0001493152-18-013545.txt : 20180920 0001493152-18-013545.hdr.sgml : 20180920 20180920163539 ACCESSION NUMBER: 0001493152-18-013545 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 64 CONFORMED PERIOD OF REPORT: 20180731 FILED AS OF DATE: 20180920 DATE AS OF CHANGE: 20180920 FILER: COMPANY DATA: COMPANY CONFORMED NAME: U.S. GOLD CORP. CENTRAL INDEX KEY: 0000027093 STANDARD INDUSTRIAL CLASSIFICATION: METAL MINING [1000] IRS NUMBER: 221831409 STATE OF INCORPORATION: NV FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-08266 FILM NUMBER: 181079783 BUSINESS ADDRESS: STREET 1: SUITE 102 - BOX 604 STREET 2: 1910 E IDAHO STREET CITY: ELKO STATE: NV ZIP: 89801 BUSINESS PHONE: 6097990071 MAIL ADDRESS: STREET 1: SUITE 102 - BOX 604 STREET 2: 1910 E IDAHO STREET CITY: ELKO STATE: NV ZIP: 89801 FORMER COMPANY: FORMER CONFORMED NAME: DATARAM CORP DATE OF NAME CHANGE: 19920703 10-Q 1 form10-q.htm

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

(Mark One)

 

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended July 31, 2018

 

or

 

[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from _____________ to _____________

 

Commission file number: 1-08266

 

U.S. GOLD CORP.

(Exact name of registrant as specified in its charter)

 

Nevada   22-1831409

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

1910 E. Idaho Street, Suite 102-Box 604, Elko, NV   89801
(Address of principal executive offices)   (Zip Code)

 

(800) 557-4550

(Registrant’s telephone number, including area code)

 

 

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

 

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. [X] Yes [  ] No

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). [X] Yes [  ] No

 

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

 

Large accelerated filer [  ] Accelerated filer [  ] Non-accelerated filer [X] Smaller reporting company [X] Emerging growth Company [  ]

 

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

 

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

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. Common Stock ($0.001 par value): As of September 20, 2018, there were 18,639,892 shares outstanding.

 

 

 

 
 

 

U.S. GOLD CORP.

FORM 10-Q

TABLE OF CONTENTS

 

    Page
PART I – FINANCIAL INFORMATION  
     
Item 1. Financial Statements- Unaudited 3
  Condensed Consolidated Balance Sheets as of July 31, 2018 (unaudited) and April 30, 2018 3
  Condensed Consolidated Statements of Operations for the Three Months ended July 31, 2018 and 2017 (unaudited) 4
  Condensed Consolidated Statement of Changes in Stockholders’ Equity for the Three Months ended July 31, 2018 (unaudited) and the Year Ended April 30, 2018 5
  Condensed Consolidated Statements of Cash Flows for the Three Months ended July 31, 2018 and 2017 (unaudited) 6
  Notes to Condensed Consolidated Financial Statements (unaudited) 7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 21
Item 3. Quantitative and Qualitative Disclosures About Market Risk 26
Item 4. Controls and Procedures 26
     
PART II – OTHER INFORMATION  
     
Item 1. Legal Proceedings 27
Item 1A. Risk Factors 27
Item 2. Unregistered Sales of Equity Securities and use of Proceeds 27
Item 3. Defaults Upon Senior Securities 27
Item 4. Mine Safety Disclosures 28
Item 5. Other Information 28
Item 6. Exhibits 28
Signature Page 29

 

2
 

 

PART I: FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS.

 

U.S. GOLD CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

 

    July 31, 2018     April 30, 2018  
    (Unaudited)        
             
ASSETS                
CURRENT ASSETS:                
Cash   $ 6,194,292     $ 7,646,279  
Prepaid expenses and other current assets     813,525       632,038  
                 
Total Current Assets     7,007,817       8,278,317  
                 
NON - CURRENT ASSETS:                
Property, net     58,250       -  
Reclamation bond deposit     92,928       92,928  
Mineral rights     4,176,952       4,176,952  
Deferred income taxes     438,145       438,145  
                 
Total Non - Current Assets     4,766,275       4,708,025  
                 
Total Assets   $ 11,774,092     $ 12,986,342  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY                
                 
CURRENT LIABILITIES:                
Accounts payable   $ 342,243     $ 262,652  
Accounts payable- related party     2,431       2,431  
Accrued liabilities     27,194       20,998  
                 
Total Current Liabilities     371,868       286,081  
                 
LONG-TERM LIABILITIES                
Asset retirement obligation     60,823       -  
                 
Total Liabilities     432,691       286,081  
                 
Commitments and Contingencies                
                 
STOCKHOLDERS’ EQUITY :                
Preferred stock, $0.001 par value; 50,000,000 authorized                
Convertible Series C Preferred stock ($0.001 Par Value; 45,002 Shares Authorized; 0 and 45,002 issued and outstanding as of July 31, 2018 and April 30, 2018)     -       -  
Convertible Series E Preferred stock ($0.001 Par Value; 2,500 Shares Authorized; 0 issued and outstanding as of July 31, 2018 and April 30, 2018)     -       -  
Common stock ($0.001 Par Value; 200,000,000 Shares Authorized; 17,619,084 and 17,590,574 shares issued and outstanding as of July 31, 2018 and April 30, 2018)     17,619       17,591  
Additional paid-in capital     31,033,838       30,911,222  
Accumulated deficit     (19,710,056 )     (18,228,552 )
                 
Total Stockholders’ Equity     11,341,401       12,700,261  
                 
Total Liabilities and Stockholders’ Equity   $ 11,774,092     $ 12,986,342  

 

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these financial statements.

 

3
 

 

U.S. GOLD CORP. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 

    For the Three Months Ended     For the Three Months Ended  
    July 31, 2018     July 31, 2017  
             
Net revenues   $ -     $ -  
                 
Operating expenses:                
Compensation and related taxes     301,760       1,389,814  
Exploration costs     504,825       767,883  
Professional fees     541,344       861,463  
General and administrative expenses     133,575       187,173  
                 
Total operating expenses     1,481,504       3,206,333  
                 
Operating loss from continuing operations     (1,481,504 )     (3,206,333 )
                 
Loss from continuing operations before provision for income taxes     (1,481,504 )     (3,206,333 )
                 
Provision for income taxes     -       -  
                 
Loss from continuing operations     (1,481,504 )     (3,206,333 )
                 
Discontinued operations:                
Loss from discontinued operations (including impairment expense of $6,094,760)     -       (6,071,448 )
                 
Total loss from discontinued operations     -       (6,071,448 )
                 
Net loss   $ (1,481,504 )   $ (9,277,781 )
                 
Loss per common share, basic and diluted                
Loss from continuing operations   $ (0.08 )   $ (0.35 )
Discontinuing :                
Operations   $ -     $ (0.65 )
Total discontinuing operations   $ -     $ (0.65 )
Net loss per share   $ (0.08 )   $ (1.00 )
                 
Weighted average common shares outstanding - basic and diluted     17,605,277       9,252,624  

 

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these financial statements.

 

4
 

 

U.S. GOLD CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

 

FOR THE THREE MONTHS ENDED JULY 31, 2018 AND FOR THE YEAR ENDED APRIL 30, 2018

 

    Preferred Stock - Series C     Preferred Stock - Series E     Common Stock     Additional           Total  
    $0.001 Par Value     $0.001 Par Value     $0.001 Par Value     Paid-in     Accumulated     Stockholders’  
    Shares     Amount     Shares     Amount     Shares     Amount     Capital     Deficit     Equity  
                                                       
Balance, April 30, 2017     45,002     $ 45       -     $ -       6,932,059     $ 6,932     $ 15,813,297     $ (4,570,057 )   $ 11,250,217  
                                                                         
Recapitalization of the Company     -       -       -       -       1,204,667       1,205       5,660,730       -       5,661,935  
                                                                         
Issuance of common stock for cash     -       -       -       -       1,568,100       1,568       2,588,436       -       2,590,004  
                                                                         
Issuance of preferred stock and warrants for cash     -       -       2,500       3       -       -       4,916,117       -       4,916,120  
                                                                         
Issuance of common stock for the acquisition of mineral rights     -       -       -       -       15,000       15       35,835       -       35,850  
                                                                         
Issuance of common stock for services     -       -       -       -       700,483       702       1,142,127       -       1,142,829  
                                                                         
Issuance of common stock for prepaid services     -       -       -       -       117,500       117       280,708       -       280,825  
                                                                         
Conversion of preferred stock into common stock     (45,002 )     (45 )     (2,500 )     (3 )     7,000,180       7,000       (6,952 )     -       -  
                                                                         
Issuance of common stock for accrued services     -       -       -       -       52,585       52       137,448       -       137,500  
                                                                         
Issuance of options for services     -       -       -       -       -       -       174,835       -       174,835  
                                                                         
Issuance of options for prepaid services     -       -       -       -       -       -       168,641       -       168,641  
                                                                         
Net loss     -       -       -       -       -       -       -       (13,658,495 )     (13,658,495 )
                                                                         
Balance, April 30, 2018     -     $ -       -     $ -       17,590,574     $ 17,591     $ 30,911,222     $ (18,228,552 )   $ 12,700,261  
                                                                         
Issuance of common stock for services     -       -       -       -       19,319       19       76,489       -       76,508  
                                                                         
Issuance of common stock for accrued services     -       -       -       -       9,191       9       12,491       -       12,500  
                                                                         
Issuance of options for services     -       -       -       -       -       -       33,636       -       33,636  
                                                                         
Net loss - For the three months ended July 31, 2018     -       -       -       -       -       -       -       (1,481,504 )     (1,481,504 )
                                                                         
Balance, July 31, 2018     -     $ -       -     $ -       17,619,084     $ 17,619     $ 31,033,838     $ (19,710,056 )   $ 11,341,401  

 

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these financial statements.

 

5
 

 

U.S. GOLD CORP. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

    For the Three Months Ended     For the Three Months Ended  
    July 31, 2018     July 31, 2017  
             
CASH FLOWS FROM OPERATING ACTIVITIES:                
Net loss   $ (1,481,504 )   $ (9,277,781 )
Adjustments to reconcile net loss to net cash used in operating activities:                
Depreciation     1,319       -  
Accretion     1,254       -  
Stock based compensation     110,144       12,500  
Amortization of prepaid stock based expenses     105,188       -  
Impairment expense     -       6,094,760  
Changes in operating assets and liabilities:                
Prepaid expenses and other current assets     (286,675 )     (589,135 )
Assets of held for sale operations, discontinued - current     -       (692,497 )
Reclamation bond deposit and other assets     -       (5,181 )
Assets of held for sale operations, discontinued – long term     -       8,000  
Accounts payable and accrued liabilities     98,287       934,631  
Liabilities of held for sale operations, discontinued - current     -       552,638  
Liabilities of held for sale operations, discontinued - long term     -       (11,944 )
                 
NET CASH USED IN OPERATING ACTIVITIES     (1,451,987 )     (2,974,009 )
                 
CASH FLOWS FROM FINANCING ACTIVITIES:                
Issuance of common stock     -       500,004  
                 
NET CASH PROVIDED BY FINANCING ACTIVITIES     -       500,004  
                 
NET DECREASE IN CASH     (1,451,987 )     (2,474,005 )
                 
CASH - beginning of period     7,646,279       6,820,623  
                 
CASH - end of period   $ 6,194,292     $ 4,346,618  
                 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:                
Cash paid for:                
Interest   $ -     $ -  
Income taxes   $ -     $ -  
                 
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:                
Increase in asset retirement obligation   $ 59,569     $ -  
Issuance of common stock for merger   $ -     $ 5,661,935  
Issuance of common stock for accrued services   $ -     $ 100,000  

 

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these financial statements.

 

6
 

 

U.S. GOLD CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JULY 31, 2018 AND 2017

 

NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

 

Organization

 

U.S. Gold Corp., formerly known as Dataram Corporation (the “Company”), was originally incorporated in the State of New Jersey in 1967 was subsequently re-incorporated under the laws of the State of Nevada in 2016. Effective June 26, 2017, the Company changed its legal name to U.S. Gold Corp. from Dataram Corporation. On May 23, 2017, the Company merged with Gold King Corp. (“Gold King”), in a transaction treated as a reverse acquisition and recapitalization, and the business of Gold King became the business of the Company. The financial statements are those of Gold King (the accounting acquirer) prior to the merger and include the activity of Dataram Corporation (the legal acquirer) from the date of the merger. Gold King is a gold and precious metals exploration company pursuing exploration and development opportunities primarily in Nevada and Wyoming. None of the Company’s properties contain proven and probable reserves and all of the Company’s activities on all of its properties are exploratory in nature.

 

On July 6, 2016, the Company filed a certificate of amendment to its Articles of Incorporation with the Secretary of State of Nevada in order to effectuate a reverse stock split of the Company’s issued and outstanding common stock per share on a one for three basis, effective on July 8, 2016. Subsequently, on May 3, 2017, the Company filed another certificate of amendment to its Articles of Incorporation, as amended, with the Secretary of State of the State of Nevada in order to effectuate a reverse stock split of the Company’s issued and outstanding common stock on a one for four basis. All share and per share values of the Company’s common stock for all periods presented in the accompanying condensed consolidated financial statements are retroactively restated for the effect of the reverse stock splits.

 

Recent developments - Acquisition and Disposition

 

On June 13, 2016, Gold King, a private Nevada corporation, entered into an Agreement and Plan of Merger (the “Merger Agreement”) with the Company, the Company’s wholly-owned subsidiary, Dataram Acquisition Sub, Inc., a Nevada corporation (“Acquisition Sub”), and all of the principal shareholders of Gold King (the “Gold King Shareholders”). Upon closing of the transactions contemplated under the Merger Agreement (the “Merger”), Gold King merged with and into Acquisition Sub with Gold King as the surviving corporation and became a wholly-owned subsidiary of the Company.

 

On May 23, 2017, the Company closed the Merger with Gold King. The Merger constituted a change of control, the majority of the Board of Directors changed with the consummation of the Merger. The Company issued shares of common stock to Gold King which represented approximately 90% of the combined company.

 

On July 31, 2017, the Company’s Board of Directors, or Board, reviewed and approved the recommendation of management to consider strategic options for Dataram Corporation’s legacy business (“Dataram Memory”) including the sale of the legacy business. Upon board approval, the legacy business activities were re-classed and reported as part of “discontinued operations” on the condensed consolidated statements of operations and assets and liabilities were reflected on the condensed consolidated balance sheets as “held for sale”.

 

On October 13, 2017, the Company sold the Dataram Memory business for a purchase price of $900,000 (see Note 6).

 

7
 

 

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation and Liquidity

 

The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the United States Securities and Exchange Commission for interim financial information, which includes the unaudited condensed consolidated financial statements and present the unaudited condensed consolidated financial statements of the Company and its wholly-owned subsidiaries as of July 31, 2018. All intercompany transactions and balances have been eliminated. The accounting policies and procedures used in the preparation of these unaudited condensed consolidated financial statements have been derived from the audited financial statements of the Company for the year ended April 30, 2018, which are contained in the Form 10-K filed on July 30, 2018. The unaudited condensed consolidated balance sheet as of April 30, 2018 was derived from those financial statements. It is management’s opinion that all material adjustments (consisting of normal recurring adjustments) have been made, which are necessary for a fair financial statement presentation. The results for the interim period are not necessarily indicative of the results to be expected for the year ending April 30, 2019.

 

As reflected in the accompanying unaudited condensed consolidated financial statements, the Company had a net loss and used cash in its operations of approximately $1.5 million and $1.5 million, respectively, for the three months ended July 31, 2018. Additionally, the Company had an accumulated deficit of approximately $19.7 million at July 31, 2018. The Company consummated private placements to several investors for the sale of the Company’s Series B Convertible Preferred Stock (“Series B Preferred Stock”) and Series C Convertible Preferred Stock (“Series C Preferred Stock”) for aggregate net proceeds of approximately $10.9 million between July 2016 and October 2016, received net proceeds from sale of the Company’s common stock of approximately $2.6 million between July 2017 and October 2017 and completed a private placement for the sale of the Company’s Series E Convertible Preferred Stock (“Series E Preferred Stock”) and warrants for aggregate net proceeds of approximately $4.9 million in January 2018. There can be no assurance that the Company will be able to raise additional capital or if the terms will be favorable.

 

The above steps substantially lowered the Company’s potential cash exposure. Additionally, the Company is able to control cash spending on its exploration activities. As a result, as of the date of the issuance of these financial statements, the Company believes its current cash position and plans have alleviated substantial doubt about its ability to sustain operations for at least one year from the issuance of these unaudited condensed consolidated financial statements.

 

Use of Estimates and Assumptions

 

In preparing the condensed consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the condensed consolidated balance sheet, and revenues and expenses for the period then ended. Actual results may differ significantly from those estimates. Significant estimates made by management include, but are not limited to valuation of mineral rights, goodwill, stock-based compensation, the fair value of common stock issued, asset retirement obligation and the valuation of deferred tax assets and liabilities.

 

Fair Value of Financial Instruments

 

The Company adopted Accounting Standards Codification (“ASC”) ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”), for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied in accordance with accounting principles generally accepted in the United States of America that requires the use of fair value measurements, establishes a framework for measuring fair value and expands disclosure about such fair value measurements.

 

8
 

 

ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs.

 

These inputs are prioritized below:

 

Level 1: Observable inputs such as quoted market prices in active markets for identical assets or liabilities.
Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data.
Level 3: Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions.

 

The Company analyzes all financial instruments with features of both liabilities and equity under the Financial Accounting Standard Board’s (“FASB”) accounting standard for such instruments. Under this standard, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

 

The carrying amounts reported in the unaudited condensed consolidated balance sheets for cash, prepaid expense and other current assets – current, accounts payable, and accrued liabilities, approximate their estimated fair values based on the short-term maturity of these instruments.

 

Goodwill and other intangible assets

 

In accordance with ASC 350-30-65, the Company assesses the impairment of identifiable intangibles whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors the Company considers to be important which could trigger an impairment review include the following:

 

  1. Significant underperformance relative to expected historical or projected future operating results;
  2. Significant changes in the manner of use of the acquired assets or the strategy for the overall business; and
  3. Significant negative industry or economic trends.

 

When the Company determines that the carrying value of intangibles may not be recoverable based upon the existence of one or more of the above indicators of impairment and the carrying value of the asset cannot be recovered from projected undiscounted cash flows, the Company records an impairment charge. The Company measures any impairment based on a projected discounted cash flow method using a discount rate determined by management to be commensurate with the risk inherent in the current business model. Significant management judgment is required in determining whether an indicator of impairment exists and in projecting cash flows.

 

Property

 

Property is carried at cost. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition. Depreciation is calculated on a straight-line basis over the estimated useful life of the assets, generally ten years.

 

Impairment of long-lived assets

 

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable, or at least annually. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value. During the year ended April 30, 2018, the Company determined that the carrying value of Goodwill (see Note 6) exceeded its fair value, which triggered an impairment analysis. The Company recorded a goodwill impairment expense of $6,094,760 during the year ended April 30, 2018, nonrecurring level 3 fair value measurement. No impairment of goodwill was recorded during the three months ended July 31, 2018.

 

9
 

 

Mineral Rights

 

Costs of lease, exploration, carrying and retaining unproven mineral lease properties are expensed as incurred. The Company expenses all mineral exploration costs as incurred as it is still in the exploration stage. If the Company identifies proven and probable reserves in its investigation of its properties and upon development of a plan for operating a mine, it would enter the development stage and capitalize future costs until production is established.

 

When a property reaches the production stage, the related capitalized costs are amortized on a units-of-production basis over the proven and probable reserves following the commencement of production. The Company assesses the carrying costs of the capitalized mineral properties for impairment under ASC 360-10, “Impairment of long-lived assets”, and evaluates its carrying value under ASC 930-360, “Extractive Activities - Mining”, annually. An impairment is recognized when the sum of the expected undiscounted future cash flows is less than the carrying amount of the mineral properties. Impairment losses, if any, are measured as the excess of the carrying amount of the mineral properties over its estimated fair value.

 

To date, the Company has not established the commercial feasibility of any exploration prospects; therefore, all exploration costs are being expensed.

 

ASC 930-805, “Extractive Activities-Mining: Business Combinations” (“ASC 930-805”), states that mineral rights consist of the legal right to explore, extract, and retain at least a portion of the benefits from mineral deposits. Mining assets include mineral rights. Acquired mineral rights are considered tangible assets under ASC 930-805. ASC 930-805 requires that mineral rights be recognized at fair value as of the acquisition date. As a result, the direct costs to acquire mineral rights are initially capitalized as tangible assets. Mineral rights include costs associated with acquiring patented and unpatented mining claims.

 

ASC 930-805 provides that in measuring the fair value of mineral assets, an acquirer should take into account both:

 

● The value beyond proven and probable reserves (“VBPP”) to the extent that a market participant would include VBPP in determining the fair value of the assets.

 

● The effects of anticipated fluctuations in the future market price of minerals in a manner that is consistent with the expectations of market participants.

 

Share-Based Compensation

 

Share-based compensation is accounted for based on the requirements of ASC 718, “Compensation – Stock Compensation’ (“ASC 718”) which requires recognition in the financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). ASC 718 also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award. Pursuant to ASC 505, “Equity – Equity Based Payments to Non-Employees” (“ASC 505-50”), for share-based payments to consultants and other third-parties, compensation expense is determined at the measurement date which is the grant date. Until the measurement date is reached, the total amount of compensation expense remains uncertain.

 

Accounting for Warrants

 

The Company classifies as equity any contracts that (i) require physical settlement or net-share settlement or (ii) gives the Company a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement). The Company classifies as assets or liabilities any contracts that (i) require net-cash settlement (including a requirement to net-cash settle the contract if an event occurs and if that event is outside the control of the Company) or (ii) gives the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement).

 

10
 

 

The Company assessed the classification of its common stock purchase warrants as of the date of each equity offering and determined that such instruments met the criteria for equity classification, as the settlement terms indicate that the instruments are indexed to the entity’s underlying stock.

 

Convertible Preferred Stock

 

The Company accounts for its convertible preferred stock under the provisions of ASC 480, “Distinguishing Liabilities from Equity”, which sets forth the standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. ASC 480 requires an issuer to classify a financial instrument that is within the scope of ASC 480 as a liability if such financial instrument embodies an unconditional obligation to redeem the instrument at a specified date and/or upon an event certain to occur.

 

Convertible Instruments

 

The Company bifurcates conversion options from their host instruments and account for them as free standing derivative financial instruments according to certain criteria. The criteria includes circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. An exception to this rule when the host instrument is deemed to be conventional as that term is described under applicable U.S. GAAP.

 

When the Company has determined that the embedded conversion options should not be bifurcated from their host instruments, the Company records, when necessary, a beneficial conversion feature (“BCF”) related to the issuance of convertible debt and equity instruments that have conversion features at fixed rates that are in-the-money when issued, and the fair value of warrants issued in connection with those instruments. The BCF for the convertible instruments is recognized and measured by allocating a portion of the proceeds to warrants, based on their relative fair value, and as a reduction to the carrying amount of the convertible instrument equal to the intrinsic value of the conversion feature. The discounts recorded in connection with the BCF and warrant valuation are recognized a) for convertible debt as interest expense over the term of the debt, using the effective interest method or b) for convertible preferred stock as dividends at the time the stock first becomes convertible.

 

Asset Retirement Obligations

 

Asset retirement obligations (“ARO”), consisting primarily of estimated reclamation costs at the Company’s Copper King and Keystone properties, are recognized in the period incurred and when a reasonable estimate can be made, and recorded as liabilities at fair value. Such obligations, which are initially estimated based on discounted cash flow estimates, are accreted to full value over time through charges to accretion expense. Corresponding asset retirement costs are capitalized as part of the carrying amount of the related long-lived asset and depreciated over the asset’s remaining useful life. Asset retirement obligations are periodically adjusted to reflect changes in the estimated present value resulting from revisions to the estimated timing or amount of reclamation and closure costs. The Company reviews and evaluates its asset retirement obligations annually or more frequently at interim periods if deemed necessary.

 

Income taxes

 

The Company accounts for income taxes pursuant to the provision of ASC 740-10, “Accounting for Income Taxes” (“ASC 740-10”), which requires, among other things, an asset and liability approach to calculating deferred income taxes. The asset and liability approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred asset will not be realized.

 

The Company follows the provision of ASC 740-10 related to Accounting for Uncertain Income Tax Positions. When tax returns are filed, there may be uncertainty about the merits of positions taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions.

 

11
 

 

Tax positions that meet the more likely than not recognition threshold are measured at the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefit associated with tax positions taken that exceed the amount measured as described above should be reflected as a liability for uncertain tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company believes its tax positions are all more likely than not to be upheld upon examination. As such, the Company has not recorded a liability for uncertain tax benefits.

 

The Company has adopted ASC 740-10-25, “Definition of Settlement”, which provides guidance on how an entity should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits and provides that a tax position can be effectively settled upon the completion and examination by a taxing authority without being legally extinguished. For tax positions considered effectively settled, an entity would recognize the full amount of tax benefit, even if the tax position is not considered more likely than not to be sustained based solely on the basis of its technical merits and the statute of limitations remains open. The federal and state income tax returns of the Company are subject to examination by the IRS and state taxing authorities, generally for three years after they are filed.

 

The Tax Cuts and Jobs Act (the “Act”) was enacted in December 2017. Among other things, the Act reduced the U.S. federal corporate tax rate from 34 percent to 21 percent as of January 1, 2018 and eliminated the alternative minimum tax (“AMT”) for corporations. Since the deferred tax assets are expected to reverse in a future year, it has been tax effected using the 21% federal corporate tax rate. As a result of the reduction in the corporate tax rate, the Company decreased its gross deferred tax assets by approximately $2.1 million which was offset by a corresponding decrease to the valuation allowance as of April 30, 2018, which has no impact on the Company’s consolidated financial statements for the year ended April 30, 2018. The Company will continue to analyze the Tax Act to assess its full effects on the Company’s financial results, including disclosures, for the Company’s fiscal year ending April 30, 2019, but the Company does not expect the Tax Act to have a material impact on the Company’s unaudited condensed consolidated financial statements.

 

On December 22, 2017, the Securities and Exchange Commission issued Staff Accounting Bulletin 118, which allows a measurement period, not to exceed one year, to finalize the accounting for the income tax effects of the Act. Until the accounting for the income tax effects of the Act is complete, the reported amounts are based on reasonable estimates, are disclosed as provisional and reflect any adjustments in subsequent periods as estimates are refined or the accounting of the tax effects are completed.

 

Recent Accounting Pronouncements

 

In June 2018, the FASB issued ASU 2018-07, “Compensation — Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting”, which expands the scope of Topic 718 to include all share-based payment transactions for acquiring goods and services from nonemployees. ASU 2018-07 specifies that Topic 718 applies to all share-based payment transactions in which the grantor acquires goods and services to be used or consumed in its own operations by issuing share-based payment awards. ASU 2018-07 also clarifies that Topic 718 does not apply to share-based payments used to effectively provide (1) financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under ASC 606. ASU 2018-07 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted, but no earlier than our adoption of ASC 606. The Company chose to early adopt ASU 2018-07 in July 2018. The adoption of this standard did not have a material impact on the Company’s unaudited condensed consolidated financial statements and related disclosures.

 

Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures.

 

12
 

 

NOTE 3 — MINERAL RIGHTS

 

Copper King Project

 

The mineral properties consist of the Copper King gold and copper development project located in the Silver Crown Mining District of southeast Wyoming (the “Copper King Project”) and certain unpatented mining claims in Meagher County, Montana. On July 2, 2014, the Company entered into an Asset Purchase Agreement whereby the Company acquired certain mining leases and other mineral rights comprising the Copper King project and certain unpatented mining claims located in Montana. The purchase price was (a) cash payment in the amount of $1.5 million and (b) closing shares calculated at 50% of the issued and outstanding shares of the Company’s common stock and valued at $1.5 million.

 

In accordance with ASC 360-10, “Property, Plant, and Equipment”, assets are recognized based on their cost to the acquiring entity, which generally includes the transaction costs of the asset acquisition. Accordingly, the Company recorded a total cost of the acquired mineral properties of $3,091,738 which includes the purchase price ($3,000,000) and related transaction cost.

 

Keystone Project

 

The Company, through its wholly-owned subsidiary, U.S. Gold Acquisition Corp., acquired the mining claims comprising the Keystone Project on May 27, 2016 from Nevada Gold Ventures, LLC (“Nevada Gold”) and Americas Gold Exploration, Inc. under the terms of a Purchase and Sale Agreement. At the time of purchase, the Keystone Project consisted of 284 unpatented lode mining claims situated in Eureka County, Nevada. The purchase price for the Keystone Project consisted of the following: (a) cash payment in the amount of $250,000, (b) the closing shares which is equivalent to 462,500 shares of the Company’s common stock and (c) an aggregate of 231,458 five-year options to purchase shares of the Company’s common stock at an exercise price of $3.60 per share.

 

The Company valued the common shares at the fair value of $555,000 or $1.20 per common share based on the contemporaneous sale of its preferred stock in a private placement at $0.10 per common share. The options were valued at $184,968. The options shall vest over a period of two years whereby 1/24 of the options shall vest and become exercisable each month for the next 24 months. The options are non-forfeitable and are not subject to obligations or service requirements.

 

Accordingly, the Company recorded a total cost of the acquired mineral properties of $1,028,885 which includes the purchase price ($989,968) and related transaction cost ($38,917). Some of the Keystone Project claims are subject to pre-existing net smelter royalty (“NSR”) obligations. In addition, under the terms of the Purchase and Sale Agreement, Nevada Gold retained additional NSR rights of 0.5% with regard to certain claims and 3.5% with regard to certain other claims. Under the terms of the Purchase and Sale Agreement, the Company may buy down one percent (1%) of the royalty from Nevada Gold at any time through the fifth anniversary of the closing date for $2,000,000. In addition, the Company may buy down an additional one percent (1%) of the royalty anytime through the eighth anniversary of the closing date for $5,000,000.

 

In August 2017, the Company closed on a transaction under a purchase and sale agreement executed in June 2017 with Nevada Gold and the Company’s wholly-owned subsidiary, U.S. Gold Acquisition Corporation, a Nevada corporation, pursuant to which Nevada Gold sold and U.S. Gold Acquisition Corporation purchased all right, title and interest in the Gold Bar North Property, a gold development project located in Eureka County, Nevada. The purchase price for the Gold Bar North Property was: (a) cash payment in the amount of $20,479 which was paid in August 2017 and (b) 15,000 shares of common stock of the Company which were issued in August 2017. Mr. David Mathewson, the Company’s Chief Geologist, is a member of Nevada Gold.

 

As of the date of these condensed consolidated financial statements, the Company has not established any proven or probable reserves on its mineral properties and has incurred only acquisition costs and exploration costs.

 

13
 

 

Mineral properties consisted of the following:

 

   July 31, 2018 (unaudited)   April 30, 2018 
Copper King project  $3,091,738   $3,091,738 
Keystone project   1,028,885    1,028,885 
Gold Bar North project   56,329    56,329 
Total  $4,176,952   $4,176,952 

 

NOTE 4 — PROPERTY

 

Property consisted of the following:

 

   July 31, 2018 (unaudited)   April 30, 2018 
Site costs  $59,569   $- 
Less: accumulated depreciation   (1,319)   - 
Total  $58,250   $- 

 

For the three months ended July 31, 2018 and 2017, depreciation expense amounted to $1,319 and $0, respectively.

 

NOTE 5 — ASSET RETIREMENT OBLIGATION

 

In conjunction with various permit approvals permitting the Company to undergo exploration activities at the Cooper King project and Keystone project, the Company has recorded an asset retirement obligation based upon the reclamation plans submitted in connection with the various permits.

 

The following table summarizes activity in the Company’s ARO:

 

   July 31, 2018 (unaudited)   April 30, 2018 
Balance, beginning of period  $-   $- 
Addition and changes in estimates   59,569    - 
Accretion expense   1,254    - 
Balance, end of period  $60,823   $- 

 

NOTE 6 — ACQUISITION AND DISPOSITION

 

On May 23, 2017, the Company closed the Merger with Gold King. Pursuant to the terms of the Merger Agreement and as consideration for the acquisition of Gold King, on the closing date, 2,446,433 shares of the Company’s common stock, par value $0.001 per share, were issued to holders of Gold King’s common stock, Series A Preferred Stock, Series B Preferred Stock and certain incoming officers. In addition, 45,000.18 shares of the Company’s newly designated Series C Preferred Stock, par value $0.001 per share, convertible into an aggregate of 4,500,180 shares of the Company’s common stock were issued to Copper King, 45,500.18 shares of Series C Preferred Stock were issued to Copper King upon closing, 4,500.01 shares of Series C Preferred Stock were to be held in escrow pursuant to the terms of an escrow agreement and 4,523,589 shares of the Company’s common stock and warrants to purchase up to 452,359 shares of the Company’s common stock were issued to the holders of Gold King’s Series C Preferred Stock. Additionally, 231,458 of the Company’s stock options were issued to the holders of Gold King’s outstanding stock options issued in connection with the closing of the acquisition of the Keystone Project.

 

As a result of the Merger, for financial statement reporting purposes, the business combination between the Company and Gold King has been treated as a reverse acquisition and recapitalization with Gold King deemed the accounting acquirer and the Company deemed the accounting acquiree under the acquisition method of accounting in accordance with FASB Accounting Standards Codification (“ASC”) Section 805-10-55. At the time of the Merger, both the Company and Gold King have their own separate operating segments. Accordingly, the assets and liabilities and the historical operations that are reflected in the consolidated financial statements after the Merger are those of the Gold King and are recorded at the historical cost basis of the Company. The acquisition process utilizes the capital structure of the Company and the assets and liabilities of Gold King which are recorded at historical cost.

 

The Company’s assets and liabilities were recorded at their fair values as of the date of the Merger and the results of operations of the Company are consolidated with results of operations of Gold King starting on the date of the Merger. The Company is deemed to have issued 1,204,667 shares of common stock which represents the outstanding common stock of the Company prior to the closing of the Merger. The Company accounted for the value under ASC 805-50-30-2 “Business Combinations” whereby if the consideration is not in the form of cash, the measurement is based on either the cost which shall be measured based on the fair value of the consideration given or the fair value of the assets (or net assets) acquired, whichever is more clearly evident and thus more reliably measurable. The Company deemed that the fair value of the consideration given was $4.70 per share based on the quoted trading price on the date of the Merger amounting to $5,661,935 which is a more reliable measurement basis. The estimated fair values of assets acquired and liabilities assumed are provisional and are based on the information that was available as of the acquisition date to estimate the fair value of assets acquired and liabilities assumed. The Company believes that information provides a reasonable basis for estimating the fair values of assets acquired and liabilities assumed.

 

As a result of the reverse merger, the total purchase consideration exceeded the net assets acquired. The Company recorded $6,094,760 of goodwill at the time of the merger. None of the goodwill recognized is expected to be deductible for income tax purposes. The following table summarizes the consideration paid and the amounts of the assets acquired and liabilities assumed recognized at the acquisition date:

 

14
 

 

The net purchase price paid by the Company was allocated to assets acquired and liabilities assumed on the records of the Company as follows:

 

Current assets (including cash of $255,555)  $3,063,059 
Other assets   45,984 
Goodwill   6,094,760 
      
Liabilities assumed (including a note payable – credit line of $1,096,504)   (3,541,868)
Net purchase price  $5,661,935 

 

During the year ended April 30, 2018, the Company recorded an impairment loss of $6,094,760 as the Company determined that the carrying value of the goodwill is not recoverable. The Company has determined that if the business combination would have occurred on the first day of the reporting period there would not have been a material change to the continuing operations of the financial statements presented.

 

In June 2017, subsequent to the Merger, the Company decided to discontinue its memory product business. The Company sold the Dataram Memory business on October 13, 2017 for a purchase price of $900,000. The Company will focus its activities on its gold and precious metal exploration business. During the year ended April 30, 2018, the Company has received net proceeds from the sale of Dataram Memory business of $326,404 after payment of fees related to the sale such as legal and commission expenses and other liabilities assumed.

 

During the year ended April 30, 2018, the Company recognized a gain on extinguishment of liabilities of $248,684 which is included in the loss from discontinued operations as the Company has settled the distribution payable to the former Dataram Memory shareholders at an amount less than the liability originally recorded at the time of acquisition. Additionally, during the year ended April 30, 2018, the Company recognized gain from sale of discontinued operations of $94,485 related to the sale of the Dataram Memory business on October 13, 2017.

 

Credit Facility

 

The Company had a financing agreement (the “Financing Agreement”) with Rosenthal & Rosenthal, Inc. that provides for a revolving loan with a maximum borrowing capacity of $3,500,000. The Financing Agreement renewal date was August 31, 2017 and will renew from year to year unless such Financing Agreement is terminated as set forth in the loan agreement. The amount outstanding under the Financing Agreement bore interest at a rate of the Prime Rate (as defined in the Financing Agreement) plus 3.25% (the “Effective Rate”) or on Over-advances (as defined in the Financing Agreement), if any, at a rate of the Effective Rate plus 3%. The Financing Agreement contained other financial and restrictive covenants, including, among others, covenants limiting the Company’s ability to incur indebtedness, guarantee obligations, sell assets, make loans, enter into mergers and acquisition transactions and declare or make dividends. Borrowings under the Financing Agreement are collateralized by substantially all the assets of the Company. The Financing Agreement provided for advances against eligible accounts receivable and inventory balances based on prescribed formulas of raw materials and finished goods. On October 13, 2017, upon the sale of the Dataram Memory business, the buyer assumed the obligation under this Financing Agreement, therefore, liabilities related to this financing agreement was $0 as of April 30, 2018.

 

15
 

 

The following table sets forth for the year ended April 30, 2018, indicated selected financial data of the Company’s discontinued operations of its memory product business from the date of merger to April 30, 2018.

 

   April 30, 2018 
Revenues  $7,885,310 
Cost of sales   6,653,363 
Gross profit   1,231,947 
Operating and other non-operating expenses (including impairment charge of 6,094,760)   (7,406,271)
Gain from extinguishment of liabilities   248,684 
Loss from discontinued operations   (5,925,640)
Gain from sale of discontinued operations   94,485 
      
Total loss from discontinued operations  $(5,831,155)

 

The following table sets forth for the year ended April 30, 2018, indicated selected financial data of the Company’s gain from sale of the Dataram Memory business.

 

Total consideration   $ 900,000  
Direct legal and sales commission expenses related to the sale     (201,510 )
Dataram’s accrued expenses to be deducted from the sales proceeds     (174,880 )
Total carrying value of Dataram Memory business on date of sale *     (429,125 )
Net gain from sale of Dataram Memory business   $ 94,485  

 

Current assets   $ 3,271,426  
Other assets     33,320  
Current liabilities     (2,866,660 )
Liabilities – long term     (8,961 )
* Total carrying value of Dataram Memory business on date of sale   $ 429,125  

 

NOTE 7 — RELATED PARTY TRANSACTIONS

 

Accounts payable to related party as of July 31, 2018 and April 30, 2018 was $2,431, and was reflected as accounts payable – related party in the accompanying unaudited condensed consolidated balance sheets. The related party is the managing partner of Copper King LLC who was a principal stockholder of Gold King.

 

NOTE 8 — STOCKHOLDERS’ EQUITY

 

2017 Equity Incentive Plan

 

In August 2017, the Company’s Board of Directors approved the Company’s 2017 Equity Incentive Plan (the “Plan”) including the reservation of 1,650,000 shares of common stock thereunder.

 

On January 1st  of each year during the term of the Plan (the “Calculation Date”), the aggregate number of shares of Common Stock that are available for issuance shall automatically be increased by such number of shares as is equal to the number of shares sufficient to cause the Share Limit (as defined in the Plan) to equal twenty percent (20%) of the issued and outstanding Common Stock of the Company at such time, provided, however, that if on any Calculation Date the number of shares equal twenty percent (20%) of our total issued and outstanding Common Stock is less than the number of shares of Common Stock available for issuance under the Plan, no change will be made to the aggregate number of shares of Common Stock issuable under the Plan for that year (such that the aggregate number of shares of Common Stock available for issuance under the Plan will never decrease).

 

Common Stock

 

In May 2017, in connection with the Merger (see Note 6), the Company issued 37,879 shares of the Company’s common stock having a fair value of $100,000 to the Chief Geologist for services rendered to the Company from June 2016 to January 2017 pursuant to his employment agreement with the Company’s wholly-owned subsidiary Gold King (see Note 10). Consequently, the Company reduced accrued salaries by $100,000 as of July 31, 2017.

 

In July 2017, the Company sold 179,211 shares of its common stock at $2.79 per common share for proceeds of approximately $500,000.

 

Between May 2017 and July 2017, the Company issued 3,682,000 shares of the Company’s common stock in exchange for the conversion of 36,820 shares of the Company’s Series C Preferred Stock.

 

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Common stock issued for services

 

During the three months ended July 31, 2018, the Company issued 28,510 shares of the Company’s common stock to the Chief Geologist for services rendered to the Company from April 2018 to June 2018 pursuant to his employment agreement (see Note 9). The Company valued these common shares at the fair value of $37,500 or $1.26 - $1.36 per common share based on the quoted trading prices on the date of grants and reduced accrued salaries by $37,500.

 

Stock Options

 

A summary of the Company’s outstanding stock options as of July 31, 2018 and changes during the period then ended are presented below:

 

   Number of
Options
   Weighted
Average
Exercise
Price
   Weighted
Average
Remaining
Contractual
Life
(Years)
 
Balance at April 30, 2018   1,531,458   $1.79    4.43 
Granted            
Exercised            
Forfeited            
Cancelled   (50,000)   1.47     
Balance at July 31, 2018   1,481,458    1.80    4.17 
                
Options exercisable at end of period   593,958   $2.30      
Options expected to vest   887,500   $1.47      
Weighted average fair value of options granted during the period       $      

 

At July 31, 2018, the aggregate intrinsic value of options outstanding and exercisable was $0 and $0, respectively.

 

At April 30, 2018, the aggregate intrinsic value of options outstanding and exercisable was $1,000 and $0, respectively.

 

Stock-based compensation for stock options has been recorded in the unaudited condensed consolidated statements of operations and totaled $132,848 for the three months ended July 31, 2018 and $0 for three months ended July 31, 2017. As of July 31, 2018, the remaining balance of unamortized expense is $874,083 and is expected to be amortized over a weighted average period of 2.11 years.

 

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Stock Warrants

 

A summary of the Company’s outstanding stock warrants as of July 31, 2018 and changes during the period then ended are presented below:

 

   Number of
Warrants
   Weighted
Average
Exercise
Price
   Weighted
Average
Remaining
Contractual
Life
(Years)
 
Balance at April 30, 2018   1,702,359   $3.12    3.25 
Granted            
Exercised            
Forfeited            
Cancelled            
Balance at July 31, 2018   1,702,359   $3.12    2.99 

 

Warrants exercisable at end of period   1,702,359   $3.12 
Weighted average fair value of warrants granted during the period       $ 

 

All warrants as of July 31, 2018 are fully vested

 

At July 31, 2018, the aggregate intrinsic value of warrants outstanding and exercisable was $0 and $0, respectively.

 

At April 30, 2018, the aggregate intrinsic value of warrants outstanding and exercisable was $0 and $0, respectively.

 

NOTE 9 — NET LOSS PER COMMON SHARE

 

Net loss per common share is calculated in accordance with ASC 260, “Earnings Per Share”. Basic loss per share is computed by dividing net loss available to common stockholder, by the weighted average number of shares of common stock outstanding during the period. The following were excluded from the computation of diluted shares outstanding as they would have had an anti-dilutive impact on the Company’s net loss. In periods where the Company has a net loss, all dilutive securities are excluded.

 

  

July 31, 2018

  

April 30, 2018

 
Common stock equivalents:          
Stock options   1,481,458    1,531,458 
Stock warrants   1,702,359    1,702,359 
Total   3,183,817    3,233,817 

 

NOTE 10 — COMMITMENTS AND CONTINGENCIES

 

Mining Leases

 

The Copper King property position consists of two State of Wyoming Metallic and Non-metallic Rocks and Minerals Mining Leases. These leases were assigned to the Company in July 2014 through the acquisition of the Copper King project.

 

The Company’s rights to the Copper King Project arise under two State of Wyoming mineral leases:

 

1) State of Wyoming Mining Lease No. 0-40828 consisting of 640 acres.

 

2) State of Wyoming Mining Lease No. 0-40858 consisting of 480 acres.

 

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Lease 0-40828 was renewed in February 2013 for a second ten-year term and Lease 0-40858 was renewed for its second ten-year term in February 2014. Each lease requires an annual payment of $2.00 per acre. In connection with the Wyoming Mining Leases, the following production royalties must be paid to the State of Wyoming, although once the project is in operation, the Board of Land Commissioners has the authority to reduce the royalty payable to the State:

 

FOB Mine Value per Ton  Percentage
Royalty
 
$00.00 to $50.00   5%
$50.01 to $100.00   7%
$100.01 to $150.00   9%
$150.01 and up   10%

 

The future minimum lease payments under these mining leases are as follows:

 

2019 (remainder of year)  $1,680 
2020   2,240 
2021   2,240 
2022   2,240 
2023   2,240 
Thereafter   960 
   $11,600 

 

The Company may renew the lease for a third ten-year term which will require an annual payment of $3.00 per acre and then $4.00 per acre thereafter.

 

Executive Employment Agreements

 

On April 12, 2016, the Company entered into an employment agreement with its Chief Executive Officer (“CEO”), Mr. Edward Karr. The initial term of the agreement is for two years ending on April 30, 2018, with automatic renewals for successive one year terms unless terminated by written notice at least 90 days prior to the expiration of the term. Mr. Karr is to receive a base salary of $250,000 per year. The agreement calls for a bonus of $250,000 to be awarded upon meeting a certain milestone goal which is concluding a financing of at least $10,000,000, a minimum of $2,500,000 of which must come from foreign investors. The bonus may be paid in cash, stock, or a combination thereof in the discretion of the board. Any bonus for a calendar year shall be subject to Mr. Karr’s continued employment with the Company through the end of the calendar year in which it is earned and shall be paid after the conclusion of the calendar year in accordance with the Company’s regular bonus payment policies in the year following the year with respect to which the bonus relates, and in any case not later than two and one half (2-1/2) months following the end of the year with respect to which a bonus is earned.

 

The Company’s Chief Operating Officer, and former Chief Financial Officer, Mr. David Rector (“COO”), is employed under an executive employment agreement dated Apri1 14, 2016. The initial term of the agreement is for one year, with automatic renewals for successive one year terms unless terminated by written notice at least 30 days prior to the expiration of the term. Mr. Rector is to receive a base salary of $15,000 per month. The agreement calls for a bonus in an amount up to the amount of the base salary, to be awarded in the discretion of the board of directors and to be paid in cash, stock, or a combination thereof in the discretion of the board.

 

19
 

 

On June 27, 2016, the Company entered into an employment agreement with its Chief Geologist, Mr. David Mathewson. The initial term of the agreement is for one year, with automatic renewals for successive one year terms unless terminated by written notice at least 30 days prior to the expiration of the term by either party. Mr. Mathewson is to receive a base salary of $200,000 per year. The base salary shall be payable as follows: (a) 25% of the base salary shall be payable in equal monthly cash installments and (b) the remaining 75% of the base salary shall be payable in equal monthly installments in the form of common stock of the Company. Each installment of common stock shall be issued on the first business day of the months and shall be valued at the market price on the trading day immediately prior to the date of issuance. Market price is the closing bid price on the principal securities exchange or trading market. Mr. Mathewson shall be entitled to receive bonus to be paid in cash, stock, or a combination thereof and equity awards.

 

Separation Agreements

 

On June 8, 2017, the Company and David A. Moylan, the Company’s former President and Chief Executive Officer, entered into a separation agreement. Mr. Moylan resigned as Chairman of the Board of Directors and as the President and Chief Executive Officer of the Company on May 23, 2017 in connection with the closing of the transactions contemplated by the Merger Agreement and Merger (see Note 6).

 

Under the terms of the separation agreement, Mr. Moylan received a severance payment of an aggregate of $494,227. The separation agreement became effective eight days following execution. Such severance payment is the sole and exclusive payment by the Company and is in lieu of any and all payments or obligations, including any separation payments under prior agreements between Mr. Moylan and the Company. Also as set forth in the separation agreement, Mr. Moylan will, until terminated by the Company’s Board of Directors at its sole option with two weeks’ notice, serve as the President and Chief Executive Officer of Dataram Memory for a monthly fee of $19,667, payable 90% in common stock of the Company and 10% in cash and provide general consulting and support services to the Company. Mr. Moylan no longer serves in any capacity with the Company or its subsidiaries effective October 31, 2017.

 

On June 6, 2017, Anthony Lougee resigned as Chief Financial Officer of the Company pursuant to a Change in Control and Severance Agreement by and between the Company and Mr. Lougee dated July 31, 2015. Mr. Lougee’s decision to resign did not result from any disagreement with the Company, the Company’s management or the Board of Directors. On June 8, 2017, the Company entered into a separation agreement with Mr. Lougee. Under the terms of the separation agreement, Mr. Lougee received a severance payment of an aggregate of $221,718. The separation agreement became effective eight days following execution. Such severance payment is the sole and exclusive payment by the Company and is in lieu of any and all payments or obligations, including any separation payments under prior agreements between Mr. Lougee and the Company, including the severance agreement.

 

Subsequent to the Merger, on June 8, 2017, the Company reappointed Mr. Lougee to serve as our Chief Financial Officer and as the Chief Financial Officer of Dataram Memory and entered into an amended and restated offer letter agreement which was accepted. Mr. Lougee’s compensation remained the same as his compensation immediately prior to his resignation: a base salary of $144,000 with additional monthly cash payments of $2,500 through the earliest to occur of (i) his resignation or removal as Chief Financial Officer of the Company or of Dataram Memory or (ii) November 23, 2017. He received a monthly award of 500 shares of restricted common stock. Mr. Lougee’s employment was on an at-will basis and may be terminated without notice at any time by Mr. Lougee or the Board of Directors. The employment agreement canceled and superseded the severance agreement, the offer letter agreement by and between the Company and Mr. Lougee dated July 31, 2015 and the incentive agreement by and between the Company and Mr. Lougee dated February 7, 2017. Effective October 17, 2017, Mr. Lougee resigned as the Company’s Chief Financial Officer.

 

NOTE 11 — SUBSEQUENT EVENTS

 

On August 14, 2018, the Company issued 9,843 shares of the Company’s common stock to the Chief Geologist for services rendered to the Company for July 2018 pursuant to his employment agreement (see Note 9). The Company valued these common shares at the fair value of $12,500 or $1.27 per common share based on the quoted trading prices on the date of grants and reduced accrued salaries by $12,500.

 

On September 6, 2018, the Company issued 10,965 shares of the Company’s common stock to the Chief Geologist for services rendered to the Company for August 2018 pursuant to his employment agreement (see Note 9). The Company valued these common shares at the fair value of $12,500 or $1.14 per common share based on the quoted trading prices on the date of grants and reduced accrued salaries by $12,500.

 

Subsequent to July 31, 2018, the Company issued an aggregate of 1,000,000 shares of the Company’s common stock to officers, directors and employees for services rendered. The shares vest 50% on the date of issuance and 50% on the one-year anniversary of the date of issuance

 

20
 

 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

This Quarterly Report on Form 10-Q contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, that involve risks and uncertainties. Many of the forward-looking statements are located in “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact. Forward-looking statements can also be identified by words such as “future,” “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “will,” “would,” “could,” “can,” “may,” and similar terms. Forward-looking statements are not guarantees of future performance and the Company’s actual results may differ significantly from the results discussed in the forward-looking statements. Factors that might cause such differences include, but are not limited to, those discussed under the heading “Risk Factors” in Part I, Item 1A of the Company’s most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “Commission”) which can be reviewed at http://www.sec.gov. The Company assumes no obligation to revise or update any forward-looking statements for any reason, except as required by law.

 

The interim unaudited consolidated financial statements included herein have been prepared by U.S. Gold Corp. (the “Company”) without audit, pursuant to the rules and regulations of the Commission. Certain information and footnote disclosure normally included in interim unaudited consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) which are duplicate to the disclosures in the audited consolidated financial statement have been omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. These interim unaudited condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto in the Form 10-K filed with the Commission on July 30, 2018.

 

In the opinion of management, all adjustments have been made consisting of normal recurring adjustments and consolidating entries, necessary to present fairly the unaudited interim condensed consolidated financial position of the Company and subsidiaries as of July 31, 2018, the results of their unaudited interim condensed consolidated statements of operations for the three month periods ended July 31, 2018 and 2017, and their unaudited interim condensed consolidated cash flows for the three month periods ended July 31, 2018 and 2017. The results of unaudited interim condensed consolidated operations for the interim periods are not necessarily indicative of the results for the full year.

 

The preparation of interim unaudited condensed consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

 

Overview

 

U.S. Gold Corp., formerly known as Dataram Corporation (the “Company”), was originally incorporated in the State of New Jersey in 1967 and was subsequently re-incorporated under the laws of the State of Nevada in 2016. Effective June 26, 2017, the Company changed its legal name to U.S. Gold Corp. from Dataram Corporation. On May 23, 2017, the Company merged with Gold King Corp. (“Gold King”), in a transaction treated as a reverse acquisition and recapitalization, and the business of Gold King became the business of the Company. The Company is a gold and precious metals exploration company pursuing exploration and development opportunities primarily in Nevada and Wyoming. None of the Company’s properties contain proven and probable reserves, and all of the Company’s activities on all of its properties are exploratory in nature.

 

21
 

 

On July 6, 2016, the Company filed a certificate of amendment to its Articles of Incorporation with the Secretary of State of Nevada in order to effectuate a reverse stock split of the Company’s issued and outstanding common stock per share on a one for three basis, effective on July 8, 2016. Subsequently, on May 3, 2017, the Company filed another certificate of amendment to its Articles of Incorporation, as amended, with the Secretary of State of the State of Nevada in order to effectuate a reverse stock split of the Company’s issued and outstanding common stock on a one for four basis. All share and per share values of the Company’s common stock for all periods presented in the accompanying consolidated financial statements are retroactively restated for the effect of the reverse stock splits.

 

On July 31, 2017, Company’s Board of Directors, or Board, reviewed and approved the recommendation of management to consider strategic options for the legacy business (“Dataram Memory”) including the sale of the business, within the next 12 months. The Company sold the Dataram memory business on October 13, 2017 for a purchase price of $900,000. The Company received net proceeds from the sale of Dataram Memory business of $326,404 after payment of fees related to the sale such as legal and commission expenses and other liabilities assumed. On January 29, 2018, the Company paid a distribution of $251,316 to shareholders of record of Dataram Memory as of the close of business on May 8, 2017, or $0.2086 per share. As such, the legacy business transactions and operations are reflected on the balance sheet and statement of operations as “discontinued operation”.

 

Results of Operations

 

Three Months Ended July 31, 2018 and 2017

 

Net Revenues

 

The Company is an exploration stage company with no operations, and we generated no revenues for the three months ended July 31, 2018 and 2017.

 

Operating Expenses

 

Total operating expenses for three months ended July 31, 2018 as compared to three months ended July 31, 2017, were approximately $1.5 million and $3.2 million, respectively. The approximate $1.7 million decrease in operating expenses for the three months ended July 31, 2018 as compared to three months ended July 31, 2018 is comprised of a decrease of approximately $1.1 million in compensation as a result of a decrease in officer compensation pursuant to separation agreements and change in control in connection with the Merger, a $263,000 decrease in exploration expenses on our mineral properties due to a decrease in exploration activities and a decrease in professional fees of approximately $320,000 due primarily to a decrease in investor relations services and an overall decrease in general and administrative expenses of approximately $53,600 due primarily to decreases in public company expenses, insurance expense and travel and related expenses.

 

Operating Loss from Operations from Continuing Operations

 

We reported an operating loss from continuing operations of approximately $1,482,000 and $3,206,000 for the three months ended July 31, 2018 and 2017, respectively.

 

Loss from Discontinued Operations

 

In June 2017, subsequent to the Merger, the Company decided to discontinue its memory product business. The Company subsequently focused its activities on its gold and precious metal exploration business. The following table sets forth for the three months ended July 31, 2017, indicated selected financial data of the Company’s discontinued operations of its memory product business from the date of merger to July 31, 2017.

 

   July 31, 2017 
Revenues  $4,363,052 
Cost of sales   3,413,448 
Gross profit   949,604 
Operating and other non-operating expenses (including impairment charge of $6,094,760)   (7,021,052)
      
Loss from discontinued operations (including impairment charge of $6,094,760)  $(6,071,448)

 

22
 

 

Net Loss

 

As a result of the operating expense and other expense discussed above, we reported a net loss of approximately $1,482,000 for the three months ended July 31, 2018 as compared to a net loss of $9,278,000 for the three months ended July 31, 2017.

 

Liquidity and Capital Resources

 

The following table summarizes total current assets, liabilities and working capital at July 31, 2018 compared to April 30, 2018:

 

    July 31, 2018     April 30, 2018     Increase/
(Decrease)
 
Current Assets   $ 7,007,817     $ 8,278,317     $ (1,270,500 )
Current Liabilities   $ 371,868     $ 286,081     $ 85,787  
Working Capital   $ 6,635,949     $ 7,992,236     $ (1,356,287 )

 

As of July 31, 2018, we had working capital of $6,635,949 as compared to working capital of $7,992,236 as of April 30, 2018, a decrease of $1,356,287. During the year ended April 30, 2018 we received proceeds of approximately $4.9 million from the issuance of preferred stock and warrants and $2.6 million from the issuance of common stock. The Company used the proceeds primarily to fund operations during the three months ended July 31, 2018 and year ended April 30, 2018 and pay asset acquisition costs during the year ended April 30, 2018.

 

We are obligated to file annual, quarterly and current reports with the SEC pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In addition, the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”) and the rules subsequently implemented by the SEC and the Public Company Accounting Oversight Board have imposed various requirements on public companies, including requiring changes in corporate governance practices. We expect these rules and regulations to increase our legal and financial compliance costs and to make some activities of ours more time-consuming and costly. We expect to spend between $200,000 and $250,000 in legal and accounting expenses annually to comply with our reporting obligations and Sarbanes-Oxley. These costs could affect profitability and our results of operations.

 

The Company’s unaudited condensed consolidated financial statements are prepared using the accrual method of accounting in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the settlement of liabilities in the normal course of business. For the three months ended July 31, 2018 and the year ended April 30, 2018, the Company has incurred losses in the amounts of approximately $1.5 million and $13.7 million, respectively.

 

As of July 31, 2018, we had cash totaling approximately $6.2 million. During the year ended April 30, 2018, The Company completed private placements to several investors for the sale of the Company’s common stock for aggregate net proceeds of approximately $2.6 million between July 2017 and October 2017 and completed a private placement to several investors for the sale of the Company’s Series E Preferred Stock and warrants for aggregate net proceeds of approximately $4.9 million in January 2018. Cash flows from financing activities continued to provide the primary source of our liquidity. The Company may need to raise additional capital to support its continuing operations but there can be no assurance that it will be able to do so or if the terms will be favorable. The unaudited condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.

 

23
 

 

The above financing transactions substantially lowered the Company’s potential cash exposure. Additionally, the Company is able to control cash spending on its exploration activities. As a result, as of the date of the issuance of these unaudited condensed consolidated financial statements, the Company believes its current cash position as a result of the Company’s financing activities during the year ended April 30, 2018 has alleviated substantial doubt about its ability to sustain operations through at least the next 12 months from the issuance date of the unaudited condensed consolidated financial statements.

 

Management has determined that additional capital will be required to continue its operations. There are no assurances that management will be able to raise capital on terms acceptable to the Company. If we are unable to obtain sufficient amounts of additional capital, we may be required to reduce the scope of our planned exploration activities, which could harm our business, financial condition and operating results. If we obtain additional funds by selling any of our equity securities or by issuing common stock to pay current or future obligations, the percentage ownership of our stockholders will be reduced, stockholders may experience additional dilution, or the equity securities may have rights preferences or privileges senior to the common stock. If adequate funds are not available to us when needed on satisfactory terms, we may be required to cease operating or otherwise modify our business strategy.

 

Financing Transactions

 

The Company completed private placements to several investors for the sale of the Company’s Series B Preferred Stock and Series C Preferred Stock for aggregate net proceeds of approximately $10.9 million between July 2016 and October 2016, received net proceeds from sale of the Company’s common stock of approximately $2.6 million between July 2017 and October 2017 and completed a private placement to several investors for the sale of the Company’s Series E Preferred Stock and warrants for aggregate net proceeds of approximately $4.9 million in January 2018. The Company may raise additional capital but there can be no assurance that it will be able to do so or if the terms will be favorable.

 

The above financing transactions substantially lowered the Company’s potential cash exposure. Additionally, the Company is able to control cash spending on its exploration activities. As a result, as of the date of the issuance of these condensed consolidated financial statements, the Company believes its current cash position and plans to raise additional capital have alleviated substantial doubt about its ability to sustain operations through at least the next 12 months.

 

Summary Cash flows for the three months July 31, 2018 and 2017:

 

   For the Three Months Ended   For the Three Months Ended 
   July 31, 2018   July 31, 2017 
         
Net cash used in operating activities  $(1,451,987)  $(2,974,009)
Net cash provided by financing activities  $-   $500,004 

 

Cash Used in Operating Activities

 

Net cash used in operating activities totaled approximately $1.5 million and $3.0 million for the three months ended July 31, 2018 and 2017, respectively. Net loss for the three months ended July 31, 2018 and 2017 totaled approximately $1.5 million and $9.3 million, respectively. The adjustments for the non-cash items decreased from the three months ended July 31, 2017 to July 31, 2018 due primarily a decrease in impairment expense of approximately $6.1 million offset by an increase in stock based compensation expense of approximately $110,000 and an increase in amortization of prepaid stock based expenses of $105,000. Net changes in operating assets and liabilities are primarily due to net increases in prepaid expenses and other current assets of approximately $287,000 and increases in accounts payable from unrelated parties and accrued liabilities of approximately $98,000.

 

24
 

 

Cash Provided by Financing Activities

 

Net cash provided by financing activities totaled $0 and $500,004 for the three months ended July 31, 2018 and 2017, respectively. During the three months ended July 31, 2017, cash provided by financing activities consisted of net proceeds of $500,004 from the sale of common stock.

 

Off-Balance Sheet Arrangements

 

The Company does not have, and do not have any present plans to implement, any off-balance sheet arrangements.

 

Recently Issued Accounting Pronouncements

 

Refer to the notes to the unaudited condensed consolidated financial statements.

 

Critical Accounting Policies

 

The discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of our financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

 

Management believes the following critical accounting policies affect the significant judgments and estimates used in the preparation of the financial statements.

 

Use of Estimates and Assumptions

 

In preparing the unaudited condensed consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet, and revenues and expenses for the period then ended. Actual results may differ significantly from those estimates. Significant estimates made by management include, but are not limited to valuation of mineral rights, goodwill, stock-based compensation, the fair value of common stock issued, asset retirement obligation and the valuation of deferred tax assets and liabilities.

 

Stock-Based Compensation

 

Stock-based compensation is accounted for based on the requirements of the Share-Based Payment Topic of ASC 718 which requires recognition in the financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). ASC 718 also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award. Pursuant to ASC Topic 505-50, for share-based payments to consultants and other third-parties, compensation expense is determined at the measurement date which is the grant date. The expense is recognized over the vesting period of the award. Until the measurement date is reached, the total amount of compensation expense remains uncertain.

 

25
 

 

Mineral Rights

 

Costs of lease, exploration, carrying and retaining unproven mineral lease properties are expensed as incurred. The Company expenses all mineral exploration costs as incurred as it is still in the exploration stage. If the Company identifies proven and probable reserves in its investigation of its properties and upon development of a plan for operating a mine, it would enter the development stage and capitalize future costs until production is established.

 

When a property reaches the production stage, the related capitalized costs are amortized on a units-of-production basis over the proven and probable reserves following the commencement of production. The Company assesses the carrying costs of the capitalized mineral properties for impairment under ASC 360-10, “Impairment of long-lived assets”, and evaluates its carrying value under ASC 930-360, “Extractive Activities - Mining”, annually. An impairment is recognized when the sum of the expected undiscounted future cash flows is less than the carrying amount of the mineral properties. Impairment losses, if any, are measured as the excess of the carrying amount of the mineral properties over its estimated fair value.

 

ASC 930-805, “Extractive Activities-Mining: Business Combinations” (“ASC 930-805”), states that mineral rights consist of the legal right to explore, extract, and retain at least a portion of the benefits from mineral deposits. Mining assets include mineral rights. Acquired mineral rights are considered tangible assets under ASC 930-805. ASC 930-805 requires that mineral rights be recognized at fair value as of the acquisition date. As a result, the direct costs to acquire mineral rights are initially capitalized as tangible assets. Mineral rights include costs associated with acquiring patented and unpatented mining claims.

 

Asset Retirement Obligations

 

Asset retirement obligations (“ARO”), consisting primarily of estimated reclamation costs at the Company’s Copper King and Keystone properties, are recognized in the period incurred and when a reasonable estimate can be made, and recorded as liabilities at fair value. Such obligations, which are initially estimated based on discounted cash flow estimates, are accreted to full value over time through charges to accretion expense. Corresponding asset retirement costs are capitalized as part of the carrying amount of the related long-lived asset and depreciated over the asset’s remaining useful life. Asset retirement obligations are periodically adjusted to reflect changes in the estimated present value resulting from revisions to the estimated timing or amount of reclamation and closure costs. The Company reviews and evaluates its asset retirement obligations annually or more frequently at interim periods if deemed necessary.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

As a smaller reporting company, we are not required to include disclosure under this item.

 

ITEM 4. CONTROLS AND PROCEDURES

 

Evaluation of Disclosure Controls and Procedures

 

We maintain disclosure controls and procedures that are designed to ensure that material information required to be disclosed in our periodic reports filed under the Securities Exchange Act of 1934, as amended, or 1934 Act, is recorded, processed, summarized, and reported within the time periods specified in the Commission’s rules and forms and to ensure that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer as appropriate, to allow timely decisions regarding required disclosure. We carried out an evaluation, under the supervision and with the participation of our management, including the principal executive officer and the principal financial officer (principal financial officer), of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rule 13(a)-15(e) under the 1934 Act, as of the end of the period covered by this report. Based on this evaluation, because of the Company’s limited resources and limited number of employees, management concluded that our disclosure controls and procedures were not effective as of July 31, 2018.

 

Remediation Plan

 

During 2018, the Company began to institute process and procedures by implementing the following:

 

1. The hiring of an outside consulting firm to assist in preparation of Company’s financial statements and provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that receipts and expenditures are being made only in accordance with authorizations of Company’s management and directors.
   
2. Starting the process of documenting its control environment.

 

26
 

 

Changes in Internal Control Over Financial Reporting

 

There have been no other changes in our internal control over financial reporting except as mentioned above that occurred during the period covered by this Quarterly Report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

PART II: OTHER INFORMATION

 

Item 1. LEGAL PROCEEDINGS

 

None.

 

Item 1A. RISK FACTORS.

 

There have been no material changes to the Risk Factors in Item 1A of our Annual Report on Form 10-K for the fiscal year ended April 30, 2018.

 

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

 

During the three months ended July 31, 2018, the Company issued 28,510 shares of the Company’s common stock to the Chief Geologist for services rendered to the Company from April 2018 to June 2018 pursuant to his employment agreement.

 

Item 3. DEFAULTS UPON SENIOR SECURITIES.

 

None.

 

27
 

 

Item 4. MINE SAFETY DISCLOSURES

 

Not applicable.

 

Item 5. OTHER INFORMATION.

 

None.

 

Item 6. EXHIBITS.

 

Exhibit No   Description
     
31(a)   Rule 13a-14(a) Certification of Edward M. Karr.
     
31(b)   Rule 13a-14(a) Certification of Robert J. DelAversano.
     
32(a)   Section 1350 Certification of Edward M. Karr (furnished not filed).
     
32(b)   Section 1350 Certification of Robert J. DelAversano (furnished not filed).
     
101.INS   XBRL Instance Document.
     
101.SCH   XBRL Taxonomy Extension Schema Document
     
101.CAL   XBRL Taxonomy Extension Calculation Linkbase Document
     
101.DEF   XBRL Taxonomy Extension Definition Linkbase Document
     
101.LAB   XBRL Taxonomy Extension Label Linkbase Document
     
101.PRE   XBRL Taxonomy Extension Presentation Linkbase Document

 

28
 

 

Signatures

 

Pursuant to the requirements 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.

 

  U.S. GOLD CORP.
     
Date: September 20, 2018 By: /s/ EDWARD M. KARR
    Edward M. Karr
   

President and Chief Executive Officer

    (Principal Executive Officer)
     
Date: September 20, 2018 By: /s/ ROBERT J. DELAVERSANO
    Robert J. DelAversano
    Principal Financial and Accounting Officer

 

29
 

 

EX-31.A 2 ex31-a.htm

 

Exhibit 31(a)

 

Rule 13a-14(a) Certification

 

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 302

 

I, Edward M. Karr, certify that:

 

1. I have reviewed this quarterly report on Form 10-Q of U.S. Gold Corp.;

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s Board of Directors (or persons performing the equivalent functions):

 

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: September 20, 2018 /s/ Edward M. Karr
 

Edward M. Karr, President and

  Chief Executive Officer
  (Principal Executive Officer)

 

   
 

EX-31.B 3 ex31-b.htm

 

Exhibit 31(b)

 

Rule 13a-14(a) Certification

 

CERTIFICATION OF CHIEF ACCOUNTING OFFICER PURSUANT TO SECTION 302

 

I, Robert J. DelAversano, certify that:

 

1. I have reviewed this quarterly report on Form 10-Q of U.S. Gold Corp.;

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s Board of Directors (or persons performing the equivalent functions):

 

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: September 20, 2018 /s/ Robert J. DelAversano
  Robert J. DelAversano
  Principal Financial and Accounting Officer

 

   
 

EX-32.A 4 ex32-a.htm

 

Exhibit 32(a)

 

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO

 

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

(18 U.S.C. SECTION 1350)

 

In connection with the Quarterly Report of U.S. Gold Corp., a Nevada corporation (the “Company”), on Form 10-Q for the quarter ended July 31, 2018, as filed with the Securities and Exchange Commission (the “Report”), Edward M. Karr, Chief Executive Officer of the Company, does hereby certify, pursuant to § 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. § 1350), that to his knowledge:

 

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

 

Date: September 20, 2018 /s/ Edward M. Karr
  Edward M. Karr
 

President and Chief Executive Officer

  (Principal Executive Officer)

 

[A signed original of this written statement required by Section 906 has been provided to U.S. Gold Corp. and will be retained by U.S. Gold Corp. and furnished to the Securities and Exchange Commission or its staff upon request.]

 

   
 

EX-32.B 5 ex32-b.htm

 

Exhibit 32(b)

 

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO

 

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

(18 U.S.C. SECTION 1350)

 

In connection with the Quarterly Report of U.S. Gold Corp., a Nevada corporation (the “Company”), on Form 10-Q for the quarter ended July 31, 2018, as filed with the Securities and Exchange Commission (the “Report”), Robert J. DelAversano, Principal Financial and Accounting Officer of the Company, does hereby certify, pursuant to § 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. § 1350), that to his knowledge:

 

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

 

Date: September 20, 2018 /s/ Robert J. DelAversano
  Robert J. DelAversano
  Principal Financial and Accounting Officer

 

[A signed original of this written statement required by Section 906 has been provided to U.S. Gold Corp. and will be retained by U.S. Gold Corp. and furnished to the Securities and Exchange Commission or its staff upon request.]

 

   
 

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Document and Entity Information - shares
3 Months Ended
Jul. 31, 2018
Sep. 20, 2018
Document And Entity Information    
Entity Registrant Name U.S. GOLD CORP.  
Entity Central Index Key 0000027093  
Document Type 10-Q  
Document Period End Date Jul. 31, 2018  
Amendment Flag false  
Current Fiscal Year End Date --04-30  
Entity Filer Category Smaller Reporting Company  
Entity Common Stock, Shares Outstanding   18,639,892
Trading Symbol USAU  
Document Fiscal Period Focus Q1  
Document Fiscal Year Focus 2019  
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Condensed Consolidated Balance Sheets - USD ($)
Jul. 31, 2018
Apr. 30, 2018
CURRENT ASSETS:    
Cash $ 6,194,292 $ 7,646,279
Prepaid expenses and other current assets 813,525 632,038
Total Current Assets 7,007,817 8,278,317
NON - CURRENT ASSETS:    
Property, net 58,250
Reclamation bond deposit 92,928 92,928
Mineral rights 4,176,952 4,176,952
Deferred income taxes 438,145 438,145
Total Non - Current Assets 4,766,275 4,708,025
Total Assets 11,774,092 12,986,342
CURRENT LIABILITIES:    
Accounts payable 342,243 262,652
Accounts payable - related party 2,431 2,431
Accrued liabilities 27,194 20,998
Total Current Liabilities 371,868 286,081
LONG-TERM LIABILITIES    
Asset retirement obligation 60,823
Total Liabilities 432,691 286,081
Commitments and Contingencies
STOCKHOLDERS' EQUITY :    
Common stock ($0.001 Par Value; 200,000,000 Shares Authorized; 17,619,084 and 17,590,574 shares issued and outstanding as of July 31, 2018 and April 30, 2018) 17,619 17,591
Additional paid-in capital 31,033,838 30,911,222
Accumulated deficit (19,710,056) (18,228,552)
Total Stockholders' Equity 11,341,401 12,700,261
Total Liabilities and Stockholders' Equity 11,774,092 12,986,342
Convertible Series C Preferred Stock [Member]    
STOCKHOLDERS' EQUITY :    
Preferred stock, value
Convertible Series E Preferred Stock [Member]    
STOCKHOLDERS' EQUITY :    
Preferred stock, value
XML 14 R3.htm IDEA: XBRL DOCUMENT v3.10.0.1
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares
Jul. 31, 2018
Apr. 30, 2018
Preferred stock, par value $ 0.001 $ 0.001
Preferred stock, shares authorized 50,000,000 50,000,000
Common stock, par value $ 0.001 $ 0.001
Common stock, shares authorized 200,000,000 200,000,000
Common stock, shares issued 17,619,084 17,590,574
Common stock, shares outstanding 17,619,084 17,590,574
Convertible Series C Preferred Stock [Member]    
Preferred stock, par value $ 0.001 $ 0.001
Preferred stock, shares authorized 45,002 45,002
Preferred stock, shares issued 0 45,002
Preferred stock, shares outstanding 0 45,002
Convertible Series E Preferred Stock [Member]    
Preferred stock, par value $ 0.001 $ 0.001
Preferred stock, shares authorized 2,500 2,500
Preferred stock, shares issued 0 0
Preferred stock, shares outstanding 0 0
XML 15 R4.htm IDEA: XBRL DOCUMENT v3.10.0.1
Condensed Consolidated Statements of Operations (Unaudited) - USD ($)
3 Months Ended
Jul. 31, 2018
Jul. 31, 2017
Income Statement [Abstract]    
Net revenues
Operating expenses:    
Compensation and related taxes 301,760 1,389,814
Exploration costs 504,825 767,883
Professional fees 541,344 861,463
General and administrative expenses 133,575 187,173
Total operating expenses 1,481,504 3,206,333
Operating loss from continuing operations (1,481,504) (3,206,333)
Loss from continuing operations before provision for income taxes (1,481,504) (3,206,333)
Provision for income taxes
Loss from continuing operations (1,481,504) (3,206,333)
Discontinued operations:    
Loss from discontinued operations (including impairment expense of $6,094,760) (6,071,448)
Total loss from discontinued operations (6,071,448)
Net loss $ (1,481,504) $ (9,277,781)
Loss per common share, basic and diluted    
Loss from continuing operations $ (0.08) $ (0.35)
Discontinuing :    
Operations (0.65)
Total discontinuing operations (0.65)
Net loss per share $ (0.08) $ (1.00)
Weighted average common shares outstanding - basic and diluted 17,605,277 9,252,624
XML 16 R5.htm IDEA: XBRL DOCUMENT v3.10.0.1
Condensed Consolidated Statements of Operations (Parenthetical) - USD ($)
3 Months Ended 12 Months Ended
Jul. 31, 2018
Jul. 31, 2017
Apr. 30, 2018
Income Statement [Abstract]      
Impairment expenses $ 6,094,760 $ 6,094,760
XML 17 R6.htm IDEA: XBRL DOCUMENT v3.10.0.1
Condensed Consolidated Statement of Changes In Stockholders' Equity - USD ($)
Series C Preferred Stock [Member]
Series E Preferred Stock [Member]
Common Stock [Member]
Additional Paid-In Capital [Member]
Accumulated Deficit [Member]
Total
Balance at Apr. 30, 2017 $ 45 $ 6,932 $ 15,813,297 $ (4,570,057) $ 11,250,217
Balance, shares at Apr. 30, 2017 45,002 6,932,059      
Recapitalization of the Company $ 1,205 5,660,730 5,661,935
Recapitalization of the Company, shares 1,204,667      
Issuance of common stock for cash $ 1,568 2,588,436 2,590,004
Issuance of common stock for cash, shares 1,568,100      
Issuance of preferred stock and warrants for cash $ 3 4,916,117 4,916,120
Issuance of preferred stock and warrants for cash, shares 2,500      
Issuance of common stock for the acquisition of mineral rights $ 15 35,835 35,850
Issuance of common stock for the acquisition of mineral rights, shares 15,000      
Issuance of common stock for services $ 702 1,142,127 1,142,829
Issuance of common stock for services, shares 700,483      
Issuance of common stock for prepaid services $ 117 280,708 280,825
Issuance of common stock for prepaid services, shares 117,500      
Conversion of preferred stock into common stock $ (45) $ (3) $ 7,000 (6,952)
Conversion of preferred stock into common stock, shares (45,002) (2,500) 7,000,180      
Issuance of common stock for accrued services $ 52 137,448 137,500
Issuance of common stock for accrued services, shares 52,585      
Issuance of options for services 174,835 174,835
Issuance of options for prepaid services 168,641 168,641
Net loss (13,658,495) (13,658,495)
Balance at Apr. 30, 2018 $ 17,591 30,911,222 (18,228,552) 12,700,261
Balance, shares at Apr. 30, 2018 17,590,574      
Issuance of common stock for services $ 19 76,489 76,508
Issuance of common stock for services, shares 19,319      
Issuance of common stock for accrued services $ 9 12,491 12,500
Issuance of common stock for accrued services, shares 9,191      
Issuance of options for services 33,636 33,636
Net loss (1,481,504) (1,481,504)
Balance at Jul. 31, 2018 $ 17,619 $ 31,033,838 $ (19,710,056) $ 11,341,401
Balance, shares at Jul. 31, 2018 17,619,084      
XML 18 R7.htm IDEA: XBRL DOCUMENT v3.10.0.1
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)
3 Months Ended
Jul. 31, 2018
Jul. 31, 2017
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net loss $ (1,481,504) $ (9,277,781)
Adjustments to reconcile net loss to net cash used in operating activities:    
Depreciation 1,319
Accretion 1,254
Stock based compensation 110,144 12,500
Amortization of prepaid stock based expenses 105,188
Impairment expense 6,094,760
Changes in operating assets and liabilities:    
Prepaid expenses and other current assets (286,675) (589,135)
Assets of held for sale operations, discontinued - current (692,497)
Reclamation bond deposit and other assets (5,181)
Assets of held for sale operations, discontinued - long term   8,000
Accounts payable and accrued liabilities 98,287 934,631
Liabilities of held for sale operations, discontinued - current 552,638
Liabilities of held for sale operations, discontinued - long term (11,944)
NET CASH USED IN OPERATING ACTIVITIES (1,451,987) (2,974,009)
CASH FLOWS FROM FINANCING ACTIVITIES:    
Issuance of common stock   500,004
NET CASH PROVIDED BY FINANCING ACTIVITIES 500,004
NET DECREASE IN CASH (1,451,987) (2,474,005)
CASH - beginning of period 7,646,279 6,820,623
CASH - end of period 6,194,292 4,346,618
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:    
Interest
Income taxes
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:    
Increase in asset retirement obligation 59,569
Issuance of common stock for merger 5,661,935
Issuance of common stock for accrued services $ 100,000
XML 19 R8.htm IDEA: XBRL DOCUMENT v3.10.0.1
Organization and Description of Business
3 Months Ended
Jul. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Organization and Description of Business

NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

 

Organization

 

U.S. Gold Corp., formerly known as Dataram Corporation (the “Company”), was originally incorporated in the State of New Jersey in 1967 was subsequently re-incorporated under the laws of the State of Nevada in 2016. Effective June 26, 2017, the Company changed its legal name to U.S. Gold Corp. from Dataram Corporation. On May 23, 2017, the Company merged with Gold King Corp. (“Gold King”), in a transaction treated as a reverse acquisition and recapitalization, and the business of Gold King became the business of the Company. The financial statements are those of Gold King (the accounting acquirer) prior to the merger and include the activity of Dataram Corporation (the legal acquirer) from the date of the merger. Gold King is a gold and precious metals exploration company pursuing exploration and development opportunities primarily in Nevada and Wyoming. None of the Company’s properties contain proven and probable reserves and all of the Company’s activities on all of its properties are exploratory in nature.

 

On July 6, 2016, the Company filed a certificate of amendment to its Articles of Incorporation with the Secretary of State of Nevada in order to effectuate a reverse stock split of the Company’s issued and outstanding common stock per share on a one for three basis, effective on July 8, 2016. Subsequently, on May 3, 2017, the Company filed another certificate of amendment to its Articles of Incorporation, as amended, with the Secretary of State of the State of Nevada in order to effectuate a reverse stock split of the Company’s issued and outstanding common stock on a one for four basis. All share and per share values of the Company’s common stock for all periods presented in the accompanying condensed consolidated financial statements are retroactively restated for the effect of the reverse stock splits.

 

Recent developments - Acquisition and Disposition

 

On June 13, 2016, Gold King, a private Nevada corporation, entered into an Agreement and Plan of Merger (the “Merger Agreement”) with the Company, the Company’s wholly-owned subsidiary, Dataram Acquisition Sub, Inc., a Nevada corporation (“Acquisition Sub”), and all of the principal shareholders of Gold King (the “Gold King Shareholders”). Upon closing of the transactions contemplated under the Merger Agreement (the “Merger”), Gold King merged with and into Acquisition Sub with Gold King as the surviving corporation and became a wholly-owned subsidiary of the Company.

 

On May 23, 2017, the Company closed the Merger with Gold King. The Merger constituted a change of control, the majority of the Board of Directors changed with the consummation of the Merger. The Company issued shares of common stock to Gold King which represented approximately 90% of the combined company.

 

On July 31, 2017, the Company’s Board of Directors, or Board, reviewed and approved the recommendation of management to consider strategic options for Dataram Corporation’s legacy business (“Dataram Memory”) including the sale of the legacy business. Upon board approval, the legacy business activities were re-classed and reported as part of “discontinued operations” on the condensed consolidated statements of operations and assets and liabilities were reflected on the condensed consolidated balance sheets as “held for sale”.

 

On October 13, 2017, the Company sold the Dataram Memory business for a purchase price of $900,000 (see Note 6).

XML 20 R9.htm IDEA: XBRL DOCUMENT v3.10.0.1
Summary of Significant Accounting Policies
3 Months Ended
Jul. 31, 2018
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation and Liquidity

 

The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the United States Securities and Exchange Commission for interim financial information, which includes the unaudited condensed consolidated financial statements and present the unaudited condensed consolidated financial statements of the Company and its wholly-owned subsidiaries as of July 31, 2018. All intercompany transactions and balances have been eliminated. The accounting policies and procedures used in the preparation of these unaudited condensed consolidated financial statements have been derived from the audited financial statements of the Company for the year ended April 30, 2018, which are contained in the Form 10-K filed on July 30, 2018. The unaudited condensed consolidated balance sheet as of April 30, 2018 was derived from those financial statements. It is management’s opinion that all material adjustments (consisting of normal recurring adjustments) have been made, which are necessary for a fair financial statement presentation. The results for the interim period are not necessarily indicative of the results to be expected for the year ending April 30, 2019.

 

As reflected in the accompanying unaudited condensed consolidated financial statements, the Company had a net loss and used cash in its operations of approximately $1.5 million and $1.5 million, respectively, for the three months ended July 31, 2018. Additionally, the Company had an accumulated deficit of approximately $19.7 million at July 31, 2018. The Company consummated private placements to several investors for the sale of the Company’s Series B Convertible Preferred Stock (“Series B Preferred Stock”) and Series C Convertible Preferred Stock (“Series C Preferred Stock”) for aggregate net proceeds of approximately $10.9 million between July 2016 and October 2016, received net proceeds from sale of the Company’s common stock of approximately $2.6 million between July 2017 and October 2017 and completed a private placement for the sale of the Company’s Series E Convertible Preferred Stock (“Series E Preferred Stock”) and warrants for aggregate net proceeds of approximately $4.9 million in January 2018. There can be no assurance that the Company will be able to raise additional capital or if the terms will be favorable.

 

The above steps substantially lowered the Company’s potential cash exposure. Additionally, the Company is able to control cash spending on its exploration activities. As a result, as of the date of the issuance of these financial statements, the Company believes its current cash position and plans have alleviated substantial doubt about its ability to sustain operations for at least one year from the issuance of these unaudited condensed consolidated financial statements.

 

Use of Estimates and Assumptions

 

In preparing the condensed consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the condensed consolidated balance sheet, and revenues and expenses for the period then ended. Actual results may differ significantly from those estimates. Significant estimates made by management include, but are not limited to valuation of mineral rights, goodwill, stock-based compensation, the fair value of common stock issued, asset retirement obligation and the valuation of deferred tax assets and liabilities.

 

Fair Value of Financial Instruments

 

The Company adopted Accounting Standards Codification (“ASC”) ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”), for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied in accordance with accounting principles generally accepted in the United States of America that requires the use of fair value measurements, establishes a framework for measuring fair value and expands disclosure about such fair value measurements.

 

ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs.

 

These inputs are prioritized below:

 

Level 1: Observable inputs such as quoted market prices in active markets for identical assets or liabilities.
Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data.
Level 3: Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions.

 

The Company analyzes all financial instruments with features of both liabilities and equity under the Financial Accounting Standard Board’s (“FASB”) accounting standard for such instruments. Under this standard, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

 

The carrying amounts reported in the unaudited condensed consolidated balance sheets for cash, prepaid expense and other current assets – current, accounts payable, and accrued liabilities, approximate their estimated fair values based on the short-term maturity of these instruments.

 

Goodwill and other intangible assets

 

In accordance with ASC 350-30-65, the Company assesses the impairment of identifiable intangibles whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors the Company considers to be important which could trigger an impairment review include the following:

 

  1. Significant underperformance relative to expected historical or projected future operating results;
  2. Significant changes in the manner of use of the acquired assets or the strategy for the overall business; and
  3. Significant negative industry or economic trends.

 

When the Company determines that the carrying value of intangibles may not be recoverable based upon the existence of one or more of the above indicators of impairment and the carrying value of the asset cannot be recovered from projected undiscounted cash flows, the Company records an impairment charge. The Company measures any impairment based on a projected discounted cash flow method using a discount rate determined by management to be commensurate with the risk inherent in the current business model. Significant management judgment is required in determining whether an indicator of impairment exists and in projecting cash flows.

 

Property

 

Property is carried at cost. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition. Depreciation is calculated on a straight-line basis over the estimated useful life of the assets, generally ten years.

 

Impairment of long-lived assets

 

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable, or at least annually. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value. During the year ended April 30, 2018, the Company determined that the carrying value of Goodwill (see Note 6) exceeded its fair value, which triggered an impairment analysis. The Company recorded a goodwill impairment expense of $6,094,760 during the year ended April 30, 2018, nonrecurring level 3 fair value measurement. No impairment of goodwill was recorded during the three months ended July 31, 2018.

 

Mineral Rights

 

Costs of lease, exploration, carrying and retaining unproven mineral lease properties are expensed as incurred. The Company expenses all mineral exploration costs as incurred as it is still in the exploration stage. If the Company identifies proven and probable reserves in its investigation of its properties and upon development of a plan for operating a mine, it would enter the development stage and capitalize future costs until production is established.

 

When a property reaches the production stage, the related capitalized costs are amortized on a units-of-production basis over the proven and probable reserves following the commencement of production. The Company assesses the carrying costs of the capitalized mineral properties for impairment under ASC 360-10, “Impairment of long-lived assets”, and evaluates its carrying value under ASC 930-360, “Extractive Activities - Mining”, annually. An impairment is recognized when the sum of the expected undiscounted future cash flows is less than the carrying amount of the mineral properties. Impairment losses, if any, are measured as the excess of the carrying amount of the mineral properties over its estimated fair value.

 

To date, the Company has not established the commercial feasibility of any exploration prospects; therefore, all exploration costs are being expensed.

 

ASC 930-805, “Extractive Activities-Mining: Business Combinations” (“ASC 930-805”), states that mineral rights consist of the legal right to explore, extract, and retain at least a portion of the benefits from mineral deposits. Mining assets include mineral rights. Acquired mineral rights are considered tangible assets under ASC 930-805. ASC 930-805 requires that mineral rights be recognized at fair value as of the acquisition date. As a result, the direct costs to acquire mineral rights are initially capitalized as tangible assets. Mineral rights include costs associated with acquiring patented and unpatented mining claims.

 

ASC 930-805 provides that in measuring the fair value of mineral assets, an acquirer should take into account both:

 

● The value beyond proven and probable reserves (“VBPP”) to the extent that a market participant would include VBPP in determining the fair value of the assets.

 

● The effects of anticipated fluctuations in the future market price of minerals in a manner that is consistent with the expectations of market participants.

 

Share-Based Compensation

 

Share-based compensation is accounted for based on the requirements of ASC 718, “Compensation – Stock Compensation’ (“ASC 718”) which requires recognition in the financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). ASC 718 also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award. Pursuant to ASC 505, “Equity – Equity Based Payments to Non-Employees” (“ASC 505-50”), for share-based payments to consultants and other third-parties, compensation expense is determined at the measurement date which is the grant date. Until the measurement date is reached, the total amount of compensation expense remains uncertain.

 

Accounting for Warrants

 

The Company classifies as equity any contracts that (i) require physical settlement or net-share settlement or (ii) gives the Company a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement). The Company classifies as assets or liabilities any contracts that (i) require net-cash settlement (including a requirement to net-cash settle the contract if an event occurs and if that event is outside the control of the Company) or (ii) gives the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement).

 

The Company assessed the classification of its common stock purchase warrants as of the date of each equity offering and determined that such instruments met the criteria for equity classification, as the settlement terms indicate that the instruments are indexed to the entity’s underlying stock.

 

Convertible Preferred Stock

 

The Company accounts for its convertible preferred stock under the provisions of ASC 480, “Distinguishing Liabilities from Equity”, which sets forth the standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. ASC 480 requires an issuer to classify a financial instrument that is within the scope of ASC 480 as a liability if such financial instrument embodies an unconditional obligation to redeem the instrument at a specified date and/or upon an event certain to occur.

 

Convertible Instruments

 

The Company bifurcates conversion options from their host instruments and account for them as free standing derivative financial instruments according to certain criteria. The criteria includes circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. An exception to this rule when the host instrument is deemed to be conventional as that term is described under applicable U.S. GAAP.

 

When the Company has determined that the embedded conversion options should not be bifurcated from their host instruments, the Company records, when necessary, a beneficial conversion feature (“BCF”) related to the issuance of convertible debt and equity instruments that have conversion features at fixed rates that are in-the-money when issued, and the fair value of warrants issued in connection with those instruments. The BCF for the convertible instruments is recognized and measured by allocating a portion of the proceeds to warrants, based on their relative fair value, and as a reduction to the carrying amount of the convertible instrument equal to the intrinsic value of the conversion feature. The discounts recorded in connection with the BCF and warrant valuation are recognized a) for convertible debt as interest expense over the term of the debt, using the effective interest method or b) for convertible preferred stock as dividends at the time the stock first becomes convertible.

 

Asset Retirement Obligations

 

Asset retirement obligations (“ARO”), consisting primarily of estimated reclamation costs at the Company’s Copper King and Keystone properties, are recognized in the period incurred and when a reasonable estimate can be made, and recorded as liabilities at fair value. Such obligations, which are initially estimated based on discounted cash flow estimates, are accreted to full value over time through charges to accretion expense. Corresponding asset retirement costs are capitalized as part of the carrying amount of the related long-lived asset and depreciated over the asset’s remaining useful life. Asset retirement obligations are periodically adjusted to reflect changes in the estimated present value resulting from revisions to the estimated timing or amount of reclamation and closure costs. The Company reviews and evaluates its asset retirement obligations annually or more frequently at interim periods if deemed necessary.

 

Income taxes

 

The Company accounts for income taxes pursuant to the provision of ASC 740-10, “Accounting for Income Taxes” (“ASC 740-10”), which requires, among other things, an asset and liability approach to calculating deferred income taxes. The asset and liability approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred asset will not be realized.

 

The Company follows the provision of ASC 740-10 related to Accounting for Uncertain Income Tax Positions. When tax returns are filed, there may be uncertainty about the merits of positions taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions.

 

Tax positions that meet the more likely than not recognition threshold are measured at the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefit associated with tax positions taken that exceed the amount measured as described above should be reflected as a liability for uncertain tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company believes its tax positions are all more likely than not to be upheld upon examination. As such, the Company has not recorded a liability for uncertain tax benefits.

 

The Company has adopted ASC 740-10-25, “Definition of Settlement”, which provides guidance on how an entity should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits and provides that a tax position can be effectively settled upon the completion and examination by a taxing authority without being legally extinguished. For tax positions considered effectively settled, an entity would recognize the full amount of tax benefit, even if the tax position is not considered more likely than not to be sustained based solely on the basis of its technical merits and the statute of limitations remains open. The federal and state income tax returns of the Company are subject to examination by the IRS and state taxing authorities, generally for three years after they are filed.

 

The Tax Cuts and Jobs Act (the “Act”) was enacted in December 2017. Among other things, the Act reduced the U.S. federal corporate tax rate from 34 percent to 21 percent as of January 1, 2018 and eliminated the alternative minimum tax (“AMT”) for corporations. Since the deferred tax assets are expected to reverse in a future year, it has been tax effected using the 21% federal corporate tax rate. As a result of the reduction in the corporate tax rate, the Company decreased its gross deferred tax assets by approximately $2.1 million which was offset by a corresponding decrease to the valuation allowance as of April 30, 2018, which has no impact on the Company’s consolidated financial statements for the year ended April 30, 2018. The Company will continue to analyze the Tax Act to assess its full effects on the Company’s financial results, including disclosures, for the Company’s fiscal year ending April 30, 2019, but the Company does not expect the Tax Act to have a material impact on the Company’s unaudited condensed consolidated financial statements.

 

On December 22, 2017, the Securities and Exchange Commission issued Staff Accounting Bulletin 118, which allows a measurement period, not to exceed one year, to finalize the accounting for the income tax effects of the Act. Until the accounting for the income tax effects of the Act is complete, the reported amounts are based on reasonable estimates, are disclosed as provisional and reflect any adjustments in subsequent periods as estimates are refined or the accounting of the tax effects are completed.

 

Recent Accounting Pronouncements

 

In June 2018, the FASB issued ASU 2018-07, “Compensation — Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting”, which expands the scope of Topic 718 to include all share-based payment transactions for acquiring goods and services from nonemployees. ASU 2018-07 specifies that Topic 718 applies to all share-based payment transactions in which the grantor acquires goods and services to be used or consumed in its own operations by issuing share-based payment awards. ASU 2018-07 also clarifies that Topic 718 does not apply to share-based payments used to effectively provide (1) financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under ASC 606. ASU 2018-07 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted, but no earlier than our adoption of ASC 606. The Company chose to early adopt ASU 2018-07 in July 2018. The adoption of this standard did not have a material impact on the Company’s unaudited condensed consolidated financial statements and related disclosures.

 

Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures.

XML 21 R10.htm IDEA: XBRL DOCUMENT v3.10.0.1
Mineral Rights
3 Months Ended
Jul. 31, 2018
Extractive Industries [Abstract]  
Mineral Rights

NOTE 3 — MINERAL RIGHTS

 

Copper King Project

 

The mineral properties consist of the Copper King gold and copper development project located in the Silver Crown Mining District of southeast Wyoming (the “Copper King Project”) and certain unpatented mining claims in Meagher County, Montana. On July 2, 2014, the Company entered into an Asset Purchase Agreement whereby the Company acquired certain mining leases and other mineral rights comprising the Copper King project and certain unpatented mining claims located in Montana. The purchase price was (a) cash payment in the amount of $1.5 million and (b) closing shares calculated at 50% of the issued and outstanding shares of the Company’s common stock and valued at $1.5 million.

 

In accordance with ASC 360-10, “Property, Plant, and Equipment”, assets are recognized based on their cost to the acquiring entity, which generally includes the transaction costs of the asset acquisition. Accordingly, the Company recorded a total cost of the acquired mineral properties of $3,091,738 which includes the purchase price ($3,000,000) and related transaction cost.

 

Keystone Project

 

The Company, through its wholly-owned subsidiary, U.S. Gold Acquisition Corp., acquired the mining claims comprising the Keystone Project on May 27, 2016 from Nevada Gold Ventures, LLC (“Nevada Gold”) and Americas Gold Exploration, Inc. under the terms of a Purchase and Sale Agreement. At the time of purchase, the Keystone Project consisted of 284 unpatented lode mining claims situated in Eureka County, Nevada. The purchase price for the Keystone Project consisted of the following: (a) cash payment in the amount of $250,000, (b) the closing shares which is equivalent to 462,500 shares of the Company’s common stock and (c) an aggregate of 231,458 five-year options to purchase shares of the Company’s common stock at an exercise price of $3.60 per share.

 

The Company valued the common shares at the fair value of $555,000 or $1.20 per common share based on the contemporaneous sale of its preferred stock in a private placement at $0.10 per common share. The options were valued at $184,968. The options shall vest over a period of two years whereby 1/24 of the options shall vest and become exercisable each month for the next 24 months. The options are non-forfeitable and are not subject to obligations or service requirements.

 

Accordingly, the Company recorded a total cost of the acquired mineral properties of $1,028,885 which includes the purchase price ($989,968) and related transaction cost ($38,917). Some of the Keystone Project claims are subject to pre-existing net smelter royalty (“NSR”) obligations. In addition, under the terms of the Purchase and Sale Agreement, Nevada Gold retained additional NSR rights of 0.5% with regard to certain claims and 3.5% with regard to certain other claims. Under the terms of the Purchase and Sale Agreement, the Company may buy down one percent (1%) of the royalty from Nevada Gold at any time through the fifth anniversary of the closing date for $2,000,000. In addition, the Company may buy down an additional one percent (1%) of the royalty anytime through the eighth anniversary of the closing date for $5,000,000.

 

In August 2017, the Company closed on a transaction under a purchase and sale agreement executed in June 2017 with Nevada Gold and the Company’s wholly-owned subsidiary, U.S. Gold Acquisition Corporation, a Nevada corporation, pursuant to which Nevada Gold sold and U.S. Gold Acquisition Corporation purchased all right, title and interest in the Gold Bar North Property, a gold development project located in Eureka County, Nevada. The purchase price for the Gold Bar North Property was: (a) cash payment in the amount of $20,479 which was paid in August 2017 and (b) 15,000 shares of common stock of the Company which were issued in August 2017. Mr. David Mathewson, the Company’s Chief Geologist, is a member of Nevada Gold.

 

As of the date of these condensed consolidated financial statements, the Company has not established any proven or probable reserves on its mineral properties and has incurred only acquisition costs and exploration costs.

 

Mineral properties consisted of the following:

 

    July 31, 2018 (unaudited)     April 30, 2018  
Copper King project   $ 3,091,738     $ 3,091,738  
Keystone project     1,028,885       1,028,885  
Gold Bar North project     56,329       56,329  
Total   $ 4,176,952     $ 4,176,952  

XML 22 R11.htm IDEA: XBRL DOCUMENT v3.10.0.1
Property
3 Months Ended
Jul. 31, 2018
Property, Plant and Equipment [Abstract]  
Property

NOTE 4 — PROPERTY

 

Property consisted of the following:

 

    July 31, 2018 (unaudited)     April 30, 2018  
Site costs   $ 59,569     $ -  
Less: accumulated depreciation     (1,319 )     -  
Total   $ 58,250     $ -  

 

For the three months ended July 31, 2018 and 2017, depreciation expense amounted to $1,319 and $0, respectively.

XML 23 R12.htm IDEA: XBRL DOCUMENT v3.10.0.1
Asset Retirement Obligatiion
3 Months Ended
Jul. 31, 2018
Asset Retirement Obligation Disclosure [Abstract]  
Asset Retirement Obligatiion

NOTE 5 — ASSET RETIREMENT OBLIGATION

 

In conjunction with various permit approvals permitting the Company to undergo exploration activities at the Cooper King project and Keystone project, the Company has recorded an asset retirement obligation based upon the reclamation plans submitted in connection with the various permits.

 

The following table summarizes activity in the Company’s ARO:

 

    July 31, 2018 (unaudited)     April 30, 2018  
Balance, beginning of period   $ -     $ -  
Addition and changes in estimates     59,569       -  
Accretion expense     1,254       -  
Balance, end of period   $ 60,823     $ -  

XML 24 R13.htm IDEA: XBRL DOCUMENT v3.10.0.1
Acquisition and Disposition
3 Months Ended
Jul. 31, 2018
Business Combinations [Abstract]  
Acquisition and Disposition

NOTE 6 — ACQUISITION AND DISPOSITION

 

On May 23, 2017, the Company closed the Merger with Gold King. Pursuant to the terms of the Merger Agreement and as consideration for the acquisition of Gold King, on the closing date, 2,446,433 shares of the Company’s common stock, par value $0.001 per share, were issued to holders of Gold King’s common stock, Series A Preferred Stock, Series B Preferred Stock and certain incoming officers. In addition, 45,000.18 shares of the Company’s newly designated Series C Preferred Stock, par value $0.001 per share, convertible into an aggregate of 4,500,180 shares of the Company’s common stock were issued to Copper King, 45,500.18 shares of Series C Preferred Stock were issued to Copper King upon closing, 4,500.01 shares of Series C Preferred Stock were to be held in escrow pursuant to the terms of an escrow agreement and 4,523,589 shares of the Company’s common stock and warrants to purchase up to 452,359 shares of the Company’s common stock were issued to the holders of Gold King’s Series C Preferred Stock. Additionally, 231,458 of the Company’s stock options were issued to the holders of Gold King’s outstanding stock options issued in connection with the closing of the acquisition of the Keystone Project.

 

As a result of the Merger, for financial statement reporting purposes, the business combination between the Company and Gold King has been treated as a reverse acquisition and recapitalization with Gold King deemed the accounting acquirer and the Company deemed the accounting acquiree under the acquisition method of accounting in accordance with FASB Accounting Standards Codification (“ASC”) Section 805-10-55. At the time of the Merger, both the Company and Gold King have their own separate operating segments. Accordingly, the assets and liabilities and the historical operations that are reflected in the consolidated financial statements after the Merger are those of the Gold King and are recorded at the historical cost basis of the Company. The acquisition process utilizes the capital structure of the Company and the assets and liabilities of Gold King which are recorded at historical cost.

 

The Company’s assets and liabilities were recorded at their fair values as of the date of the Merger and the results of operations of the Company are consolidated with results of operations of Gold King starting on the date of the Merger. The Company is deemed to have issued 1,204,667 shares of common stock which represents the outstanding common stock of the Company prior to the closing of the Merger. The Company accounted for the value under ASC 805-50-30-2 “Business Combinations” whereby if the consideration is not in the form of cash, the measurement is based on either the cost which shall be measured based on the fair value of the consideration given or the fair value of the assets (or net assets) acquired, whichever is more clearly evident and thus more reliably measurable. The Company deemed that the fair value of the consideration given was $4.70 per share based on the quoted trading price on the date of the Merger amounting to $5,661,935 which is a more reliable measurement basis. The estimated fair values of assets acquired and liabilities assumed are provisional and are based on the information that was available as of the acquisition date to estimate the fair value of assets acquired and liabilities assumed. The Company believes that information provides a reasonable basis for estimating the fair values of assets acquired and liabilities assumed.

 

As a result of the reverse merger, the total purchase consideration exceeded the net assets acquired. The Company recorded $6,094,760 of goodwill at the time of the merger. None of the goodwill recognized is expected to be deductible for income tax purposes. The following table summarizes the consideration paid and the amounts of the assets acquired and liabilities assumed recognized at the acquisition date:

 

The net purchase price paid by the Company was allocated to assets acquired and liabilities assumed on the records of the Company as follows:

 

Current assets (including cash of $255,555)   $ 3,063,059  
Other assets     45,984  
Goodwill     6,094,760  
         
Liabilities assumed (including a note payable – credit line of $1,096,504)     (3,541,868 )
Net purchase price   $ 5,661,935  

 

During the year ended April 30, 2018, the Company recorded an impairment loss of $6,094,760 as the Company determined that the carrying value of the goodwill is not recoverable. The Company has determined that if the business combination would have occurred on the first day of the reporting period there would not have been a material change to the continuing operations of the financial statements presented.

 

In June 2017, subsequent to the Merger, the Company decided to discontinue its memory product business. The Company sold the Dataram Memory business on October 13, 2017 for a purchase price of $900,000. The Company will focus its activities on its gold and precious metal exploration business. During the year ended April 30, 2018, the Company has received net proceeds from the sale of Dataram Memory business of $326,404 after payment of fees related to the sale such as legal and commission expenses and other liabilities assumed.

 

During the year ended April 30, 2018, the Company recognized a gain on extinguishment of liabilities of $248,684 which is included in the loss from discontinued operations as the Company has settled the distribution payable to the former Dataram Memory shareholders at an amount less than the liability originally recorded at the time of acquisition. Additionally, during the year ended April 30, 2018, the Company recognized gain from sale of discontinued operations of $94,485 related to the sale of the Dataram Memory business on October 13, 2017.

 

Credit Facility

 

The Company had a financing agreement (the “Financing Agreement”) with Rosenthal & Rosenthal, Inc. that provides for a revolving loan with a maximum borrowing capacity of $3,500,000. The Financing Agreement renewal date was August 31, 2017 and will renew from year to year unless such Financing Agreement is terminated as set forth in the loan agreement. The amount outstanding under the Financing Agreement bore interest at a rate of the Prime Rate (as defined in the Financing Agreement) plus 3.25% (the “Effective Rate”) or on Over-advances (as defined in the Financing Agreement), if any, at a rate of the Effective Rate plus 3%. The Financing Agreement contained other financial and restrictive covenants, including, among others, covenants limiting the Company’s ability to incur indebtedness, guarantee obligations, sell assets, make loans, enter into mergers and acquisition transactions and declare or make dividends. Borrowings under the Financing Agreement are collateralized by substantially all the assets of the Company. The Financing Agreement provided for advances against eligible accounts receivable and inventory balances based on prescribed formulas of raw materials and finished goods. On October 13, 2017, upon the sale of the Dataram Memory business, the buyer assumed the obligation under this Financing Agreement, therefore, liabilities related to this financing agreement was $0 as of April 30, 2018.

 

The following table sets forth for the year ended April 30, 2018, indicated selected financial data of the Company’s discontinued operations of its memory product business from the date of merger to April 30, 2018.

 

    April 30, 2018  
Revenues   $ 7,885,310  
Cost of sales     6,653,363  
Gross profit     1,231,947  
Operating and other non-operating expenses (including impairment charge of 6,094,760)     (7,406,271 )
Gain from extinguishment of liabilities     248,684  
Loss from discontinued operations     (5,925,640 )
Gain from sale of discontinued operations     94,485  
         
Total loss from discontinued operations   $ (5,831,155 )

 

The following table sets forth for the year ended April 30, 2018, indicated selected financial data of the Company’s gain from sale of the Dataram Memory business.

 

Total consideration   $ 900,000  
Direct legal and sales commission expenses related to the sale     (201,510 )
Dataram’s accrued expenses to be deducted from the sales proceeds     (174,880 )
Total carrying value of Dataram Memory business on date of sale *     (429,125 )
Net gain from sale of Dataram Memory business   $ 94,485  

 

Current assets   $ 3,271,426  
Other assets     33,320  
Current liabilities     (2,866,660 )
Liabilities – long term     (8,961 )
* Total carrying value of Dataram Memory business on date of sale   $ 429,125  

XML 25 R14.htm IDEA: XBRL DOCUMENT v3.10.0.1
Related Party Transactions
3 Months Ended
Jul. 31, 2018
Related Party Transactions [Abstract]  
Related Party Transactions

NOTE 7 — RELATED PARTY TRANSACTIONS

 

Accounts payable to related party as of July 31, 2018 and April 30, 2018 was $2,431, and was reflected as accounts payable – related party in the accompanying unaudited condensed consolidated balance sheets. The related party is the managing partner of Copper King LLC who was a principal stockholder of Gold King.

XML 26 R15.htm IDEA: XBRL DOCUMENT v3.10.0.1
Stockholders' Equity
3 Months Ended
Jul. 31, 2018
Equity [Abstract]  
Stockholders' Equity

NOTE 8 — STOCKHOLDERS’ EQUITY

 

2017 Equity Incentive Plan

 

In August 2017, the Company’s Board of Directors approved the Company’s 2017 Equity Incentive Plan (the “Plan”) including the reservation of 1,650,000 shares of common stock thereunder.

 

On January 1st  of each year during the term of the Plan (the “Calculation Date”), the aggregate number of shares of Common Stock that are available for issuance shall automatically be increased by such number of shares as is equal to the number of shares sufficient to cause the Share Limit (as defined in the Plan) to equal twenty percent (20%) of the issued and outstanding Common Stock of the Company at such time, provided, however, that if on any Calculation Date the number of shares equal twenty percent (20%) of our total issued and outstanding Common Stock is less than the number of shares of Common Stock available for issuance under the Plan, no change will be made to the aggregate number of shares of Common Stock issuable under the Plan for that year (such that the aggregate number of shares of Common Stock available for issuance under the Plan will never decrease).

 

Common Stock

 

In May 2017, in connection with the Merger (see Note 6), the Company issued 37,879 shares of the Company’s common stock having a fair value of $100,000 to the Chief Geologist for services rendered to the Company from June 2016 to January 2017 pursuant to his employment agreement with the Company’s wholly-owned subsidiary Gold King (see Note 10). Consequently, the Company reduced accrued salaries by $100,000 as of July 31, 2017.

 

In July 2017, the Company sold 179,211 shares of its common stock at $2.79 per common share for proceeds of approximately $500,000.

 

Between May 2017 and July 2017, the Company issued 3,682,000 shares of the Company’s common stock in exchange for the conversion of 36,820 shares of the Company’s Series C Preferred Stock.

 

Common stock issued for services

 

During the three months ended July 31, 2018, the Company issued 28,510 shares of the Company’s common stock to the Chief Geologist for services rendered to the Company from April 2018 to June 2018 pursuant to his employment agreement (see Note 9). The Company valued these common shares at the fair value of $37,500 or $1.26 - $1.36 per common share based on the quoted trading prices on the date of grants and reduced accrued salaries by $37,500.

 

Stock Options

 

A summary of the Company’s outstanding stock options as of July 31, 2018 and changes during the period then ended are presented below:

 

    Number of 
Options
    Weighted 
Average 
Exercise 
Price
    Weighted 
Average 
Remaining 
Contractual 
Life 
(Years)
 
Balance at April 30, 2018     1,531,458     $ 1.79       4.43  
Granted                  
Exercised                  
Forfeited                  
Cancelled     (50,000 )     1.47        
Balance at July 31, 2018     1,481,458       1.80       4.17  
                         
Options exercisable at end of period     593,958     $ 2.30          
Options expected to vest     887,500     $ 1.47          
Weighted average fair value of options granted during the period           $          

 

At July 31, 2018, the aggregate intrinsic value of options outstanding and exercisable was $0 and $0, respectively.

 

At April 30, 2018, the aggregate intrinsic value of options outstanding and exercisable was $1,000 and $0, respectively.

 

Stock-based compensation for stock options has been recorded in the unaudited condensed consolidated statements of operations and totaled $132,848 for the three months ended July 31, 2018 and $0 for three months ended July 31, 2017. As of July 31, 2018, the remaining balance of unamortized expense is $874,083 and is expected to be amortized over a weighted average period of 2.11 years.

 

Stock Warrants

 

A summary of the Company’s outstanding stock warrants as of July 31, 2018 and changes during the period then ended are presented below:

 

    Number of 
Warrants
    Weighted 
Average 
Exercise 
Price
    Weighted 
Average 
Remaining 
Contractual 
Life 
(Years)
 
Balance at April 30, 2018     1,702,359     $ 3.12       3.25  
Granted                  
Exercised                  
Forfeited                  
Cancelled                  
Balance at July 31, 2018     1,702,359     $ 3.12       2.99  

 

Warrants exercisable at end of period     1,702,359     $ 3.12  
Weighted average fair value of warrants granted during the period           $  

 

All warrants as of July 31, 2018 are fully vested

 

At July 31, 2018, the aggregate intrinsic value of warrants outstanding and exercisable was $0 and $0, respectively.

 

At April 30, 2018, the aggregate intrinsic value of warrants outstanding and exercisable was $0 and $0, respectively.

XML 27 R16.htm IDEA: XBRL DOCUMENT v3.10.0.1
Net Loss Per Common Share
3 Months Ended
Jul. 31, 2018
Earnings Per Share [Abstract]  
Net Loss Per Common Share

NOTE 9 — NET LOSS PER COMMON SHARE

 

Net loss per common share is calculated in accordance with ASC 260, “Earnings Per Share”. Basic loss per share is computed by dividing net loss available to common stockholder, by the weighted average number of shares of common stock outstanding during the period. The following were excluded from the computation of diluted shares outstanding as they would have had an anti-dilutive impact on the Company’s net loss. In periods where the Company has a net loss, all dilutive securities are excluded.

 

    July 31, 2018     April 30, 2018  
Common stock equivalents:                
Stock options     1,481,458       1,531,458  
Stock warrants     1,702,359       1,702,359  
Total     3,183,817       3,233,817  

XML 28 R17.htm IDEA: XBRL DOCUMENT v3.10.0.1
Commitments and Contingencies
3 Months Ended
Jul. 31, 2018
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies

NOTE 10 — COMMITMENTS AND CONTINGENCIES

 

Mining Leases

 

The Copper King property position consists of two State of Wyoming Metallic and Non-metallic Rocks and Minerals Mining Leases. These leases were assigned to the Company in July 2014 through the acquisition of the Copper King project.

 

The Company’s rights to the Copper King Project arise under two State of Wyoming mineral leases:

 

1) State of Wyoming Mining Lease No. 0-40828 consisting of 640 acres.

 

2) State of Wyoming Mining Lease No. 0-40858 consisting of 480 acres.

 

Lease 0-40828 was renewed in February 2013 for a second ten-year term and Lease 0-40858 was renewed for its second ten-year term in February 2014. Each lease requires an annual payment of $2.00 per acre. In connection with the Wyoming Mining Leases, the following production royalties must be paid to the State of Wyoming, although once the project is in operation, the Board of Land Commissioners has the authority to reduce the royalty payable to the State:

 

FOB Mine Value per Ton   Percentage 
Royalty
 
$00.00 to $50.00     5 %
$50.01 to $100.00     7 %
$100.01 to $150.00     9 %
$150.01 and up     10 %

 

The future minimum lease payments under these mining leases are as follows:

 

2019 (remainder of year)   $ 1,680  
2020     2,240  
2021     2,240  
2022     2,240  
2023     2,240  
Thereafter     960  
    $ 11,600  

 

The Company may renew the lease for a third ten-year term which will require an annual payment of $3.00 per acre and then $4.00 per acre thereafter.

 

Executive Employment Agreements

 

On April 12, 2016, the Company entered into an employment agreement with its Chief Executive Officer (“CEO”), Mr. Edward Karr. The initial term of the agreement is for two years ending on April 30, 2018, with automatic renewals for successive one year terms unless terminated by written notice at least 90 days prior to the expiration of the term. Mr. Karr is to receive a base salary of $250,000 per year. The agreement calls for a bonus of $250,000 to be awarded upon meeting a certain milestone goal which is concluding a financing of at least $10,000,000, a minimum of $2,500,000 of which must come from foreign investors. The bonus may be paid in cash, stock, or a combination thereof in the discretion of the board. Any bonus for a calendar year shall be subject to Mr. Karr’s continued employment with the Company through the end of the calendar year in which it is earned and shall be paid after the conclusion of the calendar year in accordance with the Company’s regular bonus payment policies in the year following the year with respect to which the bonus relates, and in any case not later than two and one half (2-1/2) months following the end of the year with respect to which a bonus is earned.

 

The Company’s Chief Operating Officer, and former Chief Financial Officer, Mr. David Rector (“COO”), is employed under an executive employment agreement dated Apri1 14, 2016. The initial term of the agreement is for one year, with automatic renewals for successive one year terms unless terminated by written notice at least 30 days prior to the expiration of the term. Mr. Rector is to receive a base salary of $15,000 per month. The agreement calls for a bonus in an amount up to the amount of the base salary, to be awarded in the discretion of the board of directors and to be paid in cash, stock, or a combination thereof in the discretion of the board.

 

On June 27, 2016, the Company entered into an employment agreement with its Chief Geologist, Mr. David Mathewson. The initial term of the agreement is for one year, with automatic renewals for successive one year terms unless terminated by written notice at least 30 days prior to the expiration of the term by either party. Mr. Mathewson is to receive a base salary of $200,000 per year. The base salary shall be payable as follows: (a) 25% of the base salary shall be payable in equal monthly cash installments and (b) the remaining 75% of the base salary shall be payable in equal monthly installments in the form of common stock of the Company. Each installment of common stock shall be issued on the first business day of the months and shall be valued at the market price on the trading day immediately prior to the date of issuance. Market price is the closing bid price on the principal securities exchange or trading market. Mr. Mathewson shall be entitled to receive bonus to be paid in cash, stock, or a combination thereof and equity awards.

 

Separation Agreements

 

On June 8, 2017, the Company and David A. Moylan, the Company’s former President and Chief Executive Officer, entered into a separation agreement. Mr. Moylan resigned as Chairman of the Board of Directors and as the President and Chief Executive Officer of the Company on May 23, 2017 in connection with the closing of the transactions contemplated by the Merger Agreement and Merger (see Note 6).

 

Under the terms of the separation agreement, Mr. Moylan received a severance payment of an aggregate of $494,227. The separation agreement became effective eight days following execution. Such severance payment is the sole and exclusive payment by the Company and is in lieu of any and all payments or obligations, including any separation payments under prior agreements between Mr. Moylan and the Company. Also as set forth in the separation agreement, Mr. Moylan will, until terminated by the Company’s Board of Directors at its sole option with two weeks’ notice, serve as the President and Chief Executive Officer of Dataram Memory for a monthly fee of $19,667, payable 90% in common stock of the Company and 10% in cash and provide general consulting and support services to the Company. Mr. Moylan no longer serves in any capacity with the Company or its subsidiaries effective October 31, 2017.

 

On June 6, 2017, Anthony Lougee resigned as Chief Financial Officer of the Company pursuant to a Change in Control and Severance Agreement by and between the Company and Mr. Lougee dated July 31, 2015. Mr. Lougee’s decision to resign did not result from any disagreement with the Company, the Company’s management or the Board of Directors. On June 8, 2017, the Company entered into a separation agreement with Mr. Lougee. Under the terms of the separation agreement, Mr. Lougee received a severance payment of an aggregate of $221,718. The separation agreement became effective eight days following execution. Such severance payment is the sole and exclusive payment by the Company and is in lieu of any and all payments or obligations, including any separation payments under prior agreements between Mr. Lougee and the Company, including the severance agreement.

 

Subsequent to the Merger, on June 8, 2017, the Company reappointed Mr. Lougee to serve as our Chief Financial Officer and as the Chief Financial Officer of Dataram Memory and entered into an amended and restated offer letter agreement which was accepted. Mr. Lougee’s compensation remained the same as his compensation immediately prior to his resignation: a base salary of $144,000 with additional monthly cash payments of $2,500 through the earliest to occur of (i) his resignation or removal as Chief Financial Officer of the Company or of Dataram Memory or (ii) November 23, 2017. He received a monthly award of 500 shares of restricted common stock. Mr. Lougee’s employment was on an at-will basis and may be terminated without notice at any time by Mr. Lougee or the Board of Directors. The employment agreement canceled and superseded the severance agreement, the offer letter agreement by and between the Company and Mr. Lougee dated July 31, 2015 and the incentive agreement by and between the Company and Mr. Lougee dated February 7, 2017. Effective October 17, 2017, Mr. Lougee resigned as the Company’s Chief Financial Officer.

XML 29 R18.htm IDEA: XBRL DOCUMENT v3.10.0.1
Subsequent Events
3 Months Ended
Jul. 31, 2018
Subsequent Events [Abstract]  
Subsequent Events

NOTE 11 — SUBSEQUENT EVENTS

 

On August 14, 2018, the Company issued 9,843 shares of the Company’s common stock to the Chief Geologist for services rendered to the Company for July 2018 pursuant to his employment agreement (see Note 9). The Company valued these common shares at the fair value of $12,500 or $1.27 per common share based on the quoted trading prices on the date of grants and reduced accrued salaries by $12,500.

 

On September 6, 2018, the Company issued 10,965 shares of the Company’s common stock to the Chief Geologist for services rendered to the Company for August 2018 pursuant to his employment agreement (see Note 9). The Company valued these common shares at the fair value of $12,500 or $1.14 per common share based on the quoted trading prices on the date of grants and reduced accrued salaries by $12,500.

 

Subsequent to July 31, 2018, the Company issued an aggregate of 1,000,000 shares of the Company’s common stock to officers, directors and employees for services rendered. The shares vest 50% on the date of issuance and 50% on the one-year anniversary of the date of issuance

XML 30 R19.htm IDEA: XBRL DOCUMENT v3.10.0.1
Summary of Significant Accounting Policies (Policies)
3 Months Ended
Jul. 31, 2018
Accounting Policies [Abstract]  
Basis of Presentation and Liquidity

Basis of Presentation and Liquidity

 

The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the United States Securities and Exchange Commission for interim financial information, which includes the unaudited condensed consolidated financial statements and present the unaudited condensed consolidated financial statements of the Company and its wholly-owned subsidiaries as of July 31, 2018. All intercompany transactions and balances have been eliminated. The accounting policies and procedures used in the preparation of these unaudited condensed consolidated financial statements have been derived from the audited financial statements of the Company for the year ended April 30, 2018, which are contained in the Form 10-K filed on July 30, 2018. The unaudited condensed consolidated balance sheet as of April 30, 2018 was derived from those financial statements. It is management’s opinion that all material adjustments (consisting of normal recurring adjustments) have been made, which are necessary for a fair financial statement presentation. The results for the interim period are not necessarily indicative of the results to be expected for the year ending April 30, 2019.

 

As reflected in the accompanying unaudited condensed consolidated financial statements, the Company had a net loss and used cash in its operations of approximately $1.5 million and $1.5 million, respectively, for the three months ended July 31, 2018. Additionally, the Company had an accumulated deficit of approximately $19.7 million at July 31, 2018. The Company consummated private placements to several investors for the sale of the Company’s Series B Convertible Preferred Stock (“Series B Preferred Stock”) and Series C Convertible Preferred Stock (“Series C Preferred Stock”) for aggregate net proceeds of approximately $10.9 million between July 2016 and October 2016, received net proceeds from sale of the Company’s common stock of approximately $2.6 million between July 2017 and October 2017 and completed a private placement for the sale of the Company’s Series E Convertible Preferred Stock (“Series E Preferred Stock”) and warrants for aggregate net proceeds of approximately $4.9 million in January 2018. There can be no assurance that the Company will be able to raise additional capital or if the terms will be favorable.

 

The above steps substantially lowered the Company’s potential cash exposure. Additionally, the Company is able to control cash spending on its exploration activities. As a result, as of the date of the issuance of these financial statements, the Company believes its current cash position and plans have alleviated substantial doubt about its ability to sustain operations for at least one year from the issuance of these unaudited condensed consolidated financial statements.

Use of Estimates and Assumptions

Use of Estimates and Assumptions

 

In preparing the condensed consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the condensed consolidated balance sheet, and revenues and expenses for the period then ended. Actual results may differ significantly from those estimates. Significant estimates made by management include, but are not limited to valuation of mineral rights, goodwill, stock-based compensation, the fair value of common stock issued, asset retirement obligation and the valuation of deferred tax assets and liabilities.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

 

The Company adopted Accounting Standards Codification (“ASC”) ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”), for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied in accordance with accounting principles generally accepted in the United States of America that requires the use of fair value measurements, establishes a framework for measuring fair value and expands disclosure about such fair value measurements.

 

ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs.

 

These inputs are prioritized below:

 

Level 1: Observable inputs such as quoted market prices in active markets for identical assets or liabilities.
Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data.
Level 3: Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions.

 

The Company analyzes all financial instruments with features of both liabilities and equity under the Financial Accounting Standard Board’s (“FASB”) accounting standard for such instruments. Under this standard, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

 

The carrying amounts reported in the unaudited condensed consolidated balance sheets for cash, prepaid expense and other current assets – current, accounts payable, and accrued liabilities, approximate their estimated fair values based on the short-term maturity of these instruments.

Goodwill and Other Intangible Assets

Goodwill and other intangible assets

 

In accordance with ASC 350-30-65, the Company assesses the impairment of identifiable intangibles whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors the Company considers to be important which could trigger an impairment review include the following:

 

  1. Significant underperformance relative to expected historical or projected future operating results;
  2. Significant changes in the manner of use of the acquired assets or the strategy for the overall business; and
  3. Significant negative industry or economic trends.

 

When the Company determines that the carrying value of intangibles may not be recoverable based upon the existence of one or more of the above indicators of impairment and the carrying value of the asset cannot be recovered from projected undiscounted cash flows, the Company records an impairment charge. The Company measures any impairment based on a projected discounted cash flow method using a discount rate determined by management to be commensurate with the risk inherent in the current business model. Significant management judgment is required in determining whether an indicator of impairment exists and in projecting cash flows.

Property

Property

 

Property is carried at cost. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition. Depreciation is calculated on a straight-line basis over the estimated useful life of the assets, generally ten years.

Impairment of Long-lived Assets

Impairment of long-lived assets

 

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable, or at least annually. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value. During the year ended April 30, 2018, the Company determined that the carrying value of Goodwill (see Note 6) exceeded its fair value, which triggered an impairment analysis. The Company recorded a goodwill impairment expense of $6,094,760 during the year ended April 30, 2018, nonrecurring level 3 fair value measurement. No impairment of goodwill was recorded during the three months ended July 31, 2018.

Mineral Rights

Mineral Rights

 

Costs of lease, exploration, carrying and retaining unproven mineral lease properties are expensed as incurred. The Company expenses all mineral exploration costs as incurred as it is still in the exploration stage. If the Company identifies proven and probable reserves in its investigation of its properties and upon development of a plan for operating a mine, it would enter the development stage and capitalize future costs until production is established.

 

When a property reaches the production stage, the related capitalized costs are amortized on a units-of-production basis over the proven and probable reserves following the commencement of production. The Company assesses the carrying costs of the capitalized mineral properties for impairment under ASC 360-10, “Impairment of long-lived assets”, and evaluates its carrying value under ASC 930-360, “Extractive Activities - Mining”, annually. An impairment is recognized when the sum of the expected undiscounted future cash flows is less than the carrying amount of the mineral properties. Impairment losses, if any, are measured as the excess of the carrying amount of the mineral properties over its estimated fair value.

 

To date, the Company has not established the commercial feasibility of any exploration prospects; therefore, all exploration costs are being expensed.

 

ASC 930-805, “Extractive Activities-Mining: Business Combinations” (“ASC 930-805”), states that mineral rights consist of the legal right to explore, extract, and retain at least a portion of the benefits from mineral deposits. Mining assets include mineral rights. Acquired mineral rights are considered tangible assets under ASC 930-805. ASC 930-805 requires that mineral rights be recognized at fair value as of the acquisition date. As a result, the direct costs to acquire mineral rights are initially capitalized as tangible assets. Mineral rights include costs associated with acquiring patented and unpatented mining claims.

 

ASC 930-805 provides that in measuring the fair value of mineral assets, an acquirer should take into account both:

 

● The value beyond proven and probable reserves (“VBPP”) to the extent that a market participant would include VBPP in determining the fair value of the assets.

 

● The effects of anticipated fluctuations in the future market price of minerals in a manner that is consistent with the expectations of market participants.

Share-Based Compensation

Share-Based Compensation

 

Share-based compensation is accounted for based on the requirements of ASC 718, “Compensation – Stock Compensation’ (“ASC 718”) which requires recognition in the financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). ASC 718 also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award. Pursuant to ASC 505, “Equity – Equity Based Payments to Non-Employees” (“ASC 505-50”), for share-based payments to consultants and other third-parties, compensation expense is determined at the measurement date which is the grant date. Until the measurement date is reached, the total amount of compensation expense remains uncertain.

Accounting for Warrants

Accounting for Warrants

 

The Company classifies as equity any contracts that (i) require physical settlement or net-share settlement or (ii) gives the Company a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement). The Company classifies as assets or liabilities any contracts that (i) require net-cash settlement (including a requirement to net-cash settle the contract if an event occurs and if that event is outside the control of the Company) or (ii) gives the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement).

 

The Company assessed the classification of its common stock purchase warrants as of the date of each equity offering and determined that such instruments met the criteria for equity classification, as the settlement terms indicate that the instruments are indexed to the entity’s underlying stock.

Convertible Preferred Stock

Convertible Preferred Stock

 

The Company accounts for its convertible preferred stock under the provisions of ASC 480, “Distinguishing Liabilities from Equity”, which sets forth the standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. ASC 480 requires an issuer to classify a financial instrument that is within the scope of ASC 480 as a liability if such financial instrument embodies an unconditional obligation to redeem the instrument at a specified date and/or upon an event certain to occur.

Convertible Instruments

Convertible Instruments

 

The Company bifurcates conversion options from their host instruments and account for them as free standing derivative financial instruments according to certain criteria. The criteria includes circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. An exception to this rule when the host instrument is deemed to be conventional as that term is described under applicable U.S. GAAP.

 

When the Company has determined that the embedded conversion options should not be bifurcated from their host instruments, the Company records, when necessary, a beneficial conversion feature (“BCF”) related to the issuance of convertible debt and equity instruments that have conversion features at fixed rates that are in-the-money when issued, and the fair value of warrants issued in connection with those instruments. The BCF for the convertible instruments is recognized and measured by allocating a portion of the proceeds to warrants, based on their relative fair value, and as a reduction to the carrying amount of the convertible instrument equal to the intrinsic value of the conversion feature. The discounts recorded in connection with the BCF and warrant valuation are recognized a) for convertible debt as interest expense over the term of the debt, using the effective interest method or b) for convertible preferred stock as dividends at the time the stock first becomes convertible.

Asset Retirement Obligations

Asset Retirement Obligations

 

Asset retirement obligations (“ARO”), consisting primarily of estimated reclamation costs at the Company’s Copper King and Keystone properties, are recognized in the period incurred and when a reasonable estimate can be made, and recorded as liabilities at fair value. Such obligations, which are initially estimated based on discounted cash flow estimates, are accreted to full value over time through charges to accretion expense. Corresponding asset retirement costs are capitalized as part of the carrying amount of the related long-lived asset and depreciated over the asset’s remaining useful life. Asset retirement obligations are periodically adjusted to reflect changes in the estimated present value resulting from revisions to the estimated timing or amount of reclamation and closure costs. The Company reviews and evaluates its asset retirement obligations annually or more frequently at interim periods if deemed necessary.

Income Taxes

Income taxes

 

The Company accounts for income taxes pursuant to the provision of ASC 740-10, “Accounting for Income Taxes” (“ASC 740-10”), which requires, among other things, an asset and liability approach to calculating deferred income taxes. The asset and liability approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred asset will not be realized.

 

The Company follows the provision of ASC 740-10 related to Accounting for Uncertain Income Tax Positions. When tax returns are filed, there may be uncertainty about the merits of positions taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions.

 

Tax positions that meet the more likely than not recognition threshold are measured at the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefit associated with tax positions taken that exceed the amount measured as described above should be reflected as a liability for uncertain tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company believes its tax positions are all more likely than not to be upheld upon examination. As such, the Company has not recorded a liability for uncertain tax benefits.

 

The Company has adopted ASC 740-10-25, “Definition of Settlement”, which provides guidance on how an entity should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits and provides that a tax position can be effectively settled upon the completion and examination by a taxing authority without being legally extinguished. For tax positions considered effectively settled, an entity would recognize the full amount of tax benefit, even if the tax position is not considered more likely than not to be sustained based solely on the basis of its technical merits and the statute of limitations remains open. The federal and state income tax returns of the Company are subject to examination by the IRS and state taxing authorities, generally for three years after they are filed.

 

The Tax Cuts and Jobs Act (the “Act”) was enacted in December 2017. Among other things, the Act reduced the U.S. federal corporate tax rate from 34 percent to 21 percent as of January 1, 2018 and eliminated the alternative minimum tax (“AMT”) for corporations. Since the deferred tax assets are expected to reverse in a future year, it has been tax effected using the 21% federal corporate tax rate. As a result of the reduction in the corporate tax rate, the Company decreased its gross deferred tax assets by approximately $2.1 million which was offset by a corresponding decrease to the valuation allowance as of April 30, 2018, which has no impact on the Company’s consolidated financial statements for the year ended April 30, 2018. The Company will continue to analyze the Tax Act to assess its full effects on the Company’s financial results, including disclosures, for the Company’s fiscal year ending April 30, 2019, but the Company does not expect the Tax Act to have a material impact on the Company’s unaudited condensed consolidated financial statements.

 

On December 22, 2017, the Securities and Exchange Commission issued Staff Accounting Bulletin 118, which allows a measurement period, not to exceed one year, to finalize the accounting for the income tax effects of the Act. Until the accounting for the income tax effects of the Act is complete, the reported amounts are based on reasonable estimates, are disclosed as provisional and reflect any adjustments in subsequent periods as estimates are refined or the accounting of the tax effects are completed.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

 

In June 2018, the FASB issued ASU 2018-07, “Compensation — Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting”, which expands the scope of Topic 718 to include all share-based payment transactions for acquiring goods and services from nonemployees. ASU 2018-07 specifies that Topic 718 applies to all share-based payment transactions in which the grantor acquires goods and services to be used or consumed in its own operations by issuing share-based payment awards. ASU 2018-07 also clarifies that Topic 718 does not apply to share-based payments used to effectively provide (1) financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under ASC 606. ASU 2018-07 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted, but no earlier than our adoption of ASC 606. The Company chose to early adopt ASU 2018-07 in July 2018. The adoption of this standard did not have a material impact on the Company’s unaudited condensed consolidated financial statements and related disclosures.

 

Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures.

XML 31 R20.htm IDEA: XBRL DOCUMENT v3.10.0.1
Mineral Rights (Tables)
3 Months Ended
Jul. 31, 2018
Extractive Industries [Abstract]  
Schedule of Mineral Properties

Mineral properties consisted of the following:

 

    July 31, 2018 (unaudited)     April 30, 2018  
Copper King project   $ 3,091,738     $ 3,091,738  
Keystone project     1,028,885       1,028,885  
Gold Bar North project     56,329       56,329  
Total   $ 4,176,952     $ 4,176,952  

XML 32 R21.htm IDEA: XBRL DOCUMENT v3.10.0.1
Property (Tables)
3 Months Ended
Jul. 31, 2018
Property, Plant and Equipment [Abstract]  
Schedule of Property and Equipment

Property consisted of the following:

 

    July 31, 2018 (unaudited)     April 30, 2018  
Site costs   $ 59,569     $ -  
Less: accumulated depreciation     (1,319 )     -  
Total   $ 58,250     $ -  

XML 33 R22.htm IDEA: XBRL DOCUMENT v3.10.0.1
Asset Retirement Obligatiion (Tables)
3 Months Ended
Jul. 31, 2018
Asset Retirement Obligation Disclosure [Abstract]  
Schedule of Asset Retirement Obligation

The following table summarizes activity in the Company’s ARO:

 

    July 31, 2018 (unaudited)     April 30, 2018  
Balance, beginning of period   $ -     $ -  
Addition and changes in estimates     59,569       -  
Accretion expense     1,254       -  
Balance, end of period   $ 60,823     $ -  

XML 34 R23.htm IDEA: XBRL DOCUMENT v3.10.0.1
Acquisition and Disposition (Tables)
3 Months Ended
Jul. 31, 2018
Schedule of Discontinued Operations

The following table sets forth for the year ended April 30, 2018, indicated selected financial data of the Company’s discontinued operations of its memory product business from the date of merger to April 30, 2018.

 

    April 30, 2018  
Revenues   $ 7,885,310  
Cost of sales     6,653,363  
Gross profit     1,231,947  
Operating and other non-operating expenses (including impairment charge of 6,094,760)     (7,406,271 )
Gain from extinguishment of liabilities     248,684  
Loss from discontinued operations     (5,925,640 )
Gain from sale of discontinued operations     94,485  
         
Total loss from discontinued operations   $ (5,831,155 )

Gold King [Member]  
Schedule of Assets Acquired and Liabilities Assumed

The net purchase price paid by the Company was allocated to assets acquired and liabilities assumed on the records of the Company as follows:

 

Current assets (including cash of $255,555)   $ 3,063,059  
Other assets     45,984  
Goodwill     6,094,760  
         
Liabilities assumed (including a note payable – credit line of $1,096,504)     (3,541,868 )
Net purchase price   $ 5,661,935  

Dataram Memory [Member]  
Schedule of Selected Financial Data of the Company's Gain from Sale

The following table sets forth for the year ended April 30, 2018, indicated selected financial data of the Company’s gain from sale of the Dataram Memory business.

 

Total consideration   $ 900,000  
Direct legal and sales commission expenses related to the sale     (201,510 )
Dataram’s accrued expenses to be deducted from the sales proceeds     (174,880 )
Total carrying value of Dataram Memory business on date of sale *     (429,125 )
Net gain from sale of Dataram Memory business   $ 94,485  

 

Current assets   $ 3,271,426  
Other assets     33,320  
Current liabilities     (2,866,660 )
Liabilities – long term     (8,961 )
* Total carrying value of Dataram Memory business on date of sale   $ 429,125  

XML 35 R24.htm IDEA: XBRL DOCUMENT v3.10.0.1
Stockholders' Equity (Tables)
3 Months Ended
Jul. 31, 2018
Equity [Abstract]  
Schedule of Stock Option Activity

A summary of the Company’s outstanding stock options as of July 31, 2018 and changes during the period then ended are presented below:

 

    Number of 
Options
    Weighted 
Average 
Exercise 
Price
    Weighted 
Average 
Remaining 
Contractual 
Life 
(Years)
 
Balance at April 30, 2018     1,531,458     $ 1.79       4.43  
Granted                  
Exercised                  
Forfeited                  
Cancelled     (50,000 )     1.47        
Balance at July 31, 2018     1,481,458       1.80       4.17  
                         
Options exercisable at end of period     593,958     $ 2.30          
Options expected to vest     887,500     $ 1.47          
Weighted average fair value of options granted during the period           $          

Schedule of Stock Warrant Activity

A summary of the Company’s outstanding stock warrants as of July 31, 2018 and changes during the period then ended are presented below:

 

    Number of 
Warrants
    Weighted 
Average 
Exercise 
Price
    Weighted 
Average 
Remaining 
Contractual 
Life 
(Years)
 
Balance at April 30, 2018     1,702,359     $ 3.12       3.25  
Granted                  
Exercised                  
Forfeited                  
Cancelled                  
Balance at July 31, 2018     1,702,359     $ 3.12       2.99  

 

Warrants exercisable at end of period     1,702,359     $ 3.12  
Weighted average fair value of warrants granted during the period           $  

XML 36 R25.htm IDEA: XBRL DOCUMENT v3.10.0.1
Net Loss Per Common Share (Tables)
3 Months Ended
Jul. 31, 2018
Earnings Per Share [Abstract]  
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

The following were excluded from the computation of diluted shares outstanding as they would have had an anti-dilutive impact on the Company’s net loss. In periods where the Company has a net loss, all dilutive securities are excluded.

 

    July 31, 2018     April 30, 2018  
Common stock equivalents:                
Stock options     1,481,458       1,531,458  
Stock warrants     1,702,359       1,702,359  
Total     3,183,817       3,233,817  

XML 37 R26.htm IDEA: XBRL DOCUMENT v3.10.0.1
Commitments and Contingencies (Tables)
3 Months Ended
Jul. 31, 2018
Commitments and Contingencies Disclosure [Abstract]  
Schedule of Royalty Payable

FOB Mine Value per Ton   Percentage 
Royalty
 
$00.00 to $50.00     5 %
$50.01 to $100.00     7 %
$100.01 to $150.00     9 %
$150.01 and up     10 %

Schedule of Future Minimum Lease Payments

The future minimum lease payments under these mining leases are as follows:

 

2019 (remainder of year)   $ 1,680  
2020     2,240  
2021     2,240  
2022     2,240  
2023     2,240  
Thereafter     960  
    $ 11,600  

XML 38 R27.htm IDEA: XBRL DOCUMENT v3.10.0.1
Organization and Description of Business (Details Narrative) - USD ($)
Oct. 13, 2017
May 23, 2017
Equity ownership interest rate percent   90.00%
Dataram Memory [Member]    
Proceeds from sales of business $ 900,000  
XML 39 R28.htm IDEA: XBRL DOCUMENT v3.10.0.1
Summary of Significant Accounting Policies (Details Narrative) - USD ($)
1 Months Ended 3 Months Ended 4 Months Ended 12 Months Ended
Jan. 31, 2018
Jul. 31, 2018
Jul. 31, 2017
Oct. 30, 2017
Oct. 30, 2016
Apr. 30, 2018
Net loss   $ 1,481,504 $ 9,277,781     $ 13,658,495
Cash used in operations   1,451,987 2,974,009      
Accumulated deficit   $ 19,710,056       18,228,552
Net proceeds from sales of common stock     $ 500,004      
Estimated useful life   10 years        
Impairment of goodwill         $ 6,094,760
Adjustment in deferred tax assets and valuation of allowance   $ 2,100,000        
Alternative Minimum Tax [Member]            
Income tax description           Among other things, the Act reduced the U.S. federal corporate tax rate from 34 percent to 21 percent as of January 1, 2018 and eliminated the alternative minimum tax ("AMT") for corporations.
Income tax corporate percentage           21.00%
Series B Convertible Preferred Stock and Series C Convertible Preferred Stock [Member]            
Proceeds from convertible preferred stock         $ 10,900,000  
Net proceeds from sales of common stock       $ 2,600,000    
Series E Preferred Stock [Member]            
Proceeds from convertible preferred stock and warrants $ 4,900,000          
XML 40 R29.htm IDEA: XBRL DOCUMENT v3.10.0.1
Mineral Rights (Details Narrative) - USD ($)
3 Months Ended 12 Months Ended
Aug. 31, 2017
May 27, 2016
Jul. 02, 2014
Jul. 31, 2018
Apr. 30, 2018
Jul. 31, 2017
Number of options to purchase shares of common stock       1,481,458 1,531,458  
Common shares fair value         $ 35,850  
Common stock value per share       $ 0.001 $ 0.001  
Sale of stock price per share           $ 2.79
Asset Purchase Agreement [Member] | Gold Bar North Property [Member]            
Payments to acquire mineral properties $ 20,479          
Number of common shares issued for acquisitions 15,000          
Asset Purchase Agreement [Member] | Copper King Project [Member]            
Payments to acquire mineral properties     $ 1,500,000 $ 3,091,738    
Percentage of issued and outstanding shares     50.00%      
Common stock outstanding value     $ 1,500,000      
Purchase price and related transaction costs       3,000,000    
Purchase and Sale Agreement [Member] | Keystone Project [Member]            
Payments to acquire mineral properties   $ 250,000   989,968    
Purchase price and related transaction costs       38,917    
Number of common shares issued for acquisitions   462,500        
Number of options to purchase shares of common stock   231,458        
Aggregate options term   5 years        
Option exercise price per share   $ 3.60        
Common shares fair value       $ 555,000    
Common stock value per share       $ 1.20    
Sale of stock price per share       $ 0.10    
Grant of stock options for the acquisition of mineral rights       $ 184,968    
Mineral properties cost       $ 1,028,885    
Royalty rights description       Under the terms of the Purchase and Sale Agreement, Nevada Gold retained additional NSR rights of 0.5% with regard to certain claims and 3.5% with regard to certain other claims.    
Royalty percentage       1.00%    
Purchase and Sale Agreement [Member] | Keystone Project [Member] | Eight Anniversary of Closing Date [Member]            
Royalty percentage       1.00%    
Purchase and Sale Agreement [Member] | Keystone Project [Member] | Royalty [Member] | Fifth Anniversary [Member]            
Royalty revenue       $ 2,000,000    
Purchase and Sale Agreement [Member] | Keystone Project [Member] | Royalty [Member] | Eight Anniversary of Closing Date [Member]            
Royalty revenue       $ 5,000,000    
XML 41 R30.htm IDEA: XBRL DOCUMENT v3.10.0.1
Mineral Rights - Schedule of Mineral Properties (Details) - USD ($)
Jul. 31, 2018
Apr. 30, 2018
Total $ 4,176,952 $ 4,176,952
Copper King Project [Member]    
Total 3,091,738 3,091,738
Keystone Project [Member]    
Total 1,028,885 1,028,885
Gold Bar North Project [Member]    
Total $ 56,329 $ 56,329
XML 42 R31.htm IDEA: XBRL DOCUMENT v3.10.0.1
Property (Details Narrative) - USD ($)
3 Months Ended
Jul. 31, 2018
Jul. 31, 2017
Property, Plant and Equipment [Abstract]    
Depreciation expense $ 1,319
XML 43 R32.htm IDEA: XBRL DOCUMENT v3.10.0.1
Property - Schedule of Property and Equipment (Details) - USD ($)
Jul. 31, 2018
Apr. 30, 2018
Less: accumulated depreciation $ (1,319)
Property total 58,250
Site Costs [Member]    
Property gross $ 59,569
XML 44 R33.htm IDEA: XBRL DOCUMENT v3.10.0.1
Asset Retirement Obligatiion - Schedule of Asset Retirement Obligation (Details) - USD ($)
3 Months Ended 12 Months Ended
Jul. 31, 2018
Jul. 31, 2017
Apr. 30, 2018
Asset Retirement Obligation Disclosure [Abstract]      
Balance, beginning of period
Addition and changes in estimates 59,569  
Accretion expense 1,254
Balance, end of period $ 60,823  
XML 45 R34.htm IDEA: XBRL DOCUMENT v3.10.0.1
Acquisition and Disposition (Details Narrative) - USD ($)
3 Months Ended 12 Months Ended
Oct. 13, 2017
May 23, 2017
Jul. 31, 2018
Jul. 31, 2017
Apr. 30, 2018
Common stock, par value     $ 0.001   $ 0.001
Preferred stock, par value     $ 0.001   $ 0.001
Impairment expense     $ 6,094,760 $ 6,094,760
Net proceeds from sales of common stock       $ 500,004  
Gain on extinguishment of liabilities         248,684
Gain from sale of discontinued operations         94,485
Gold King [Member]          
Common stock shares outstanding     1,204,667    
Acquisition consideration fair value per share     $ 4.70    
Quoted trading price on the date of the merger     $ 5,661,935    
Goodwill     6,094,760    
Dataram Memory [Member]          
Purchase price $ 900,000        
Net proceeds from sales of common stock         326,404
Financing Agreement [Member] | Rosenthal & Rosenthal, Inc [Member]          
Revolving line of credit maximum borrowing capacity     $ 3,500,000    
Financing Agreement [Member] | Rosenthal & Rosenthal, Inc [Member] | Prime Rate [Member]          
Line of credit interest rate, percentage     3.25%    
Financing Agreement [Member] | Rosenthal & Rosenthal, Inc [Member] | Effective Rate [Member]          
Line of credit interest rate, percentage     3.00%    
Financing Agreement [Member] | Dataram Memory [Member] | Rosenthal & Rosenthal, Inc [Member]          
Liabilities related to agreement         $ 0
Series C Preferred Stock [Member]          
Conversion of stock shares converted       36,820  
Number of shares issued for conversion       3,682,000  
Series C Preferred Stock [Member] | Escrow Agreement [Member]          
Number of shares held for escrow   4,500.01      
Gold King [Member]          
Number of common shares issued for acquisition   2,446,433      
Common stock, par value   $ 0.001      
Gold King [Member] | Series C Preferred Stock [Member]          
Number of common shares issued for acquisition   4,523,589      
Number of common stock options issued in connection with acquisition   231,458      
Gold King [Member] | Series C Preferred Stock [Member] | Maximum [Member]          
Number of warrants issued to purchase common stock   452,359      
Copper King [Member] | Series C Convertible Preferred Stock [Member]          
Preferred stock, shares designated   45,000.18      
Preferred stock, par value   $ 0.001      
Copper King [Member] | Series C Preferred Stock [Member]          
Conversion of stock shares converted   45,500.18      
Number of shares issued for conversion   45,500.18      
XML 46 R35.htm IDEA: XBRL DOCUMENT v3.10.0.1
Acquisition and Disposition - Schedule of Assets Acquired and Liabilities Assumed (Details) - Gold King [Member]
Jul. 31, 2018
USD ($)
Current assets (including cash of $255,555) $ 3,063,059
Other assets 45,984
Goodwill 6,094,760
Liabilities assumed (including a note payable - credit line of $1,096,504) (3,541,868)
Net purchase price $ 5,661,935
XML 47 R36.htm IDEA: XBRL DOCUMENT v3.10.0.1
Acquisition and Disposition - Schedule of Assets Acquired and Liabilities Assumed (Details) (Parenthetical)
Jul. 31, 2018
USD ($)
Business Combinations [Abstract]  
Cash $ 255,555
Note payable - credit line $ 1,096,504
XML 48 R37.htm IDEA: XBRL DOCUMENT v3.10.0.1
Acquisition and Disposition - Schedule of Discontinued Operations (Details) - USD ($)
3 Months Ended 12 Months Ended
Jul. 31, 2018
Jul. 31, 2017
Apr. 30, 2018
Business Combinations [Abstract]      
Revenues     $ 7,885,310
Cost of sales     6,653,363
Gross profit     1,231,947
Operating and other non-operating expenses (including impairment charge of 6,094,760)     (7,406,271)
Gain from extinguishment of liabilities     248,684
Loss from discontinued operations $ (6,071,448) (5,925,640)
Gain from sale of discontinued operations     94,485
Total loss from discontinued operations $ (6,071,448) $ (5,831,155)
XML 49 R38.htm IDEA: XBRL DOCUMENT v3.10.0.1
Acquisition and Disposition - Schedule of Discontinued Operations (Details) (Parenthetical) - USD ($)
3 Months Ended 12 Months Ended
Jul. 31, 2018
Jul. 31, 2017
Apr. 30, 2018
Business Combinations [Abstract]      
Impairment charge $ 6,094,760 $ 6,094,760
XML 50 R39.htm IDEA: XBRL DOCUMENT v3.10.0.1
Acquisition and Disposition - Schedule of Selected Financial Data of the Company's Gain from Sale (Details) - Dataram Memory [Member]
12 Months Ended
Apr. 30, 2018
USD ($)
Total consideration $ 900,000
Direct legal and sales commission expenses related to the sale (201,510)
Dataram's accrued expenses to be deducted from the sales proceeds (174,880)
Total carrying value of Dataram Memory business on date of sale (429,125)
Net gain from sale of Dataram Memory business 94,485
Current assets 3,271,426
Other assets 33,320
Current liabilities (2,866,660)
Liabilities - long term (8,961)
Total carrying value of Dataram Memory business on date of sale $ 429,125
XML 51 R40.htm IDEA: XBRL DOCUMENT v3.10.0.1
Related Party Transactions (Details Narrative) - USD ($)
Jul. 31, 2018
Apr. 30, 2018
Related Party Transactions [Abstract]    
Accounts payable to related party $ 2,431 $ 2,431
XML 52 R41.htm IDEA: XBRL DOCUMENT v3.10.0.1
Stockholders' Equity (Details Narrative) - USD ($)
1 Months Ended 3 Months Ended 12 Months Ended
Jul. 31, 2017
Jul. 31, 2017
May 31, 2017
Jul. 31, 2018
Jul. 31, 2017
Apr. 30, 2018
Aug. 31, 2017
Number of shares issued for services rendered, value       $ 76,508   $ 1,142,829  
Number of common stock shares sold   179,211          
Sale of stock price per share $ 2.79 $ 2.79     $ 2.79    
Proceeds from sale of common stock   $ 500,000          
Stock option, outstanding intrinsic value       0   1,000  
Stock option, exercisable intrinsic value       $ 0   0  
Number of shares issued as compensation       132,848 0    
Unamortized expense           $ 874,083  
Expected amortized weighted average period       2 years 1 month 9 days      
Warrants outstanding, intrinsic value       $ 0   $ 0  
Warrants exercisable, intrinsic value       $ 0   $ 0  
Employment Agreement [Member]              
Reduction in accrued salaries $ 100,000            
Employment Agreement [Member] | Chief Geologist [Member]              
Number of shares issued for services rendered     37,879 28,510      
Number of shares issued for services rendered, value     $ 100,000 $ 37,500      
Reduction in accrued salaries       $ 37,500      
Employment Agreement [Member] | Chief Geologist [Member] | Minimum [Member]              
Shares issued price per share       $ 1.26      
Employment Agreement [Member] | Chief Geologist [Member] | Maximum [Member]              
Shares issued price per share       $ 1.36      
Series C Preferred Stock [Member]              
Common stock issued upon conversion of shares         3,682,000    
Conversation of stock, shares converted         36,820    
2017 Equity Incentive Plan [Member]              
Common stock reservation of shares             1,650,000
Debt description       On January 1st of each year during the term of the Plan (the "Calculation Date"), the aggregate number of shares of Common Stock that are available for issuance shall automatically be increased by such number of shares as is equal to the number of shares sufficient to cause the Share Limit (as defined in the Plan) to equal twenty percent (20%) of the issued and outstanding Common Stock of the Company at such time, provided, however, that if on any Calculation Date the number of shares equal twenty percent (20%) of our total issued and outstanding Common Stock is less than the number of shares of Common Stock available for issuance under the Plan, no change will be made to the aggregate number of shares of Common Stock issuable under the Plan for that year (such that the aggregate number of shares of Common Stock available for issuance under the Plan will never decrease).      
XML 53 R42.htm IDEA: XBRL DOCUMENT v3.10.0.1
Stockholders' Equity - Schedule of Stock Option Activity (Details)
3 Months Ended
Jul. 31, 2018
$ / shares
shares
Equity [Abstract]  
Number of Options Outstanding, Beginning of Period | shares 1,531,458
Number of Options, Granted | shares
Number of Options, Exercised | shares
Number of Options, Forfeited | shares
Number of Options, Cancelled | shares (50,000)
Number of Options Outstanding, End of Period | shares 1,481,458
Number of Options exercisable at end of period | shares 593,958
Number of Options expected to vest | shares 887,500
Weighted Average Exercise Price Outstanding, Beginning of Period $ 1.79
Weighted Average Exercise Price, Granted
Weighted Average Exercise Price, Exercised
Weighted Average Exercise Price, Forfeited
Weighted Average Exercise Price, Cancelled 1.47
Weighted Average Exercise Price Outstanding, End of Period 1.80
Weighted Average Exercise Price Options exercisable at end of period 2.30
Weighted Average Exercise Price Options expected to vest 1.47
Weighted Average Exercise Price Weighted average fair value of options granted during the period
Weighted Average Remaining Contractual Life (Years), Beginning of Period 4 years 5 months 5 days
Weighted Average Remaining Contractual Life (Years), Ending of Period 4 years 2 months 1 day
XML 54 R43.htm IDEA: XBRL DOCUMENT v3.10.0.1
Stockholders' Equity - Schedule of Stock Warrant Activity (Details) - Warrants [Member]
3 Months Ended
Jul. 31, 2018
$ / shares
shares
Number of Warrants Outstanding, Beginning of Period | shares 1,702,359
Number of Warrants, Granted | shares
Number of Warrants, Exercised | shares
Number of Warrants, Forfeited | shares
Number of Warrants, Cancelled | shares
Number of Warrants Outstanding, End of Period | shares 1,702,359
Warrants exercisable at end of period | shares 1,702,359
Weighted Average Exercise Price of Warrants Outstanding, Beginning of Period $ 3.12
Weighted Average Exercise Price, Granted
Weighted Average Exercise Price, Exercised
Weighted Average Exercise Price, Forfeited
Weighted Average Exercise Price, Cancelled
Weighted Average Exercise Price of Warrants Outstanding, End of Period 3.12
Weighted Average Exercise Price, exercisable at end of period 3.12
Weighted average fair value of warrants granted during the period
Weighted Average Remaining Contractual Life in Years, Beginning of Period 3 years 2 months 30 days
Weighted Average Remaining Contractual Life in Years, End of Period 2 years 11 months 26 days
XML 55 R44.htm IDEA: XBRL DOCUMENT v3.10.0.1
Net Loss Per Common Share - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares
3 Months Ended 12 Months Ended
Jul. 31, 2018
Apr. 30, 2018
Total 3,183,817 3,233,817
Stock Options [Member]    
Total 1,481,458 1,531,458
Stock Warrants [Member]    
Total 1,702,359 1,702,359
XML 56 R45.htm IDEA: XBRL DOCUMENT v3.10.0.1
Commitments and Contingencies (Details Narrative)
3 Months Ended
Nov. 23, 2017
shares
Jun. 08, 2017
USD ($)
Jun. 27, 2016
USD ($)
Apr. 14, 2016
USD ($)
Apr. 12, 2016
USD ($)
Jul. 31, 2018
USD ($)
a
$ / T
Employment Agreement [Member] | Common Stock [Member]            
Percentage of base salary     75.00%      
Employment Agreement [Member] | Cash [Member]            
Percentage of base salary     25.00%      
Employment Agreement [Member] | Foreign Investor [Member] | Minimum [Member]            
Milestone amount         $ 2,500,000  
Employment Agreement [Member] | Mr. Edward Karr [Member]            
Agreement description         The initial term of the agreement is for two years ending on April 30, 2018, with automatic renewals for successive one year terms unless terminated by written notice at least 90 days prior to the expiration of the term.  
Agreement due date         Apr. 30, 2018  
Base salary         $ 250,000  
Bonus awarded         250,000  
Milestone amount         $ 10,000,000  
Employment Agreement [Member] | Mr. David Rector [Member]            
Agreement description       The initial term of the agreement is for one year, with automatic renewals for successive one year terms unless terminated by written notice at least 30 days prior to the expiration of the term.    
Base salary       $ 15,000    
Employment Agreement [Member] | Mr. David Mathewson [Member]            
Agreement description     The initial term of the agreement is for one year, with automatic renewals for successive one year terms unless terminated by written notice at least 30 days prior to the expiration of the term by either party.      
Base salary     $ 200,000      
Employment Agreement [Member] | Mr. Lougee [Member]            
Base salary   $ 144,000        
Monthly cash payments   2,500        
Restricted shares awarded | shares 500          
Moylan Separation Agreement [Member]            
Severance payment           $ 494,227
Severance monthly fee           $ 19,667
Moylan Separation Agreement [Member] | Common Stock [Member]            
Percentage of severance monthly fee           90.00%
Moylan Separation Agreement [Member] | Cash [Member]            
Percentage of severance monthly fee           10.00%
Lougee Separation Agreement [Member]            
Severance payment   $ 221,718        
State of Wyoming Mining Lease One [Member]            
Area of land | a           640
Lease renewed date           Feb. 28, 2013
Lease term           10 years
Lease annual payment per acre | $ / T           2.00
Lease annual payment per acre third ten year term | $ / T           3.00
Lease annual payment per acre thereafter | $ / T           4.00
State of Wyoming Mining Lease Two [Member]            
Area of land | a           480
Lease renewed date           Feb. 28, 2014
Lease term           10 years
Lease annual payment per acre | $ / T           2.00
Lease annual payment per acre third ten year term | $ / T           3.00
Lease annual payment per acre thereafter | $ / T           4.00
XML 57 R46.htm IDEA: XBRL DOCUMENT v3.10.0.1
Commitments and Contingencies - Schedule of Royalty Payable (Details)
Jul. 31, 2018
$ / T
FOB Mine Value Per Ton Range One [Member]  
Percentage Royalty 5.00%
FOB Mine Value Per Ton Range One [Member] | Minimum [Member]  
FOB Mine Value per Ton 0.00
FOB Mine Value Per Ton Range One [Member] | Maximum [Member]  
FOB Mine Value per Ton 50.00
FOB Mine Value Per Ton Range Two [Member]  
Percentage Royalty 7.00%
FOB Mine Value Per Ton Range Two [Member] | Minimum [Member]  
FOB Mine Value per Ton 50.01
FOB Mine Value Per Ton Range Two [Member] | Maximum [Member]  
FOB Mine Value per Ton 100.00
FOB Mine Value Per Ton Range Three [Member]  
Percentage Royalty 9.00%
FOB Mine Value Per Ton Range Three [Member] | Minimum [Member]  
FOB Mine Value per Ton 100.01
FOB Mine Value Per Ton Range Three [Member] | Maximum [Member]  
FOB Mine Value per Ton 150.00
FOB Mine Value Per Ton Range Four [Member]  
FOB Mine Value per Ton 150.01
Percentage Royalty 10.00%
XML 58 R47.htm IDEA: XBRL DOCUMENT v3.10.0.1
Commitments and Contingencies - Schedule of Future Minimum Lease Payments (Details)
Jul. 31, 2018
USD ($)
Commitments and Contingencies Disclosure [Abstract]  
2019 (remainder of year) $ 1,680
2020 2,240
2021 2,240
2022 2,240
2023 2,240
Thereafter 960
Total $ 11,600
XML 59 R48.htm IDEA: XBRL DOCUMENT v3.10.0.1
Subsequent Events (Details Narrative) - USD ($)
3 Months Ended 12 Months Ended
Sep. 06, 2018
Aug. 14, 2018
Jul. 31, 2018
Apr. 30, 2018
Subsequent Event [Line Items]        
Number of shares issued for services, value     $ 76,508 $ 1,142,829
Officers Director and Employees [Member]        
Subsequent Event [Line Items]        
Number of shares issued for services     1,000,000  
Debt description     Subsequent to July 31, 2018, the Company issued an aggregate of 1,000,000 shares of the Company's common stock to officers, directors and employees for services rendered. The shares vest 50% on the date of issuance and 50% on the one-year anniversary of the date of issuance  
Subsequent Event [Member] | Chief Geologist [Member]        
Subsequent Event [Line Items]        
Number of shares issued for services 10,965 9,843    
Number of shares issued for services, value $ 12,500 $ 12,500    
Share issued price per share $ 1.14 $ 1.27    
Reduction in accrued salaries $ 12,500 $ 12,500    
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