What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2021-09-17 compared with 2020-09-25 · 183 added, 136 removed, 504 unchanged (39% of the section changed)

35 unchanged sentences

Consolidated Balance Sheets as of June 30, 2021 and 2020

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

Consolidated Statements of Operations and Comprehensive Loss for the years ended June 30, 2021 and 2020

Consolidated Statements of Cash Flows for the years ended June 30, 2021 and 2020

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Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

Paramount Gold Nevada Corp.

September 17, 2021

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Glen Van Treek

/s/ John Seaberg

September 25, 2020

/s/ Rudi Fronk

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Consolidated Balance Sheets as of June 30, 2021 and 20 20

Consolidated Statements of Operations for the Years ended June 30, 2020 and 20 19

Consolidated Statements of Operations and Comprehensive Loss for the Years ended June 30, 2021 and 20 20

Consolidated Statements of Stockholders’ Equity for the Years ended June 30, 2021 and 20 20

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Notes to Consolidated Financial Statements

REPORT OF INDEPENDENT REGIST ERED PUBLIC ACCOUNTING FIRM

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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

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

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Assessment of the Provision for Reclamation and Environmental Obligations

Critical Audit Matter Description

As described in Note 8 to the consolidated financial statements, as at June 30, 2021, the provision for reclamation and environmental obligations amounted to $1,849,644.

The provision is determined using estimates of the nature, timing and amount of future costs to be incurred to reclaim the mine sites, future inflation and discount rates.

These assumptions are subject to change due to continued mining, reclamation of properties and regulatory changes.

We identified the assessment of the provision for reclamation and environmental obligations as a critical audit matter due to the subjective judgment involved in assessing the amount of the provision.

Significant assumptions included amounts of future reclamation costs, inflation rates and discount rates.

These assumptions are challenging to evaluate, as minor changes in these assumptions have a significant effect on the Company’s determination of the provision for reclamation and environmental obligations.

Audit Response

We responded to this matter by performing audit procedures over the provision for reclamation and environmental obligations.

Our audit work in relation to this included, but was not restricted to, the following:

Obtained and evaluated management’s asset retirement obligation working papers and examined assumptions regarding the discount rate, inflation rate, and the amounts and timing of future costs.

Inquired with management whether there have been any changes to the original obligation estimates or activities that would impact the value of the obligation.

Engaged an internal valuation specialist with specialized skill and knowledge to assist in evaluating the discount rates used to determine the amount of the provision.

Assessed the future inflation rate by comparing to a third-party source.

Obtained confirmation from management’s experts regarding the future reclamation costs.

Assessed certain elements of the future costs to be incurred to reclaim the mine sites by comparing the costs to recent rehabilitation activities.

Assessed the appropriateness and completeness of related disclosures in the consolidated financial statements.

Chartered Professional Accountants

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

Vancouver, Canada

September 17, 2021

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Cash and cash equivalents

Prepaid and deposits

Prepaid expenses and deposits

Total Current Assets

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

Total Non-Current Liabilities

Total Liabilities

Stockholders' Equity

Common stock, par value $0.01, 50,000,000 authorized shares, 32,958,404 issued and outstanding at June 30, 2020 and 26,519,954 issued and outstanding at June 30, 2019 (Note 5)

Common stock, par value $0.01, 200,000,000 authorized shares, 38,154,109 issued and outstanding at June 30, 2021 and 50,000,000 authorized shares, 32,958,404 issued and outstanding at June 30, 2020 (Note 5)

Additional paid in capital

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Other income (Note 9)

Total Revenue

Exploration (Note 10)

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Interest and service charges

Gain on forgiveness of promissory note

Net Loss before Income Taxes

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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)

Net loss and comprehensive loss

Balance at June 30, 2020

Stock based compensation

Capital issued for purchase of mineral properties

Conversion of convertible notes to shares

Capital issued for services (Note 4)

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Capital issued for financing (Note 5)

Net loss and comprehensive loss

Balance at June 30, 2021

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June 30, 2020

Net loss and comprehensive loss

Adjustment for:

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Accretion expense (Note 8)

Interest earned on reclamation bond

(Increase) decrease in other assets

Gain upon forgiveness of promissory note

Changes in reclamation bonds and accounts

(Increase) decrease in prepaid expenses

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Purchase of equipment

Sale of royalty on mineral property (Note 7)

Purchase of mineral properties

Cash provided by (used in) investing activities

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Promissory note (Note 6)

Capital issued for warrant exercise (Note 5)

Cash provided by financing activities

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Cash at end of year

See Note 4 for supplemental cash flow information

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

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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 Company’s primary goal during the COVID-19 pandemic is to safeguard the health of our employees, suppliers and the communities where we operate while minimizing business interruption.

To date, COVID-19 pandemic has not had a material impact on our business however because of the highly uncertain and dynamic nature of events relating to the COVID-19 pandemic, it is not currently possible to predict any future impact of the COVID-19 pandemic, but these impacts could have a material adverse effect on the business, financial position, results of operations and/or cash flows.

We will continue to monitor the COVID-19 situation closely.

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

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dollar equivalents using foreign exchange rates which prevailed at the balance sheet date.

Revenues and expenses are translated at average rates of exchange during the period.

Related translation adjustments as well as gains or losses resulting from foreign currency transactions are reported as part of operating expenses on the statement of operations.

Income and expenses are translated at average rates of exchange during the period.

Related translation adjustments as well as gains or losses resulting from foreign currency transactions are reported as part of operating expenses on the statement of operations and comprehensive loss.

Use of Estimates

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Actual results could differ from those estimates.

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

The recoverability of the costs incurred for the exploration and development of precious mineral properties is dependent on the ability of the Company to obtain the necessary financing to advance the projects to production, upon future profitable production or from proceeds from sale of properties or production royalties.

The Company will continue to incur losses and have negative cash flows from operating activities and as such we will require additional capital to fund exploration and development programs, future property acquisitions and for general corporate purposes.

If the Company is unable to obtain additional funding, we may be unable to continue operations, and amounts realized for assets may be less than amounts reflected in these consolidated financial statements.

These consolidated financial statements have been prepared on the accounting principles applicable to a going concern, which assumes that the Company will realize its assets and discharge its liabilities in the normal course of business.

In assessing whether the going concern assumption is appropriate, management takes into account all available information about the future, which is at least twelve months after the date that the financial statements are issued.

Management has carried out an assessment of the going concern assumption and, after considering subsequent events, has concluded that the cash position of the Company is sufficient to finance continued operations for the twelve-month period after the issuance of these financial statements.

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

Cash and Cash Equivalents

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

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

At June 30, 2021 and 2020, the Company had $2.81 million and $5.13 million, respectively, 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 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.

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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).

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

Under the provisions of ASC 718, stock-based compensation cost is measured at the grant date and based on the calculated fair value of the award.

For grants to employees an expense is recognized over the employee’s requisite service period (generally the vesting period of the equity grant) using the graded vesting method.

For grants to nonemployees, an expense is recognized when the good or service is received.

For options with performance conditions, the Company accrues compensation if it is probable that the performance condition will be achieved and recognizes the compensation cost over the requisite service period.

The requisite service period for options with performance conditions is estimated based on the analysis of the terms of the award and the specific performance conditions.

The Company shall recognize the effect of forfeited awards in compensation cost when they occur.

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

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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 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;

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20% declining balance

Long-Lived Assets

Impairment of Long-Lived Assets

In accordance with ASC 360, “Property, Plant, and Equipment”, the Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable.

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and current expectation that the asset will more likely than not be sold or disposed significantly before the end of its estimated useful life.

Recoverability is assessed based on the carrying amount of the asset and its fair value which is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances.

An impairment loss is recognized when the carrying amount exceeds fair value.

An impairment loss shall be recognized only if the carrying amount of a long-lived asset (asset group) is not recoverable and exceeds its fair value.

The carrying amount of a long-lived asset (asset group) is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset (asset group).

That assessment shall be based on the carrying amount of the asset (asset group) at the date it is tested for recoverability, whether in use or under development.

An impairment loss shall be measured as the amount by which the carrying amount of a long-lived asset (asset group) exceeds its fair value.

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 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 .

The Company follows the provisions of ASC 410, “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 fair value of a liability for an asset retirement obligation will be recognized in the period in which it is incurred if a reasonable estimate of fair value can be made.

The fair value of the liability is added to the carrying amount of the associated asset.

An accretion cost, representing the increase over time in the present value of the liability, is recorded each period.

As reclamation work is performed or liabilities are otherwise settled, the recorded amount of the liability is reduced.

Future reclamation costs are accrued based on management’s best estimate at the end of each period of the discounted costs expected to be incurred for the asset.

Such costs include facilities removal, earthworks, revegetation and on-going monitoring.

Changes in estimates are reflected prospectively in the period an estimate is revised.

Net Loss per Share

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For the years ended June 30, 2021 and 2020, 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 adopted ASU No.

2016-02 Leases effective July 1, 2019.

The adoption of this guidance did not have a material effect on the Company’s consolidated financial position, results of operation, cash flows and related disclosures.

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.

Right-of-use (“ROU”) assets related to operating leases are included in Other assets, non-current with related liabilities included in Accrued liabilities and Other long-term liabilities .

ROU 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.

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.

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

In the adoption of ASU No.

2016, the Company elected the short-term lease recognition exemption.

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

Revenue Recognition

The Company adopted Accounting Standards Code Topic 606, “Revenue from Contracts with Customers” (“Topic 606”) with a date of initial application of July 1, 2018.

As a result of this adoption, the Company has changed its accounting policy for revenue recognition.

Revenue is measured based on the amount of consideration that is expected to be received by the Company for providing goods or services under a contract with a customer, which is initially estimated with pricing specified in the contract and adjusted primarily for sales returns, discounts and other credits at contract inception then updated each reporting period.

The Company recognizes revenue when persuasive evidence of a contract with a customer exists and a performance obligation is identified and satisfied as the customer obtains control of the goods or services.

Revenue is recognized net of any taxes collected from customers and subsequently remitted to governmental authorities.

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

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

In circumstances where convertible debt contains embedded derivatives that are required 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 allocated 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 method.

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).

As of June 30, 2021 and 2020, there were no embedded derivatives.

Income taxes are determined using the asset and liability method.

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Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not.

The Company has adopted FASB ASC 740 as of its inception.

The Company has adopted FASB ASC 740 “Income Taxes” as of its inception.

Pursuant to FASB ASC 740 the Company is required to compute tax asset benefits for net operating losses carried forward.

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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 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 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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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.

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.

The adoption of ASU No.

2016-13 did not have a significant impact on the Company's consolidated financial position, results of operations, and cash flows.

In August 2018, the FASB issued ASU No.

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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.

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.

The adoption of ASU No.

2018-13 did not have a significant impact on the Company's consolidated financial position, results of operations, cash flows and related disclosures.

In November 26, 2019, the FASB issued ASU No.

2019-11, Codification Improvements to Topic 326, Financial Instruments – Credit Losses.

The changes will be effective for the Company’s fiscal year beginning July 1, 2020.

The amendments in this ASU clarify, correct errors in, improve, or address issues about certain topics related to the amendments in ASU No.

2016-13, Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments.

2016-13 was issued on June 16, 2016 and introduced an expected credit loss model for the impairment of financial assets measured at amortized cost basis.

The adoption of ASU No.

2019-11 did not have a significant impact on the Company's consolidated financial position, results of operations, cash flows and related disclosures.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes, which is intended to simplify various aspects related to accounting for income taxes.

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

This guidance is effective for public entities for fiscal years beginning after December 15, 2020, and for interim periods within those fiscal years.

The Company is currently evaluating the impact of implementing these changes on the Company’s consolidated financial position, operating results and cash-flows.

In August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40):

Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which addresses the complexity of its guidance for certain financial instruments with characteristics of liabilities and equity.

ASU 2020-06 removes the accounting models that require beneficial conversion features or cash conversion features associated with convertible instruments to be recognized as a separate component of equity, adds certain disclosure requirements for convertible instruments, amends the guidance for the derivatives scope exception for contracts in an entity’s own equity and simplifies the diluted earnings per share calculation for certain situations.

This ASU is effective for the Company beginning on January 1, 2024.

The Company is currently evaluating the impact of implementing these changes on the Company’s consolidated financial position, operating results and cash-flows.

In July 2021, the FASB issued ASU No.

2021-5, Leases.

These changes will be effective for fiscal years beginning after December 15, 2021.

The amendments affect lessors with lease contracts that have variable lease payments that do not depend on a reference index or a rate and would have resulted in the recognition of a selling loss at lease commencement if classified as sales-type or direct financing.

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

Fair Value Measurements

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Inputs that are both significant to the fair value measurement and unobservable.

The following table sets forth the Company’s financial assets and liabilities measured at fair value by level within the fair value hierarchy.

The following table sets forth the Company’s financial assets and liabilities measured at fair value on a recurring basis by level within the fair value hierarchy.

As required by ASC 820, assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

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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 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.

Treasury securities.

The carrying values of accounts payable and accrued liabilities and convertible debt (Note 6) approximate fair value as of June 30, 2021 and 2020.

Non-Cash Transactions

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.

During the year-ended June 30, 2021, the Company issued 257,353 shares of its common stock with a fair value of $277,941 for the acquisition of mining claims.

During the year-ended June 30, 2021, the Company issued 362,427 shares of Common Stock for payment of interest accrued and owing on its outstanding 2019 Convertible Notes with a fair value of $398,777.

Additionally, 1,200,000 shares of Common Stock were issued upon the conversion of 1,200 of its outstanding 2019 Convertible Notes.

The Company also issued 166,792 shares of Common Stock to Ausenco Engineering USA South Inc.

in exchange for consulting services to complete the Grassy Mountain feasibility study valued at $181,458.

During the comparative year-ended June 30, 2020, the Company issued 1,096,791 shares to Ausenco in exchange for services valued at $976,144 to complete a feasibility study at its Grassy Mountain Project.

Capital Stock

Authorized Capital

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).

Authorized capital stock consists of 200,000,000 shares of Common Stock with par value of $0.01 per common share (2020- 50,000,000 shares of Common Stock with par value $0.01 per common share).

An increase to authorized capital stock was approved by the Company’s stockholders during the year-ended June 30, 2021.

During the year-ended June 30, 2021, the Company issued 3,209,133 shares at an approximate average price of $1.21 through its at-the market offering.

Share issuance costs related to this were $157,979.

The Company also issued 362,427 shares for payment of interest accrued and owing (Note 4 and Note 6) with a fair value of $398,777.

The Company also issued 1,200,000 shares upon the conversion of 1,200 of the 2019 Senior Secured Convertible Notes (Note 4 and Note 6).

In addition, during the year-ended June 30, 2021, the Company issued 166,792 shares at a value of $1.09 per share of Common Stock to Ausenco in exchange for services to complete a feasibility study at its Grassy Mountain Project (Note 4).

It also issued 257,353 shares for the purchase of a mineral property with a fair value of $$277,941 (Note 4 and 7).

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.

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 $5,000,008.

Share issuance costs were $421,558 for net proceeds of $4,578,450.

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 through its at-the-market offering.

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.

Share issuance costs were $0.09 million for net proceeds of $2.91 million.

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

Each warrant will have 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.

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.

At June 30, 2021 there were 38,154,109 common shares issued and outstanding (June 30, 2020 – 32,958,404 common shares).

A summary of warrant exercisable into common stock as of June 30, 2020, and changes during year ended is presented below:

A summary of warrants exercisable into common stock as of June 30, 2021, and changes during years-ended June 30, 2021 and 2020 are presented below:

Exercise Price

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Outstanding at June 30, 2020

Outstanding at June 30, 2021

Stock Options and Stock Based Compensation

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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 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.

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

Option and share awards provide for accelerated vesting if there is a change in control (as defined in the employee share option plan).For the year-ended June 30, 2021, the Company granted 755,000 stock options to employees, directors and consultants.

For the year-ended June 30, 2020, the Company granted 690,000 stock options.

For the year-ended June 30, 2021, share-based compensation expense relating to service conditions options and performance conditions were $286,096 and $150,681, respectively (2020 - $73,509 and $129,683).

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 June 30, 2020, and changes during the year then ended is presented below.

A summary of option activity under the Stock Incentive and Compensation Plan as of June 30, 2021 and 2020, and changes during the years ended June 30, 2021 and 2020 are presented below.

Exercise Price

5 unchanged sentences

Outstanding at June 30, 2020

Forfeited or expired

Outstanding at June 30, 2021

Exercisable at June 30, 2021

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.

A summary of the status of Paramount’s non-vested options as of June 30, 2021 and 2020 and changes during the years ended June 30, 2021 and 2020 are presented below.

Non-vested Options

Average Grant-Date Fair

Nonvested at July 1, 2019

Non-vested at July 1, 2019

Nonvested at June 30, 2020

Nonvested at June 30, 2021

As of June 30, 2021 and 2020, there was $143,998 and $153,802 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 1.05 years.

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

That cost is expected to be recognized over a weighted-average period of 0.78 years (2020 – $1.05).

The total fair value of shares vested during the years ended June 30, 2021 and 2020, was $332,835 and $202,121, respectively.

Convertible Debt

3 unchanged sentences

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.

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 September 2023.

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

The effective interest rate of the 2019 Convertible Notes is 9.24%.

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

3 unchanged sentences

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.

At June 30, 2021, the working capital covenant was met by the Company.

During the year-ended June 30, 2021, a total of 1,200 notes were converted in 1,200,000 shares of Common Stock (2020 – nil).

Also during the year-ended June 30, 2021, the Company recorded an interest expense of $359,253 (2020 - $324,160).

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

3 unchanged sentences

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.

During the year-ended June 30, 2021, the PPP Loan and accrued interest was forgiven and a gain of $35,947 was recorded on the Company’s Consolidated Statements of Operation and Comprehensive Loss.

Mineral Properties

5 unchanged sentences

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.

Corporation (“Franco”) a two percent (2%) net smelter return royalty on minerals produced from its Sleeper Gold property for gross cash proceeds of $2,000,000.

Net proceeds of the transaction of $1,927,659 decreased the carrying value of the Sleeper property.

This decrease was offset by the change in reclamation and environmental obligation of $122,406 (Note 8).

During the year-ended June 30, 2021, the Company recorded an increase in reclamation and environmental obligation of $1,498,950 (2020 - $278,181) (Note 8) for the Sleeper Gold Project.

Also, during the year-ended June 30, 2021, the Company purchased 152 unpatented lode mining claims by issuing 257,353 shares of common stock for a fair value of $277,941 and cash payment of $87,500 for a total consideration of $365,441.

These claims have been included as part of the Sleeper Gold Project.

Grassy Mountain:

2 unchanged sentences

Reclamation and Environmental Obligation:

The Company holds an insurance policy which is in effect until 2033 related to its Sleeper Gold Project.

The policy covers reclamation costs up to an aggregate of $25 million in the event the Company’s bond is insufficient to cover any mandated reclamation obligations.

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

The balance of the commutation account and reclamation bonds at June 30, 2020 is $695,041 (June 30, 2019 - $1,401,833).

Reclamation and environmental costs are based principally on legal requirements.

2 unchanged sentences

however, actual amounts could differ from those based on estimates and assumptions.

The asset retirement obligation at the Sleeper Gold Project has been measured using the following variables:

1) Expected costs for earthwork, re-vegetation, in-pit water treatment, on-going monitoring, labor and management, 2) Inflation adjustment, and 3) Market risk premium.

The sum of the expected costs by year is discounted using the Company’s credit adjusted risk free interest rate from the time it expects to pay the retirement obligation to the time it incurs the obligation.

The reclamation and environmental obligation recorded on the balance sheet is equal to the present value of the estimated costs.

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

Assumptions used to compute the asset retirement obligations for the year ended June 30, 2020 for the Sleeper Gold Project included a credit adjusted risk free rate and inflation rate of 9.76% (2019 – 9.76%) and 1.6% (2019 – 1.6%), respectively.

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

Changes to the Company’s reclamation and environmental obligation for the year ended June 30, 2020 are as follows:

The Company has posted several cash bonds as financial security to satisfy reclamation requirements.

The balance of posted cash reclamation bonds at June 30, 2021 is $533,703 (June 30, 2020 - $695,041).

Paramount is responsible for managing the reclamation activities from the previous mine operations at the Sleeper Gold Mine as directed by the BLM and the Nevada State Department of Environmental Protection (“NDEP”).

Paramount has estimated the undiscounted reclamation costs for existing disturbances at the Sleeper Gold Project required by the BLM to be $3,557,944.

These costs are expected to be incurred between the years calendar 2021 and 2060.

Paramount has also estimated undiscounted reclamation cost as required by the NDEP to be $1,470,000.

These costs include on-going monitoring and new requests from the NDEP to convert three processing ponds from the historical operations to evaporation cell ponds by 2023.

These costs are expected to be incurred between 2021 and 2039.

The sum of expected costs by year are discounted using the Company’s credit adjusted risk free interest rate from the time it expects to pay the retirement to the time it incurs the obligation.

The asset retirement obligation for the Sleeper Gold Project recorded on the balance sheet is equal to the present value of the estimated reclamation costs as required by both the BLM and NDEP.

The following variables were used in the calculation for the fiscal years ending June 30, 2021 and 2020:

Weighted average credit adjusted risk free rate

Weighted-average inflation rate

Changes to the Company’s asset retirement obligation for the Sleeper Gold Mine for the year ended June 30, 2021 are as follows:

June 30, 2021

1 unchanged sentence

Balance at beginning of year

Accretion expense

Change in estimate of existing obligation

Additions and changes in estimates

Balance at end of year

3 unchanged sentences

Leasing of water rights to third party

Reimbursement of workers compensation insurance

Segmented Information

27 unchanged sentences

Change in estimates

Change in tax rates

Change in valuation allowance

18 unchanged sentences

Commitments and Contingencies:

Lease Commitments

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

11 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 June 30, 2020.

All required payments under the agreement due at June 30, 2021 have been paid.

The Frost Claims are without known mineral reserves.

Subsequent Events

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.

Subsequent to June 30, 2021, the Company issued 2,189,521 ATM shares at an average price of $0.86 per share and for gross proceeds of approximately $1,875,521.

The Company also issued 168,690 shares at a fair value price of $0.99 per share for the payment of interest accrued and owing at June 30, 2021 for its outstanding convertible debt.

Subsequent to June 30, 2021, the Company entered into an option agreement with Nevada Select to purchase mining claims in the State of Nevada for a total consideration of $300,000.

Payments under the agreement will based on achieving certain events over time.

Upon, signing the agreement Paramount made a payment of $20,000 to Nevada Select.

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