What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2020-09-25 compared with 2019-09-16 · 152 added, 118 removed, 488 unchanged (36% of the section changed)

15 unchanged sentences

Based on this assessment, our management concluded that, as of June 30, 2020, our internal control over financial reporting is effective based on those criteria.

Because we are an emerging growth company under the JOBS Act, our independent registered public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting for so long as we are an emerging growth company.

Because we are a smaller reporting company, our independent registered public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting for so long as we are a smaller reporting company.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

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Consolidated Statements of Cash Flows for the years ended June 30, 2020 and 2019

Consolidated Statements of Stockholders’s Equity for the years ended June 30, 2019 and 2018

Consolidated Statements of Stockholders’ Equity for the years ended June 30, 2020 and 2019

Notes to Consolidated Financial Statements

Index to Exhibits

Controlled Equity Offering SM Sales Agreement, dated as of May 20, 2020, by and between Paramount Gold Nevada Corp., Cantor Fitzgerald & Co.

and Canaccord Genuity LLC (Incorporated herein by reference to Exhibit 1.1 to Current Report on Form 8-K of the Company filed on May 20, 2020)

Agency Agreement, dated as of June 24, 2020, by and between Paramount Gold Nevada Corp., Canaccord Genuity Corp.

and Cantor Fitzgerald Canada Corporation.

(Incorporated herein by reference to Exhibit 1.2 to Current Report on Form 8-K of the Company filed on June 25, 2020)

Form of Separation and Distribution Agreement by and between Paramount Gold and Silver Corp.

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Amended and Restated Bylaws.

Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934

Form of Warrant (Incorporated herein by reference to Exhibit 4.1 to Current Report on Form 8-K of the Company filed on February 9, 2017)

Form of Warrant (Incorporated herein by reference to Exhibit 4.1 to Current Report on Form 8-K of the Company filed on June 29, 2018)

Form of Senior Secured Convertible Note (Incorporated herein by reference to Exhibit 4.1 to Current Report on Form 8-K of the Company filed on September 13, 2019)

2015 Stock Incentive and Equity Compensation Plan.

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Form of Subscription Agreement (Incorporated herein by reference to Exhibit 10.1 to Current Report on Form 8-K of the Company filed on June 29, 2018)

Form of Security Agreement (Incorporated herein by reference to Exhibit 10.1 to Current Report on Form 8-K of the Company filed on September 13, 2019)

List of subsidiaries.

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September 25, 2020

/s/ Glen Van Treek

Glen Van Treek

(Director, CEO and President)

/s/ Rachel Goldman

Rachel Goldman

(Director and CEO)

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Report has been signed below by the following persons on behalf of the Registrant in the capacities and on the dates indicated.

/s/ Glen Van Treek

Director and President (Principal Executive Officer)

/s/ Rachel Goldman

Director and CEO (Principal Executive Officer)

September 25, 2020

Glen Van Treek

Rachel Goldman

/s/ Carlo Buffone

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Carlo Buffone

/s/ Glen Van Treek

Director, President and Chief Operating Officer

September 25, 2020

Glen Van Treek

/s/ John Seaberg

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September 25, 2020

Eiseo Gonzalez-Urien

Eliseo Gonzalez-Urien

/s/ Christopher Reynolds

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Notes to Consolidated Financial Statements

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

REPORT OF INDEPENDENT REGIST ERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Paramount Gold Nevada Corp.

Opinion on the Financial Statements

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Paramount Gold Nevada Corp.

(the Company) as of June 30, 2019 and 2018 and the related statements of operations and comprehensive income, stockholders’ equity, and cash flows for each of the years in the two year period ended June 30, 2019, and the related notes (collectively referred to as the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2019 and 2018, and the results of its operations and its cash flows for each of the years in the two year period ended June 30, 2019 in conformity with accounting principles generally accepted in the United States of America.

(the Company) as of June 30, 2020 and 2019, and the related consolidated statements of operations and comprehensive loss, stockholders’ equity, and cash flows for each of the years in the two year period ended June 30, 2020, and the related notes (collectively referred to as the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of June 30, 2020 and 2019, and the results of its consolidated operations and its consolidated cash flows for each of the years in the two year period ended June 30, 2020, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

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We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

1 unchanged sentence

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

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We have served as the Company’s auditor since 2015.

Vancouver, BC, Canada

September 25, 2020

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Non-Current Liabilities

Convertible debt (Note 6)

Promissory note (Note 6)

Reclamation and environmental obligation, non-current portion (Note 8)

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Capital issued for financing (Note 5)

Capital issued for warrant exercise (Note 5)

Balance at June 30, 2019

Stock based compensation

Capital issued for services (Note 4)

Capital issued for payment of interest

Capital issued for financing (Note 5)

Capital issued for warrant exercise (Note 5)

Balance at June 30, 2020

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Adjustment for:

Share based payments

Stock based compensation

Amortization of debt issuance costs

Interest expense

Accretion expense (Note 8)

Interest earned on reclamation bond

(Increase) decrease in accounts receivable

(Increase) decrease in other assets

2 unchanged sentences

Cash used in operating activities

Purchase of mineral properties

Purchase of equipment

Sale of royalty on mineral property (Note 7)

1 unchanged sentence

Capital issued for financing (Note 5)

Convertible debt issued (Note 6)

Promissory note (Note 6)

Capital issued for warrant exercise (Note 5)

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All significant intercompany accounts and transactions are eliminated in consolidation.

The Company faces various risks related to the COVID-19 global pandemic.

The Company cannot at this time predict the impact of the COVID-19 pandemic, but it could have a material adverse effect on the business, financial position, results of operations and/or cash flows.

The results of operations for the year ending June 30, 2020 is not necessarily indicative of the operating results expected for any future period.

Foreign Currency Translation and Transactions

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The Company maintains cash in accounts which may, at times, exceed federally insured limits.

At June 30, 2019, there were no balances that were in excess of federally insured limits.

At June 30, 2020, the Company had $5.13 million of balances in excess of federally insured limits.

The Company deposits its cash with financial institutions which it believes have sufficient credit quality to minimize the risk of loss.

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The Company has adopted FASB ASC 825, Financial Instruments, which allows companies to choose to measure eligible financial instruments and certain other items at fair value that are not required to be measured at fair value.

The Company has not elected the fair value option for any eligible f inancial instruments.

The Company has not elected the fair value option for any eligible financial instruments.

Stock Based Compensation

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Reclamation and Environmental Obligation

The Company follows the provisions of ASC 440, “Asset Retirement and Environmental Obligations”, which establishes the standards for the initial measurement and subsequent accounting for obligations associated with the sale, abandonment, or other disposal of long-lived tangible assets arising from the acquisition, construction or development and for normal operations of such assets.

long-lived tangible assets ar ising from the acquisition, construction or development and for normal operations of such assets.

The Company’s asset retirement obligations are further described in Note 7 .

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For the years ended June 30, 2020 and 2019, the shares of common stock equivalents related to outstanding stock options have not been included in the diluted per share calculation as they are anti-dilutive as the Company has recorded a net loss from continuing operations for each year.

The Company determines if an arrangement is, or contains, a lease at the inception date.

Operating leases are included in Other assets, non-current with related liabilities included in Accrued liabilities and Other long-term liabilities .

Assets under finance leases, which primarily represent property and equipment, are included in Property, plant and equipment, net with related liabilities in debt, current and debt, non-current on the Consolidated Balance Sheet.

Operating lease assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease.

Operating lease assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term.

We use our estimated incremental borrowing rate in determining the present value of lease payments.

Variable components of the lease payments such as maintenance costs are expensed as incurred and not included in determining the present value.

Our lease terms include options to extend or terminate the lease when it is reasonably certain that we will exercise that option.

Lease expense is recognized on a straight-line basis over the lease term.

Currently, the Company does not have any leases with terms greater than 12 months.

Revenue Recognition

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When the Company performs shipping and handling activities after the customer obtains control of the goods, the Company accounts for the costs as fulfillment costs which are included in cost of revenues, as allowed under Topic 606.

Convertible Debt

The Company reviews the terms of its convertible notes payable to determine whether to account for any portion of the proceeds towards the conversion feature.

In general, when the convertible notes instrument has the following characteristics and terms no portion of the proceeds from the issuance shall be accounted for as attributable to the conversion feature:

a) is convertible into common stock of the Company at a specified price at the option of holder;

b) the debt is sold at a price or has value at issuance not significantly in excess of the face amount;

c) an interest rate that is lower than the Company could establish for nonconvertible debt;

d) an initial conversion price that is greater than the fair value of the common stock at time of issuance and;

e) a conversion price that does not decrease except pursuant to antidilution provisions.

When proceeds are not attributable to the conversion features of the debt, the Company records the entire amount as a liability.

If the fair value option is not elected, the Company will reduce the initial carrying amount of the debt by any direct and incremental issuance costs paid to third parties that are associated with the convertible debt issuance.

The Company also reviews the terms of its convertible note s payable to determine whether there are embedded derivatives, included the embedded conversion option, that are required to be bifurcated and accounted for as individual derivative financial instruments.

In circumstances where convertible debt contains e mbedded derivatives that are to be separated from the host contracts, the total proceeds received are first allocated to the fair value of the derivative financial instruments determined using the binomial model.

The remaining proceeds, if any, are then a llocated to the debenture cost contracts, usually resulting in those instruments being recorded at a discount from their principal amount.

This discount is accreted over the expected life of the instruments to profit (loss) using the effective interest me thod.

The debenture host contracts are subsequently recorded at amortized cost at each reporting date, using the effective interest method.

The embedded derivatives are subsequently recorded at fair value at each reporting date, with changes in fair value recognized in profit (loss).

Income taxes are determined using the asset and liability method.

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Recent Accounting Guidance

In August 2016, the FASB issued ASU No.

2016-15, “Statement of Cash Flows:

Classification of Certain Cash Receipts and Cash Payments”.

ASU 2016-15 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years.

These amendments provide cash flow statement classification guidance for:

Debt Prepayment or Debt Extinguishment Costs;

Settlement of Zero-Coupon Debt Instruments or Other Debt Instruments with Coupon Interest Rates That Are Insignificant in Relation to the Effective Interest Rate of the Borrowing;

Contingent Consideration Payments Made after a Business Combination;

Proceeds from the Settlement of Insurance Claims;

Proceeds from the Settlement of Corporate-Owned Life Insurance Policies, including Bank-Owned Life Insurance Policies;

Distributions Received from Equity Method Investees;

Beneficial Interests in Securitization Transactions;

Separately Identifiable Cash Flows and Application of the Predominance Principle.

The Company’s adoption of this guidance on July 1, 2018 did not have a material impact on the Company’s related disclosures.

In January 2016, the FASB issued ASU No.

2016-01, Financial Instruments─Overall (Subtopic 825-10):

Recognition and Measurement of Financial Assets and Financial Liabilities to improve the recognition and measurement of financial instruments the new guidance makes targeted improvements to existing U.S.

Requiring equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income;

Requiring public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes;

Requiring separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (i.e., securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements;

Eliminating the requirement to disclose the fair value of financial instruments measured at amortized cost for organizations that are not public business entities;

Eliminating the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet;

Requiring a reporting organization to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk (also referred to as “own credit”) when the organization has elected to measure the liability at fair value in accordance with the fair value option for financial instruments.

The new guidance is effective for public companies for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years.

The Company’s adoption of this guidance on July 1, 2018, did not have a material impact on the Company’s consolidated results of operations, financial position and related disclosures.

In January 2017, the FASB issued ASU No.

2017-01, Business Combinations (Topic 805):

Clarifying the Definition of a Business.

ASU 2017-01 is effective for fiscal years beginning after December 15, 2017, and interim periods within that reporting period.

These amendments clarify the definition of a business.

The amendments affect all companies and other reporting organizations that must determine whether they have acquired or sold a business.

The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation.

The amendments are intended to help companies and other organizations evaluate whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses.

These changes were adopted for the Company’s fiscal year beginning July 1, 2018 and did not have a material impact on the Company’s consolidated financial position, results of operations, and cash flows.

In February 2016, the FASB issued ASU No.

2017-05, Other Income – Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20):

Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets.

ASU 2017-05 is effective for fiscal years beginning after December 15, 2017, and interim periods within that reporting period.

The amendments clarify that a financial asset is within the scope of Subtopic 610-20 if it meets the definition of an in substance nonfinancial asset.

The amendments also define the term in substance nonfinancial asset.

The amendments clarify that nonfinancial assets within the scope of Subtopic 610- 20 may include nonfinancial assets transferred within a legal entity to a counterparty.

For example, a parent may transfer control of nonfinancial assets by transferring ownership interests in a consolidated subsidiary.

A contract that includes the transfer of ownership interests in one or more consolidated subsidiaries is within the scope of Subtopic 610-20 if substantially all of the fair value of the assets that are promised to the counterparty in a contract is concentrated in nonfinancial assets.

The amendments clarify that an entity should identify each distinct nonfinancial asset or in substance nonfinancial asset promised to a counterparty and derecognize each asset when a counterparty obtains control of it.

The Company’s adoption of this guidance on July 2018, did not have a material impact on the Company’s consolidated results of operations, financial position and related disclosures.

In February 2016, the FASB issued ASU No.

2016-02, Leases.

The new standard establishes a right-of-use (“ROU”) model that requires a lessee to record an ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months.

The new standard establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months.

Leases are classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement.

These changes will be effective for the Company's fiscal year beginning July 1, 2019.

The Company is currently evaluating the potential impact of implementing these changes on the Company's consolidated financial position, results of operations, and cash flows.

The Company adoption of this guidance on July 1, 2019 did not have a material effect on the Company's consolidated financial position, results of operations, cash flows and related disclosures.

In June 2016, the FASB issued ASU No.

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The Company is currently evaluating the potential impact of implementing these changes on the Company's consolidated financial position, results of operations, and cash flows.

In January 2017, the FASB issued ASU No.

2017 -04, Intangibles – Goodwill and Other (Topic 350):

Simplifying the Test for Goodwill Impairment.

These changes will be effective for the Company’s fiscal year beginning July 1, 2021.

These amendments eliminate Step 2 from the goodwill impairment test.

The annual, or interim, goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount.

An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value;

however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit.

The amendments also eliminate the requirements for any reporting unit with zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test.

An entity has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is

The Co mpany is currently evaluating the potential impact of implementing these changes on the Company’s consolidated financial position, results of operation, and cash flows.

In August 2018, the FASB issued ASU No.

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The Company is currently evaluating the potential impact of implementing these changes on the Company's consolidated financial position, results of operations, and cash flows.

In December 2019, the FASB issued ASU 2019-2, “Income Taxes – Simplifying the Accounting for Income Taxes (Topic 740)” which is intended to simplify various aspects related to accounting for income taxes.

ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application.

ASU 2019-12 will be effective for interim and annual periods beginning after December 15, 2020 (January 1, 2021 for the Company).

Early adoption is permitted.

The Company is currently evaluating the impact the adoption of ASU 2019-12 will have on its consolidated financial statements.

Fair Value Measurements

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Cash and cash equivalents

The Company’s cash and cash equivalents are classified within Level 1 of the fair value hierarchy because they are valued usi ng quoted market prices.

The Company’s cash and cash equivalents are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices.

The cash and cash equivalents that are valued based on quoted market prices in active markets are primarily comprised of commercial paper, short-term certificates of deposit and U.S.

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Non-Cash Transactions

During the years ended June 30, 2019 and 2018, the Company did not enter into any non-cash activities.

During the year-ended June 30, 2020, the Company the Company issued 1,096,791 shares to Ausenco Engineering USA South Inc.

(“Ausenco”) in exchange for services valued at $976,144 to complete a feasibility study at its Grassy Mountain Project.

The shares are being held in escrow until Ausenco delivers a feasibility study on Grassy Mountain to the Company.

During the year-ended June 30, 2020, the Company issued 161,217 shares of Common Stock for payment of interest accrued and owing at Decemb er 31, 2019 on its outstanding 2023 Secured Convertible Notes .

During the comparative year-ended June 30, 2019, the Company did not enter into any non-cash activities.

Capital Stock

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Authorized capital stock consists of 50,000,000 common shares with par value of $0.01 per common share (2019- 50,000,000 common shares with par value $0.01 per common share).

During the year-ended June 30, 2020, the Company issued 1,096,791 shares at a value of $0.89 per share to Ausenco in exchange for services to complete a feasibility study at its Grassy Mountain Project (Note 4) .

The Company also issued 161,217 shares for payment of interest accrued and owing at December 31, 2019 (Note 4 and 6).

During the year-ended June 30, 2020, the Company issued 4,807,700 shares at a price of $1.04 per share for gross proceeds of $5.0 million.

Share issuance costs were $0.43 million for net proceeds of $4.57 million.

During the year ended June 30, 2020, the Company issued 372,742 shares at an average approximate price of $1.17 for gross proceeds of $436,783.

Share issuance costs, including one-time transaction costs and commissions were $124,265 for net proceeds of $312,518.

During the year-ended June 30, 2019, the Company issued 2,400,000 units at $1.25 per unit for aggregate proceeds of $3 million.

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Also during the year ended June 30, 2019, the Company issued 1,045,000 shares from the exercising of warrants for gross proceeds of $0.96 million.

During the year-ended June 30, 2018, the Company issued 5,295,000 shares of its common stock.

The issuance was a result of a public offering of 3,520,000 shares of common stock for gross proceeds of $4.9 million and of a private placement of 1,775,000 shares of common stock for gross proceeds of $2.5 million.

Share issuance costs were $0.79 million for net proceeds of $6.6 million.

At June 30, 2020 there were 32,958,404 common shares issued and outstanding (June 30, 2019 – 26,519,954 common shares).

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Outstanding at June 30, 2020

During the year-ended June 30, 2019, the Company repriced 1,045,000 warrants that were issued and outstanding with an exercise price of $2.25 to an exercise price of $0.93.

As a result, 1,045,000 warrants were exercised during the year-ended June 30, 2019.

Stock Options and Stock Based Compensation

Paramount’s 2015 and 2016 Stock Incentive and Compensation Plan, which is shareholder-approved, permits the grant of share options and shares to its employees for up to 2.169 million shares of common stock.

In December 2018, the Company’s stockholders approved an increase of 0.6 million stock options and stock available to be granted to its employees under the 2016 Stock Incentive and Compensation Plan.

Option awards are generally granted with an exercise price equal to the market price of Paramount’s stock at the date of grant and have contractual lives of 5 years.

To better align the interests of its key executives and employees with those of its shareholders a significant portion of those share option awards will vest contingent upon meeting certain stock price appreciation

performance goals.

Option and share awards provide for accelerated vesting if there is a chan ge in control (as defined in the employee share option plan).

The fair value of option awards that have market conditions are estimated on the date of grant using a Monte-Carlo Simulation valuation model.

The award’s grant date fair value is determined by taking the average of the grant date fair values under each of many Monte Carlo trials.

There were no options granted during the fiscal years ended June 30, 2019 and 2018 with market conditions.

The fair value of option awards that do not have market conditions are estimated on the date of grant using a Black-Scholes option valuation model that uses the assumptions noted in the following table.

Because Black-Scholes option valuation models incorporate ranges of assumptions for inputs, those ranges are disclosed.

Given Paramount’s short history as a public company, expected volatilities are based on, historical volatilities from five proxy companies’ stock.

Paramount uses historical data to estimate option exercise and employee termination within the valuation model;

separate groups of employees that have similar historical exercise behavior are considered separately for valuation purposes.

The expected term of options granted is derived from the output of the option valuation model and represents the period of time that options granted are expected to be outstanding;

the range given below results from certain groups of employees exhibiting different behavior.

The risk-free rate for periods within the contractual life of the option is based on the U.S.

Treasury yield curve in effect at the time of grant.

Option and share awards provide for accelerated vesting if there is a change in control (as defined in the employee share option plan).

During the year-ended June 30, 2020, the Company granted 690,000 stock options to employees, directors and consultants with a strike price of $1.00.

Each option carries a 5 year term.

Options received by senior management and directors will vest and become exercisable on achieving the following performance conditions:

1) ½ upon the completion of the Grassy Mountain Project feasibility study and 2) ½ on the issuance of mining permits for the Grassy Mountain Project by the State of Oregon.

Options received by employees and consultants will vest and become exercisable as follows:

1/3 on the first anniversary of the date of grant, 1/3 on the second anniversary of the date of grant and 1/3 on the third anniversary of the date of grant.

There were no option granted for the year-ended June 30, 2019.

The fair value for these options was calculated using the Black-Scholes option valuations method.

The weighted average assumptions used for the fiscal years ending June 30, 2020 and 2019 were as follows:

Weighted average risk-free interest rate

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Weighted-Average

Contractual Term

Contractual Term (In Years)

Intrinsic Value

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Exercisable at June 30, 2020

A summary of the status of Paramount’s non-vested shares as of June 30, 2019 and changes during the year ended June 30, 2019 is presented below.

A summary of the status of Paramount’s non-vested options as of June 30, 2020 and changes during the year ended June 30, 2020 is presented below.

Non-vested Options

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As of June 30, 2020 and 2019, there was $153,802 and $108,003 respectively of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the employee share option plan.

That cost is expected to be recognized over a weighted-average period of 1.28 years.

The total fair value of shares vested during the years ended June 30, 2019 and 2018, was $202,121 and $nil, respectively.

That cost is expected to be recognized

over a weighted-average period of 1.05 years.

The total fair value of s hares vested during the years ended June 30, 2020 and 2019 , was $ 202,121 and $ nil , respectively.

Convertible Debt

June 30, 2020

June 30, 2019

2019 Secured Convertible Notes

unamortized discount and issuance costs

In September 2019, the Company completed a private offering of 5,478 Senior Secured Convertible Notes (“2019 Convertible Notes”) at $975 per $1,000 face amount due in 2023.

Each 2019 Convertible Note will bear an interest rate of 7.5% per annum, payable semi-annually.

The principal amount of the 2019 Convertible Notes will be convertible at a price of $1.00 per share of Paramount common stock.

Unamortized discount and issuance costs of $275,883 will be amortized as an additional interest expense over the four-year term of the 2019 Convertible Notes.

During the year-ended June 30, 2020, the Company amortized $54,421 of discount and issuance costs.

At any point after the second anniversary of the issuance of the convertible notes, Paramount may force conversion if the share price of its common stock remains above $1.75 for 20 consecutive trading days.

The convertible notes are secured by a lien on all assets of the Company and the Company is required to maintain a working capital balance of $250,000.

On May 5, 2020, the Company was granted a loan (the “PPP Loan”) from Wells Fargo Bank, N.A.

in the amount of $35,628 pursuant to the Paycheck Protection Program (the “PPP”) under Division A, Title I of the CARES Act, which was enacted March 27, 2020.

The PPP Loan which was in the form of a Promissory Note matures on May 3, 2022 and bears interest at a rate of 0.98% per annum, payable monthly commencing on November 1, 2020.

The Note many be prepaid by the Company at any time prior to maturity with no prepayment penalties.

Under the terms of the PPP, certain amounts of the PPP Loan may be forgiven if they are used for qualifying expenses as described in the CARES Act.

Mineral Properties

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The Sleeper Gold Mine consists of 2,322 unpatented mining claims totaling approximately 38,300 acres.

During the year-ended June 30, 2020, the Company recorded a change in reclamation and environmental obligation of $278,181 (Note 8).

This change in estimate is a result of completing certain reclamation activities in the year-ended June 30, 2020 that were expected to be completed in future periods.

During the year-ended June 30, 2019, the Company sold to Franco Nevada U.S.

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It consists of 442 federal mining claims, 3 patented lode claims, and various leased fee land surface and surface/mineral rights, all totaling approximately 9,300 acres .

During the year ended June 30, 2018, Paramount exercised its option to reduce the existing Net Smelter Royalty (“NSR”) from 6% down to 1.5% and to acquire all rights to the private land at Grassy Mountain Project in Oregon for a total payment of $2.4 million.

Reclamation and Environmental Obligation:

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At June 30, 2020, the Company has net operating loss carry forwards of $48,984,744 (2019 - $43,150,088) expiring between the years 2020 and 2038 which are available to reduce future taxable income.

Tax losses incurred after June 30, 2017 may be carried forward indefinitely.

The tax effects of the significant components within the Company’s deferred tax asset (liability) at June 30, 2020 and 2019 are as follows:

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Valuation allowance

Mineral properties

Net deferred tax asset

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The Company has no income tax examinations in process.

Summary of Quarterly Financial Data (Unaudited)

The following table sets forth a summary of the unaudited quarterly results of operations for the years ended June 30, 2019 and 2018:

Net loss before other items

Net loss per Common Share

Net loss before other items

Net loss (income)

Net loss (income) per Common Share

Commitments and Contingencies:

Lease Commitments

The Company has office premises leases that expire at various dates until June 30, 2021.

The aggregate minimum rentals payable for these operating leases are as follows:

The Company has an office premises leases that expires on June 30, 2021.

The aggregate minimum rentals payable for this operating lease is as follows:

During the year ended June 30, 2020, $46,885 was recognized as rent expense in the consolidated statements of operations and comprehensive loss.

Other Commitments

During the year ended June 30, 2019, Paramount entered into an agreement to acquire 44 mining claims (“Cryla Claims”) covering 589 acres located immediately to the west of the proposed Grassy Mountain site from Cryla LLC.

Paramount will make annual lease payments of $40,000 per year the first two years of the lease term and $60,000 per year thereafter with an option to purchase the Cryla Claims for $560,000 at any time.

Paramount has an agreement to acquire 44 mining claims (“Cryla Claims”) covering 589 acres located immediately to the west of the proposed Grassy Mountain site from Cryla LLC.

Paramount is obligated to make annual lease payments of $40,000 per year the first two years of the lease term and $60,000 per year thereafter with an option to purchase the Cryla Claims for $560,000 at any time.

The term of the agreement is 25 years.

In the event Paramount exercises its option to acquire the Cryla Claims, all annual payments shall be credited against a production royalty that will be based a prevailing price of the metals produced from the Cryla Claims.

In the event Paramount exercises its option to acquire the Cryla Claims, all annual payments shall be credited against a production royalty that will be based on a prevailing price of the metals produced from the Cryla Claims.

The royalty rate ranges between 2% and 4% based on the daily price of gold.

2 unchanged sentences

The Cryla Claims are without known mineral reserves and there is no current exploratory work being performed.

During the year ended June 30, 2019, Paramount entered into an agreement with Nevada Select Royalty (“Nevada Select”) to purchase 100% in the Frost Project, which consists of 40 mining claims located approximately 12 miles west of its Grassy Mountain Project.

Paramount has an agreement with Nevada Select Royalty (“Nevada Select”) to purchase 100% in the Frost Project, which consists of 40 mining claims located approximately 12 miles west of its Grassy Mountain Project.

A total consideration of $250,000 payable to Nevada Select will be based on certain events over time.

1 unchanged sentence

Nevada Select will retain a 2% NSR on the Frost Claims and Paramount has the right to reduce the NSR to 1% for a payment of $1 million.

All required payments under the agreement are up to date as of June 30, 2020.

The Frost Claims are without known mineral reserves.

Subsequent Events

Subsequent to June 30, 2019, the Company issued 1,096,791 shares at $0.78 to Ausenco in exchange for services to complete a feasibility study at its Grassy Mountain Project.

The shares will be held in escrow until Ausenco delivers a feasibility study to the Company.

Subsequent to June 30, 2019, the Company entered into definitive agreements with accredited investors to issue convertible notes in a private transaction (the “Transaction”).

Under the terms of the Transaction, Paramount has agreed to sell an aggregate of 5,478 notes at $975 per $1000 face amount with a four year maturity for aggregate proceeds of $5.34 million.

Each convertible note will bear interest rate of 7.5% per annum, payable semi-annually.

The principle amount of the convertible notes will be convertible at a price of $1.00 per share of Paramount common stock.

Subsequent to June 30, 2020, the Company issued 595,281 shares at an average price of $1.33 per share and for gross proceeds of approximately $0.8 million.

The Company also issued 183,395 at an average price of $1.12 per share for the payment of interest accrued and owing at June 30, 2020 for its outstanding convertible debt.

Subsequent to June 30, 2020, 200 Senior Secured Convertible Notes were converted and as a result the Company issued 200,000 shares of its Common Stock.

Subsequent to June 30, 2020, the Company issued 55,000 stock-options to purchase common stock at strike price of $1.23.

The term of the options is 5 years.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures