UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For the quarterly period ended
OR
FOR THE TRANSITION PERIOD FROM TO
Commission File Number
(Exact name of registrant as specified in its charter)
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Registrant’s telephone number, including area code: (
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company or an emerging growth company. See the definition of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
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Small reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
The number of shares of registrant’s Common Stock outstanding, $0.01 par value per share, as of May 10, 2023 was
Securities registered pursuant to Section 12(b) of the Act:
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Table of Contents
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PART I |
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Item 1. |
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2 |
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Condensed Consolidated Interim Balance Sheets as of March 31, 2023 (Unaudited) and June 30, 2022 |
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3 |
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4 |
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5 |
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Notes to Condensed Consolidated Interim Financial Statements (Unaudited) |
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Item 2. |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3. |
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20 |
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Item 4. |
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21 |
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PART II |
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Item 1A. |
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22 |
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Item 4. |
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Item 6. |
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Signatures |
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24 |
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i
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements.
PARAMOUNT GOLD NEVADA CORP.
Condensed Consolidated Interim Balance Sheets
(Unaudited)
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March 31, |
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June 30, |
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Assets |
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Current Assets |
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Cash and cash equivalents |
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$ |
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Prepaid expenses and deposits |
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Total Current Assets |
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Non-Current Assets |
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Mineral properties |
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Reclamation bond |
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Property and equipment |
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Total Non-Current Assets |
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Total Assets |
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$ |
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Liabilities and Stockholders' Equity |
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Liabilities |
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Current Liabilities |
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Accounts payable and accrued liabilities |
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$ |
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$ |
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Reclamation and environmental obligation, current portion |
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Convertible debt |
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— |
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Convertible debt, related parties |
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— |
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Notes payable, related party |
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— |
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Total Current Liabilities |
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Non-Current Liabilities |
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Convertible debt |
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— |
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Convertible debt, related parties |
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— |
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Deferred tax liability |
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Reclamation and environmental obligation, non-current portion |
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Total Non-Current Liabilities |
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Total Liabilities |
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(Note 12) |
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Stockholders' Equity |
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Common stock, par value $ |
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Additional paid in capital |
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Accumulated deficit |
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Total Stockholders' Equity |
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Total Liabilities and Stockholders' Equity |
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$ |
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$ |
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The accompanying notes are an integral part of these condensed consolidated interim financial statements.
2
PARAMOUNT GOLD NEVADA CORP.
Condensed Consolidated Interim Statements of Operations
(Unaudited)
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Three Months Ended March 31, |
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Nine Months Ended March 31, |
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2023 |
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2022 |
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2023 |
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2022 |
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Expenses |
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Exploration |
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Land holding costs |
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Professional fees |
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Salaries and benefits |
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Directors' compensation |
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General and administrative |
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Accretion |
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Total Expenses |
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Net Loss before Other Expense |
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Other Expense (Income) |
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Other income |
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Interest and service charges |
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Net Loss |
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$ |
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$ |
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Loss per Common Share |
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Basic and diluted |
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$ |
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$ |
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Weighted Average Number of Common |
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Shares Used in Per Share Calculations |
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Basic and diluted |
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The accompanying notes are an integral part of these condensed consolidated interim financial statements.
3
PARAMOUNT GOLD NEVADA CORP.
Condensed Consolidated Interim Statements of Stockholders’ Equity
(Unaudited)
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Shares (#) |
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Common Stock |
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Additional |
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Deficit |
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Total Stockholders' |
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Balance at June 30, 2022 |
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$ |
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$ |
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Stock based compensation |
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— |
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— |
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Capital issued for payment of interest |
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— |
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Net loss |
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Balance at September 30, 2022 |
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$ |
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Stock based compensation |
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Capital issued for financing |
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Net loss |
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Balance at December 31, 2022 |
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$ |
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Stock based compensation |
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Capital issued for financing |
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Capital issued for payment of interest |
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Net loss |
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Balance at March 31, 2023 |
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$ |
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$ |
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$ |
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Shares (#) |
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Common Stock |
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Additional |
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Deficit |
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Total Stockholders' |
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Balance at June 30, 2021 |
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$ |
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$ |
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Stock based compensation |
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Capital issued for financing |
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Capital issued for payment of interest |
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Net loss |
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Balance at September 30, 2021 |
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Stock based compensation |
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Capital issued for financing |
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Net loss |
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Balance at December 31, 2021 |
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Stock based compensation |
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Capital issued for financing |
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Capital issued for payment of interest |
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Net loss |
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Balance at March 31, 2022 |
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$ |
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$ |
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$ |
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The accompanying notes are an integral part of these condensed consolidated interim financial statements.
4
PARAMOUNT GOLD NEVADA CORP.
Condensed Consolidated Interim Statements of Cash Flows
(Unaudited)
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Nine Months Ended March 31, |
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2023 |
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2022 |
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Net Loss |
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Adjustments to reconcile net loss to net cash used in operations: |
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Depreciation |
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Stock based compensation |
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Amortization of debt issuance costs |
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Interest expense |
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Accretion expense |
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Settlement of asset retirement obligations |
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Change in reclamation bonds accounts |
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Effect of changes in operating working capital items: |
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(Increase)/Decrease in prepaid expenses |
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Increase/(Decrease) in accounts payable |
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Cash used in operating activities |
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Cash flows from investing activities: |
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Purchase of mineral properties |
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Purchase of equipment |
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Cash used in investing activities |
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Cash flows from financing activities |
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Capital issued for financing, net of share issuance costs |
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Proceeds from notes payable, related parties |
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Cash provided by financing activities |
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Change in cash during period |
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Cash at beginning of period |
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Cash at end of period |
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See Note 4 for supplemental cash flow information
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
5
PARAMOUNT GOLD NEVADA CORP.
Notes to Condensed Consolidated Interim Financial Statements
For the Nine-Months Period Ended March 31, 2023 and 2022
(Unaudited)
Note 1. Description of Business and Summary of Significant Accounting Policies
Paramount Gold Nevada Corp. (the “Company” or “Paramount”), incorporated under Chapter 78 of Nevada Revised Statutes, and its wholly-owned subsidiaries are engaged in the acquisition, exploration and development of precious metal properties. The Company’s wholly owned subsidiaries include New Sleeper Gold LLC, Sleeper Mining Company, LLC, and Calico Resources USA Corp (“Calico”). The Company is in the process of exploring its mineral properties in Nevada and Oregon, United States. The Company’s activities are subject to significant risks and uncertainties, including the risk of failing to secure additional funding to advance its projects and the risks of determining whether these properties contain reserves that are economically recoverable. The Company’s shares of common stock trade on the NYSE American LLC under the symbol “PZG”.
Basis of Presentation and Preparation
The unaudited condensed consolidated interim financial statements are prepared by management in accordance with accounting principles for interim financial information and Article 10 of Regulation S-X. Accordingly, they do not include all of the disclosures required by U.S. generally accepted accounting principles (“U.S. GAAP”) for complete financial statements. In the opinion of management, all the normal and recurring adjustments necessary to fairly present the interim financial information set forth herein have been included.
The condensed consolidated interim financial statements have been prepared on an accrual basis of accounting, in conformity with U.S. GAAP, are presented in US dollars and follow the same accounting policies and methods of their application as the most recent annual financial statements. The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany accounts and transactions are eliminated in consolidation. The condensed consolidated interim financial statements should be read in conjunction with the consolidated financial statements and related footnotes for the year ended June 30, 2022.
Significant Accounting Policies
Please see Note 1- Description of Business and Summary of Significant Accounting Policies contained in the 2022 10-K.
Note 2. Going Concern
The Company has not generated any revenues or cash flows from operations to date. As such the Company is subject to all the risks associated with development stage companies. Since inception, the Company has incurred losses and negative cash flows from operating activities which have been funded from the issuance of common stock, convertible notes and the sale of royalties on its mineral properties. The Company does not expect to generate positive cash flows from operating activities in the near future, if at all, until such time it successfully initiates production at its Grassy Mountain Project, including obtaining construction financing, completing the construction of the proposed mine and anticipates incurring operating losses for the foreseeable future.
The Condensed Consolidated Financial Statements of the Company have been prepared on a “going concern” basis, which means that the continuation of the Company is presumed even though events and conditions exist that, when considered in aggregate, raise substantial doubt about the Company’s ability to continue as a going concern because it is possible that the Company will be required to adversely change its current business plan or may be unable to meet its obligations as they become due with one year after the date of that these financial statements were issued.
Paramount expects to continue to incur losses as a result of costs and expenses related to maintaining its properties and general and administrative expenses. Since 2015, the Company has relied on equity financings, debt financings and sale of royalties to fund its operations and the Company expects to rely on these forms of financing to fund operations into the near future. The Company will also continue to identify ways to reduce its cash expenditures.
Paramount’s current business plan requires working capital to fund non-discretionary expenditures for its exploration and development activities on its mineral properties, mineral property holding costs and general and administrative expenses. It requires approximately $
Subsequent to May 12, 2023, the Company expects to fund operations as follows:
6
Historically, we have been successful in accessing capital through equity and debt financing arrangements or by the sale of royalties on its mineral properties, no assurance can be given that additional financing will be available to it in amounts sufficient to meet its needs, or on terms acceptable to the Company. In the event that we are unable to obtain additional capital or financing, our operations, exploration and development activities will be significantly adversely affected. The continuation of the Company as a going concern is dependent on having sufficient capital to maintain our operations and to repay debt which become due in September 2023. In considering our financing plans, our current working capital position and our ability to reduce operating expenses the Company believes there is substantial doubt about its ability to continue as a going concern twelve months after the date that our financial statements are issued.
Note 3. Fair Value Measurements
Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization with the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:
The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3).
The three levels of the fair value hierarchy are described below:
Level 1 Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
Level 2 Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.
Level 3 Inputs that are both significant to the fair value measurement and unobservable.
Financial assets and liabilities measured at fair value on a recurring basis by level within the fair value hierarchy. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.
Our financial instruments include cash, accounts payable, accrued liabilities, notes payable and convertible debt. Due to their short maturity of our cash, accounts payable, notes payable and accrued liabilities, we believe that their carrying amounts approximate fair value as of March 31, 2023 and 2022. The carrying amount of convertible debt approximates fair value as the interest rate charged represents a market rate of interest.
Note 4. Non-Cash Transactions
For the nine months ended March 31, 2023, the Company issued
For the nine months ended March 31, 2022, the Company issued
Note 5. Capital Stock
Authorized Capital
Authorized capital stock consists of
For the three months ended March 31, 2023, the Company issued
7
For the three months ended March 31, 2022, the Company issued
For the nine months ended March 31, 2023, the Company issued
For the nine months ended March 31, 2022, the Company issued
Stock Options, Restricted Stock Units and Stock Based Compensation
Paramount’s 2015 and 2016 Stock Incentive and Compensation Plans, which are stockholder-approved, permits the grant of stock options, restricted stock units and stock to its employees and directors for up to
Total stock-based compensation for the three months ended March 31, 2023 and 2022 were $
Total stock-based compensation for the nine months ended March 31, 2023 and 2022 were $
Stock Options
Stock option awards are generally granted with an exercise price equal to the market price of Paramount’s stock at the date of grant and have contractual lives of
For the three months ended March 31, 2023, the Company did
For the nine months ended March 31, 2023, the Company granted
The fair value for options granted for the nine months ended March 31, 2023 was calculated using the Black-Scholes option valuations method. The weighted average assumptions used were as follows:
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Nine Months Ended March 31, 2023 |
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Nine Months Ended March 31, 2022 |
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Weighted average risk-free interest rate |
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% |
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N/A |
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Weighted-average volatility |
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% |
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N/A |
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Expected dividends |
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|
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N/A |
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Weighted average expected term (years) |
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N/A |
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Weighted average fair value |
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$ |
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