0001493152-20-017661.txt : 20200911 0001493152-20-017661.hdr.sgml : 20200911 20200911171128 ACCESSION NUMBER: 0001493152-20-017661 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 60 CONFORMED PERIOD OF REPORT: 20200731 FILED AS OF DATE: 20200911 DATE AS OF CHANGE: 20200911 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: 201171707 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

 

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

 

For the quarterly period ended July 31, 2020

 

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: 001-08266

 

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)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
Common Stock   USAU   Nasdaq Capital Market

 

Indicate by check mark whether the registrant (1) 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 every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). [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.

 

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 registrant’s classes of common stock, as of the latest practicable date. Common Stock ($0.001 par value): As of September 11, 2020, there were 3,589,178 shares outstanding.

 

 

 

 

 

 

U.S. GOLD CORP.

FORM 10-Q

TABLE OF CONTENTS

 

    Page
PART I – FINANCIAL INFORMATION  
     
Item 1. Financial Statements 4
  Condensed Consolidated Balance Sheets as of July 31, 2020 (Unaudited) and April 30, 2020 4
  Condensed Consolidated Statements of Operations for the Three Months ended July 31, 2020 and 2019 (Unaudited) 5
  Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three Months ended July 31, 2020 and 2019 (Unaudited) 6
  Condensed Consolidated Statements of Cash Flows for the Three Months ended July 31, 2020 and 2019 (Unaudited) 7
  Notes to Condensed Consolidated Financial Statements (Unaudited) 8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 20
Item 3. Quantitative and Qualitative Disclosures About Market Risk 27
Item 4. Controls and Procedures 27
     
PART II – OTHER INFORMATION  
     
Item 1. Legal Proceedings 28
Item 1A. Risk Factors 28
Item 2. Unregistered Sales of Equity Securities and use of Proceeds 29
Item 3. Defaults Upon Senior Securities 29
Item 4. Mine Safety Disclosures 29
Item 5. Other Information 29
Item 6. Exhibits 30
Signature Page 31

 

2

 

 

FORWARD-LOOKING STATEMENTS

 

Some information contained in or incorporated by reference into this Quarterly Report on Form 10-Q may contain forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995. Such forward-looking statements concern our anticipated results and developments in our operations in future periods, planned exploration and development of our properties, plans related to our business and other matters that may occur in the future. These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management. These statements include, but are not limited to, comments regarding:

 

  our plans to conduct geologic surveys and determine the scope of our drilling program during our fiscal year ended April 30, 2021,
  the impact of COVID-19 on our business and exploration activities,
  our ability to maintain compliance with the NASDAQ Capital Market’s listing standards,
  the conclusions of additional exploration programs and related studies,
  expectations and the timing and budget for exploration and future exploration of our properties,
  our planned expenditures during our fiscal year ended April 30, 2021 and future periods,
  our estimates of the cost of future permitting changes and additional bonding requirements,
  future exploration plans and expectations related to our properties,
  our ability to fund our business with our current cash reserves based on our currently planned activities,
  our expected cash needs and the availability and plans with respect to future financing,
  statements concerning our financial condition,
  our anticipation of future environmental and regulatory impacts,
  our business and operating strategies, and
  statements related to operating and legal risks.

 

We use the words “anticipate,” “continue,” “likely,” “estimate,” “expect,” “may,” “could,” “will,” “project,” “should,” “believe” and variations of such words and similar expressions to identify forward-looking statements. Statements that contain these words discuss our future expectations and plans, or state other forward-looking information. Although we believe the expectations and assumptions reflected in those forward-looking statements are reasonable, we cannot assure you that these expectations and assumptions will prove to be correct. Our actual results could differ materially from those expressed or implied in these forward-looking statements as a result of various factors, including the risk factors described in this report and in “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended April 30, 2020.

 

Many of these factors are beyond our ability to control or predict. Although we believe that the expectations reflected in our forward-looking statements are based on reasonable assumptions, such expectations may prove to be materially incorrect due to known and unknown risk and uncertainties. You should not unduly rely on any of our forward-looking statements. These statements speak only as of the date of this report. Except as required by law, we are not obligated to publicly release any revisions to these forward-looking statements to reflect future events or developments. All subsequent written and oral forward-looking statements attributable to us and persons acting on our behalf are qualified in their entirety by the cautionary statements contained in this section and elsewhere in this report.

 

3

 

 

PART I: FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS.

 

U.S. GOLD CORP. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

 

   July 31,   April 30, 
   2020   2020 
         
ASSETS          
CURRENT ASSETS:          
Cash  $1,737,047   $2,749,957 
Income tax receivable   219,072    219,072 
Prepaid expenses and other current assets   388,715    212,718 
           
Total current assets   2,344,834    3,181,747 
           
NON - CURRENT ASSETS:          
Property, net   129,171    133,371 
Reclamation bond deposit   377,556    355,556 
Mineral rights   6,163,559    6,163,559 
           
Total non - current assets   6,670,286    6,652,486 
           
Total assets  $9,015,120   $9,834,233 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY          
           
CURRENT LIABILITIES:          
Accounts payable  $185,810   $154,381 
Accounts payable - related parties   34,497    3,459 
           
Total current liabilities   220,307    157,840 
           
LONG- TERM LIABILITIES          
Asset retirement obligation   172,452    168,392 
           
Total liabilities   392,759    326,232 
           
Commitments and Contingencies          
           
STOCKHOLDERS’ EQUITY:          
Preferred stock, $0.001 par value; 50,000,000 authorized          
Convertible Series F Preferred stock ($0.001 Par Value; 1,250 Shares Authorized; none issued and outstanding as of July 31, 2020 and April 30, 2020)   -    - 
Convertible Series G Preferred stock ($0.001 Par Value; 127 Shares Authorized; none and 57 issued and outstanding as of July 31, 2020 and April 30, 2020)   -    - 
Common stock ($0.001 Par Value; 200,000,000 Shares Authorized; 2,925,625 and 2,903,393 shares issued and outstanding as of July 31, 2020 and April 30, 2020)   2,926    2,903 
Additional paid-in capital   41,164,507    41,093,050 
Accumulated deficit   (32,545,072)   (31,587,952)
           
Total stockholders’ equity   8,622,361    9,508,001 
           
Total liabilities and stockholders’ equity  $9,015,120   $9,834,233 

 

See accompanying notes to unaudited condensed consolidated financial statements.

 

4

 

 

U.S. GOLD CORP. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 

   For the Three Months   For the Three
Months
 
   Ended   Ended 
   July 31, 2020   July 31, 2019 
         
Net revenues  $-   $- 
           
Operating expenses:          
Compensation and related taxes - general and administrative   194,273    287,082 
Exploration costs   74,348    195,393 
Professional and consulting fees   550,800    644,073 
General and administrative expenses   137,699    182,051 
           
Total operating expenses   957,120    1,308,599 
           
Loss before benefit (provision) for income taxes   (957,120)   (1,308,599)
           
Benefit (provision) for income taxes   -    - 
           
Net loss   (957,120)   (1,308,599)
           
Deemed dividend related to beneficial conversion feature of preferred stock   -    (2,022,712)
           
Net loss applicable to U.S. Gold Corp. common shareholders  $(957,120)  $(3,331,311)
           
Net Loss per common share, basic and diluted  $(0.33)  $(1.65)
           
Weighted average common shares outstanding - basic and diluted   2,916,670    2,015,365 

 

See accompanying notes to unaudited condensed consolidated financial statements.

 

5

 

 

U.S. GOLD CORP. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE THREE MONTHS ENDED JULY 31, 2020 AND 2019

 

   Preferred Stock - Series F   Preferred Stock - Series G   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, 2020   -   $-    57   $-    2,903,393   $2,903   $41,093,050   $(31,587,952)  $9,508,001 
                                              
Conversion of preferred stock into common stock   -    -    (57)   -    20,357    21    (21)   -    - 
                                              
Stock options granted for services   -    -    -    -    -    -    51,262    -    51,262 
                                              
Stock-based compensation in connection with restricted common stock award grants and restricted common stock unit grants   -    -    -    -    1,875    2    20,216    -    20,218 
                                              
Net loss   -    -    -    -    -    -    -    (957,120)   (957,120)
                                              
Balance, July 31, 2020   -   $-    -   $-   $2,925,625   $2,926   $41,164,507   $(32,545,072)  $8,622,361 

 

   Preferred Stock - Series F   Preferred Stock - Series G   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, 2019   -   $-    -   $-    1,986,063   $1,986  $33,425,931  $(26,275,102)  $7,152,815 
                                              
Issuance of preferred stock and warrants for cash, net of offering cost   1,250    1    -    -    -    -    2,401,201    -    2,401,202 
                                              
Conversion of preferred stock into common stock   (616)   -    -    -    108,071    108    (108)   -    - 
                                              
Issuance of common stock for services   -    -    -    -    2,153    2    24,998    -    25,000 
                                              
Issuance of common stock for accrued services   -    -    -    -    1,068    1    12,499    -    12,500 
                                              
Stock options granted for services   -    -    -    -    -    -    52,214    -    52,214 
                                              
Stock-based compensation in connection with restricted common stock unit grants   -    -    -    -    -    -    52,682    -    52,682 
                                              
Cancellation of common stock   -    -    -    -    (8,500)   (9)   9    -    - 
                                              
Deemed dividends - series F preferred stock   -    -    -    -    -    -    2,022,712    (2,022,712)   - 
                                              
Net loss   -    -    -    -    -    -    -    (1,308,599)   (1,308,599)
                                              
Balance, July 31, 2019   634    1    -    -    2,088,855    2,088    37,992,138    (29,606,413)   8,387,814 

 

See accompanying notes to unaudited condensed consolidated financial statements.

 

6

 

 

U.S. GOLD CORP. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

   For the Three
Months
   For the Three
Months
 
   Ended   Ended 
   July 31, 2020   July 31, 2019 
         
CASH FLOWS FROM OPERATING ACTIVITIES:          
Net loss  $(957,120)  $(1,308,599)
Adjustments to reconcile net loss to net cash used in operating activities:          
Depreciation   4,200    2,423 
Accretion   4,060    2,140 
Stock based compensation   71,480    129,896 
Amortization of prepaid stock based expenses   -    53,210 
Changes in operating assets and liabilities:          
Prepaid expenses and other current assets   (175,997)   (67,982)
Reclamation bond deposit   (22,000)   (16,109)
Accounts payable   31,429    157,075 
Accounts payable - related parties   31,038    (6,364)
Accrued liabilities   -    (5,367)
           
NET CASH USED IN OPERATING ACTIVITIES   (1,012,910)   (1,059,677)
           
CASH FLOWS FROM FINANCING ACTIVITIES:          
Issuance of preferred stock and warrants, net of issuance cost   -    2,401,202 
           
NET CASH PROVIDED BY FINANCING ACTIVITIES   -    2,401,202 
           
NET (DECREASE) INCREASE IN CASH   (1,012,910)   1,341,525 
           
CASH - beginning of year   2,749,957    2,197,181 
           
CASH - end of period  $1,737,047   $3,538,706 
           
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:          
Cash paid for:          
Interest  $-   $- 
Income taxes  $-   $- 
           
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:          
           
Issuance of common stock for accrued services  $-   $12,500 
Deemed dividends - Series F preferred stock  $-   $2,022,712 
Issuance of common stock in connection with conversion of preferred stock  $21   $108 

 

See accompanying notes to unaudited condensed consolidated financial statements.

 

7

 

 

U.S. GOLD CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JULY 31, 2020

 

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 and was subsequently re-incorporated under the laws of the State of Nevada in 2016. Effective June 26, 2017, the Company changed its name to U.S. Gold Corp. from Dataram Corporation.

 

On June 13, 2016, Gold King Corp. (“Gold King”), a private Nevada corporation, entered into an Agreement and Plan of Merger (the “Gold King 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. Upon closing of the transactions contemplated under the Gold King Merger Agreement (the “Gold King 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. The Gold King Merger was 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 the Company (the legal acquirer) from the date of the Gold King Merger. Gold King is a gold and precious metals exploration company pursuing exploration and development opportunities primarily in Nevada and Wyoming. The Company has a wholly owned subsidiary, U.S. Gold Acquisition Corporation, formerly Dataram Acquisition Sub, Inc. (“U.S. Gold Acquisition”), a Nevada corporation which was formed in April 2016.

 

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

 

On September 10, 2019, the Company, 2637262 Ontario Inc., a corporation incorporated under the laws of the Providence of Ontario (“NumberCo”), and all of the shareholders of NumberCo (the “NumberCo Shareholders”), entered into a Share Exchange Agreement (the “Share Exchange Agreement”), pursuant to which, among other things, the Company agreed to issue to the NumberCo Shareholders 200,000 shares of the Company’s common stock in exchange for all of the issued and outstanding shares of NumberCo, with NumberCo becoming a wholly-owned subsidiary of the Company (see Note 4).

 

On August 10, 2020, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Gold King Acquisition Corp. (“Acquisition Corp.”), a wholly owned subsidiary of the Company, Northern Panther Resources Corporation (“Northern Panther” or “NPRC”) and the Stockholder Representative named therein, pursuant to which Acquisition Corp. merged with and into NPRC, with NPRC surviving as a wholly-owned subsidiary of the Company (see Note 11).

 

On March 17, 2020, the board of directors (the “Board”) of the Company approved a 1-for-10 reverse stock split of the Company’s issued and outstanding shares of common stock (the “Reverse Stock Split”), and on March 18, 2020, the Company filed with the Secretary of State of the State of Nevada a Certificate of Amendment to its Articles of Incorporation to effect the Reverse Stock Split. The Reverse Stock Split became effective as of 5:00 p.m. Eastern Time on March 19, 2020, and the Company’s common stock began trading on a split-adjusted basis when the market opened on March 20, 2020. Accordingly, all common share and per share data are retrospectively restated to give effect of the split for all periods presented herein.

 

None of the Company’s properties contain proven and probable reserves and all of the Company’s activities are exploratory in nature.

 

Unless the context otherwise requires, all references herein to the “Company” refer to U.S. Gold Corp. and its consolidated subsidiaries.

 

8

 

 

U.S. GOLD CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JULY 31, 2020

 

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of presentation and principles of consolidation

 

The accompanying interim unaudited condensed consolidated financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), the instructions to Form 10-Q, 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 presents the unaudited condensed consolidated financial statements of the Company and its wholly-owned subsidiaries as of July 31, 2020. 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, 2020, which are contained in the Form 10-K filed on July 13, 2020. The unaudited condensed consolidated balance sheet as of April 30, 2020 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. Operating results for the three-month period ended July 31, 2020 are not necessarily indicative of the results to be expected for the year ending April 30, 2021.

 

Use of Estimates and Assumptions

 

In preparing the 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 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, stock-based compensation, the fair value of common and preferred stock, valuation of warrants, asset retirement obligations and the valuation of deferred tax assets and liabilities.

 

Fair Value Measurements

 

The Company has adopted Accounting Standards Codification (“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 U.S. GAAP, which 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.

 

At July 31, 2020 and April 30, 2020, the Company had no financial instruments or liabilities accounted for at fair value on a recurring basis or nonrecurring basis.

 

Prepaid expenses and other current assets

 

Prepaid expenses and other current assets of $388,715 and $212,718 at July 31, 2020 and April 30, 2020, respectively, consist primarily of costs paid for future services which will occur within a year. Prepaid expenses principally include prepayments in cash and equity instruments for consulting, public relations, and business advisory services, insurance premiums, mining claim fees and mineral lease fees which are being amortized over the terms of their respective agreements.

 

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.

 

9

 

  

U.S. GOLD CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JULY 31, 2020

 

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. The Company did not recognize any impairment during the periods ended July 31, 2020 and April 30, 2020.

 

Mineral Rights

 

Costs of leasing, exploring, 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 will be 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.

 

Leases to explore for or use of natural resources are outside the scope of ASU 2016-02, “Leases”.

 

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.

 

10

 

 

U.S. GOLD CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JULY 31, 2020

 

ASU 2018-07 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 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 effect on the Company’s consolidated financial statements and related disclosures.

 

Accounting for Warrants

 

Warrants are accounted for in accordance with the applicable accounting guidance provided in ASC 815, “Derivatives and Hedging” (“ASC 815”) as either derivative liabilities or as equity instruments, depending on the specific terms of the agreements. The Company classifies as equity any contracts that (i) require physical settlement or net-share settlement or (ii) give 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) give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement). Instruments that are classified as liabilities are recorded at fair value at each reporting period, with any change in fair value recognized as a component of change in fair value of derivative liabilities in the consolidated statements of operations.

 

The Company assessed the classification of its outstanding common stock purchase warrants as of the date of issuance and determined that such instruments met the criteria for equity classification under the guidance in ASU 2017-11 “Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Feature”. The Company has no outstanding warrants that contain a “down round” feature under Topic 815 of ASU 2017-11.

 

Convertible Preferred Stock

 

The Company accounts for its convertible preferred stock under the provisions of ASC 480, “Distinguishing Liabilities from Equity” (“ASC 480”), 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. During the periods ended July 31, 2020 and April 30, 2020, the Company’s outstanding convertible preferred shares were accounted for as equity, with no liability recorded.

 

Convertible Instruments

 

The Company bifurcates conversion options from their host instruments and accounts 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.

 

11

 

 

U.S. GOLD CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JULY 31, 2020

 

Remediation and Asset Retirement Obligation

 

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. AROs 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 AROs annually or more frequently at interim periods if deemed necessary.

 

Foreign Currency Transactions

 

The reporting and functional currency of the Company is the U.S. dollar. Transactions denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing on the transaction dates. Assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing at the balance sheet date with any transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency included in the results of operations as incurred. Transaction gains or losses have not had, and are not expected to have, a material effect on the results of operations of the Company, and are included in General and administrative expenses.

 

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, “Accounting for Uncertain Income Tax Positions” (“ASC 740-10”). 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 Internal Revenue Service and state taxing authorities, generally for three years after they are filed.

 

The Unaudited Condensed Statements of Operations includes a tax refund receivable of $219,072 for the periods ended July 31, 2020 and April 30, 2020, under the Tax Cuts and Jobs Act of 2017 for carryovers of previously paid alternative minimum tax by Dataram Corporation.

 

Recent Accounting Pronouncements

 

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 effect on the financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an effect on or are unrelated to its financial condition, results of operations, cash flows or disclosures.

 

12

 

 

U.S. GOLD CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JULY 31, 2020

 

NOTE 3 — GOING CONCERN

 

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As of July 31, 2020, the Company had cash of approximately $1.7 million, working capital of approximately $2.1 million, and an accumulated deficit of approximately $32.5 million. The Company had a net loss and cash used in operating activities of approximately $957,000 and $1.0 million, respectively, as of July 31, 2020. As a result of the utilization of cash in its operating activities, and the development of its assets, the Company has incurred losses since it commenced operations. The Company’s primary source of operating funds since inception has been equity financings. As of July 31, 2020, the Company had sufficient cash to fund its operations for approximately 6 to 9 months, prior to its merger with NPRC subsequent to the end of the quarter, and expected that it would be required to raise additional funds to fund its operations thereafter. These matters raise substantial doubt about the Company’s ability to continue as a going concern for the twelve months following the issuance of these financial statements.

 

Subsequent to the close of the quarter ended July 31, 2020, on August 11, 2020, the Company closed on a merger with Acquisition Corp and NPRC, together with a concurrent equity placement, under which the Company added approximately $7.9 million of net proceeds to its cash reserves. Upon receipt of the additional proceeds from the equity raise on August 11, 2020, the Company believes, but it cannot be certain it has adequate resources to fund its operations along with its long-term exploration activities for a period of at least 12 months from the date these financial statements are available until additional cash is raised.

 

The consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset amounts or the classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

NOTE 4 — MINERAL RIGHTS

 

As of the date of these 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.

 

As of the dates presented, mineral properties consisted of the following:

 

   July 31, 2020   April 30, 2020 
CK Gold Project  $3,091,738   $3,091,738 
Keystone Project   1,028,885    1,028,885 
Gold Bar North Project   56,329    56,329 
Maggie Creek Project   1,986,607    1,986,607 
Total  $6,163,559   $6,163,559 

 

NOTE 5 — PROPERTY

 

As of the dates presented, property consisted of the following:

 

   July 31, 2020   April 30, 2020 
Site costs  $151,057   $151,057 
Less: accumulated depreciation   (21,886)   (17,686)
Total  $129,171   $133,371 

 

For the three-month periods ended July 31, 2020 and 2019, depreciation expense amounted to $4,200 and $2,423, respectively.

 

NOTE 6 — ASSET RETIREMENT OBLIGATION

 

In conjunction with various permit approvals permitting the Company to undergo exploration activities at the CK Gold Project and Keystone Project, the Company has recorded an ARO based upon the reclamation plans submitted in connection with the various permits. The following table summarizes activity in the Company’s ARO for the periods presented:

 

13

 

 

U.S. GOLD CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JULY 31, 2020

 

   July 31, 2020   April 30, 2020 
         
Balance, beginning of period  $168,392   $88,746 
Addition and changes in estimates   -    69,172 
Accretion expense   4,060    10,474 
Balance, end of period  $172,452   $168,392 

 

For the three-month periods ended July 31, 2020 and 2019, accretion expense amounted to $4,060 and $2,140, respectively. There were no exploration activities or new disturbance on any of the Company’s projects during the three months ended July 31, 2020.

 

NOTE 7 — RELATED PARTY TRANSACTIONS

 

On April 16, 2019, the Company entered into a one-year consulting agreement with a director of the Company for providing services related to investor and strategic introduction to potential industry partners. In consideration for the services, the consultant was paid $3,750 per month in cash, and total shares of the Company’s common stock with a value of $45,000. In April 2019, the Company issued 4,592 shares of the Company’s common stock, valued at $45,000 at the market price on the dates of grant, in connection with this consulting agreement. This agreement was not renewed. The Company paid consulting fees to such director of $0 and $11,250 in cash during the three-month periods ended July 31, 2020 and 2019, respectively.

 

Accounts payable to related parties as of July 31, 2020 and April 30, 2019 was $34,497 and $3,459, respectively, and was reflected as accounts payable – related party in the accompanying consolidated balance sheets. The related party to which accounts were payable as of July 31, 2020 and 2019, was the Chief Financial Officer, who was owed a total of $34,497 (including $10,839 payable in shares of common stock) and a total of $3,459 (including $2,700 payable in shares of common stock), respectively.

 

NOTE 8 — STOCKHOLDERS’ EQUITY

 

As of July 31, 2020, authorized capital stock consisted of 200,000,000 shares of common stock, par value $0.001 per share, and 50,000,000 shares of “blank check” preferred stock, par value $0.001 per share, of which 1,300,000 shares are designated as Series A Convertible Preferred Stock, 400,000 shares are designated as Series B Convertible Preferred Stock, 45,002 shares are designated as Series C Convertible Preferred Stock, 7,402 shares are designated as Series D Convertible Preferred Stock, 2,500 shares are designated as Series E Convertible Preferred Stock, 1,250 shares are designated as Series F Preferred Stock and 127 shares are designated as Series G Preferred Stock. The Company’s Board has the authority, without further action by the stockholders, to issue shares of preferred stock in one or more series and to fix the rights, preferences, privileges and restrictions granted to or imposed upon the preferred stock.

 

Effective on March 19, 2020, the Company filed an amendment to the Articles of Incorporation to effect the Reverse Stock Split (see Note 1). All share and per share information in this Quarterly Report on Form 10-Q has been retroactively adjusted to reflect the Reverse Stock Split. As of July 31, 2020, there were 2,925,625 shares of common stock issued and outstanding, and no shares of preferred stock outstanding.

 

Series G Convertible Preferred Stock

 

During the quarter ended July 31, 2020, the Company issued an aggregate of 20,357 shares of the Company’s common stock in exchange for the conversion of 57 shares of Series G Preferred Stock. As of July 31, 2020, all Series G Preferred Stock had converted and there were no shares of Series G Preferred Stock outstanding.

 

Common Stock Issued, Restricted Stock Awards, and RSUs Granted for Services

 

On April 30, 2020, the Compensation Committee of the Board awarded four directors of the Company an aggregate of 1,875 shares of restricted stock pursuant to respective restricted stock award agreements. The shares of restricted stock vested immediately on the date of grant. The total 1,875 shares of restricted stock had a fair value of $9,581, or $5.11 per share, based on the quoted trading price on the date of grant, which was fully vested and expensed immediately. These shares were issued on May 5, 2020, subsequent to the close of the fiscal year 2020.

 

14

 

 

U.S. GOLD CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JULY 31, 2020

 

On July 31, 2020, the Compensation Committee of the Board awarded four directors of the Company an aggregate of 1,875 shares of restricted stock pursuant to respective restricted stock award agreements. The shares of restricted stock vested immediately on the date of grant. The total 1,875 shares of restricted stock had a fair value of $15,244, or $8.13 per share, based on the quoted trading price on the date of grant, which was fully vested and expensed immediately. These shares were issued subsequent to the close of the fiscal quarter ended July 31, 2020.

 

A total of $20,218 and $52,682 was expensed for the three-month periods ended July 31, 2020 and 2019, respectively. A balance of $334,750 remains to be expensed over future vesting periods.

 

Equity Incentive Plan

 

In August 2017, the Board approved the Company’s 2017 Equity Incentive Plan (the “2017 Plan”) including the reservation of 165,000 shares of common stock thereunder.

 

On August 6, 2019, the Board approved and adopted, subject to stockholder approval, the U.S. Gold Corp. 2020 Stock Incentive Plan (the “2020 Plan”). The 2020 Plan reserves 330,710 shares for future issuance to officers, directors, employees and contractors as directed from time to time by the Compensation Committee of the Board. The Board directed that the 2020 Plan be submitted to the Company’s stockholders for their approval at the 2019 Annual Meeting of Stockholders of the Company (the “Annual Meeting”), which was held on September 18, 2019. The 2020 Plan was approved by a vote of stockholders at the Annual Meeting. With the approval and effectivity of the 2020 Plan, no further grants will be made under the 2017 Plan.

 

Stock options

 

The following is a summary of the Company’s stock option activity during the periods ended July 31, 2020 and April 30, 2020:

 

   Number of Options   Weighted Average Exercise Price   Weighted Average Remaining Contractual Life (Years) 
Balance at April 30, 2020   100,000   $14.31    2.87 
Granted   -    -    - 
Exercised            
Forfeited   -    -     
Cancelled            
Balance at July 31, 2020   100,000    14.31    2.63 
                
Options exercisable at end of period   76,667   $14.49      
Options expected to vest   23,333   $13.69      
Weighted average fair value of options granted during the period       $-      

 

At July 31, 2020 and April 30, 2020, the aggregate intrinsic value of options outstanding and exercisable was $150 and $0 for each period.

 

Stock-based compensation for stock options recorded in the consolidated statements of operations totaled $51,262 and $52,214 for the three-month periods ended July 31, 2020 and 2019, respectively. A balance of $162,788 remains to be expensed over future vesting periods.

 

15

 

 

U.S. GOLD CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JULY 31, 2020

 

Stock Warrants

 

A summary of the Company’s outstanding warrants to purchase shares of common stock as of July 31, 2020 and changes during the three-month period then ended are presented below:

 

   Number of Warrants  

Weighted Average

Exercise

Price

  

Weighted Average Remaining Contractual

Life

(Years)

 
Warrants with no Class designation:               
Balance at April 30, 2020   527,378   $14.83    3.73 
Granted            
Exercised            
Forfeited            
Canceled            
Balance at July 31, 2020   527,378    14.83    3.48 
Class A Warrants:               
Balance at April 30, 2020   219,375    11.40    4.22 
Granted            
Exercised            
Forfeited            
Canceled            
Balance at July 31, 2020   219,375    11.40    3.97 
Total Warrants Outstanding at July 31, 2020   746,753   $13.82    3.62 
Warrants exercisable at end of period   389,611   $20.07      
Weighted average fair value of warrants granted during the period       $      

 

As of July 31, 2020, the aggregate intrinsic value of warrants outstanding and exercisable was $0.

 

NOTE 9 — NET LOSS PER COMMON SHARE

 

Net loss per share of common stock 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, 2020   July 31, 2019 
Common stock equivalents:          
Preferred stock   -    - 
Restricted stock units   32,500    111,228 
Stock options   100,000    136,895 
Stock warrants   746,753    499,360 
Total   879,253    747,483 

 

NOTE 10 — COMMITMENTS AND CONTINGENCIES

 

The CK Gold 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 CK Gold Project. Leases to explore for or use of natural resources are outside the scope of ASU 2016-02 “Leases”. There are no lease contracts for office space or other Company expenses which qualify for treatment as capital assets under ASU 2016-02.

 

The Company’s rights to the CK Gold Project arise under two State of Wyoming mineral leases; 1) State of Wyoming Mining Lease No. 0-40828, consisting of 640 acres, and 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 of Wyoming:

 

16

 

 

U.S. GOLD CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JULY 31, 2020

 

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 at July 31, 2020 under these mining leases are as follows, each payment to be made in the fourth quarter of the respective fiscal years:

 

Fiscal 2021  $2,240 
Fiscal 2022   2,240 
Fiscal 2023   2,240 
Fiscal 2024   960 
   $7,680 

 

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

 

Orevada option:

 

Pursuant to the acquisition of NumberCo on September 10, 2019, the Company acquired from Orevada its right to the Option Agreement. The option agreement grants Orevada the exclusive right and option to earn-in and acquire up to 50% undivided interest in a property called Maggie Creek, located in Eureka County, Nevada by completing the Initial Earn-in over a seven-year period, as amended for year one and two to move the $100,000 first year earn-in into the second year:

 

First agreement year  $0 
Second agreement year   300,000 
Third agreement year   500,000 
Fourth agreement year   700,000 
Fifth agreement year   1,000,000 
Sixth agreement year   1,000,000 
Seventh agreement year   1,000,000 
   $4,500,000 

 

The Initial Earn-in is vested by paying $250,000 to Renaissance at the end of the Initial Earn-in period.

 

NOTE 11 — SUBSEQUENT EVENTS

 

Northern Panther Merger Agreement

 

On August 10, 2020, the Company entered into the Merger Agreement with Acquisition Corp., NPRC and the Stockholder Representative named therein, pursuant to which Acquisition Corp. merged with and into NPRC, with NPRC surviving as a wholly-owned subsidiary of the Company (such transaction, the “Merger”).

 

At the closing of the Merger, which occurred on August 11, 2020, the shares of common stock of NPRC outstanding immediately prior to the Merger (other than shares held as treasury stock) were converted into and represent the right to receive (i) 581,053 shares of the Company’s common stock, par value $0.001 per share, and (ii) 106,894 shares of the Company’s Series H Convertible Preferred Stock, par value $0.001 per share (the “Series H Preferred Stock” and, together with the common stock, the “Merger Consideration”), which Series H Preferred Stock is expected to convert into common stock on a 1 for 10 basis upon receipt of the approval by the requisite vote of the Company’s stockholders at the next annual general meeting, scheduled for October 27, 2020.

 

The Series H Preferred Stock issued as part of the Merger Consideration is convertible at the option of the holder, subject to an exchange cap, which prohibits the conversion of the Series H Preferred Stock if such conversion would result in a violation of the rules of the Nasdaq Capital Market. Holders of the Series H Preferred Stock have the same voting rights and liquidation preference as holders of common stock, on an as-converted basis.

 

17

 

 

U.S. GOLD CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JULY 31, 2020

 

The common stock issued pursuant to the Merger Agreement as part of the Merger Consideration is being sold as “restricted stock” subject to the six-month minimum hold period under Rule 144 under the Securities Act of 1933, as amended. In addition, pursuant to certain leak-out agreements entered into concurrently with the execution of the Merger Agreement by and between the stockholders of NPRC and the Company, the shares of common stock issued pursuant to the Merger Agreement, including shares issued upon conversion of the Series H Convertible Preferred Stock, are subject to a leak-out provision limiting future share sales of the Company’s common stock held by the holders of such shares to no more than 10% of the daily trading volume.

 

In connection with the Merger, Luke Norman Consulting Ltd. received a finder’s fee equal to the quotient of (a) 5% of the purchase value for the Merger and (b) the 30-day Volume Weighted Average Price (“VWAP”) of a share of our common stock as reported on the Nasdaq Capital Market prior to the execution Merger Agreement, which was paid in 82,500 shares restricted common stock on the closing date of the Merger.

 

Total consideration given consist of the common shares and common share equivalents of 1,650,000 shares, valued at the Volume Weighted Average Price for the 30-day period immediately prior to the date of the Merger Agreement of $7.6612 per common share, or $12,640,980. Net assets purchased consist of:

 

Cash – US Dollars  $2,500,000 
Intangible assets – (mineral rights) Challis Gold Project   10,249,632 
Total assets acquired at fair value   12,749,632 
Total Liabilities assumed at fair value – US Dollars   (108,652)
Total purchase consideration  $12,640,980 

 

Accounting Treatment

 

Management analyzed the Merger Agreement to determine if the Company acquired a business or acquired assets. The FASB issued new guidance (ASU 2017-01) that changed the definition of a business to assist entities with evaluating when a set of transferred assets and activities is a business. The guidance requires an entity to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets; if so, the set of transferred assets and activities is not a business. The guidance also requires a business to include at least one substantive process and narrows the definition of outputs by more closely aligning it with how outputs are described in ASC 606. Under the new guidance, an entity first determines whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets. If this threshold is met, the set is not a business. Under the ASU, a set is not a business when substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets.

 

Pursuant to ASC 805-10-55-5, to be capable of being conducted and managed, as further described in 805-10-55-3A, an integrated set of activities and assets require two essential elements, at a minimum, include inputs and substantive process that together significantly contribute to the ability to create output. Management first considered the guidance in paragraphs 805-10-55-5A through 55-5C.

 

Per 805-10-55-5A, if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets, the set is not considered a business. Gross assets acquired should exclude cash and cash equivalents, as well as other identified assets which are not part of this acquisition.

 

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U.S. GOLD CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JULY 31, 2020

 

The identifiable assets that could be recognized in the agreements are 1) cash and 2) mineral rights on a gold exploration project in Idaho called the Challis Gold exploration project. Pursuant to 805-10-55-5A, NPRC is a newly formed Nevada corporation, with limited operating history and no established bank or business accounts. The only identifiable assets are the escrowed $2.5 million in cash (excluded from the analysis per ASC 8005-10-55-5A) and the Challis Gold Project. Management has excluded cash in the determination of the gross assets, and thus determined that the Challis Gold project represents substantially all of the fair value of the gross assets.

 

Pursuant to ASC 805-10-55-5A, the Company concludes that the acquisition of NPRC, and its wholly owned subsidiaries, is an acquisition of assets.

 

Securities Purchase Agreement

 

In connection with the Merger, on August 10, 2020, the Company entered into a securities purchase agreement (the “SPA”) with certain investors (the “Purchasers”), pursuant to which the Company sold to the Purchasers in a private placement (i) an aggregate of 921,666 shares of the Company’s Series I Convertible Preferred Stock, par value $0.001 per share (the “Series I Preferred Stock”) and (ii) warrants to purchase an aggregate of 921,666 shares of common stock at an exercise price of $6.00 per share (the “Warrants”) for aggregate consideration of $5,530,004.

 

The Series I Preferred Stock has substantially the same terms as the Series H Preferred Stock, except that each share of Series I Preferred Stock is convertible into one share of common stock, and is subject to an exchange cap. The Warrants are exercisable in whole or in part at any time, from time to time following the initial exercise date, terminate five years following the issuance, and are subject to an exchange cap. The sale of the Series I Preferred Stock and Warrants under the SPA closed on August 11, 2020.

 

The Warrants and the shares of the Company’s common stock issuable upon the exercise of the Warrants, the conversion of the Series H Preferred Stock, and the conversion of the Series I Preferred Stock are not being registered under the Securities Act and are being offered pursuant to and in reliance on the exemption provided in Section 4(a)(2) under the Securities Act and Rule 506(b) promulgated thereunder.

 

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

 

The interim unaudited condensed consolidated financial statements included herein have been prepared by U.S. Gold Corp. (the “Company”, “we”, “us”, or “our”) without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (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 (“U.S. GAAP”), which are duplicate to the disclosures in the audited consolidated financial statement have been omitted pursuant to such rules and regulations, although we believe 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 13, 2020.

 

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 us and our subsidiaries as of July 31, 2020, the results of our unaudited interim condensed consolidated statements of operations and changes in stockholders’ equity for the three-month periods ended July 31, 2020 and 2019, and our unaudited interim condensed consolidated cash flows for the three-month periods ended July 31, 2020 and 2019. 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 U.S. GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

 

Forward-Looking Statements

 

In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. See “Forward-Looking Statements.” Our results and the timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of many factors, including the risk factors described in this report and in “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended April 30, 2020.

 

Overview

 

We are an exploration company that owns certain mining leases and other mineral rights comprising the CK Gold Project in Wyoming and the Keystone, Gold Bar North, Maggie Creek Projects in Nevada and most recently the Challis Gold Project in Idaho. None of our properties contain any proven and probable reserves under SEC Industry Guide 7, and all of our activities on our properties are exploratory in nature.

 

During the three-months ended July 31, 2020, we focused primarily on continued interpretation of our 2019 drilling program at our Keystone Project and enhancing our understanding of that property through continuing analytics. In addition, we commenced an internal analysis of our newly acquired Maggie Creek exploration project. An overview of certain significant events follows:

 

  On May 13, 2020, we announced the results of a district-wide gravity survey at the Maggie Creek Project. The results are being interpreted in conjunction with all the prior historic drilling.
     
  On May 20, 2020, we announced our Proposed 2020 Keystone exploration plans. These plans remain subject to refinement and to acquiring the necessary budget to execute them.
     
  On May 26, 2020, we announced the intention to advance our CK Gold Project (formerly known as Copper King) from the Preliminary Economic Assessment (“PEA”) level to a Preliminary Feasibility Study (“PFS”).

 

Recent Developments

 

Merger Agreement and Sale of Unregistered Equity Securities

 

On August 10, 2020, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Gold King Acquisition Corp., a wholly owned subsidiary of U.S. Gold Corp. (“Acquisition Corp.”), Northern Panther Resources Corporation (“Northern Panther” or “NPRC”) and the Stockholder Representative named therein, pursuant to which Acquisition Corp. merged with and into NPRC, with NPRC surviving as our wholly-owned subsidiary (such transaction, the “Merger”).

 

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At the closing of the Merger, which occurred on August 11, 2020, the outstanding shares of common stock of NPRC outstanding immediately prior to the Merger were converted into and represent the right to receive (i) 581,053 shares of our common stock, par value $0.001 per share, and (ii) 106,894 shares of our Series H Convertible Preferred Stock, par value $0.001 per share (the “Series H Preferred Stock” and, together with the common stock, the “Merger Consideration”), which Series H Preferred Stock is expected to convert into common stock on a 1 for 10 basis upon receipt of the approval by the requisite vote of our stockholders at the next annual general meeting on October 27, 2020 (the “Company Shareholder Meeting”), as described below.

 

The Series H Preferred Stock to be issued as part of the Merger Consideration is convertible at the option of the holder, subject to an exchange cap, which prohibits the conversion of the Series H Preferred Stock if such conversion would result in a violation of the rules of the Nasdaq Capital Market. Holders of the Series H Preferred Stock have the same voting rights and liquidation preference as holders of common stock, on an as-converted basis.

 

The common stock issued pursuant to the Merger Agreement as part of the Merger Consideration is being sold as “restricted stock” subject to the six-month minimum hold period under Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”). In addition, pursuant to certain leak-out agreements (the “Leak-Out Agreements”) entered into concurrently with the execution of the Merger Agreement by and between the stockholders of NPRC and us, the shares of common stock issued pursuant to the Merger Agreement, including shares issued upon conversion of the Series H Convertible Preferred Stock, are subject to a leak-out provision limiting future share sales of our common stock held by the holders of such shares to no more than 10% of the daily trading volume.

 

The Merger Agreement includes customary representations and warranties of the Company, Acquisition Corp. and NPRC. In connection with the Merger, Luke Norman Consulting Ltd. received a finder’s fee equal to the quotient of (a) 5% of the purchase value for the Merger and (b) the 30-day Volume Weighted Average Price (“VWAP”) of a share of our common stock as reported on the Nasdaq Capital Market prior to the execution Merger Agreement, which was paid in 82,500 shares restricted common stock on the closing date of the Merger.

 

Total consideration given consist of the common shares and common share equivalents of 1,650,000 shares, valued at the VWAP for the 30-day period immediately prior to the date of the Merger Agreement of $7.6612 per common share, or $12,640,980. Net assets purchased consist of:

 

Cash – US Dollars  $2,500,000 
Intangible assets – (mineral rights) Challis Gold Project    10,249,632 
Total assets acquired at fair value    12,749,632 
Total Liabilities assumed at fair value – US Dollars   (108,652)
Total purchase consideration   $12,640,980 

 

Accounting Treatment

 

Management analyzed the Merger Agreement to determine if the Company acquired a business or acquired assets. The FASB issued new guidance (ASU 2017-01) that changed the definition of a business to assist entities with evaluating when a set of transferred assets and activities is a business. The guidance requires an entity to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets; if so, the set of transferred assets and activities is not a business. The guidance also requires a business to include at least one substantive process and narrows the definition of outputs by more closely aligning it with how outputs are described in ASC 606. Under the new guidance, an entity first determines whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets. If this threshold is met, the set is not a business. If it’s not met, the entity then evaluates whether the set meets the requirement that a business include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs. Under the ASU, a set is not a business when substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets.

 

Pursuant to ASC 805-10-55-5, to be capable of being conducted and managed, as further described in 805-10-55-3A, an integrated set of activities and assets require two essential elements, at a minimum, include inputs and substantive process that together significantly contribute to the ability to create output. Management first considered the guidance in paragraphs 805-10-55-5A through 55-5C.

 

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Per 805-10-55-5A, if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets, the set is not considered a business. Gross assets acquired should exclude cash and cash equivalents, as well as other identified assets not included in this acquisition.

 

The identifiable assets that could be recognized in the agreements are 1) cash and 2) mineral rights on a gold exploration project in Idaho called the Challis Gold exploration project. Pursuant to 805-10-55-5A, NPRC is a newly formed Nevada corporation, with limited operating history and no established bank or business accounts. The only identifiable assets are the escrowed $2.5 million in cash (excluded from the analysis per ASC 8005-10-55-5A) and the Challis Gold Project. Management has excluded cash in the determination of the gross assets, and thus determined that the Challis Gold project represents substantially all of the fair value of the gross assets.

 

Pursuant to ASC 805-10-55-5A, we conclude that the acquisition of NPRC, and its wholly owned subsidiaries, is an acquisition of assets.

 

Securities Purchase Agreement

 

In connection with the Merger, on August 10, 2020, we entered into a securities purchase agreement (the “SPA”) with certain investors (the “Purchasers”), pursuant to which we sold to the Purchasers in a private placement (i) an aggregate of 921,666 shares of our Series I Convertible Preferred Stock, par value $0.001 per share (the “Series I Preferred Stock”) and (ii) warrants to purchase an aggregate of 921,666 shares of common stock at an exercise price of $6.00 per share (the “Warrants”) for aggregate consideration of $5,530,004.

 

The Series I Preferred Stock has substantially the same terms as the Series H Preferred Stock, except that each share of Series I Preferred Stock is convertible into one share of common stock, and is subject to an exchange cap. The Warrants are exercisable in whole or in part at any time, from time to time following the initial exercise date, terminate five years following the issuance, and are subject to an exchange cap. The sale of the Series I Preferred Stock and Warrants under the SPA closed on August 11, 2020.

 

The Warrants and the shares of the Company’s Common Stock issuable upon the exercise of the Warrants, the conversion of the Series H Preferred Stock, and the conversion of the Series I Preferred Stock are not being registered under the Securities Act and are being offered pursuant to and in reliance on the exemption provided in Section 4(a)(2) under the Securities Act and Rule 506(b) promulgated thereunder.

 

Voting Agreements

 

On August 10, 2020, concurrently with the execution of the Merger Agreement, certain of our stockholders identified therein, including each of our directors and executive officers, entered into a Voting Agreement with the Stockholder Representative (the “Company Stockholder Agreement”), pursuant to and on the terms and subject to the conditions of which, among other things, each such stockholder agreed to vote (or acted upon by written consent) all of such stockholder’s shares of Company common stock, in favor of the conversion of the Series H Preferred Stock, at the Company Shareholder Meeting. As of August 10, 2020, the stockholder parties to the Company Stockholder Agreement owned 357,836 shares of the Company common stock, representing approximately 12.20% of the Company common stock issued and outstanding at such time. The Company Stockholder Agreement will terminate on the earlier to occur of (i) the conclusion of the Company Shareholder Meeting and (ii) the termination of the Merger Agreement.

 

Also on August 10, 2020, concurrently with the execution of the Merger Agreement, the stockholders of NPRC identified therein, entered into a Voting Agreement with us, (the “Northern Panther Stockholder Agreement”), pursuant to and on the terms and subject to the conditions of which, among other things, each such stockholder agreed to vote (or acted upon by written consent) all of such stockholder’s shares of common stock of NPRC, among other things, (a) in favor of the adoption of the Merger Agreement (as amended from time to time) and (b) against any proposal for any recapitalization, merger, sale of assets or other business combination between NPRC or any of its subsidiaries and any person or entity other than the Company or any of its affiliates. As of August 10, 2020, the stockholder parties to the Northern Panther Voting Agreement owned all of the issued and outstanding shares of common stock of NPRC.

 

Change in Corporate Officers

 

Pursuant to the terms and conditions of the Merger Agreement, on August 11, 2020, Mr. Edward M. Karr relinquished his position as President, and the board appointed Mr. George Bee as President of the Company. Mr. Karr remains Chief Executive Officer and a director of the Company. In addition, pursuant to the Merger Agreement, we are required to seek the approval of our stockholders for the conversion of the Series H Preferred Stock and nominate Mr. Bee and Mr. Robert Schafer for election to the Board at the Company Shareholder Meeting.

 

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Mr. Bee will serve until a successor is chosen and qualified, or until his earlier resignation or removal. Mr. Bee, age 62, is a senior mining industry executive, with deep operational experience. He has an extensive career operating and developing world-class gold mining projects throughout the world. Mr. Bee was the past president, chief executive officer and director of Andina Minerals Inc. He served on the board of directors of Peregrine Metals, which was acquired by Stillwater Mining Company. Previously, he was chief operating officer at Aurelian Resources Inc. where he was primarily responsible for the development of the Fruta del Norte Project in Ecuador. Prior to that Mr. Bee was director, Technical Projects for Barrick Gold Corporation (“Barrick”). Mr. Bee has more than 30 years of experience operating and developing world-class mines and projects, including an eight-year tour with Barrick in Latin America during his 16-year service with the company. Having been part of the team that developed Goldstrike in phases between 1988 and 1995, he left Goldstrike as mine manager. Between 1998 and 2007, he returned to Barrick to complete the construction of the Pierina mine, and continued as operations manager until he was reassigned to Chile and Argentina. As general manager, he formed and led the team responsible for the successful development of the Veladero mine in 2005. After leaving Barrick, he became president and chief executive officer of Andina Minerals Inc., before moving on to become chief executive officer at Jaguar Mining Inc. Mr. Bee is a graduate of the Camborne School of Mines in Cornwall, United Kingdom.

 

Concurrent with the appointment of Mr. Bee as President of the Company, we entered into a letter of employment with Mr. Bee, pursuant to which Mr. Bee shall receive (a) $300,000 annual compensation, to be paid in cash, and (b) receive reimbursement for his monthly healthcare premiums.

 

Designation of Preferred Stock

 

On August 11, 2020, we filed a Certificate of Designation of Rights, Powers, Preferences, Privileges and Restrictions of the Series H Preferred Stock (the “Series H Certificate of Designation”) with the Secretary of State of the State of Nevada amending its Articles of Incorporation to establish the Series H Preferred Stock and the number, relative rights, powers, preferences, privileges and restrictions thereof. Pursuant to the Series H Certificate of Designations, 106,984 shares of preferred stock have been designated as Series H Preferred Stock.

 

Also on August 11, 2020, we filed a Certificate of Designation of Rights, Powers, Preferences, Privileges and Restrictions of the Series I Preferred Stock (the “Series I Certificate of Designation”) with the Secretary of State of the State of Nevada amending its Articles of Incorporation to establish the Series I Preferred Stock and the number, relative rights, powers, preferences, privileges and restrictions thereof. Pursuant to the Series I Certificate of Designations, 921,666 shares of preferred stock have been designated as Series I Preferred Stock.

 

COVID-19 Developments

 

In December 2019, a novel strain of coronavirus, COVID-19, was reported to have surfaced in Wuhan, China and has reached multiple other countries, resulting in government-imposed quarantines, travel restrictions and other public health safety measures in China and other countries. On March 12, 2020, the WHO declared COVID-19 to be a global pandemic, and the COVID-19 pandemic has resulted in significant financial market volatility and uncertainty in recent months. The ongoing COVID-19 pandemic has and may continue to adversely impact our business, as our operations are based in and rely on third parties located in areas affected by the pandemic.

 

We, or our people, investors, contractors or stakeholders, have been prevented from free cross-border travel or normal attendance to activities in conducting our business at trade shows, presentations, meetings or other activities meant to promote or execute our business strategy and transactions. We have been prevented from receiving goods or services from contractors. Decisions beyond our control, such as canceled events, restricted travel, barriers to entry or other factors have affected or may affect our ability to accomplish drilling programs, technical analysis of completed exploration actions, equity raising activities, and other needs that would normally be accomplished without such limitations. Furthermore, our exploration activities rely heavily on outside contracts. The COVID-19 pandemic has caused disruptions in travel and accessing our exploration properties with contractors. Such government-imposed precautionary measures may have been relaxed in certain countries or states, but there is no assurance that more strict measures will be put in place again due to a resurgence in COVID-19 cases. There can be no assurance that the Company and its personnel may travel and access property freely in the near future.

 

Moreover, the COVID-19 pandemic has made and continues to make indeterminable adverse effects on general commercial activity and the world economy, and our business and results of operations could be adversely affected to the extent that COVID-19 or any other epidemic harms the global economy generally.

 

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We do not yet know the full extent of potential delays or impact on our business, our relationship with our business partners, or the global economy as a whole. However, any one or a combination of these events could have an adverse effect on our other business operations. A continuation or worsening of the levels of market disruption and volatility seen in the recent past could have an adverse effect on our ability to access capital, on our business, results of operations and financial condition, and on the market price of our common stock.

 

Results of Operations

 

Three months ended July 31, 2020 compared to the three months ended July 31, 2019:

 

Net Revenues

 

We are an exploration stage company with no operations, and we generated no revenues for the three-month periods ended July 31, 2020 and 2019.

 

Operating Expenses

 

Total operating expenses for the three months ended July 31, 2020 as compared to the three months ended July 31, 2019, were approximately $1.0 million and $1.3 million, respectively. The approximate $351,000 decrease in operating expenses for the three months ended July 31, 2020 as compared to three months ended July 31, 2019, is comprised of decreases in every classification of expenses, compensation decreased approximately $93,000 as a result of a decrease in stock-based compensation due to a decrease in issuance of stock options and common stock issued to our officers and employees as compared to the prior period, approximately $121,000 decrease in exploration expenses on our mineral properties due to a decrease in exploration activities and a decrease in professional fees of approximately $93,000 due primarily to a decrease in in investor relations and consulting expenses of approximately $181,000 offset by an increase in legal and accounting fees of approximately $88,000 and an overall decrease in general and administrative expenses of approximately $44,000 due primarily to decreases in advertising expense and travel and related expenses.

 

Net Loss

 

We reported loss from operations before tax of approximately $1.0 million and $1.3 million for the three months ended July 31, 2020 and 2019, respectively.

 

Liquidity and Capital Resources

 

The following table summarizes total current assets, liabilities and working capital at July 31, 2020 compared to April 30, 2020, and the increase between those periods:

 

   July 31, 2020   April 30, 2020   Increase (Decrease) 
Current Assets   $2,344,834   $3,181,747   $(836,913)
Current Liabilities   $220,307   $157,840   $62,467 
Working Capital   $2,124,527   $3,023,907   $(899,380)

 

As of July 31, 2020, we had working capital of $2,124,527, as compared to working capital of $3,023,907 as of April 30, 2020, a decrease of $899,380. During the three months ended July 31, 2020, we received $0 net proceeds from the issuance of preferred stock and warrants, which is the primary source of cash to fund operations.

 

We are obligated to file annual, quarterly and current reports with the Commission 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 Commission 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 costlier. 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.

 

Our unaudited condensed consolidated financial statements are prepared using the accrual method of accounting in accordance with U.S. GAAP and have been prepared assuming that we 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, 2020 and 2019, we incurred losses in the amounts of approximately $1.0 million and $1.3 million, respectively. As of July 31, 2020, we had cash of approximately $1.7 million, working capital of approximately $2.1 million, and an accumulated deficit of approximately $32.5 million. We had a net loss and cash used in operating activities of approximately $1.0 million. As a result of the utilization of cash in its operating activities, and the development of its assets, we have incurred losses since it commenced operations. Our primary source of operating funds since inception has been equity financings. As of July 31, 2020, we had sufficient cash to fund its operations for approximately 6 to 9 months and expected that we will be required to raise additional funds to fund its operations thereafter. These matters raise substantial doubt about our ability to continue as a going concern for the twelve months following the issuance of these financial statements.

 

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Subsequent to the close of the quarter ended July 31, 2020, on August 11, 2020, we closed on a merger with Gold King Acquisition Corp and NPRC, together with a concurrent equity placement, under which we added approximately $7.9 million of net proceeds to our cash reserves. Upon receipt of the additional proceeds from the equity raise on August 11, 2020, we believe, but cannot be certain we have adequate resources to fund our operations along with our long-term exploration activities for a period of at least 12 months from the date these financial statements are available until additional cash is raised.

 

We have based this estimate on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect. Our future capital requirements will depend on many factors, including potential acquisitions, changes in exploration programs and related studies and other operating strategies. In addition, we continue to assess the impact of COVID-19, which may adversely affect our ability to obtain additional future capital. To the extent we require additional funding, we cannot be certain that additional funding will be available on acceptable terms, or at all. To the extent we raise additional funds by issuing equity securities, our stockholders may experience significant dilution. Any debt financing, if available, may involve restrictive covenants that impact our ability to conduct business. If unable to raise additional capital when required or on acceptable terms, we may have to delay, scale back or discontinue the exploration activities or programs.

 

Cash Used in Operating Activities

 

Net cash used in operating activities totaled $1.0 million and $1.1 million for the three months ended July 31, 2020 and 2019, respectively. Net loss for the three months ended July 31, 2020 and 2019 totaled approximately $1.0 million and $1.3 million, respectively. Additionally, we expensed approximately $71,000 in stock-based compensation for options and shares issued to employees and consultants during the three months ended July 31, 2020. Net changes in operating assets and liabilities are primarily due to net increases in prepaid expenses and other assets of approximately $176,000 and reclamation of bond deposits of approximately $22,000, net of decreases of approximately $62,000 in accounts payable to trade vendors and related parties.

 

Cash Provided by Investing Activities

 

The was no cash provided by investing activities for each of the three months ended July 31, 2020 and July 31, 2019, respectively.

 

Cash Provided by Financing Activities

 

There was no cash provided by financing activities the three months ended July 31, 2020, compared with net cash provided by financing activities of approximately $2.4 million, net of issuance costs, for the three months ended July 31, 2019, due to the issuance of Series F Preferred Stock and warrants as compared to no issuances of preferred stock or warrants during the three months ended July 31, 2020.

 

Off-Balance Sheet Arrangements

 

As of July 31, 2020, we did not have, and do not have any present plans to implement, any off-balance sheet arrangements.

 

Recently Issued Accounting Pronouncements

 

See Note 2, Summary of Significant Accounting Policies, to the unaudited condensed consolidated financial statements for a summary of recently issued accounting pronouncements.

 

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. GAAP. 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.

 

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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 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, stock-based compensation, the assumptions used to fair value of common and preferred stock, valuation of warrants, asset retirement obligations, and the valuation of deferred tax assets and liabilities.

 

Stock-Based Compensation

 

Stock-based compensation is accounted for based on the requirements of Accounting Standards Codification (“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.

 

In June 2018, the FASB issued Accounting Standards Update 2018-07, “Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting” (“ASU 2018-07”), 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 adoption of ASC 606. We chose to early adopt ASU 2018-07 in July 2018. The adoption of this standard did not have a material effect on our consolidated financial statements and related disclosures.

 

Mineral Rights

 

Costs of leasing, exploring, carrying and retaining unproven mineral lease properties are expensed as incurred. We expense all mineral exploration costs as incurred as we are still in the exploration stage. If we identify proven and probable reserves in our investigation of our properties and upon development of a plan for operating a mine, we 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. We assess the carrying costs of the capitalized mineral properties for impairment under ASC 360-10, “Impairment of Long-Lived Assets”, and evaluate 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.

 

Leases to explore for or use of natural resources are outside the scope of ASU 2016-02 “Leases”.

 

26

 

 

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

 

Disclosure Controls and Procedures

 

At the end of the period covered by this report, an evaluation was carried out under the supervision of, and with the participation of, the Company’s management, including the our President and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a – 15(e) and Rule 15d – 15(e) of the Exchange Act). Based on that evaluation, the President and Chief Financial Officer have concluded that as of the end of the period covered by this Quarterly Report, the Company’s disclosure controls and procedures were not effective in ensuring that information required to be disclosed by the Company in its reports that it files or submits to the SEC under the Exchange Act, is recorded, processed, summarized and reported within the time period specified in applicable rules and forms.

 

While present in our design of internal controls, our internal controls over financial reporting and disclosure are not written; however, the operation of many controls are in place and are applied on a consistent basis. Company personnel perform controls standard to: 1) approve all Company expenditures, 2) approve and sign contractual obligations, 3) reconcile bank accounts and other general ledger accounts, and 4) many other similar rudimentary controls applied as best practice. However, we have concluded that due to the Company’s small size and limited personnel available to perform control functions, the Company is precluded from applying adequate segregation of duties in financial transactions. These are material weaknesses common to companies of similar size and staffing in our industry. We expect these material weakness conditions to continue for the foreseeable future, or until significant Company growth results in additional personnel to perform financial functions.

 

Changes in Internal Control Over Financial Reporting

 

During the three months ended July 31, 2020, management determined that the delay of its program for compliance with the Sarbanes-Oxley Act of 2002 and the 2013 COSO Framework continued to be necessary to conserve cash in our current financial condition. There have been no changes in the Company’s internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting; however, management has determined that for the sake of transparency and conservancy, it cannot state that internal controls over financial reporting are effective at this time.

 

27

 

 

PART II: OTHER INFORMATION

 

Item 1. LEGAL PROCEEDINGS

 

From time to time we may be involved in claims and legal actions that arise in the ordinary course of business. To our knowledge, there are no material pending legal proceedings to which we are a party or of which any of our property is the subject.

 

Item 1A. RISK FACTORS.

 

Except as follows and as supplemented by the Risk Factors disclosed below, there were no material changes to the Risk Factors disclosed in “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended April 30, 2020. For more information concerning our risk factors, please see “Item 1A. Risk Factors” in our Form 10-K, filed with the Securities and Exchange Commission on July 13, 2020.

 

Our activities may be adversely affected by unforeseeable and unquantifiable health risks, such as the COVID-19 pandemic, whether those effects are local, nationwide or global. Matters outside our control may prevent us from executing on our exploration programs, limit travel of Company representatives, adversely affect the health and welfare of Company personnel or prevent important vendors and contractors from performing normal and contracted activities.

 

In December 2019, a novel strain of coronavirus, COVID-19, was reported to have surfaced in Wuhan, China and has reached multiple other countries, resulting in government-imposed quarantines, travel restrictions and other public health safety measures in China and other countries. On March 12, 2020, the WHO declared COVID-19 to be a global pandemic, and the COVID-19 pandemic has resulted in significant financial market volatility and uncertainty in recent months. The ongoing COVID-19 pandemic has and may continue to adversely impact the Company’s business, as its operations are based in and rely on third parties located in areas affected by the pandemic.

 

The risks to the Company related to contagious disease, or policies implemented by governments to protect against the spread of a disease, are unforeseeable and unquantifiable by us. The COVID-19 pandemic has prevented the Company, or its people, investors, contractors or stakeholders, from free cross-border travel or normal attendance to activities in conducting its business at trade shows, presentations, meetings or other activities meant to promote or execute its business strategy and transactions. In addition, the Company has been prevented from receiving goods or services from contractors. Decisions beyond the Company’s control, such as canceled events, restricted travel, barriers to entry or other factors have affected or may affect its ability to accomplish drilling programs, technical analysis of completed exploration actions, equity raising activities, and other needs that would normally be accomplished without such limitations. Such government-imposed precautionary measures related to the COVID-19 may have been relaxed in certain states, but there is no assurance that more strict measures will be put in place again due to a resurgence in COVID-19 cases. There can be no assurance that the Company and its personnel may travel and access property freely in the near future.

 

Furthermore, the Company uses a variety of outsourced contractors to execute our exploration programs. Drilling contractors need to be able to access our projects and insure social distancing recommended safety standards. The COVID-19 pandemic has caused disruptions in travel and accessing our exploration properties with contractors. There is still uncertainty and lack of clarity with regards to travel restrictions and future State openings in Wyoming and Nevada. The Company continues to monitor the overall situation closely, with safety of its employees and contractors our top priority. There are no assurances that material exploration activities can take place in 2020.

 

The COVID-19 pandemic has brought tremendous uncertainty to the global financial markets. As an exploration company with no revenues, the Company is reliant on constantly raising additional capital to fund its operations. A continuation or worsening of the levels of market disruption and volatility seen in the recent past could have an adverse effect on its ability to access capital, on its business, results of operations and financial condition, and on the market price of the Company’s common stock. There are no assurances we will be able to raise additional capital on favorable terms in the foreseeable future.

 

The COVID-19 pandemic can cause potential disruptions with several of its outsourced consultants and professionals which the Company relies on to execute its business. The Company’s outsourced accountants, financial advisors, auditors, legal counsel, employees and Board have all experienced disruptions due to travel restrictions and remote working conditions. This has the potential to cause delays to current and future financial filings. The Company has taken steps to mitigate the potential risks to suppliers and employees posed by the spread of COVID-19. The Company has implemented work from home policies where appropriate. The Company will continue to monitor developments affecting both its workforce and contractors, and will take additional precautions that management determines are necessary in order to mitigate the impacts.

 

In addition, the economic disruptions caused by COVID-19 could also adversely impact the impairment risks for certain long-lived assets and equity method investments. We evaluated these impairment considerations and determined that no such impairments occurred as of July 31, 2020.

 

28

 

 

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

 

Other than set forth below, there were no sales of unregistered securities during the quarter ended July 31, 2020 that were not previously reported on a Current Report on Form 8-K. None of the following transactions involved any underwriters, underwriting discounts or commissions. The recipients of the securities in each of these transactions represented their intentions to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof, and appropriate legends were placed on the share certificates issued in these transactions. All recipients had adequate access sufficient information about us to make an informed investment decision. The sales of these securities were made without any general solicitation or advertising. Each of the issuances set forth below was exempt from the registration requirements of the Securities Act of 1933, as amended, pursuant to Section 4(a)(2) thereof and Rule 506 of Regulation D promulgated thereunder as a transaction not involving a public offering.

 

On April 30, 2020, the Compensation Committee of the Board awarded four directors of the Company an aggregate of 1,875 shares of restricted stock pursuant to respective restricted stock award agreements. The shares of restricted stock vested immediately on the date of grant. The total 1,875 shares of restricted stock had a fair value of $9,581, or $5.11 per share, based on the quoted trading price on the date of grant, which was fully vested and expensed immediately. These shares were issued on May 5, 2020.

 

On July 31, 2020, the Compensation Committee of the Board awarded four directors of the Company an aggregate of 1,875 shares of restricted stock pursuant to respective restricted stock award agreements. The shares of restricted stock vested immediately on the date of grant. The total 1,875 shares of restricted stock had a fair value of $15,244, or $8.13 per share, based on the quoted trading price on the date of grant, which was fully vested and expensed immediately. At the date of this report, these shares have not yet been issued.

 

Item 3. DEFAULTS UPON SENIOR SECURITIES.

 

None.

 

Item 4. MINE SAFETY DISCLOSURES

 

Pursuant to Section 1503(a) of the Dodd-Frank Act, issuers that are operators, or that have a subsidiary that is an operator, of a coal or other mine in the United States are required to disclose specified information about mine health and safety in their periodic reports. These reporting requirements are based on the safety and health requirements applicable to mines under the Federal Mine Safety and Health Act of 1977 (the “Mine Act”) which is administered by the U.S. Department of Labor’s Mine Safety and Health Administration (“MSHA”). During the three-month period ended July 31, 2020, we and our properties or operations were not subject to regulation by MSHA under the Mine Act and thus no disclosure is required under Section 1503(a) of the Dodd-Frank Act.

 

Item 5. OTHER INFORMATION.

 

None.

 

29

 

 

Item 6. EXHIBITS.

 

Exhibit No   Description
     
3.1   Certificate of Designations of Series H Convertible Preferred Stock. Incorporated by reference from Exhibit 3.1 to a Current Report on Form 8-K filed with the Securities and Exchange Commission, SEC file number 001-08266, on August 13, 2020.
3.2   Certificate of Designations of Series I Convertible Preferred Stock. Incorporated by reference from Exhibit 3.2 to a Current Report on Form 8-K filed with the Securities and Exchange Commission, SEC file number 001-08266, on August 13, 2020.
4.1   Form of Warrant. Incorporated by reference from Exhibit 4.1 to a Current Report on Form 8-K filed with the Securities and Exchange Commission, SEC file number 001-08266, on August 13, 2020.
10.1   Agreement and Plan of Merger, dated as of August 10, 2020, by and among the Company, Acquisition Corp., Northern Panther and the Stockholder Representative named therein. Incorporated by reference from Exhibit 10.1 to a Current Report on Form 8-K filed with the Securities and Exchange Commission, SEC file number 001-08266, on August 13, 2020.
10.2   Form of Leak-Out Agreement. Incorporated by reference from Exhibit 10.2 to a Current Report on Form 8-K filed with the Securities and Exchange Commission, SEC file number 001-08266, on August 13, 2020.
10.3   Securities Purchase Agreement, dated as of August 10, 2020, by and among the Company and the Purchasers signatory thereto. Incorporated by reference from Exhibit 10.3 to a Current Report on Form 8-K filed with the Securities and Exchange Commission, SEC file number 001-08266, on August 13, 2020.
10.4   Form of Company Stockholder Agreement. Incorporated by reference from Exhibit 10.4 to a Current Report on Form 8-K filed with the Securities and Exchange Commission, SEC file number 001-08266, on August 13, 2020.
10.5   Form of Northern Panther Stockholder Agreement. Incorporated by reference from Exhibit 10.5 to a Current Report on Form 8-K filed with the Securities and Exchange Commission, SEC file number 001-08266, on August 13, 2020.
10.6*   Employment Letter, dated as of August 10, 2020, by and between the Company and George Bee. Incorporated by reference from Exhibit 10.6 to a Current Report on Form 8-K filed with the Securities and Exchange Commission, SEC file number 001-08266, on August 13, 2020.
     
31(a)   Rule 13a-14(a) Certification of Edward M. Karr.
     
31(b)   Rule 13a-14(a) Certification of Ted R. Sharp.
     
32(a)   Section 1350 Certification of Edward M. Karr (furnished not filed).
     
32(b)   Section 1350 Certification of Ted R. Sharp (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

 

# Schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. U.S. Gold Corp. hereby undertakes to furnish supplemental copies of any of the omitted schedules and exhibits upon request by the Securities and Exchange Commission.
* Management Contract or Compensatory Plan or Arrangement.

 

30

 

 

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 11, 2020 By: /s/ Edward M. Karr
    Edward M. Karr
    Chief Executive Officer
    (Principal Executive Officer)
     
Date: September 11, 2020 By: /s/ Ted R. Sharp
    Ted R. Sharp
    Principal Financial and Accounting Officer

 

31

 

EX-31 2 ex31a.htm

 

Exhibit 31(a)

 

Rule 13a-14(a) Certification

 

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

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 11, 2020 /s/ Edward M. Karr
  Edward M. Karr,
  Chief Executive Officer
  (Principal Executive Officer)

 

 

 

EX-31 3 ex31b.htm

 

Exhibit 31(b)

 

Rule 13a-14(a) Certification

 

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Ted R. Sharp, 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 11, 2020 /s/ Ted R. Sharp
  Ted R. Sharp
  Principal Financial and Accounting Officer

 

 

 

EX-32 4 ex32a.htm

 

Exhibit 32(a)

 

CERTIFICATION OF PRINCIPAL 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, 2020, 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 results of operations of the Company.

 

Date: September 11, 2020 /s/ Edward M. Karr
  Edward M. Karr
  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 5 ex32b.htm

 

Exhibit 32(b)

 

CERTIFICATION OF PRINCIPAL 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, 2020, as filed with the Securities and Exchange Commission (the “Report”), Ted R. Sharp, 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 results of operations of the Company.

 

Date: September 11, 2020 /s/ Ted R. Sharp
  Ted R. Sharp
  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, 2020
Sep. 11, 2020
Cover [Abstract]    
Entity Registrant Name U.S. GOLD CORP.  
Entity Central Index Key 0000027093  
Document Type 10-Q  
Document Period End Date Jul. 31, 2020  
Amendment Flag false  
Current Fiscal Year End Date --04-30  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Non-accelerated Filer  
Entity Small Business Flag true  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   3,589,178
Document Fiscal Period Focus Q1  
Document Fiscal Year Focus 2020  
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Condensed Consolidated Balance Sheets (Unaudited) - USD ($)
Jul. 31, 2020
Apr. 30, 2020
CURRENT ASSETS:    
Cash $ 1,737,047 $ 2,749,957
Income tax receivable 219,072 219,072
Prepaid expenses and other current assets 388,715 212,718
Total current assets 2,344,834 3,181,747
NON - CURRENT ASSETS:    
Property, net 129,171 133,371
Reclamation bond deposit 377,556 355,556
Mineral rights 6,163,559 6,163,559
Total non - current assets 6,670,286 6,652,486
Total assets 9,015,120 9,834,233
CURRENT LIABILITIES:    
Accounts payable 185,810 154,381
Accounts payable - related parties 34,497 3,459
Total current liabilities 220,307 157,840
LONG- TERM LIABILITIES    
Asset retirement obligation 172,452 168,392
Total liabilities 392,759 326,232
Commitments and Contingencies
STOCKHOLDERS' EQUITY:    
Common stock ($0.001 Par Value; 200,000,000 Shares Authorized; 2,925,625 and 2,903,393 shares issued and outstanding as of July 31, 2020 and April 30, 2020) 2,926 2,903
Additional paid-in capital 41,164,507 41,093,050
Accumulated deficit (32,545,072) (31,587,952)
Total stockholders' equity 8,622,361 9,508,001
Total liabilities and stockholders' equity 9,015,120 9,834,233
Convertible Series F Preferred Stock [Member]    
STOCKHOLDERS' EQUITY:    
Preferred stock value
Convertible Series G Preferred Stock [Member]    
STOCKHOLDERS' EQUITY:    
Preferred stock value
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Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares
Jul. 31, 2020
Apr. 30, 2020
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
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Common stock, shares outstanding 2,925,625 2,903,393
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Preferred stock, shares issued
Preferred stock, shares outstanding
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Condensed Consolidated Statements of Operations (Unaudited) - USD ($)
3 Months Ended
Jul. 31, 2020
Jul. 31, 2019
Income Statement [Abstract]    
Net revenues
Operating expenses:    
Compensation and related taxes - general and administrative 194,273 287,082
Exploration costs 74,348 195,393
Professional and consulting fees 550,800 644,073
General and administrative expenses 137,699 182,051
Total operating expenses 957,120 1,308,599
Loss before benefit (provision) for income taxes (957,120) (1,308,599)
Benefit (provision) for income taxes
Net loss (957,120) (1,308,599)
Deemed dividend related to beneficial conversion feature of preferred stock (2,022,712)
Net loss applicable to U.S. Gold Corp. common shareholders $ (957,120) $ (3,331,311)
Net Loss per common share, basic and diluted $ (0.33) $ (1.65)
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Preferred Stock - Series F [Member]
Preferred Stock - Series G [Member]
Common Stock [Member]
Additional Paid-in Capital [Member]
Accumulated Deficit [Member]
Total
Balance at Apr. 30, 2019 $ 1,986 $ 33,425,931 $ (26,275,102) $ 7,152,815
Balance, shares at Apr. 30, 2019 1,986,063      
Issuance of preferred stock and warrants for cash, net of offering cost $ 1 2,401,201 2,401,202
Issuance of preferred stock and warrants for cash, net of offering cost, shares 1,250      
Conversion of preferred stock into common stock $ 108 (108)
Conversion of preferred stock into common stock, shares (616) 108,071      
Issuance of common stock for services $ 2 24,998 25,000
Issuance of common stock for services, shares 2,153      
Issuance of common stock for accrued services $ 1 12,499 12,500
Issuance of common stock for accrued services, shares 1,068      
Stock options granted for services 52,214 52,214
Stock-based compensation in connection with restricted common stock award grants and restricted common stock unit grants 52,682 52,682
Stock-based compensation in connection with restricted common stock award grants and restricted common stock unit grants, shares      
Cancellation of common stock $ (9) 9
Cancellation of common stock, shares (8,500)      
Deemed dividends - series F preferred stock 2,022,712 (2,022,712) 2,022,712
Net loss (1,308,599) (1,308,599)
Balance at Jul. 31, 2019 $ 1 $ 2,088 37,992,138 (29,606,413) 8,387,814
Balance, shares at Jul. 31, 2019 634 2,088,855      
Balance at Apr. 30, 2020   $ 2,903 41,093,050 (31,587,952) 9,508,001
Balance, shares at Apr. 30, 2020 57 2,903,393      
Conversion of preferred stock into common stock $ 21 (21)
Conversion of preferred stock into common stock, shares (57) 20,357      
Stock options granted for services 51,262 51,262
Stock-based compensation in connection with restricted common stock award grants and restricted common stock unit grants $ 2 20,216 20,218
Stock-based compensation in connection with restricted common stock award grants and restricted common stock unit grants, shares 1,875      
Deemed dividends - series F preferred stock          
Net loss (957,120) (957,120)
Balance at Jul. 31, 2020 $ 2,926 $ 41,164,507 $ (32,545,072) $ 8,622,361
Balance, shares at Jul. 31, 2020 2,925,625      
XML 17 R6.htm IDEA: XBRL DOCUMENT v3.20.2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)
3 Months Ended 12 Months Ended
Jul. 31, 2020
Jul. 31, 2019
Apr. 30, 2020
CASH FLOWS FROM OPERATING ACTIVITIES:      
Net loss $ (957,120) $ (1,308,599)  
Adjustments to reconcile net loss to net cash used in operating activities:      
Depreciation 4,200 2,423  
Accretion 4,060 2,140 $ 10,474
Stock based compensation 71,480 129,896  
Amortization of prepaid stock based expenses 53,210  
Changes in operating assets and liabilities:      
Prepaid expenses and other current assets (175,997) (67,982)  
Reclamation bond deposit (22,000) (16,109)  
Accounts payable 31,429 157,075  
Accounts payable - related parties 31,038 (6,364)  
Accrued liabilities (5,367)  
NET CASH USED IN OPERATING ACTIVITIES (1,012,910) (1,059,677)  
CASH FLOWS FROM FINANCING ACTIVITIES:      
Issuance of preferred stock and warrants, net of issuance cost 2,401,202  
NET CASH PROVIDED BY FINANCING ACTIVITIES 2,401,202  
NET (DECREASE) INCREASE IN CASH (1,012,910) 1,341,525  
CASH - beginning of year 2,749,957 2,197,181 2,197,181
CASH - end of period 1,737,047 3,538,706 $ 2,749,957
Cash paid for:      
Interest  
Income taxes  
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:      
Issuance of common stock for accrued services 12,500  
Deemed dividends - Series F preferred stock 2,022,712  
Issuance of common stock in connection with conversion of preferred stock $ 21 $ 108  
XML 18 R7.htm IDEA: XBRL DOCUMENT v3.20.2
Organization and Description of Business
3 Months Ended
Jul. 31, 2020
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 and was subsequently re-incorporated under the laws of the State of Nevada in 2016. Effective June 26, 2017, the Company changed its name to U.S. Gold Corp. from Dataram Corporation.

 

On June 13, 2016, Gold King Corp. (“Gold King”), a private Nevada corporation, entered into an Agreement and Plan of Merger (the “Gold King 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. Upon closing of the transactions contemplated under the Gold King Merger Agreement (the “Gold King 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. The Gold King Merger was 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 the Company (the legal acquirer) from the date of the Gold King Merger. Gold King is a gold and precious metals exploration company pursuing exploration and development opportunities primarily in Nevada and Wyoming. The Company has a wholly owned subsidiary, U.S. Gold Acquisition Corporation, formerly Dataram Acquisition Sub, Inc. (“U.S. Gold Acquisition”), a Nevada corporation which was formed in April 2016.

 

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

 

On September 10, 2019, the Company, 2637262 Ontario Inc., a corporation incorporated under the laws of the Providence of Ontario (“NumberCo”), and all of the shareholders of NumberCo (the “NumberCo Shareholders”), entered into a Share Exchange Agreement (the “Share Exchange Agreement”), pursuant to which, among other things, the Company agreed to issue to the NumberCo Shareholders 200,000 shares of the Company’s common stock in exchange for all of the issued and outstanding shares of NumberCo, with NumberCo becoming a wholly-owned subsidiary of the Company (see Note 4).

 

On August 10, 2020, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Gold King Acquisition Corp. (“Acquisition Corp.”), a wholly owned subsidiary of the Company, Northern Panther Resources Corporation (“Northern Panther” or “NPRC”) and the Stockholder Representative named therein, pursuant to which Acquisition Corp. merged with and into NPRC, with NPRC surviving as a wholly-owned subsidiary of the Company (see Note 11).

 

On March 17, 2020, the board of directors (the “Board”) of the Company approved a 1-for-10 reverse stock split of the Company’s issued and outstanding shares of common stock (the “Reverse Stock Split”), and on March 18, 2020, the Company filed with the Secretary of State of the State of Nevada a Certificate of Amendment to its Articles of Incorporation to effect the Reverse Stock Split. The Reverse Stock Split became effective as of 5:00 p.m. Eastern Time on March 19, 2020, and the Company’s common stock began trading on a split-adjusted basis when the market opened on March 20, 2020. Accordingly, all common share and per share data are retrospectively restated to give effect of the split for all periods presented herein.

 

None of the Company’s properties contain proven and probable reserves and all of the Company’s activities are exploratory in nature.

 

Unless the context otherwise requires, all references herein to the “Company” refer to U.S. Gold Corp. and its consolidated subsidiaries.

XML 19 R8.htm IDEA: XBRL DOCUMENT v3.20.2
Summary of Significant Accounting Policies
3 Months Ended
Jul. 31, 2020
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of presentation and principles of consolidation

 

The accompanying interim unaudited condensed consolidated financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), the instructions to Form 10-Q, 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 presents the unaudited condensed consolidated financial statements of the Company and its wholly-owned subsidiaries as of July 31, 2020. 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, 2020, which are contained in the Form 10-K filed on July 13, 2020. The unaudited condensed consolidated balance sheet as of April 30, 2020 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. Operating results for the three-month period ended July 31, 2020 are not necessarily indicative of the results to be expected for the year ending April 30, 2021.

 

Use of Estimates and Assumptions

 

In preparing the 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 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, stock-based compensation, the fair value of common and preferred stock, valuation of warrants, asset retirement obligations and the valuation of deferred tax assets and liabilities.

 

Fair Value Measurements

 

The Company has adopted Accounting Standards Codification (“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 U.S. GAAP, which 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.

 

At July 31, 2020 and April 30, 2020, the Company had no financial instruments or liabilities accounted for at fair value on a recurring basis or nonrecurring basis.

 

Prepaid expenses and other current assets

 

Prepaid expenses and other current assets of $388,715 and $212,718 at July 31, 2020 and April 30, 2020, respectively, consist primarily of costs paid for future services which will occur within a year. Prepaid expenses principally include prepayments in cash and equity instruments for consulting, public relations, and business advisory services, insurance premiums, mining claim fees and mineral lease fees which are being amortized over the terms of their respective agreements.

 

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. The Company did not recognize any impairment during the periods ended July 31, 2020 and April 30, 2020.

 

Mineral Rights

 

Costs of leasing, exploring, 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 will be 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.

 

Leases to explore for or use of natural resources are outside the scope of ASU 2016-02, “Leases”.

 

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.

  

ASU 2018-07 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 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 effect on the Company’s consolidated financial statements and related disclosures.

 

Accounting for Warrants

 

Warrants are accounted for in accordance with the applicable accounting guidance provided in ASC 815, “Derivatives and Hedging” (“ASC 815”) as either derivative liabilities or as equity instruments, depending on the specific terms of the agreements. The Company classifies as equity any contracts that (i) require physical settlement or net-share settlement or (ii) give 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) give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement). Instruments that are classified as liabilities are recorded at fair value at each reporting period, with any change in fair value recognized as a component of change in fair value of derivative liabilities in the consolidated statements of operations.

 

The Company assessed the classification of its outstanding common stock purchase warrants as of the date of issuance and determined that such instruments met the criteria for equity classification under the guidance in ASU 2017-11 “Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Feature”. The Company has no outstanding warrants that contain a “down round” feature under Topic 815 of ASU 2017-11.

 

Convertible Preferred Stock

 

The Company accounts for its convertible preferred stock under the provisions of ASC 480, “Distinguishing Liabilities from Equity” (“ASC 480”), 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. During the periods ended July 31, 2020 and April 30, 2020, the Company’s outstanding convertible preferred shares were accounted for as equity, with no liability recorded.

 

Convertible Instruments

 

The Company bifurcates conversion options from their host instruments and accounts 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.

  

Remediation and Asset Retirement Obligation

 

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. AROs 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 AROs annually or more frequently at interim periods if deemed necessary.

 

Foreign Currency Transactions

 

The reporting and functional currency of the Company is the U.S. dollar. Transactions denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing on the transaction dates. Assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing at the balance sheet date with any transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency included in the results of operations as incurred. Transaction gains or losses have not had, and are not expected to have, a material effect on the results of operations of the Company, and are included in General and administrative expenses.

 

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, “Accounting for Uncertain Income Tax Positions” (“ASC 740-10”). 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 Internal Revenue Service and state taxing authorities, generally for three years after they are filed.

 

The Unaudited Condensed Statements of Operations includes a tax refund receivable of $219,072 for the periods ended July 31, 2020 and April 30, 2020, under the Tax Cuts and Jobs Act of 2017 for carryovers of previously paid alternative minimum tax by Dataram Corporation.

 

Recent Accounting Pronouncements

 

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 effect on the financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an effect on or are unrelated to its financial condition, results of operations, cash flows or disclosures.

XML 20 R9.htm IDEA: XBRL DOCUMENT v3.20.2
Going Concern
3 Months Ended
Jul. 31, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Going Concern

NOTE 3 — GOING CONCERN

 

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As of July 31, 2020, the Company had cash of approximately $1.7 million, working capital of approximately $2.1 million, and an accumulated deficit of approximately $32.5 million. The Company had a net loss and cash used in operating activities of approximately $957,000 and $1.0 million, respectively, as of July 31, 2020. As a result of the utilization of cash in its operating activities, and the development of its assets, the Company has incurred losses since it commenced operations. The Company’s primary source of operating funds since inception has been equity financings. As of July 31, 2020, the Company had sufficient cash to fund its operations for approximately 6 to 9 months, prior to its merger with NPRC subsequent to the end of the quarter, and expected that it would be required to raise additional funds to fund its operations thereafter. These matters raise substantial doubt about the Company’s ability to continue as a going concern for the twelve months following the issuance of these financial statements.

 

Subsequent to the close of the quarter ended July 31, 2020, on August 11, 2020, the Company closed on a merger with Acquisition Corp and NPRC, together with a concurrent equity placement, under which the Company added approximately $7.9 million of net proceeds to its cash reserves. Upon receipt of the additional proceeds from the equity raise on August 11, 2020, the Company believes, but it cannot be certain it has adequate resources to fund its operations along with its long-term exploration activities for a period of at least 12 months from the date these financial statements are available until additional cash is raised.

 

The consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset amounts or the classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

XML 21 R10.htm IDEA: XBRL DOCUMENT v3.20.2
Mineral Rights
3 Months Ended
Jul. 31, 2020
Extractive Industries [Abstract]  
Mineral Rights

NOTE 4 — MINERAL RIGHTS

 

As of the date of these 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.

 

As of the dates presented, mineral properties consisted of the following:

 

    July 31, 2020     April 30, 2020  
CK Gold Project   $ 3,091,738     $ 3,091,738  
Keystone Project     1,028,885       1,028,885  
Gold Bar North Project     56,329       56,329  
Maggie Creek Project     1,986,607       1,986,607  
Total   $ 6,163,559     $ 6,163,559  
XML 22 R11.htm IDEA: XBRL DOCUMENT v3.20.2
Property
3 Months Ended
Jul. 31, 2020
Property, Plant and Equipment [Abstract]  
Property

NOTE 5 — PROPERTY

 

As of the dates presented, property consisted of the following:

 

    July 31, 2020     April 30, 2020  
Site costs   $ 151,057     $ 151,057  
Less: accumulated depreciation     (21,886 )     (17,686 )
Total   $ 129,171     $ 133,371  

 

For the three-month periods ended July 31, 2020 and 2019, depreciation expense amounted to $4,200 and $2,423, respectively.

XML 23 R12.htm IDEA: XBRL DOCUMENT v3.20.2
Asset Retirement Obligation
3 Months Ended
Jul. 31, 2020
Asset Retirement Obligation Disclosure [Abstract]  
Asset Retirement Obligation

NOTE 6 — ASSET RETIREMENT OBLIGATION

 

In conjunction with various permit approvals permitting the Company to undergo exploration activities at the CK Gold Project and Keystone Project, the Company has recorded an ARO based upon the reclamation plans submitted in connection with the various permits. The following table summarizes activity in the Company’s ARO for the periods presented:

 

    July 31, 2020     April 30, 2020  
             
Balance, beginning of period   $ 168,392     $ 88,746  
Addition and changes in estimates     -       69,172  
Accretion expense     4,060       10,474  
Balance, end of period   $ 172,452     $ 168,392  

 

For the three-month periods ended July 31, 2020 and 2019, accretion expense amounted to $4,060 and $2,140, respectively. There were no exploration activities or new disturbance on any of the Company’s projects during the three months ended July 31, 2020.

XML 24 R13.htm IDEA: XBRL DOCUMENT v3.20.2
Related Party Transactions
3 Months Ended
Jul. 31, 2020
Related Party Transactions [Abstract]  
Related Party Transactions

NOTE 7 — RELATED PARTY TRANSACTIONS

 

On April 16, 2019, the Company entered into a one-year consulting agreement with a director of the Company for providing services related to investor and strategic introduction to potential industry partners. In consideration for the services, the consultant was paid $3,750 per month in cash, and total shares of the Company’s common stock with a value of $45,000. In April 2019, the Company issued 4,592 shares of the Company’s common stock, valued at $45,000 at the market price on the dates of grant, in connection with this consulting agreement. This agreement was not renewed. The Company paid consulting fees to such director of $0 and $11,250 in cash during the three-month periods ended July 31, 2020 and 2019, respectively.

 

Accounts payable to related parties as of July 31, 2020 and April 30, 2019 was $34,497 and $3,459, respectively, and was reflected as accounts payable – related party in the accompanying consolidated balance sheets. The related party to which accounts were payable as of July 31, 2020 and 2019, was the Chief Financial Officer, who was owed a total of $34,497 (including $10,839 payable in shares of common stock) and a total of $3,459 (including $2,700 payable in shares of common stock), respectively.

XML 25 R14.htm IDEA: XBRL DOCUMENT v3.20.2
Stockholders' Equity
3 Months Ended
Jul. 31, 2020
Equity [Abstract]  
Stockholders' Equity

NOTE 8 — STOCKHOLDERS’ EQUITY

 

As of July 31, 2020, authorized capital stock consisted of 200,000,000 shares of common stock, par value $0.001 per share, and 50,000,000 shares of “blank check” preferred stock, par value $0.001 per share, of which 1,300,000 shares are designated as Series A Convertible Preferred Stock, 400,000 shares are designated as Series B Convertible Preferred Stock, 45,002 shares are designated as Series C Convertible Preferred Stock, 7,402 shares are designated as Series D Convertible Preferred Stock, 2,500 shares are designated as Series E Convertible Preferred Stock, 1,250 shares are designated as Series F Preferred Stock and 127 shares are designated as Series G Preferred Stock. The Company’s Board has the authority, without further action by the stockholders, to issue shares of preferred stock in one or more series and to fix the rights, preferences, privileges and restrictions granted to or imposed upon the preferred stock.

 

Effective on March 19, 2020, the Company filed an amendment to the Articles of Incorporation to effect the Reverse Stock Split (see Note 1). All share and per share information in this Quarterly Report on Form 10-Q has been retroactively adjusted to reflect the Reverse Stock Split. As of July 31, 2020, there were 2,925,625 shares of common stock issued and outstanding, and no shares of preferred stock outstanding.

 

Series G Convertible Preferred Stock

 

During the quarter ended July 31, 2020, the Company issued an aggregate of 20,357 shares of the Company’s common stock in exchange for the conversion of 57 shares of Series G Preferred Stock. As of July 31, 2020, all Series G Preferred Stock had converted and there were no shares of Series G Preferred Stock outstanding.

 

Common Stock Issued, Restricted Stock Awards, and RSUs Granted for Services

 

On April 30, 2020, the Compensation Committee of the Board awarded four directors of the Company an aggregate of 1,875 shares of restricted stock pursuant to respective restricted stock award agreements. The shares of restricted stock vested immediately on the date of grant. The total 1,875 shares of restricted stock had a fair value of $9,581, or $5.11 per share, based on the quoted trading price on the date of grant, which was fully vested and expensed immediately. These shares were issued on May 5, 2020, subsequent to the close of the fiscal year 2020.

  

On July 31, 2020, the Compensation Committee of the Board awarded four directors of the Company an aggregate of 1,875 shares of restricted stock pursuant to respective restricted stock award agreements. The shares of restricted stock vested immediately on the date of grant. The total 1,875 shares of restricted stock had a fair value of $15,244, or $8.13 per share, based on the quoted trading price on the date of grant, which was fully vested and expensed immediately. These shares were issued subsequent to the close of the fiscal quarter ended July 31, 2020.

 

A total of $20,218 and $52,682 was expensed for the three-month periods ended July 31, 2020 and 2019, respectively. A balance of $334,750 remains to be expensed over future vesting periods.

 

Equity Incentive Plan

 

In August 2017, the Board approved the Company’s 2017 Equity Incentive Plan (the “2017 Plan”) including the reservation of 165,000 shares of common stock thereunder.

 

On August 6, 2019, the Board approved and adopted, subject to stockholder approval, the U.S. Gold Corp. 2020 Stock Incentive Plan (the “2020 Plan”). The 2020 Plan reserves 330,710 shares for future issuance to officers, directors, employees and contractors as directed from time to time by the Compensation Committee of the Board. The Board directed that the 2020 Plan be submitted to the Company’s stockholders for their approval at the 2019 Annual Meeting of Stockholders of the Company (the “Annual Meeting”), which was held on September 18, 2019. The 2020 Plan was approved by a vote of stockholders at the Annual Meeting. With the approval and effectivity of the 2020 Plan, no further grants will be made under the 2017 Plan.

 

Stock options

 

The following is a summary of the Company’s stock option activity during the periods ended July 31, 2020 and April 30, 2020:

 

    Number of Options     Weighted Average Exercise Price     Weighted Average Remaining Contractual Life (Years)  
Balance at April 30, 2020     100,000     $ 14.31       2.87  
Granted     -       -       -  
Exercised                  
Forfeited     -       -        
Cancelled                  
Balance at July 31, 2020     100,000       14.31       2.63  
                         
Options exercisable at end of period     76,667     $ 14.49          
Options expected to vest     23,333     $ 13.69          
Weighted average fair value of options granted during the period           $ -          

 

At July 31, 2020 and April 30, 2020, the aggregate intrinsic value of options outstanding and exercisable was $150 and $0 for each period.

 

Stock-based compensation for stock options recorded in the consolidated statements of operations totaled $51,262 and $52,214 for the three-month periods ended July 31, 2020 and 2019, respectively. A balance of $162,788 remains to be expensed over future vesting periods.

  

Stock Warrants

 

A summary of the Company’s outstanding warrants to purchase shares of common stock as of July 31, 2020 and changes during the three-month period then ended are presented below:

 

    Number of Warrants    

Weighted Average

Exercise

Price

   

Weighted Average Remaining Contractual

Life

(Years)

 
Warrants with no Class designation:                        
Balance at April 30, 2020     527,378     $ 14.83       3.73  
Granted                  
Exercised                  
Forfeited                  
Canceled                  
Balance at July 31, 2020     527,378       14.83       3.48  
Class A Warrants:                        
Balance at April 30, 2020     219,375       11.40       4.22  
Granted                  
Exercised                  
Forfeited                  
Canceled                  
Balance at July 31, 2020     219,375       11.40       3.97  
Total Warrants Outstanding at July 31, 2020     746,753     $ 13.82       3.62  
Warrants exercisable at end of period     389,611     $ 20.07          
Weighted average fair value of warrants granted during the period           $          

 

As of July 31, 2020, the aggregate intrinsic value of warrants outstanding and exercisable was $0.

XML 26 R15.htm IDEA: XBRL DOCUMENT v3.20.2
Net Loss Per Common Share
3 Months Ended
Jul. 31, 2020
Earnings Per Share [Abstract]  
Net Loss Per Common Share

NOTE 9 — NET LOSS PER COMMON SHARE

 

Net loss per share of common stock 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, 2020     July 31, 2019  
Common stock equivalents:                
Preferred stock     -       -  
Restricted stock units     32,500       111,228  
Stock options     100,000       136,895  
Stock warrants     746,753       499,360  
Total     879,253       747,483  
XML 27 R16.htm IDEA: XBRL DOCUMENT v3.20.2
Commitments and Contingencies
3 Months Ended
Jul. 31, 2020
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies

NOTE 10 — COMMITMENTS AND CONTINGENCIES

 

The CK Gold 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 CK Gold Project. Leases to explore for or use of natural resources are outside the scope of ASU 2016-02 “Leases”. There are no lease contracts for office space or other Company expenses which qualify for treatment as capital assets under ASU 2016-02.

 

The Company’s rights to the CK Gold Project arise under two State of Wyoming mineral leases; 1) State of Wyoming Mining Lease No. 0-40828, consisting of 640 acres, and 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 of Wyoming:

  

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 at July 31, 2020 under these mining leases are as follows, each payment to be made in the fourth quarter of the respective fiscal years:

 

Fiscal 2021   $ 2,240  
Fiscal 2022     2,240  
Fiscal 2023     2,240  
Fiscal 2024     960  
    $ 7,680  

 

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

 

Orevada option:

 

Pursuant to the acquisition of NumberCo on September 10, 2019, the Company acquired from Orevada its right to the Option Agreement. The option agreement grants Orevada the exclusive right and option to earn-in and acquire up to 50% undivided interest in a property called Maggie Creek, located in Eureka County, Nevada by completing the Initial Earn-in over a seven-year period, as amended for year one and two to move the $100,000 first year earn-in into the second year:

 

First agreement year   $ 0  
Second agreement year     300,000  
Third agreement year     500,000  
Fourth agreement year     700,000  
Fifth agreement year     1,000,000  
Sixth agreement year     1,000,000  
Seventh agreement year     1,000,000  
    $ 4,500,000  

 

The Initial Earn-in is vested by paying $250,000 to Renaissance at the end of the Initial Earn-in period.

XML 28 R17.htm IDEA: XBRL DOCUMENT v3.20.2
Subsequent Events
3 Months Ended
Jul. 31, 2020
Subsequent Events [Abstract]  
Subsequent Events

NOTE 11 — SUBSEQUENT EVENTS

 

Northern Panther Merger Agreement

 

On August 10, 2020, the Company entered into the Merger Agreement with Acquisition Corp., NPRC and the Stockholder Representative named therein, pursuant to which Acquisition Corp. merged with and into NPRC, with NPRC surviving as a wholly-owned subsidiary of the Company (such transaction, the “Merger”).

 

At the closing of the Merger, which occurred on August 11, 2020, the shares of common stock of NPRC outstanding immediately prior to the Merger (other than shares held as treasury stock) were converted into and represent the right to receive (i) 581,053 shares of the Company’s common stock, par value $0.001 per share, and (ii) 106,894 shares of the Company’s Series H Convertible Preferred Stock, par value $0.001 per share (the “Series H Preferred Stock” and, together with the common stock, the “Merger Consideration”), which Series H Preferred Stock is expected to convert into common stock on a 1 for 10 basis upon receipt of the approval by the requisite vote of the Company’s stockholders at the next annual general meeting, scheduled for October 27, 2020.

 

The Series H Preferred Stock issued as part of the Merger Consideration is convertible at the option of the holder, subject to an exchange cap, which prohibits the conversion of the Series H Preferred Stock if such conversion would result in a violation of the rules of the Nasdaq Capital Market. Holders of the Series H Preferred Stock have the same voting rights and liquidation preference as holders of common stock, on an as-converted basis.

 

The common stock issued pursuant to the Merger Agreement as part of the Merger Consideration is being sold as “restricted stock” subject to the six-month minimum hold period under Rule 144 under the Securities Act of 1933, as amended. In addition, pursuant to certain leak-out agreements entered into concurrently with the execution of the Merger Agreement by and between the stockholders of NPRC and the Company, the shares of common stock issued pursuant to the Merger Agreement, including shares issued upon conversion of the Series H Convertible Preferred Stock, are subject to a leak-out provision limiting future share sales of the Company’s common stock held by the holders of such shares to no more than 10% of the daily trading volume.

 

In connection with the Merger, Luke Norman Consulting Ltd. received a finder’s fee equal to the quotient of (a) 5% of the purchase value for the Merger and (b) the 30-day Volume Weighted Average Price (“VWAP”) of a share of our common stock as reported on the Nasdaq Capital Market prior to the execution Merger Agreement, which was paid in 82,500 shares restricted common stock on the closing date of the Merger.

 

Total consideration given consist of the common shares and common share equivalents of 1,650,000 shares, valued at the Volume Weighted Average Price for the 30-day period immediately prior to the date of the Merger Agreement of $7.6612 per common share, or $12,640,980. Net assets purchased consist of:

 

Cash – US Dollars   $ 2,500,000  
Intangible assets – (mineral rights) Challis Gold Project     10,249,632  
Total assets acquired at fair value     12,749,632  
Total Liabilities assumed at fair value – US Dollars     (108,652 )
Total purchase consideration   $ 12,640,980  

 

Accounting Treatment

 

Management analyzed the Merger Agreement to determine if the Company acquired a business or acquired assets. The FASB issued new guidance (ASU 2017-01) that changed the definition of a business to assist entities with evaluating when a set of transferred assets and activities is a business. The guidance requires an entity to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets; if so, the set of transferred assets and activities is not a business. The guidance also requires a business to include at least one substantive process and narrows the definition of outputs by more closely aligning it with how outputs are described in ASC 606. Under the new guidance, an entity first determines whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets. If this threshold is met, the set is not a business. Under the ASU, a set is not a business when substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets.

 

Pursuant to ASC 805-10-55-5, to be capable of being conducted and managed, as further described in 805-10-55-3A, an integrated set of activities and assets require two essential elements, at a minimum, include inputs and substantive process that together significantly contribute to the ability to create output. Management first considered the guidance in paragraphs 805-10-55-5A through 55-5C.

 

Per 805-10-55-5A, if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets, the set is not considered a business. Gross assets acquired should exclude cash and cash equivalents, as well as other identified assets which are not part of this acquisition.

 

The identifiable assets that could be recognized in the agreements are 1) cash and 2) mineral rights on a gold exploration project in Idaho called the Challis Gold exploration project. Pursuant to 805-10-55-5A, NPRC is a newly formed Nevada corporation, with limited operating history and no established bank or business accounts. The only identifiable assets are the escrowed $2.5 million in cash (excluded from the analysis per ASC 8005-10-55-5A) and the Challis Gold Project. Management has excluded cash in the determination of the gross assets, and thus determined that the Challis Gold project represents substantially all of the fair value of the gross assets.

 

Pursuant to ASC 805-10-55-5A, the Company concludes that the acquisition of NPRC, and its wholly owned subsidiaries, is an acquisition of assets.

 

Securities Purchase Agreement

 

In connection with the Merger, on August 10, 2020, the Company entered into a securities purchase agreement (the “SPA”) with certain investors (the “Purchasers”), pursuant to which the Company sold to the Purchasers in a private placement (i) an aggregate of 921,666 shares of the Company’s Series I Convertible Preferred Stock, par value $0.001 per share (the “Series I Preferred Stock”) and (ii) warrants to purchase an aggregate of 921,666 shares of common stock at an exercise price of $6.00 per share (the “Warrants”) for aggregate consideration of $5,530,004.

 

The Series I Preferred Stock has substantially the same terms as the Series H Preferred Stock, except that each share of Series I Preferred Stock is convertible into one share of common stock, and is subject to an exchange cap. The Warrants are exercisable in whole or in part at any time, from time to time following the initial exercise date, terminate five years following the issuance, and are subject to an exchange cap. The sale of the Series I Preferred Stock and Warrants under the SPA closed on August 11, 2020.

 

The Warrants and the shares of the Company’s common stock issuable upon the exercise of the Warrants, the conversion of the Series H Preferred Stock, and the conversion of the Series I Preferred Stock are not being registered under the Securities Act and are being offered pursuant to and in reliance on the exemption provided in Section 4(a)(2) under the Securities Act and Rule 506(b) promulgated thereunder.

XML 29 R18.htm IDEA: XBRL DOCUMENT v3.20.2
Summary of Significant Accounting Policies (Policies)
3 Months Ended
Jul. 31, 2020
Accounting Policies [Abstract]  
Basis of Presentation and Principles of Consolidation

Basis of presentation and principles of consolidation

 

The accompanying interim unaudited condensed consolidated financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), the instructions to Form 10-Q, 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 presents the unaudited condensed consolidated financial statements of the Company and its wholly-owned subsidiaries as of July 31, 2020. 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, 2020, which are contained in the Form 10-K filed on July 13, 2020. The unaudited condensed consolidated balance sheet as of April 30, 2020 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. Operating results for the three-month period ended July 31, 2020 are not necessarily indicative of the results to be expected for the year ending April 30, 2021.

Use of Estimates and Assumptions

Use of Estimates and Assumptions

 

In preparing the 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 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, stock-based compensation, the fair value of common and preferred stock, valuation of warrants, asset retirement obligations and the valuation of deferred tax assets and liabilities.

Fair Value Measurements

Fair Value Measurements

 

The Company has adopted Accounting Standards Codification (“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 U.S. GAAP, which 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.

 

At July 31, 2020 and April 30, 2020, the Company had no financial instruments or liabilities accounted for at fair value on a recurring basis or nonrecurring basis.

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets

 

Prepaid expenses and other current assets of $388,715 and $212,718 at July 31, 2020 and April 30, 2020, respectively, consist primarily of costs paid for future services which will occur within a year. Prepaid expenses principally include prepayments in cash and equity instruments for consulting, public relations, and business advisory services, insurance premiums, mining claim fees and mineral lease fees which are being amortized over the terms of their respective agreements.

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. The Company did not recognize any impairment during the periods ended July 31, 2020 and April 30, 2020.

Mineral Rights

Mineral Rights

 

Costs of leasing, exploring, 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 will be 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.

 

Leases to explore for or use of natural resources are outside the scope of ASU 2016-02, “Leases”.

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.

  

ASU 2018-07 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 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 effect on the Company’s consolidated financial statements and related disclosures.

Accounting for Warrants

Accounting for Warrants

 

Warrants are accounted for in accordance with the applicable accounting guidance provided in ASC 815, “Derivatives and Hedging” (“ASC 815”) as either derivative liabilities or as equity instruments, depending on the specific terms of the agreements. The Company classifies as equity any contracts that (i) require physical settlement or net-share settlement or (ii) give 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) give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement). Instruments that are classified as liabilities are recorded at fair value at each reporting period, with any change in fair value recognized as a component of change in fair value of derivative liabilities in the consolidated statements of operations.

 

The Company assessed the classification of its outstanding common stock purchase warrants as of the date of issuance and determined that such instruments met the criteria for equity classification under the guidance in ASU 2017-11 “Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Feature”. The Company has no outstanding warrants that contain a “down round” feature under Topic 815 of ASU 2017-11.

Convertible Preferred Stock

Convertible Preferred Stock

 

The Company accounts for its convertible preferred stock under the provisions of ASC 480, “Distinguishing Liabilities from Equity” (“ASC 480”), 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. During the periods ended July 31, 2020 and April 30, 2020, the Company’s outstanding convertible preferred shares were accounted for as equity, with no liability recorded.

Convertible Instruments

Convertible Instruments

 

The Company bifurcates conversion options from their host instruments and accounts 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.

Redemption and Asset Retirement Obligation

Remediation and Asset Retirement Obligation

 

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. AROs 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 AROs annually or more frequently at interim periods if deemed necessary.

Foreign Currency Transactions

Foreign Currency Transactions

 

The reporting and functional currency of the Company is the U.S. dollar. Transactions denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing on the transaction dates. Assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing at the balance sheet date with any transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency included in the results of operations as incurred. Transaction gains or losses have not had, and are not expected to have, a material effect on the results of operations of the Company, and are included in General and administrative expenses.

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, “Accounting for Uncertain Income Tax Positions” (“ASC 740-10”). 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 Internal Revenue Service and state taxing authorities, generally for three years after they are filed.

 

The Unaudited Condensed Statements of Operations includes a tax refund receivable of $219,072 for the periods ended July 31, 2020 and April 30, 2020, under the Tax Cuts and Jobs Act of 2017 for carryovers of previously paid alternative minimum tax by Dataram Corporation.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

 

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 effect on the financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an effect on or are unrelated to its financial condition, results of operations, cash flows or disclosures.

XML 30 R19.htm IDEA: XBRL DOCUMENT v3.20.2
Mineral Rights (Tables)
3 Months Ended
Jul. 31, 2020
Extractive Industries [Abstract]  
Schedule of Mineral Properties

As of the dates presented, mineral properties consisted of the following:

 

    July 31, 2020     April 30, 2020  
CK Gold Project   $ 3,091,738     $ 3,091,738  
Keystone Project     1,028,885       1,028,885  
Gold Bar North Project     56,329       56,329  
Maggie Creek Project     1,986,607       1,986,607  
Total   $ 6,163,559     $ 6,163,559  
XML 31 R20.htm IDEA: XBRL DOCUMENT v3.20.2
Property (Tables)
3 Months Ended
Jul. 31, 2020
Property, Plant and Equipment [Abstract]  
Schedule of Property and Equipment

As of the dates presented, property consisted of the following:

 

    July 31, 2020     April 30, 2020  
Site costs   $ 151,057     $ 151,057  
Less: accumulated depreciation     (21,886 )     (17,686 )
Total   $ 129,171     $ 133,371  
XML 32 R21.htm IDEA: XBRL DOCUMENT v3.20.2
Asset Retirement Obligation (Tables)
3 Months Ended
Jul. 31, 2020
Asset Retirement Obligation Disclosure [Abstract]  
Schedule of Asset Retirement Obligation

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

 

    July 31, 2020     April 30, 2020  
             
Balance, beginning of period   $ 168,392     $ 88,746  
Addition and changes in estimates     -       69,172  
Accretion expense     4,060       10,474  
Balance, end of period   $ 172,452     $ 168,392  
XML 33 R22.htm IDEA: XBRL DOCUMENT v3.20.2
Stockholders' Equity (Tables)
3 Months Ended
Jul. 31, 2020
Equity [Abstract]  
Schedule of Stock Option Activity

The following is a summary of the Company’s stock option activity during the periods ended July 31, 2020 and April 30, 2020:

 

    Number of Options     Weighted Average Exercise Price     Weighted Average Remaining Contractual Life (Years)  
Balance at April 30, 2020     100,000     $ 14.31       2.87  
Granted     -       -       -  
Exercised                  
Forfeited     -       -        
Cancelled                  
Balance at July 31, 2020     100,000       14.31       2.63  
                         
Options exercisable at end of period     76,667     $ 14.49          
Options expected to vest     23,333     $ 13.69          
Weighted average fair value of options granted during the period           $ -          
Schedule of Stock Warrant Activity

A summary of the Company’s outstanding warrants to purchase shares of common stock as of July 31, 2020 and changes during the three-month period then ended are presented below:

 

    Number of Warrants    

Weighted Average

Exercise

Price

   

Weighted Average Remaining Contractual

Life

(Years)

 
Warrants with no Class designation:                        
Balance at April 30, 2020     527,378     $ 14.83       3.73  
Granted                  
Exercised                  
Forfeited                  
Canceled                  
Balance at July 31, 2020     527,378       14.83       3.48  
Class A Warrants:                        
Balance at April 30, 2020     219,375       11.40       4.22  
Granted                  
Exercised                  
Forfeited                  
Canceled                  
Balance at July 31, 2020     219,375       11.40       3.97  
Total Warrants Outstanding at July 31, 2020     746,753     $ 13.82       3.62  
Warrants exercisable at end of period     389,611     $ 20.07          
Weighted average fair value of warrants granted during the period           $          
XML 34 R23.htm IDEA: XBRL DOCUMENT v3.20.2
Net Loss Per Common Share (Tables)
3 Months Ended
Jul. 31, 2020
Earnings Per Share [Abstract]  
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share
    July 31, 2020     July 31, 2019  
Common stock equivalents:                
Preferred stock     -       -  
Restricted stock units     32,500       111,228  
Stock options     100,000       136,895  
Stock warrants     746,753       499,360  
Total     879,253       747,483  
XML 35 R24.htm IDEA: XBRL DOCUMENT v3.20.2
Commitments and Contingencies (Tables)
3 Months Ended
Jul. 31, 2020
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 at July 31, 2020 under these mining leases are as follows, each payment to be made in the fourth quarter of the respective fiscal years:

 

Fiscal 2021   $ 2,240  
Fiscal 2022     2,240  
Fiscal 2023     2,240  
Fiscal 2024     960  
    $ 7,680  
Schedule of Right and Option to Earn-in and Acquire Undivided Interest

The option agreement grants Orevada the exclusive right and option to earn-in and acquire up to 50% undivided interest in a property called Maggie Creek, located in Eureka County, Nevada by completing the Initial Earn-in over a seven-year period, as amended for year one and two to move the $100,000 first year earn-in into the second year:

 

First agreement year   $ 0  
Second agreement year     300,000  
Third agreement year     500,000  
Fourth agreement year     700,000  
Fifth agreement year     1,000,000  
Sixth agreement year     1,000,000  
Seventh agreement year     1,000,000  
    $ 4,500,000  
XML 36 R25.htm IDEA: XBRL DOCUMENT v3.20.2
Subsequent Events (Tables)
3 Months Ended
Jul. 31, 2020
Subsequent Events [Abstract]  
Schedule of Net Assets Purchased Consideration

Net assets purchased consist of:

 

Cash – US Dollars   $ 2,500,000  
Intangible assets – (mineral rights) Challis Gold Project     10,249,632  
Total assets acquired at fair value     12,749,632  
Total Liabilities assumed at fair value – US Dollars     (108,652 )
Total purchase consideration   $ 12,640,980  
XML 37 R26.htm IDEA: XBRL DOCUMENT v3.20.2
Organization and Description of Business (Details Narrative) - shares
Mar. 17, 2020
Sep. 10, 2019
May 23, 2017
Equity ownership interest rate percent     90.00%
Board of Directors [Member]      
Reverse stock split description 1-for-10 reverse stock split of the Company's issued and outstanding shares of common stock (the "Reverse Stock Split"),    
Share Exchange Agreement [Member]      
Number of shares issued for common stock   200,000  
XML 38 R27.htm IDEA: XBRL DOCUMENT v3.20.2
Summary of Significant Accounting Policies (Details Narrative) - USD ($)
3 Months Ended 12 Months Ended
Jul. 31, 2020
Apr. 30, 2020
Apr. 30, 2019
Accounting Policies [Abstract]      
Prepaid expenses and other current assets $ 388,715 $ 212,718 $ 212,718
Impairment of goodwill  
Tax refund receivable $ 219,072 $ 219,072  
XML 39 R28.htm IDEA: XBRL DOCUMENT v3.20.2
Going Concern (Details Narrative) - USD ($)
3 Months Ended
Aug. 11, 2020
Jul. 31, 2020
Jul. 31, 2019
Apr. 30, 2020
Cash   $ 1,737,047   $ 2,749,957
Working capital   (2,100,000)    
Accumulated deficit   (32,545,072)   $ (31,587,952)
Net loss   (957,120) $ (1,308,599)  
Cash used in operating activities   $ (1,012,910) $ (1,059,677)  
Subsequent Event [Member]        
Proceeds from cash reserves $ 7,900,000      
XML 40 R29.htm IDEA: XBRL DOCUMENT v3.20.2
Mineral Rights - Schedule of Mineral Properties (Details) - USD ($)
Jul. 31, 2020
Apr. 30, 2020
Total $ 6,163,559 $ 6,163,559
CK Gold 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
Maggie Creek Project [Member]    
Total $ 1,986,607 $ 1,986,607
XML 41 R30.htm IDEA: XBRL DOCUMENT v3.20.2
Property (Details Narrative) - USD ($)
3 Months Ended
Jul. 31, 2020
Jul. 31, 2019
Property, Plant and Equipment [Abstract]    
Depreciation expense $ 4,200 $ 2,423
XML 42 R31.htm IDEA: XBRL DOCUMENT v3.20.2
Property - Schedule of Property and Equipment (Details) - USD ($)
Jul. 31, 2020
Apr. 30, 2020
Less: accumulated depreciation $ (21,886) $ (17,686)
Total 129,171 133,371
Site Costs [Member]    
Property gross $ 151,057 $ 151,057
XML 43 R32.htm IDEA: XBRL DOCUMENT v3.20.2
Asset Retirement Obligation (Details Narrative) - USD ($)
3 Months Ended 12 Months Ended
Jul. 31, 2020
Jul. 31, 2019
Apr. 30, 2020
Asset Retirement Obligation Disclosure [Abstract]      
Accretion expense $ 4,060 $ 2,140 $ 10,474
XML 44 R33.htm IDEA: XBRL DOCUMENT v3.20.2
Asset Retirement Obligation - Schedule of Asset Retirement Obligation (Details) - USD ($)
3 Months Ended 12 Months Ended
Jul. 31, 2020
Jul. 31, 2019
Apr. 30, 2020
Asset Retirement Obligation Disclosure [Abstract]      
Balance, beginning of period $ 168,392 $ 88,746 $ 88,746
Addition and changes in estimates   69,172
Accretion expense 4,060 $ 2,140 10,474
Balance, end of period $ 172,452   $ 168,392
XML 45 R34.htm IDEA: XBRL DOCUMENT v3.20.2
Related Party Transactions (Details Narrative) - USD ($)
1 Months Ended 3 Months Ended
Apr. 16, 2019
Apr. 30, 2019
Jul. 31, 2020
Jul. 31, 2019
Apr. 30, 2020
Shares issued for services, value       $ 25,000  
Consulting fees     $ 550,800 644,073  
Accounts payable to related party     34,497   $ 3,459
Directors [Member]          
Consulting fees     0 11,250  
Chief Financial Officer [Member]          
Accounts payable to related party     34,497 3,459  
Accounts payable in shares of common stock     $ 10,839 $ 2,700  
Consulting Agreement [Member]          
Payment due to related parties $ 3,750        
Shares issued for services, value $ 45,000 $ 45,000      
Shares issued for services   4,592      
XML 46 R35.htm IDEA: XBRL DOCUMENT v3.20.2
Stockholders' Equity (Details Narrative) - USD ($)
3 Months Ended
Jul. 31, 2020
Apr. 30, 2020
Jul. 31, 2020
Jul. 31, 2019
Aug. 06, 2019
Aug. 31, 2017
Common stock, shares authorized 200,000,000 200,000,000 200,000,000      
Common stock, par value $ 0.001 $ 0.001 $ 0.001      
Preferred stock, shares designated 50,000,000 50,000,000 50,000,000      
Preferred stock, par value $ 0.001 $ 0.001 $ 0.001      
Common stock, shares issued 2,925,625 2,903,393 2,925,625      
Common stock, shares outstanding 2,925,625 2,903,393 2,925,625      
Number of performance based restricted stock, value     $ 20,218 $ 52,682    
Warrants outstanding, intrinsic value $ 0   $ 0      
Warrants exercisable, intrinsic value $ 0   $ 0      
2017 Equity Incentive Plan [Member]            
Share based compensation     $ 51,262 52,214    
Common stock reservation of shares           165,000
Stock option, outstanding intrinsic value $ 150 $ 0 150      
Stock option, exercisable intrinsic value $ 150 $ 0 $ 150      
Remaining balance of unvested stock options 162,788   162,788      
2020 Incentive Plan [Member]            
Common stock reservation of shares         330,710  
Four Board of Directors [Member] | Restricted Stock [Member]            
Shares issued price per share $ 8.13 $ 5.11 $ 8.13      
Share based compensation     $ 20,218 $ 52,682    
Number of performance based restricted stock 1,875 1,875        
Number of performance based restricted stock, value $ 15,244 $ 9,581        
Four Board of Directors [Member] | Restricted Stock [Member] | Remains to be Expensed Over Future Vesting Periods [Member]            
Share based compensation     $ 334,750      
Series A Convertible Preferred Stock [Member]            
Preferred stock, shares designated 1,300,000   1,300,000      
Series B Convertible Preferred Stock [Member]            
Preferred stock, shares designated 400,000   400,000      
Series C Convertible Preferred Stock [Member]            
Preferred stock, shares designated 45,002   45,002      
Series D Convertible Preferred Stock [Member]            
Preferred stock, shares designated 7,402   7,402      
Series E Convertible Preferred Stock [Member]            
Preferred stock, shares designated 2,500   2,500      
Series F Convertible Preferred Stock [Member]            
Preferred stock, shares designated 1,250   1,250      
Series G Preferred Stock [Member]            
Preferred stock, shares designated 127   127      
Series G Preferred Stock [Member]            
Common stock issue shares     20,357      
Shares issued upon conversion of preferred stock 57   57      
XML 47 R36.htm IDEA: XBRL DOCUMENT v3.20.2
Stockholders' Equity - Schedule of Stock Option Activity (Details)
3 Months Ended
Jul. 31, 2020
$ / shares
shares
Equity [Abstract]  
Number of Options Outstanding, Beginning of Period | shares 100,000
Number of Options, Granted | shares
Number of Options, Exercised | shares
Number of Options, Forfeited | shares
Number of Options, Cancelled | shares
Number of Options Outstanding, End of Period | shares 100,000
Number of Options exercisable at end of period | shares 76,667
Number of Options expected to vest | shares 23,333
Weighted Average Exercise Price Outstanding, Beginning of Period $ 14.31
Weighted Average Exercise Price, Granted
Weighted Average Exercise Price, Exercised
Weighted Average Exercise Price, Forfeited
Weighted Average Exercise Price, Cancelled
Weighted Average Exercise Price Outstanding, End of Period 14.31
Weighted Average Exercise Price Options exercisable at end of period 14.49
Weighted Average Exercise Price Options expected to vest 13.69
Weighted Average Exercise Price Weighted average fair value of options granted during the period
Weighted Average Remaining Contractual Life (Years), Beginning of Period 2 years 10 months 14 days
Weighted Average Remaining Contractual Life in Years, Granted 0 years
Weighted Average Remaining Contractual Life (Years), Ending of Period 2 years 7 months 17 days
XML 48 R37.htm IDEA: XBRL DOCUMENT v3.20.2
Stockholders' Equity - Schedule of Stock Warrant Activity (Details)
3 Months Ended
Jul. 31, 2020
$ / shares
shares
Number of Warrants Outstanding, End of Period | shares 746,753
Warrants exercisable at end of period | shares 389,611
Weighted Average Exercise Price of Warrants Outstanding, End of Period $ 13.82
Weighted Average Exercise Price, exercisable at end of period 20.07
Weighted average fair value of warrants granted during the period
Weighted Average Remaining Contractual Life in Years, End of Period 3 years 7 months 13 days
Warrants with No Class Designation [Member]  
Number of Warrants Outstanding, Beginning of Period | shares 527,378
Number of Warrants, Granted | shares
Number of Warrants, Exercised | shares
Number of Warrants, Forfeited | shares
Number of Warrants, Canceled | shares
Number of Warrants Outstanding, End of Period | shares 527,378
Weighted Average Exercise Price of Warrants Outstanding, Beginning of Period $ 14.83
Weighted Average Exercise Price, Granted
Weighted Average Exercise Price, Exercised
Weighted Average Exercise Price, Forfeited, with no financial effect
Weighted Average Exercise Price, Canceled
Weighted Average Exercise Price of Warrants Outstanding, End of Period $ 14.83
Weighted Average Remaining Contractual Life in Years, Beginning of Period 3 years 8 months 23 days
Weighted Average Remaining Contractual Life in Years, Granted 0 years
Weighted Average Remaining Contractual Life in Years, End of Period 3 years 5 months 23 days
Class A Warrants [Member]  
Number of Warrants Outstanding, Beginning of Period | shares 219,375
Number of Warrants, Granted | shares
Number of Warrants, Exercised | shares
Number of Warrants, Forfeited | shares
Number of Warrants, Canceled | shares
Number of Warrants Outstanding, End of Period | shares 219,375
Weighted Average Exercise Price of Warrants Outstanding, Beginning of Period $ 11.40
Weighted Average Exercise Price, Granted
Weighted Average Exercise Price, Exercised
Weighted Average Exercise Price, Forfeited, with no financial effect
Weighted Average Exercise Price, Canceled
Weighted Average Exercise Price of Warrants Outstanding, End of Period $ 11.40
Weighted Average Remaining Contractual Life in Years, Beginning of Period 4 years 2 months 19 days
Weighted Average Remaining Contractual Life in Years, Granted 0 years
Weighted Average Remaining Contractual Life in Years, End of Period 3 years 11 months 19 days
XML 49 R38.htm IDEA: XBRL DOCUMENT v3.20.2
Net Loss Per Common Share - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares
3 Months Ended
Jul. 31, 2020
Jul. 31, 2019
Total 879,253 747,483
Preferred Stock [Member]    
Total
Restricted Stock Units [Member]    
Total 32,500 111,228
Stock Options [Member]    
Total 100,000 136,895
Stock Warrants [Member]    
Total 746,753 499,360
XML 50 R39.htm IDEA: XBRL DOCUMENT v3.20.2
Commitments and Contingencies (Details Narrative)
3 Months Ended
Sep. 10, 2019
Jul. 31, 2020
USD ($)
a
$ / T
Renaissance Exploration Inc [Member]    
Payment to initial earn in amount | $   $ 250,000
NumberCo [Member]    
Undivided interest Percentage 0.50  
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   2.00
Lease annual payment per acre third ten year term   3.00
Lease annual payment per acre thereafter   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   2.00
Lease annual payment per acre third ten year term   3.00
Lease annual payment per acre thereafter   4.00
XML 51 R40.htm IDEA: XBRL DOCUMENT v3.20.2
Commitments and Contingencies - Schedule of Royalty Payable (Details)
Jul. 31, 2020
$ / 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 52 R41.htm IDEA: XBRL DOCUMENT v3.20.2
Commitments and Contingencies - Schedule of Future Minimum Lease Payments (Details)
Jul. 31, 2020
USD ($)
Commitments and Contingencies Disclosure [Abstract]  
Fiscal 2021 $ 2,240
Fiscal 2022 2,240
Fiscal 2023 2,240
Fiscal 2024 960
Total $ 7,680
XML 53 R42.htm IDEA: XBRL DOCUMENT v3.20.2
Commitments and Contingencies - Schedule of Right and Option to Earn-in and Acquire Undivided Interest (Details)
Sep. 10, 2019
USD ($)
Initial earn in amount $ 4,500,000
First Agreement Year [Member]  
Initial earn in amount 0
Second Agreement Year [Member]  
Initial earn in amount 300,000
Third Agreement Year [Member]  
Initial earn in amount 500,000
Fourth Agreement Year [Member]  
Initial earn in amount 700,000
Fifth Agreement Year [Member]  
Initial earn in amount 1,000,000
Sixth Agreement Year [Member]  
Initial earn in amount 1,000,000
Seventh Agreement Year [Member]  
Initial earn in amount $ 1,000,000
XML 54 R43.htm IDEA: XBRL DOCUMENT v3.20.2
Subsequent Events (Details Narrative) - USD ($)
3 Months Ended
Aug. 11, 2020
Aug. 10, 2020
Jul. 31, 2020
Jul. 31, 2019
Common Stock [Member]        
Number of shares of restricted common stock     1,875
Subsequent Event [Member] | Merger Agreement [Member] | Luke Norman Consulting Ltd [Member]        
Purchase value, percentage 5.00%      
Number of shares of restricted common stock 82,500      
Subsequent Event [Member] | Merger Agreement [Member] | Northern Panther [Member]        
Share issued price per share $ 7.6612      
Reverse stock split description Series H Preferred Stock is expected to convert into common stock on a 1 for 10 basis upon receipt of the approval by the requisite vote of the Company's stockholders at the next annual general meeting,      
Business acquisition, equity interest issued, number of shares 1,650,000      
Business acquisition, purchase consideration $ 12,640,980      
Subsequent Event [Member] | Merger Agreement [Member] | Northern Panther [Member] | Series H Preferred Stock [Member]        
Number of shares issued for acquisition, shares 106,894      
Share issued price per share $ 0.001      
Subsequent Event [Member] | Merger Agreement [Member] | Northern Panther [Member] | Common Stock [Member]        
Number of shares issued for acquisition, shares 581,053      
Share issued price per share $ 0.001      
Subsequent Event [Member] | Securities Purchase Agreement [Member] | Private Placement [Member]        
Business acquisition, purchase consideration   $ 5,530,004    
Number of warrants to purchase common shares   921,666    
Warrants exercise price per share   $ 6.00    
Subsequent Event [Member] | Securities Purchase Agreement [Member] | Series I Convertible Preferred Stock [Member] | Private Placement [Member]        
Number of shares sold during period   921,666    
Shares sold, price per share   $ 0.001    
XML 55 R44.htm IDEA: XBRL DOCUMENT v3.20.2
Subsequent Events - Schedule of Net Assets Purchased Consideration (Details) - Subsequent Event [Member] - Merger Agreement [Member] - Northern Panther [Member]
Aug. 10, 2020
USD ($)
Cash - US Dollars $ 2,500,000
Intangible assets - (mineral rights) Challis Gold Project 10,249,632
Total assets acquired at fair value 12,749,632
Total Liabilities assumed at fair value - US Dollars (108,652)
Total purchase consideration $ 12,640,980
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