368



        24,708


Notes payable


        48,000



                -


Convertible note payable


        10,000



                -


Related party payables


        72,256



        12,224




 

 


 

 



Total Current Liabilities

 

      385,519


 

      182,511









STOCKHOLDERS' DEFICIT















Preferred stock, 10,000,000 shares authorized at par







   value of $0.001, 100,000 and no shares issued and







   outstanding, respectively


            100



                -


Common stock, 75,000,000 shares authorized at par







  value of $0.001; 17,800,000 shares issued and







  outstanding, respectively


        17,800



        17,800


Additional paid-in capital


        89,436



        79,536


Accumulated deficit

 

     (374,891)


 

     (116,026)











Total Stockholders' Deficit

 

     (267,555)


 

       (18,690)











TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT

$

      117,964


$

      163,821









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



SILVERTON ADVENTURES, INC.

Consolidated Statements of Operations












For the Years Ended




June 30,




2012


 

2011









SALES INCOME

$

      214,059


$

      177,516

ROYALTY INCOME

 

      115,169


 

      297,746

TOTAL REVENUES


      329,228



      475,262









COST OF SALES

 

      109,177


 

        91,202




 

 


 

 

GROSS MARGIN

 

      220,051


 

      384,060









OPERATING EXPENSES















Royalty expense


        17,467



        35,766


Bad debt expense


          2,005



        94,872


Depreciation expense


        14,050



          8,932


General and administrative


      199,045



      103,274


Payroll expense


      201,364



        88,651


Professional fees

 

        60,681


 

        53,610











Total Operating Expenses

 

      494,612


 

      385,105









LOSS FROM OPERATIONS

 

     (274,561)


 

         (1,045)









OTHER INCOME (EXPENSES)















Interest expense


         (4,159)



                 -


Loss on disposal of assets


         (1,951)



                 -


Gain on settlement of debt

 

        21,806


 

                 -











Total Other Income (Expenses)

 

        15,696


 

                 -









NET LOSS BEFORE INCOME TAXES


     (258,865)



         (1,045)










Income taxes

 

                 -


 

                 -









NET LOSS

$

     (258,865)


$

         (1,045)





   




BASIC AND DILUTED LOSS PER SHARE

$

           (0.01)


$

           (0.00)









BASIC AND DILUTED WEIGHTED AVERAGE






   NUMBER OF SHARES OUTSTANDING

 

  17,800,000


 

  14,299,725









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


SILVERTON ADVENTURES, INC.

Consolidated Statements of Stockholders' Deficit

































 Additional









 Preferred Stock


 Common Stock


 Paid-in


 Accumulated






 Shares


 Amount


 Shares


 Amount


 Capital


 Deficit


 Total





















Balance, June 30, 2010


               -


$

        -


  11,250,000


$

  11,250


$

    24,750


$

  (114,981)


$

   (78,981)





















Common stock cancelled


               -



        -


 (500,000)



     (500)



        500



              -



             -





















Common stock issued for




















  acquisition of subsidiary


               -



        -


    7,050,000



    7,050



    40,389



              -



    47,439





















Contributed capital for forgiveness




















  of related party debt


               -



        -


                 -



           -



    13,897



              -



    13,897





















Net loss for the year ended




















 June 30, 2011


               -


 

        -


                 -


 

           -


 

             -


 

      (1,045)


 

     (1,045)





















Balance, June 30, 2011


               -



        -


  17,800,000


   

  17,800


   

    79,536


   

  (116,026)


   

   (18,690)





















Preferred stock issued for cash




















  and services rendered at $0.10




















  per share


    100,000



    100


                 -



           -



      9,900



              -



    10,000





















Net loss for the year ended




















 June 30, 2012


               -


 

        -


                 -


 

           -


 

             -


 

  (258,865)


 

 (258,865)





















Balance, June 30, 2012


    100,000


$

    100


  17,800,000

   

$

  17,800

   

$

    89,436

   

$

  (374,891)

   

$

 (267,555)





















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



SILVERTON ADVENTURES, INC.

Consolidated Statements of Cash Flows






For the Years Ended





June 30,





2012


2011

CASH FLOWS FROM OPERATING ACTIVITIES
















Net loss

$

     (258,865)


$

        (1,045)


Adjustments to reconcile net loss to







  net cash used by operating activities:








Bad debt expense


                 -



       94,892



Preferred stock issued for services


                 -



                -



Depreciation expense


        14,050



         8,931



Bad debt expense


          2,005



                -



Expenses paid on behalf of the Company









by a related party


        23,251



       23,259



Expenses paid on behalf of the Company









by an unrelated party


          6,500



                -



Loss on disposal of fixed assets


          1,951



                -


Changes to operating assets and liabilities:








Accounts receivable


        46,811



     (123,727)



Inventory


                 -



         3,035



Related-party receivables


       (50,408)



                -



Prepaid royalties


         (4,721)



        (5,032)



Accounts payable and accrued liabilities


      132,955



       86,168



Royalties payable

 

         (1,340)


 

       24,708




Net Cash Provided by (Used in) Operating Activities

 

       (87,811)


 

      111,189










CASH FLOWS FROM INVESTING ACTIVITIES
















Cash acquired in acquisition of subsidiary


                 -

 


         6,570


Purchase of property and equipment


       (35,385)

 


      (60,863)




Net Cash Used in Investing Activities

 

       (35,385)


 

      (54,293)










CASH FLOWS FROM FINANCING ACTIVITIES

















Proceeds from the sale of preferred stock


        10,000



                -



Changes in bank overdraft


        19,972



                -



Proceeds from related party payables


        54,867



      175,742



Repayments to related parties payable


       (18,086)






Proceeds from convertible notes payable


        10,000



                -



Proceeds from notes payable


        47,000



                -



Repayments on notes payable


         (5,500)



                -



Repayments of related party payables

 

                 -


 

     (228,470)




Net Cash Provided by (Used in) Financing Activities

 

      118,253


 

      (52,728)










NET INCREASE (DECREASE) IN CASH


         (4,943)



         4,168

CASH AT BEGINNING OF YEAR

 

          4,943


 

            775










CASH AT END OF YEAR

$

                 -


$

         4,943






   




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


SILVERTON ADVENTURES, INC.

Consolidated Statements of Cash Flows






For the Years Ended





June 30,





2012


2011

SUPPLEMENTAL DISCLOSURES OF






 

CASH FLOW INFORMATION
















CASH PAID FOR:

















Interest

$

          2,524


$

                -



Income Taxes

$

                 -


$

                -










NON CASH FINANCING AND INVESTING ACTIVITIES:

















Common stock issued for acquisition of subsidiary

$

                 -


$

       47,439



Contributed capital for forgiveness of related party debt

$

                 -


$

       13,897



Cancellation of common stock

$

                 -


$

            500










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







25


SILVERTON ADVENTURES, INC.

Notes to Consolidated Financial Statements

June 30, 2012 and 2011

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


Business and Organization

Silverton Adventures, Inc. (the "Company"), was originally incorporated in the State of Nevada on May 31, 2006 as Mor Travel, Inc. On December 26, 2007, the Company changed its name to Silverton Adventures, Inc. The Company currently operates under the DBA Silverton Print and Mail in Clark County, Nevada.  The Companys principal business objectives are the licensing and distribution of educational and family media content to distributors and end consumers, and providing printing and mailing services to companies nationwide.


On December 30, 2010, the Company acquired Worldwide Media Organization, Inc. (Worldwide).  Worldwide is the owner or licensee of media content and also has important relationships with media distributers that the Company felt would allow significant growth in the media content and royalty business.  Worldwide operates as a wholly owned subsidiary of the Company.


On June 30, 2011 the Company formed Silverton Printing, Inc., a Nevada corporation, as a wholly-owned subsidiary.  The Company plans to operate its printing and mailing services through this subsidiary.


Accounting Basis

The Companys financial statements are prepared using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States.  The Company has elected a June 30 fiscal year end.  


Principles of Consolidation

The accompanying consolidated financial statements for the years ended June 30, 2012 and 2011 include the accounts of the Company and its wholly-owned subsidiaries.  All significant intercompany balances and transactions have been eliminated in consolidation.


Use of Estimates

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


Cash and Cash Equivalents

The company considers all highly liquid investments with original maturities of three months or less to be cash or cash equivalents


Concentrations of Risk

The Companys bank accounts are held by insured institutions. The funds are insured up to $250,000. At June 30, 2012, the Companys bank deposits did not exceed the insured amounts.


Two of the Companys customers make up 31 percent of total sales and two vendor accounts for 28 percent of total purchases.


Accounts Receivable (Continued)

The Companys accounts receivable are presented net of the allowance for estimated doubtful accounts. Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts represents the Companys best estimate of the amount of probable credit losses in the existing accounts receivable balance. The Company determines the allowance for doubtful accounts based upon historical write-off experience and current economic conditions. The Company reviews the adequacy of its allowance for doubtful accounts on a regular basis. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.








26


SILVERTON ADVENTURES, INC.

Notes to Consolidated Financial Statements

June 30, 2012 and 2011

NOTE 1 ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)


Accounts Receivable (Continued)

The Companys accounts receivable, net of the allowance for doubtful accounts, was $15,187 and $64,003 at June 30, 2012 and 2011, respectively.


Property and Equipment

Property and equipment is recorded at cost.  Major additions and improvements are capitalized and depreciated over their estimated useful lives.  Depreciation of property and equipment is determined using the straight-line method over their useful lives, which ranges from three to five years.  Gains or losses on the sale or disposal of property and equipment are included in the statements of operations. Maintenance and repairs that do not extend the useful life of the assets are expensed as incurred.  


Valuation of Long-Lived Assets

The Company follows ASC 360 regarding the valuations and carrying values of its long-lived assets. Long-lived tangible assets and definite-lived intangible assets are reviewed for possible impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. The Company uses an estimate of undiscounted future net cash flows of the assets over the remaining useful lives in determining whether the carrying value of the assets is recoverable. If the carrying values of the assets exceed the expected future cash flows of the assets, the Company recognizes an impairment loss equal to the difference between the carrying values of the assets and their estimated fair values.  For the years ended June 30, 2012 and 2011 no impairment of fixed assets was recognized.


Fair Value of Financial Instruments

The carrying amounts reported in the balance sheets for cash, accounts payable, notes payable, loans payable related parties and accrued interest approximate their fair market value based on the short-term maturity of these instruments.


Revenue Recognition

The Company's revenues are generated from the printing and mailing services and from royalties on rights to media owned or licensed by the Company, primarily film rights.  The Company follows guidance found in ASC 605, which provides guidance on the recognition, presentation and disclosure of revenue in financial statements and ASC 926 which provides guidance on the recognition of revenue from the sales or licensing of films by producers or distributors of films.


ASC 605 outlines the basic criteria that must be met to recognize revenue and provides guidance for disclosure related to revenue recognition policies. In general, the Company recognizes revenue related to goods and services provided when the following conditions are met:


a)

Persuasive evidence of an arrangement exists,

b)

Delivery has occurred or services have been rendered,

c)

The fee is fixed or determinable,

d)

Collectability is reasonably assured.  


Revenues from printing, reproduction and royalties are recognized under ASC 605.


Advertising Costs

The Companys policy regarding advertising is to expense advertising when incurred. The Company incurred $18,067 and $15,223 in advertising expense for the years ended June 30, 2012 and 2011, respectively.


Reclassification


Certain balances in previously issued financial statements have been reclassified to be consistent with the current period presentation.




27


SILVERTON ADVENTURES, INC.

Notes to Consolidated Financial Statements

June 30, 2012 and 2011

NOTE 1 ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)


Stock-based Compensation

The Company follows the provisions of ASC 718 which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values.  The Company uses the Black-Scholes pricing model for determining the fair value of stock-based compensation.  


Equity instruments issued to non-employees for goods or services are accounted at fair value when the service is complete or a performance commitment date is reached, whichever is earlier.


Income Taxes

The Company accounts for income taxes in accordance with accounting guidance now codified as ASC 740, "Income Taxes," which requires that the Company recognize deferred tax liabilities and assets based on the differences between the financial statement carrying amounts and the tax bases of assets and liabilities, using enacted tax rates in effect in the years the differences are expected to reverse. Deferred income tax benefit (expense) results from the change in net deferred tax assets or deferred tax liabilities.


A valuation allowance is recorded when it is more likely than not that some or all deferred tax assets will not be realized.


The Company applies the provisions of ASC 740, Accounting for Uncertainty in Income Taxes. The ASC clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements.  The ASC prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.  The ASC provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.  The Company did not identify any material uncertain tax positions on returns that have been filed or that will be filed.  The Company did not recognize any interest or penalties for unrecognized tax benefits during the years ended June 30, 2012 and 2011, nor were any interest or penalties accrued as of June 30, 2012.


Basic and Diluted Loss per Common Share

Basic loss per share is calculated by dividing the Companys net loss applicable to common stockholders by the weighted average number of common shares during the period. Diluted loss per share is calculated by dividing the Companys net loss available to common stockholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. There are no such common stock equivalents outstanding as of June 30, 2012 or 2011.


Recent Accounting Pronouncements

Management has considered all recent accounting pronouncements issued since the last audit of our consolidated financial statements. The Companys management believes that these recent pronouncements will not have a material effect on the Companys consolidated financial statements.


NOTE 2 - GOING CONCERN


The Company's financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business.  The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern.  During the year ended June 30, 2012, the Company realized a net loss of $258,865 and has incurred an accumulated deficit of $374,891.  The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable.  If the Company is unable to obtain adequate capital, it could be forced to cease operations.






28


SILVERTON ADVENTURES, INC.

Notes to Consolidated Financial Statements

June 30, 2012 and 2011

NOTE 2 - GOING CONCERN (Continued)


In order to continue as a going concern, the Company will need, among other things, additional capital resources.  Management's plans to obtain such resources for the Company include (1) obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses, and (2) seeking out and completing a merger with an existing operating company.  However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.


The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations.  The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.


NOTE 3  PROPERTY AND EQUIPMENT 


As of June 30, 2012 and 2011, property and equipment consisted of the following:



June 30,


2012


2011







Printing and imaging equipment

$

28,053


$

73,333

Computer equipment


2,506



2,506

Total property and equipment


30,559



75,839

Accumulated depreciation


(14,388)



(12,441)







Total property and equipment, net

$

16,171)


$

63,399)


Depreciation expense for the years ended June 30, 2012 and 2011 was $14,050 and $8,932, respectively.  


During the year ended June 30, 2012, the Company acquired $35,385 in fixed assets.  During the same period, fixed assets valued at $80,763 (including certain assets purchased during the 2012 fiscal year) were returned to vendors.  These fixed asset returns yielded a loss on disposal of assets in the amount of $1,951.


NOTE 4 - RELATED PARTY TRANSACTIONS


Various general and administrative expenses of the Company as well as loans for operating purposes have been paid for or made by related parties of the Company.  During the year ended June 30, 2012 the Company received cash of $54,867 on these payables, had $27,262 in expenses paid on behalf of the Company, and made payments totaling $18,469 on these related-party payables.  Related party payables totaled $72,256 and $12,224 at June 30, 2012 and 2011, respectively. These amounts payable bear no interest, are uncollateralized and due on demand.  


During the year ended June 30, 2012, the Company made cash payments totaling $199,002 to related parties, and received cash payments in return in the amount of $146,589.  Related-party receivables totaled $76,853 at June 30, 2012.  These receivables are unsecured, bear no interest, and are due on demand.  


NOTE 5  ROYALTIES

 

The Company entered into several royalty agreements wherein the Company acquired rights to licensed content.  The Company intends to either reproduce and distribute the media or sublicense the rights to another party.  The agreements require the Company to pay an upfront royalty fee and then ongoing royalty fees of 15 to 30 percent of gross sales receipts over the life of the licensing agreement.  The agreements vary in length from three to five years.  Royalty expenses totaled $17,467 and $35,766 for the years ended June 30, 2012 and 2011, respectively.  As of June 30, 2012 and 2011, royalty payables under these agreements totaled $23,368 and $24,708, respectively.






29


SILVERTON ADVENTURES, INC.

Notes to Consolidated Financial Statements

June 30, 2012 and 2011

NOTE 5  ROYALTIES (CONTINUED)


Under some of these arrangements, the Company pays an upfront royalty fee that is applied to future royalties as the Company achieves sales and incurs corresponding royalty expense.  The upfront fees that are to be applied against future royalty expenses are capitalized and amortized as royalty expenses are applied.  As of June 30, 2012 and 2011, the Company has recorded $9,753 and $5,032 as prepaid royalties, respectively. 

 

The Company has also entered into similar royalty agreements wherein the Company licenses content rights to third parties in exchange for a royalty fee.  During the years ended June 30, 2012 and 2011, the Company recognized royalty revenue of $115,169 and $297,746, respectively.


NOTE 6 ACQUISITION OF SUBSIDIARY


On December 30, 2010 the Company acquired Worldwide Media Organization, Inc., a Nevada Corporation (Worldwide) pursuant to a share exchange agreement whereby the Company issued 7,050,000 shares of common stock in exchange for 100 percent of the issued and outstanding common stock of Worldwide. At the close of the transaction, Worldwide became a wholly-owned subsidiary of the Company. The acquisition was accounted for as a purchase.


At the time of acquisition, both entities were under common control and thus the acquisition was accounted for under ASC 845 which requires that transfers of nonmonetary assets between shareholders in exchange for stock should be recorded at the transferors historical costs basis.  Accordingly, the assets and liabilities transferred have been recorded at their carrying amounts at the date of transfer and the Company has recorded the acquisition price as equal to book value of Worldwide, or $47,439, on the date of acquisition.


A breakdown of the assets acquired and their book values at acquisition is as follows:


Assets and liabilities acquired:



     Cash and cash equivalents

$

6,570

     Accounts receivable, net


35,168

     Inventory


3,035

     Fixed assets, net


5,587

     Accounts payable and other liabilities


(2,921)

Net assets on acquisition

$

47,439

     Purchase price


47,439

Excess of fair value of net assets over purchase price

$

-


NOTE 7 - STOCKHOLDERS DEFICIT


The Company is authorized to issue two classes of stock.  The total number of shares authorized to be issued by the Company is 10,000,000 shares of preferred stock at a par value of $0.001 per share and 75,000,000 shares of common stock at a par value of $0.001.  As of June 30, 2012, the Company has 100,000 preferred shares issued and outstanding and 17,800,000 common shares issued and outstanding.


Preferred Stock

On December 2, 2011 the Company issued 100,000 shares of Series A preferred stock to two unrelated entities for cash at $0.10 per share in exchange for cash of $3,500 and services valued at $6,500.  According to the terms of the preferred stock, each share of Series A preferred stock is convertible into shares of the Companys common stock at a conversion ratio of one hundred (100) shares of common stock for every one (1) share of preferred stock.  The Companys Series A preferred stock is not entitled to receive any dividends, has no liquidation rights, and is not entitled to any voting rights.







30


SILVERTON ADVENTURES, INC.

Notes to Consolidated Financial Statements

June 30, 2012 and 2011

NOTE 7 - STOCKHOLDERS DEFICIT (CONTINUED)


Common Stock

On June 30, 2011, the Company issued 7,050,000 shares of common stock to acquire its now wholly owned subsidiary, Worldwide Media Organization, Inc.  The shares were valued at $47,439 based on the net book value of Worldwide Media Organization, Inc. on the date of acquisition (see Note 6). On June 30, 2011, two related party debt holders agreed to cancel debts totaling $13,897. The forgiveness of debt was recorded as contributed capital from related parties.


NOTE 8 CONVERTIBLE NOTES PAYABLE


On July 20, 2011, the Company entered into a convertible note payable in the amount of $10,000.  The note bears interest at 8.5 percent per annum and has a maturity date of July 20, 2014.  The creditor has the option at any time to convert the principal and any accrued interest into common stock of the Company according to the following stock prices: year one, $0.75 per share; year two, $1.00 per share; and year three, $1.25 per share.  As at June 30, 2012, the note has not been converted to common stock by the note holder


NOTE 9 NOTES PAYABLE


On May 18, 2012 the Company entered into a note payable with an unrelated third party in the amount of $30,000.  The note is unsecured, bears interest at a rate of 12.0 percent per annum, and is due on May 18, 2014.


During the year ended June 30, 2012 the Company entered into a note payable with an unrelated third-party in the amount of $8,000.  The Company received $6,000 in cash, but agreed to repay a total of $8,000.  The $2,000 difference is accounted for as interest expense.  As of June 30, 2012, the note was in default and the creditor had made demands for payment.   As of June 30, 2012 the outstanding balance on this note was $6,500.


During the year ended June 30, 2012 the Company entered into a note payable with an unrelated third-party in the amount of $3,500.  The Company received $3,000 but promised to repay a total of $3,500 as of June 28, 2012.   The $500 difference is accounted for as interest expense.   As of June 30, 2012 the note was in default and the creditor has demanded payment.  The note term dictates that upon default, the Company is responsible for $100 per week in accrued interest.  In August 2012, this weekly penalty interest was reduced to $50 per week.  The note is unsecured and as of June 30, 2012 the outstanding balance on this note, including accrued interest, totaled $3,500.


During the year ended June 30, 2012 the Company entered into a note payable agreement with an unrelated third-party in which the related party would pay $6,500 of expenses on behalf of the Company.  The note is due on demand and bears no interest.  As of June 30, 2012 the outstanding balance on this note was $6,500.


During the year ended June 30, 2012 the Company entered into a note payable agreement with an unrelated third-party in the amount of $8,000.   The note is due on demand and bears no interest.  As of June 30, 2012 the outstanding balance on this note was $2,500.


NOTE 10 INCOME TAXES


The Companys provision for income taxes was $-0- for the years ended June 30, 2012 and 2011, respectively, since the Company has accumulated taxable losses from operations.  ASC 740 requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. In the Companys opinion, it is uncertain whether they will generate sufficient taxable income in the future to fully utilize the net deferred tax asset. Accordingly, a full valuation allowance equal to the deferred tax asset has been recorded.


The total deferred tax asset is calculated by multiplying a 34 percent marginal tax rate by the cumulative Net Operating Loss (NOL).  At June 30, 2012, the Company has available $48,565 of NOLs which expire in various years beginning in 2026 and carrying forward through 2032.  The tax effects of significant items comprising the Company's net deferred taxes as of June 30, 2012 and 2011 were as follows:




31


SILVERTON ADVENTURES, INC.

Notes to Consolidated Financial Statements

June 30, 2012 and 2011

NOTE 10 INCOME TAXES (CONTINUED)



June 30,


2012


2011







Cumulative NOL

$

163,645


$

55,639







Deferred Tax Assets:






Net operating loss carry forwards


48,565



(39,449)

Common and preferred stock issued for services


3,366



3,366

Valuation allowance


(51,931)



36,083


$

-


$

-


The provision for income taxes differs from the amounts which would be provided by applying the statutory federal income tax rate of 34 percent to net loss before provision for income taxes for the following reasons:



June 30,


2012


2011







Income tax benefit at U. S. federal statutory rates:

$

88,014


$

(356)

Change in valuation allowance


(88,014)



356


$

-


$

-


The Company files federal and Nevada income tax returns subject to statutes of limitations.   The years ended June 30, 2012, 2011, and 2010 are subject to examination by federal and state tax authorities.


NOTE 11  COMMITMENTS AND CONTINGENCIES


Lease Agreements

During the year ended June 30, 2012 the Company entered into a three-year office lease agreement.  The lease calls for monthly lease payments of $4,446 per month for the first year, $4,581 per month for the second year, and $4,717 per month for the third year.  The Company is also responsible for insurance, utilities, and common area expenses.  Rent expense totaled $34,566 and $16,850 for the years ended June 20, 2012 and 2011, respectively.


Royalty Agreements

The Company entered into several royalty agreements wherein the Company acquired rights to licensed content.  The Company intends to either reproduce and distribute the media or sublet the rights to another party.  The agreements require the Company to pay royalties of 15 to 30 percent of gross sales receipts over the life of the licensing agreement.  The agreements vary in length from three to five years.  Royalty expenses totaled $17,467 and $35,766 for the years ended June 30, 2012 and 2011, respectively.


Legal Proceedings

The Company may be party to various legal actions arising in the ordinary course of business. Matters that are probable of unfavorable outcomes to the Company and which can be reasonably estimated are accrued. Such accruals are based the Companys estimates of the outcomes of such matters and its experience in contesting, litigating and settling similar matters.  There is no litigation or contingencies that require accrual or disclosure as of June 30, 2012.











32


SILVERTON ADVENTURES, INC.

Notes to Consolidated Financial Statements

June 30, 2012 and 2011

NOTE 11  COMMITMENTS AND CONTINGENCIES (CONTINUED)


Notes Payable

As of June 30, 2012 the Company was in default on a $3,000 note payable to an unrelated third-party.  The note terms dictate that upon default, the Company is responsible for $100 per week in accrued interest.  In August 2012 this weekly penalty interest was reduced to $50 per week.  As of June 30, 2012 the Company owed $500 in accrued interest related to its default on the note.


As of June 30, 2012 the Company was in default on an $8,000 note payable to an unrelated third-party.  The note has been sent to a collections agency, which has made a demand for full payment of the note principal and an additional $1,300 in collection fees.   


NOTE 12 - SUBSEQUENT EVENTS


In accordance with ASC 855, Company management reviewed all material events through the date of this filing, and there are no material subsequent events to report other than those reported.  



33



Item 9 Changes In and Disagreements with Accountants on Accounting and Financial Disclosure


None.  


Item 9AT Controls and Procedures


Disclosure Controls and Procedures


Under the supervision and with the participation of our management, including our principal executive officer and the principal financial officer, we have conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as of the end of the period covered by this report. Based on this evaluation, Ron Miller (Our President, Principal Executive Officer, Principal Financial Officer, and Principal Accounting Officer), concluded as of the evaluation date that our disclosure controls and procedures were not effective such that the material information required to be included in our Securities and Exchange Commission reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms relating to our company,  and was made known to us by others within those entities, particularly during the period when this report was being prepared.


Managements Annual Report on Internal Control Over Financial Reporting.  


The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. The internal control process has been designed, under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Companys financial statements for external reporting purposes in accordance with accounting principles generally accepted in the United States of America.


Management conducted an assessment of the effectiveness of the Companys internal control over financial reporting as of June 30, 2012, including (i) the control environment, (ii) risk assessment, (iii) control activities, (iv) information and communication, and (v) monitoring, based on the framework in  Internal Control Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). As of June 30, 2012, management has determined that the Companys internal control over financial reporting as of June 30, 2012 was not effective.  We are in the process of developing new policies and procedures with regards to internal control over financial reporting.


Our internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that accurately and fairly reflect, in reasonable detail, transactions and dispositions of assets; and provide reasonable assurances that: (1) transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States; (2) receipts and expenditures are being made only in accordance with authorizations of management and the directors of the Company; and (3) unauthorized acquisitions, use, or disposition of the Companys assets that could have a material effect on the Companys financial statements are prevented or timely detected.


All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparations and presentations. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.


Changes in Internal Control Over Financial Reporting.


There were no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the evaluation date.




34



Item 9B. Other Information


No items required to be reported on Form 8-K during the fourth quarter ended June 30, 2012 covered by this report were not previously reported on Form 8-K.




35



PART III


Item 10. Directors, Executive Officers, and Corporate Governance.


Set forth below is the name and age of each individual who was a director or executive officer of Silverton Adventures, Inc. as of June 30, 2012, together with all positions and offices of the Company held by each and the term of office and the period during which each has served:

NAME

AGE

POSITION

DATES SERVED





Ron Miller

59

President and Director (Chairman of the Board)

December 2010 to Present





Sarit Mor

51

Secretary, Treasurer, and Director

Inception to Present


Biographical Information

The following paragraphs set forth brief biographical information for the aforementioned director and executive officer:


Ron Miller President, Treasurer, and Chairman of the Board Mr. Miller has a vast amount of experience in publishing, producing and marketing. Mr. Miller is a 1975 graduate of La Verne University in La Verne, California with a degree in business administration. He has produced and marketed over 70 educational programs since 1992. From 1989 to 1991, Mr. Miller, through a privately owned company called Entertainment Clearinghouse, operated a business of the distribution of paperback books from major publishers. He has published books such as The American Dream: Shadow and Substance, The Breaking of a President, and The Gambia. Also, Mr. Miller has been an executive producer of several educational videos which include:

·

The Rise and Fall of the Soviet Union

·

The History and Mystery of China

·

Japan: Land of the Rising Sun

·

The Life and Times of Ronald Reagan

·

World War I: Cause and Effect

·

The History and Function of Congress

·

The Extraordinary Life of Amelia Earhart

·

When Women Ruled: Great Women Leaders in World History

·

Einstein

·

The Mystery of Sherlock Holmes

·

Great American Landmarks

·

Helen Keller

Sarit Mor Secretary, Treasurer, and Director - Ms. Mor is a career leadership professional with insight, vision, and enthusiasm necessary to inspire her team to garner impressive results with more than 20 years. With history leaning in manufacturing of printed material and operations management she has significant expertise in the Printing industry that allows her performance and assessments to carry throughout her career. Ms. Mor graduated from the University of Tel Aviv with her Bachelors of Science degree in Psychology.


Involvement in Certain Legal Proceedings


To our knowledge, during the past five years, no present or former director or executive officer of our company: (1) filed a petition under the federal bankruptcy laws or any state insolvency law, nor had a receiver, fiscal agent or similar officer appointed by a court for the business or present of such a 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



36



an executive officer within two years before the time of such filing; (2) was convicted in a criminal proceeding or named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses); (3) 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, associated person of any of the foregoing, or as an investment advisor, underwriter, broker or dealer in securities, or as an affiliated person, director of any investment company, or engaging in or continuing any conduct or practice in connection with such activity; (ii) engaging in any type of business practice; (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 commodity laws; (4) 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 above under this Item, or to be associated with persons engaged in any such activity; (5) was found by a court of competent jurisdiction in a civil action or by the Securities and Exchange Commission to have violated any federal or state securities law and the judgment has not been subsequently reversed, suspended or vacated; or (6) 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.


Compliance with Section 16(a) of the Exchange Act


Because we do not have a class of equity securities registered pursuant to Section 12 of the Exchange Act, our executive officers, directors and persons who beneficially own more than 10% of our common stock are not required to file initial reports of ownership and reports of changes in ownership with the SEC under Section 16(a) of the Exchange Act.


Audit Committee and Audit Committee Financial Expert Disclosure


The Companys Board of Directors does not have a separately designated audit committee or an audit committee financial expert. Audit committee functions are performed by our Board of Directors. None of our directors is deemed independent. All directors also hold positions as our officers. Our audit committee is responsible for: (1) selection and oversight of our independent accountant; (2) establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal controls, and auditing matters; (3) establishing procedures for the confidential, anonymous submission by our employees of concerns regarding accounting and auditing matters; (4) engaging outside advisors; and, (5) funding for the outside auditory and any outside advisors engagement by the audit committee.


The Board of Directors does not have an audit committee financial expert at this time due to the fact that the Company has only limited operations and no revenues.  We believe the cost related to retaining a financial expert at this time is prohibitive. Further, because of our limited operations, we believe the services of a financial expert are not warranted.


Code of Ethics


We have adopted a corporate code of ethics. We believe our code of ethics is reasonably designed to deter wrongdoing and promote honest and ethical conduct; provide full, fair, accurate, timely and understandable disclosure in public reports; comply with applicable laws; ensure prompt internal reporting of code violations; and provide accountability for adherence to the code.


Item 11.  Executive Compensation


(a) Since Silverton Adventures, Inc.s incorporation on May 31, 2006, we have not paid any compensation to any officer, director or employee. We do not have employment agreements.  Any future compensation to be paid will be



37



determined by the Board of Directors, and, as appropriate, an employment agreement will be executed.  We do not currently have plans to pay any compensation until such time as it maintains a positive cash flow.

(b) There are no annuity, pension, or retirement benefits proposed to be paid to officers, directors, or employees of the Corporation in the event of retirement at normal retirement date pursuant to any presently existing plan provided or contributed to by the Corporation.

Director Compensation

The Directors of the Company do not receive compensation at this time.


Item 12 - Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters


The following table sets forth the beneficial ownership of the Company's officers, directors, and persons who own more than five percent of the Company's common stock as of June 30, 2012. Under relevant provisions of the Exchange Act, a person is deemed to be a "beneficial owner" of a security if he or she has or shares the power to vote or direct the voting of the security or the power to dispose or direct the disposition of the security. A person is also deemed to be a beneficial owner of any securities of which that person has the right to acquire beneficial ownership in 60 days. More than one person may be deemed to be a beneficial owner of the same securities. The percentage ownership of each stockholder is calculated based on 17,800,000 total outstanding shares of our common stock as of October 23, 2011.

Amount and Nature of Beneficial Ownership as of June 30, 2012:


Name of Individual

# Shares Beneficially Owned

# of Class of Common Stock




Sarit Mor

CEO and Director

5070 Arville Street, Suite 7

Las Vegas, Nevada 89118

10,000,000

56.18%




Ron Miller

President and Director

5070 Arville Street, Suite 7

Las Vegas, Nevada 89118

6,500,000

36.52%




All Officers and Directors as a Group (2 Persons)

16,500,000

92.70%


Item 13 Certain Relationships and Related Transactions, Director Independence



Various general and administrative expenses of the Company as well as loans for operating purposes have been paid for or made by related parties of the Company.  During the year ended June 30, 2012 the Company received cash of $54,867 on these payables, had $27,262 in expenses paid on behalf of the Company, and made payments totaling $18,469 on these related-party payables.  Related party payables totaled $72,256 and $12,224 at June 30, 2012 and 2011, respectively. These amounts payable bear no interest, are uncollateralized and due on demand.  


During the year ended June 30, 2012, the Company made cash payments totaling $199,002 to related parties, and received cash payments in return in the amount of $146,589.  Related-party receivables totaled $76,853 at June 30, 2012.  These receivables are unsecured, bear no interest, and are due on demand.  



Item 14 Principal Accountant Fees and Services


Audit Fees: All fees which pertain to each of the last two fiscal year audits for professional services rendered by the principal accountant for the audit of the registrant's annual financial statements and the review of interim financial



38



statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years.


2012:  $21,500


2011:

$ 19,000


Audit-Related Fees: All fees billed in each of the last two fiscal years for assurance and related services by the principal accountant that are reasonably related to the performance of the audit or review of the registrant's financial statements and are not reported under Item 9(e)(f1) of Schedule 14A.


2012:   $ -0-


2011:

  $ -0-


Tax Fees: The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning:


2012:    $ -0-


2011:    $ -0-



All Other Fees:


2012:

 $ -0-


2011:   $ -0-

 (5)   Our audit committee's pre-approval policies and procedures described in paragraph (c)(7)(i) of Rule 2-01 of Regulation S-X were that the audit committee pre-approve all accounting related activities prior to the performance of any services by any accountant or auditor.

(6)   The percentage of hours expended on the principal accountant's engagement to audit our financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant's full-time, permanent employees was 0%.




39



PART IV


Item 15 Exhibits, Financial Statement Schedules


The following exhibits are included with this filing:



Exhibit No.:

Description:



3.1(i)

Articles of Incorporation and amendments thereto (1)



3.1(ii)

Bylaws (1)



14

Code of Ethics (1)



31.1

Section 302 Certification by Principal Executive Officer and Principal Financial and Accounting Officer



32.1

Section 906 Certification by Principal Executive Officer and Principal Financial and Accounting Officer


(1)

Filed with the Securities and Exchange Commission on September 23, 2008 as an exhibit numbered as indicated above, to the Registrants registration statement on Form S-1 (file no. 333-153626 which exhibit is incorporated herein by reference.






40



Signatures


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


October 23, 2012

    

Silverton Adventures, Inc.


By:

/s/ Ron Miller

Ron Miller, President (Principal Executive and Accounting Officer)



Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates included.


October 23, 2012

By:

/s/ Ron Miller

Ron Miller, President

Principal Executive Officer

Principal Financial Officer

Principal Accounting Officer

Chairman of the Board of Directors



41


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