What changed in this filing

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Item 1. Financial Statements

2020-11-05 compared with 2020-05-07 · 72 added, 131 removed, 216 unchanged (48% of the section changed)

2 unchanged sentences

Condensed Consolidated Interim Balance Sheets

as at March 31, 2020 and June 30, 2019

As at March 31,

As at September 30,

As at June 30,

15 unchanged sentences

Convertible debt (Note 6)

Promissory note

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

1 unchanged sentence

Stockholders' Equity

Common stock, par value $0.01, 50,000,000 authorized shares, 27,777,962 issued and outstanding at March 31, 2020 and 26,519,954 issued and outstanding at June 30, 2019

Common stock, par value $0.01, 50,000,000 authorized shares, 33,937,080 issued and outstanding at September 30, 2020 and 32,958,404 issued and outstanding at June 30, 2020

Additional paid in capital

2 unchanged sentences

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

Subsequent Events:

PARAMOUNT GOLD NEVADA CORP.

Condensed Consolidated Interim Statements of Operations and Comprehensive Loss

for the Three and Nine-Month Periods Ended March 31, 2020 and 2019

Period Ended March 31, 2020

March 31, 2019

Period Ended March 31, 2020

March 31, 2019

Period Ended September 30, 2020

September 30, 2019

Other income (Note 9)

11 unchanged sentences

Interest and service charges

Net Loss before Income Taxes

Net Loss and Comprehensive Loss

5 unchanged sentences

Condensed Consolidated Interim Statements of Stockholders’ Equity

for the Three-Month Periods Ended September 30, 2019, December 31, 2019 and March 31, 2020 and Years ended June 30, 2019 and 2018

for the Three-Month Period Ended September 30, 2020 and Year ended June 30, 2020

Paid-In Capital

2 unchanged sentences

Stock based compensation

Capital issued for financing (Note 5)

Capital issued for warrant exercise (Note 5)

Capital issued for services

Capital issued for payment of interest

Capital issued for financing

Balance at June 30, 2020

Stock based compensation

Capital issued for services (Note 4)

Capital issued for payment of interest

Capital issued for financing

Capital issued on conversion of debt

Balance at September 30, 2020

Stock based compensation

Balance at December 31, 2019

Stock based compensation

Capital issued for payment of interest (Note 4)

Balance at March 31, 2020

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

1 unchanged sentence

Condensed Consolidated Interim Statements of Cash Flows

for the Nine-Month Periods Ended March 31, 2020 and 2019

Period Ended March 31, 2020

March 31, 2019

Period Ended September 30, 2020

September 30, 2019

Adjustment for:

5 unchanged sentences

Interest earned on reclamation bond

(Increase) decrease in accounts receivable

(Increase) decrease in prepaid expenses

1 unchanged sentence

Cash used in operating activities

Purchase of equipment

Cash used in investing activities

1 unchanged sentence

Convertible debt issued (Note 6)

Capital issued for warrant exercise (Note 5)

Cash provided by financing activities

3 unchanged sentences

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

Non-Cash Transactions:

PARAMOUNT GOLD NEVADA CORP.

Notes to Condensed Consolidated Interim Financial Statements

For the Three-Month Periods Ended September 30, 2020 and 2019

Description of Business and Summary of Significant Accounting Policies

Paramount Gold Nevada Corp.

(the “Company” or “Paramount”), incorporated under the General Corporation Law of the State of Nevada, and its wholly-owned subsidiaries are engaged in the acquisition, exploration and development of precious metal properties.

(the “Company” or “Paramount”), incorporated under Chapter 78 of Nevada Revised Statutes, and its wholly-owned subsidiaries are engaged in the acquisition, exploration and development of precious metal properties.

The Company’s wholly owned subsidiaries include New Sleeper Gold LLC, Sleeper Mining Company, LLC, and Calico Resources USA Corp (“Calico”).

10 unchanged sentences

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 interim period ending March 31, 2020 is not necessarily indicative of the operating results expected for the year ended June 30, 2020 or for any future period.

The results of operations for the interim period ending September 30, 2020 is not necessarily indicative of the operating results expected for the year ended June 30, 2021 or for any future period.

The condensed consolidated interim financial statements have been prepared on an accrual basis of accounting, in conformity with accounting principles generally accepted in the United States of America (“U.S.

3 unchanged sentences

The condensed consolidated interim financial statements should be read in conjunction with the consolidated financial statements and related footnotes for the year ended June 30, 2020.

The Company has conducted a subsequent events review through the date the financial statements were issued, and has concluded that there were no subsequent events requiring adjustments or additional disclosures to the Company’s financial statements at March 31, 2020.

Use of Estimates

The preparation of these interim condensed consolidated financial statements in conformity with U.S.

GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the condensed consolidated interim financial statements, and the reported amounts of revenue and expenses during the reporting period.

Actual results could differ from those estimates.

Significant estimates made by management in the condensed consolidated interim financial statements include the adequacy of the Company’s reclamation and environmental obligation, share based compensation, warrant valuation, valuation of deferred tax assets and liabilities, and assessment of impairment of mineral properties.

Cash and Cash Equivalents

All highly liquid cash equivalent investments with maturities of three months or less at the date of purchase are classified as cash and cash equivalents.

The carrying amount of these securities approximates fair value because of the short-term maturity of these instruments.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to a concentration of credit risk consist principally of cash and cash equivalents.

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

At March 31, 2020, the Company had $1.41 million of balances in excess of federally insured limits.

We deposit our cash with financial institutions which we believe have sufficient credit quality to minimize the risk of loss.

Fair Value Measurements

The Company has adopted FASB ASC 820, Fair Value Measurements and Disclosures, which defines fair value, establishes guidelines for measuring fair value and expands disclosures regarding fair value measurements.

The Company applies fair value accounting for all financial assets and liabilities and non – financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis.

The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

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 financial instruments.

Stock Based Compensation

The Company has adopted the provisions of FASB ASC 718, “ Stock Compensation ” (“ASC 718”), which establishes accounting for equity instruments exchanged for employee services.

Under the provisions of ASC 718, stock-based compensation cost is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense over the employee’s requisite service period (generally the vesting period of the equity grant).

Shares of the Company’s common stock will be issued for any options exercised.

Mineral Properties

Mineral property acquisition costs are capitalized when incurred and will be amortized using the units-of-production method over the estimated life of the ore reserve following the commencement of production.

If a mineral property is subsequently abandoned or impaired, any capitalized costs will be expensed in the period of abandonment or impairment.

Acquisition costs include cash consideration and the fair market value of shares issued on the acquisition of mineral properties.

Exploration Costs

Exploration costs, which include maintenance, development and exploration of mineral claims, are expensed as incurred.

When it is determined that a mineral deposit can be economically and legally developed as a result of establishing proven and probable reserves, the costs incurred after such determination will be capitalized and amortized over their useful lives.

To date, the Company has not established the commercial feasibility of its exploration prospects;

therefore, all exploration costs are expensed.

Property and Equipment

Equipment is recorded at cost less accumulated depreciation.

All equipment is depreciated over its estimated useful life at the following annual rates:

Computer equipment

30% declining balance

20% declining balance

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.

The Company’s asset retirement obligations are further described in Note 8.

Net Loss per Common Share

Basic loss/income per share is computed by dividing net loss available to common shareholders by the weighted average number of shares outstanding during each period.

Diluted loss or income per share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock.

For the three and nine-month periods ended March 31, 2020 and 2019, the shares of common stock equivalents related to outstanding stock options and convertible notes 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 those periods.

Significant Accounting Policies

Please see Note 1- Description of Business and Summary of Significant Accounting Policies contained in the 2020 10-K.

Recent Accounting Guidance

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.

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 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.

2 unchanged sentences

Among other things, these amendments require the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts.

The Company is currently evaluating the potential impact.

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, 2020 did not have a material effect on the Company’s consolidated financial position, results of operations, cash flows and related disclosures.

In August 2018, the FASB issued ASU No.

4 unchanged sentences

Early adoption is permitted.

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, 2020 did not have a material effect on the Company’s consolidated financial position, results of operations, cash flows and related disclosures.

Fair Value Measurements

5 unchanged sentences

Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

The fair value of financial assets and liabilities carried at book value by level within the fair value hierarchy in the Condensed Consolidated Interim Balance Sheets at March 31, 2020 and June 30, 2019 are presented in the following table:

Fair Value at March 31, 2020

The fair value of financial assets and liabilities carried at book value by level within the fair value hierarchy in the Condensed Consolidated Interim Balance Sheets at September 30, 2020 and June 30, 2020 are presented in the following table:

Fair Value at September 30, 2020

June 30, 2020

Cash and cash equivalents

Convertible debt

The Company’s cash and cash equivalents are classified within Level 1 of the fair value hierarchy due to their short-term nature.

Convertible debt is classified within Level 2 of the fair value hierarchy, carried at book value and is assumed to approximate fair value due to being recently acquired.

Convertible debt is classified within Level 2 of the fair value hierarchy, carried at book value.

Non-Cash Transactions

During the nine-month period ended March 31, 2020, the Company issued 1,096,791 shares to Ausenco Engineering USA South Inc.

During the three-month period ended September 30, 2020, the Company issued 183,395 shares of Common Stock for payment of interest accrued and owing at June 30, 2020 on its outstanding 2019 Convertible Notes.

Additionally, 200,000 shares of Common Stock were issued upon the conversion of 200 of its outstanding 2019 Convertible Notes.

During the three-month period ended September 30, 2019, 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 to the Company.

During the three-month period ended March 31, 2020, the Company issued 161,217 shares of Common Stock for payment of interest accrued and owing at December 31, 2019 on its outstanding 2023 Secured Convertible Notes

During the three-month and nine-month period ended March 31, 2019, the Company did not enter into any material non-cash activities.

The shares are being held in escrow until Ausenco delivers a final feasibility study report to the Company.

Capital Stock

1 unchanged sentence

Authorized capital stock consists of 50,000,000 common shares with par value of $0.01 per common share (June 30, 2020 – 50,000,000 common shares with par value $0.01 per common share).

During the nine-month period ended March 31, 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 nine-month period ended March 31, 2019, the Company issued 2,400,000 units at $1.25 per unit for net proceeds of $2,911,286.

Each unit consisted of one share of common stock and one warrant to purchase one-half of a share of common stock.

Each warrant has a two-year term and will be exercisable at the following exercise prices:

in the first year at $1.30 per share and in the second year at $1.50 per share.

At March 31, 2020 there were 27,777,962 common shares issued and outstanding (June 30, 2019 – 26,519,954 common shares).

A summary of warrants exercisable into common stock activity as of March 31, 2020, and changes during the nine-month period ended is presented below:

During the three-month period ended September 30, 2020, the Company issued 595,281 shares at an approximate average price of $1.3344 for gross proceeds of $794,345.

Share issuance costs including commissions were $23,830 for net proceeds of $770,514.

The Company also issued 183,395 shares for payment of interest accrued and owing at June 30, 2020 (Note 6).

The Company also issued 200,000 shares upon the conversion of 200 of the 2019 Senior Secured Convertible Notes (Note 6).

During the three-month period ended September 30, 2019, 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) .

At September 30, 2020 there were 33,937,080 common shares issued and outstanding (June 30, 2020 – 32,958,404 common shares).

A summary of warrants exercisable into common stock activity as of September 30, 2020, and changes during the three-month period ended is presented below:

Exercise Price

3 unchanged sentences

Outstanding at July 1, 2020

Outstanding at March 31, 2020

Outstanding at September 30, 2020

Stock Options and Stock Based Compensation

1 unchanged sentence

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 stockholders, a significant portion of those stock option awards will

vest contingent upon meeting certain stock price appreciation performance goals or other perf ormance conditions.

To better align the interests of its key executives and employees with those of its stockholders, a significant portion of those stock option awards will vest contingent upon meeting certain stock price appreciation performance goals or other performance conditions.

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

During the nine-month period ending March 31, 2020, the Company granted 690,000 stock options to employees, directors and consultants with a strike price of $1.00.

During the three-month period ending September 30, 2020, the Company granted 55,000 stock options to senior management, 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.

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

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

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

5 unchanged sentences

Weighted average fair value

A summary of option activity under the Stock Incentive and Compensation Plan as of March 31, 2020, and changes during the nine-month period ended are presented below:

A summary of option activity under the Stock Incentive and Compensation Plan as of September 30, 2020, and changes during the three-month period ended are presented below:

Exercise Price

4 unchanged sentences

Forfeited or expired

Outstanding at March 31, 2020

Exercisable at March 31, 2020

A summary of the status of Paramount’s non-vested options as of July 1, 2019 and changes during the nine-month period ended March 31, 2020 is presented below:

Outstanding at September 30, 2020

Exercisable at September 30, 2020

A summary of the status of Paramount’s non-vested options as at July 1, 2020 and changes during the three-month period ended September 30, 2020 is presented below:

Non-vested Options

2 unchanged sentences

Non-vested at July 1, 2020

Non-vested at March 31, 2020

As of March 31, 2020, there was $229,983 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the employee share option plan.

Non-vested at September 30, 2020

As of September 30, 2020, there was $110,376 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 1.03 years.

The total fair value of share based compensation arrangements vested during the nine-month period ended March 31, 2020 and 2019, was $49,408 and $69,628, respectively.

The total fair value of stock based compensation arrangements vested during the three-month period ended September 30, 2020 and 2019, was $nil and $28,310, respectively.

Convertible Debt

March 31, 2020

September 30, 2020

June 30, 2020

5 unchanged sentences

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 nine-month period ended March 31, 2020, the Company amortized $37,225 of discount and issuance costs.

During the three-month period ended September 30, 2020, the Company amortized $17,384 (2019- $2,645) 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.

During the three-month period ended September 30, 2020, 200 of the 2019 Convertible Notes outstanding were converted into 200,000 shares of common stock of the Company (Note 5 ) and $7,934 of unamortized discount and issuance costs were debited to additional paid in capital to reflect the issued common st ock .

Mineral Properties

The Company has capitalized acquisition costs on mineral properties as follows:

March 31, 2020

September 30, 2020

June 30, 2020

9 unchanged sentences

As a part of its insurance policy, the Company has funds in a commutation account and reclamation bonds which are used to reimburse reclamation costs and indemnity claims.

The balance of the commutation account and reclamation bonds at March 31, 2020 is $693,001 (June 30, 2019- $1,401,833).

The balance of the commutation account and reclamation bonds at September 30, 2020 is $633,060 (June 30, 2020- $695,041).

Reclamation and environmental costs are based principally on legal requirements.

6 unchanged sentences

The current undiscounted estimate of the reclamation costs for existing disturbances at the Sleeper Gold Project is $ 4,010,403 as required by the U.S Bureau of Land Management and the Nevada Department of Environmental Protection.

Assumptions used to compute the asset retirement obligations as at March 31, 2020 and June 30, 2019 for the Sleeper Gold Project included a credit adjusted risk free rate and inflation rate of 9.76% (June 30, 2019– 9 .76%) and 1.1% (June 30, 2019 – 1.1%), respectively.

Assumptions used to compute the asset retirement obligations as at September 30, 2020 and June 30, 2020 for the Sleeper Gold Project included a credit adjusted risk free rate and inflation rate of 9.76% (June 30, 2020– 9.76%) and 1.6% (June 30, 2020 – 1.6%), respectively.

Expenses are expected to be incurred between the years 2019 and 2056.

Changes to the Company’s asset retirement obligations for the nine-month period ended March 31, 2020 and the year ended June 30, 2019 are as follows:

Period Ended March 31, 2020

Changes to the Company’s asset retirement obligations for the thre e -month period ended September 30 , 2020 and the year ended June 30, 2020 are as follows:

Period Ended September 30, 2020

Year Ended June 30, 2020

3 unchanged sentences

Balance at end of period

The balance of the asset retirement obligation of $313,340 at March 31, 2020 (June 30, 2019 -$965,677 ) is comprised of a current portion of $97,287 (June 30, 2019 -$97,287 ) and a non-current portion of $216,053 (June 30, 2019 -$868,390).

The Company’s other income details for the nine-month period ended March 31, 2020 and 2019 were as follows:

Nine-Month Period

Ended March 31, 2020

Ended March 31, 2019

The balance of the asset retirement obligation of $566,975 at September 30, 2020 (June 30, 2020 -$615,170 ) is comprised of a current portion of $91,026 (June 30, 2020 -$154,231 ) and a non-current portion of $475,949 (June 30, 2020 -$460,939).

The Company recorded an accretion expense for the three-month period ended September 30, 2020 of $15,010 (September 30, 2019 - $23,647)

The Company’s other income details for the three-month period ended September 30, 2020 and 2019 were as follows:

Three-Month Period

Ended September 30, 2020

Ended September 30, 2019

Re-imbursement of reclamation costs

2 unchanged sentences

Segmented information has been compiled based on the material mineral properties in which the Company performs exploration activities.

Expenses and mineral property carrying values by material project for the nine-month period ended March 31, 2020:

Expenses and mineral property carrying values by material project for the three-month period ended September 30, 2020:

Mineral Properties

As at March 31, 2020

As at September 30, 2020

Sleeper Gold Project

Grassy Mountain Project

Expenses for the nine-month period ended March 31, 2019 and mineral property carrying values as at June 30, 2019 by material project:

Expenses for the three-month period ended September 30, 2019 and mineral property carrying values as at June 30, 2020 by material project:

Mineral Properties

6 unchanged sentences

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

During the nine-month period ended March 31, 2020, $38,288 was recognized as rent expense in the statement of operations and comprehensive loss/income.

During the three-month period ended September 30, 2020, $16,474 was recognized as rent expense in the statement of operations and comprehensive loss/income.

Other Commitments

5 unchanged sentences

The agreement with Cryla can be terminated by Paramount at any time.

All lease payments under the agreement are up-to-date and no other payments were made during the nine-month period ending March 31, 2020.

All lease payments under the agreement are up-to-date and no other payments were made during the three-month period ending September 30, 2020.

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

2 unchanged sentences

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 March 31, 2020.

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

The Frost Claims are without known mineral reserves.

Note 12 Subsequent Events

Subsequent to the period-ended September 30, 2020, the Company issued 350,609 shares upon the conversion of 351 outstanding 2019 Convertible Notes.

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-Q

Item 1. Financial Statements