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Share Name | Share Symbol | Market | Type |
---|---|---|---|
El Capitan Precious Metals Inc (CE) | USOTC:ECPN | OTCMarkets | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.0001 | 0.0001 | 0.0001 | 0.0001 | 183,842 | 01:00:00 |
þ
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐ |
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Nevada
|
88-0482413
|
(State or Other Jurisdiction of
|
(I.R.S. Employer
|
Incorporation or Organization)
|
Identification No.)
|
5871 Honeysuckle Road
|
|
Prescott, Arizona
|
86305
|
(Address of Principal Executive Offices)
|
(Zip Code)
|
Large accelerated filer
|
☐
|
Accelerated filer
|
☐
|
||
Non-accelerated filer
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☐
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(Do not check if a smaller reporting company)
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Smaller reporting company
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☑
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|
Emerging growth company
|
☐
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Page
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4
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5
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6
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PART I
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Item 1
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7
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Item 1A
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12
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Item 1B
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17
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Item 2
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18
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Item 3
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24
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Item 4
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24
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PART II
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Item 5
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25
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Item 6
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26
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Item 7
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26
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Item 7A
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34
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Item 8
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35
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Item 9
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76
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Item 9A
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76
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Item 9B
|
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77
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PART III
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|
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||
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Item 10
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78
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Item 11
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80
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||
Item 12
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|
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84
|
||
Item 13
|
|
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86
|
||
Item 14
|
|
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|
87
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||
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PART IV
|
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||||
|
|
|
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||
Item 15
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|
89
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||
Item 16
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|
91
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||
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||||
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|
S-1
|
Exploration State
|
|
The term “exploration state” (or “exploration stage”) includes all issuers engaged in the search for mineral deposits (reserves) which are not in either the development or production stage.
|
|
|
|
Development Stage
|
|
The term “development stage” includes all issuers engaged in the preparation of an established commercially mineable deposit (reserves) for its extraction which are not in the production stage. This stage occurs after completion of a feasibility study.
|
|
|
|
Mineralized Material
|
|
The term “mineralized material” refers to material that is not included in the reserve as it does not meet all of the criteria for adequate demonstration for economic or legal extraction.
|
|
|
|
Probable (Indicated)
Reserve |
|
The term “probable reserve” or “indicated reserve” refers to reserves for which quantity and grade and/or quality are computed from information similar to that used for proven (measured) reserves, but the sites for inspection, sampling, and measurement are farther apart or are otherwise less adequately spaced. The degree of assurance, although lower than that for proven reserves, is high enough to assume continuity between points of observation.
|
|
|
|
Production Stage
|
|
The term “production stage” includes all issuers engaged in the exploitation of a mineral deposit (reserve).
|
|
|
|
Proven (Measured)
Reserve |
|
The term “proven reserve” or “measured reserve” refers to reserves for which (a) quantity is computed from dimensions revealed in outcrops, trenches, workings or drill holes; grade and/or quality are computed from the results of detailed sampling and (b) the sites for inspection, sampling and measurement are spaced so closely and the geologic character is so well defined that size, shape, depth and mineral content of reserves are well-established.
|
|
|
|
Reserve
|
|
The term “reserve” refers to that part of a mineral deposit which could be economically and legally extracted or produced at the time of the reserve determination. Reserves must be supported by a feasibility study done to bankable standards that demonstrates the economic extraction. (“Bankable standards” implies that the confidence attached to the costs and achievements developed in the study is sufficient for the project to be eligible for external debt financing.) A reserve includes adjustments to the in-situ tons and grade to include diluting materials and allowances for losses that might occur when the material is mined.
|
• |
our ability to continue as a going concern;
|
• |
we will require additional financing in the future to start production at the El Capitan Property and to bring it into sustained commercial production;
|
• |
our anticipated needs for working capital;
|
• |
our ability to secure financing;
|
• |
our dependence on our El Capitan Property for our future operating revenue, which property currently has no proven or probable reserves;
|
• |
our mineralized material calculations at the El Capitan Property are only estimates and are based principally on historic data;
|
• |
actual capital costs, operating costs, production and economic returns may differ significantly from those that we have anticipated;
|
• |
exposure to all of the risks associated with starting and establishing new mining operations, if the development of our mineral project is found to be economically feasible;
|
• |
title to some of our mineral properties may be uncertain or defective;
|
• |
land reclamation and mine closure may be burdensome and costly;
|
• |
significant risk and hazards associated with mining operations;
|
• |
the requirements that we obtain, maintain and renew environmental, construction and mining permits, which is often a costly and time-consuming process and may be opposed by local environmental groups;
|
• |
our exposure to material costs, liabilities and obligations as a result of environmental laws and regulations (including changes thereto) and permits;
|
• |
changes in the price of silver, gold and iron ore;
|
• |
extensive regulation by the U.S. government as well as state and local governments;
|
• |
our projected sales and profitability;
|
• |
anticipated trends in our industry;
|
• |
unfavorable weather conditions;
|
• |
the lack of commercial acceptance of our product or by-products;
|
• |
problems regarding availability of materials and equipment; and
|
• |
failure of equipment to process or operate in accordance with specifications, including expected throughput, which could prevent the production of commercially viable output.
|
Gold
|
2.53 oz.
|
Silver
|
0.54 oz.
|
Platinum
|
0.88 oz.
|
Gold - London Afternoon Fix Prices - US Dollars
|
||||||||||||
|
High
|
Low
|
Average
|
|||||||||
Period
|
||||||||||||
For the nine months ended September 30, 2017
|
$
|
1,346
|
$
|
1,151
|
$
|
1,251
|
||||||
For the year ended December 31, 2016
|
1,366
|
1,077
|
1,251
|
|||||||||
For the year ended December 31, 2015
|
1,297
|
1,040
|
1,160
|
|||||||||
For the year ended December 31, 2014
|
1,385
|
1,192
|
1,266
|
|||||||||
For the year ended December 31, 2013
|
1,694
|
1,192
|
1,411
|
|||||||||
For the year ended December 31, 2012
|
1,750
|
1,540
|
1,669
|
|||||||||
Data Source: Kitco
|
• |
economically insufficient mineralized materials;
|
• |
decrease in values due to lower metal prices;
|
• |
fluctuations in production cost that may make mining uneconomical;
|
• |
unanticipated variations in grade and other geologic problems;
|
• |
unusual or unexpected formations;
|
• |
difficult surface conditions;
|
• |
metallurgical and other processing problems;
|
• |
environmental hazards;
|
• |
water conditions; and
|
• |
government regulations.
|
• |
adverse changes in the worldwide prices for gold, silver or iron ore;
|
• |
disappointing results from our exploration or development efforts;
|
• |
failure to meet operating budget;
|
• |
decline in demand for our common stock;
|
• |
downward revisions in securities analysts’ estimates or changes in general market conditions;
|
• |
technological innovations by competitors or in competing technologies;
|
• |
investor perception of our industry or our prospects; and
|
• |
general economic trends.
|
ITEM 5. |
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
|
Price Range
|
|||||||
Quarter Ended
|
High
|
Low
|
||||||
|
||||||||
September 30, 2017
|
$
|
0.085
|
$
|
0.0416
|
||||
June 30, 2017
|
$
|
0.0874
|
$
|
0.045
|
||||
March 31, 2017
|
$
|
0.1068
|
$
|
0.047
|
||||
December 31, 2016
|
$
|
0.0925
|
$
|
0.04
|
||||
|
||||||||
September 30, 2016
|
$
|
0.199
|
$
|
0.035
|
||||
June 30, 2016
|
$
|
0.074
|
$
|
0.030
|
||||
March 31, 2016
|
$
|
0.067
|
$
|
0.034
|
||||
December 31, 2015
|
$
|
0.995
|
$
|
0.045
|
|
|
Page
|
|
|
|
|
36
|
|
|
|
|
Report of MaloneBailey, LLP | 37 | |
|
38
|
|
|
|
|
|
39
|
|
|
|
|
|
40
|
|
|
|
|
|
41
|
|
|
|
|
|
43
|
|
September 30,
|
|||||||
|
2017
|
2016
|
||||||
ASSETS
|
||||||||
CURRENT ASSETS:
|
||||||||
Cash and cash equivalents
|
$
|
80,416
|
$
|
296,619
|
||||
Prepaid expense and other current assets
|
36,596
|
135,196
|
||||||
Inventory
|
165,040
|
252,466
|
||||||
Total Current Assets
|
282,052
|
684,281
|
||||||
|
||||||||
Property and equipment, net of accumulated depreciation of $212,989 and $128,748,
respectively
|
572,711
|
577,883
|
||||||
Exploration property
|
257,000
|
1,864,608
|
||||||
Restricted cash
|
79,861
|
74,504
|
||||||
Deposits
|
22,440
|
22,440
|
||||||
Total Assets
|
$
|
1,214,064
|
$
|
3,223,716
|
||||
|
||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
|
||||||||
|
||||||||
CURRENT LIABILITIES:
|
||||||||
Accounts payable
|
$
|
228,922
|
$
|
224,079
|
||||
Current portion of long-term debt
|
8,520
|
—
|
||||||
Notes payable, net of unamortized discounts of $0 and $1,769, respectively
|
452,261
|
857,219
|
||||||
Convertible note payable, net of unamortized discount of $73,246 and $0, respectively
|
23,438
|
—
|
||||||
Note payable, related party
|
30,000
|
30,000
|
||||||
Derivative instruments liability
|
606,330
|
—
|
||||||
Accrued compensation - related parties
|
72,700
|
500,000
|
||||||
Accrued liabilities
|
130,716
|
407,332
|
||||||
Total Current Liabilities
|
1,552,887
|
2,018,630
|
||||||
|
||||||||
LONG-TERM LIABILITY:
|
||||||||
Note payable, net of current portion
|
12,805
|
—
|
||||||
Total Liabilities
|
1,565,692
|
2,018,630
|
||||||
STOCKHOLDERS’ EQUITY:
|
||||||||
Preferred stock, $0.001 par value; 5,000,000 shares authorized; 51 and 51 shares
issued and outstanding, respectively
|
—
|
—
|
||||||
Common stock, $0.001 par value; 500,000,000 shares authorized; 430,433,547 and
366,254,777 shares issued and outstanding, respectively
|
430,434
|
366,255
|
||||||
Additional paid-in capital
|
216,463,060
|
212,865,439
|
||||||
Accumulated deficit
|
(217,245,122
|
)
|
(212,026,608
|
)
|
||||
Total Stockholders’ Equity (Deficit)
|
(351,628
|
)
|
1,205,086
|
|||||
Total Liabilities and Stockholders’ Equity (Deficit)
|
$
|
1,214,064
|
$
|
3,223,716
|
|
Years Ended September 30,
|
|||||||
|
2017
|
2016
|
||||||
OPERATING EXPENSES:
|
||||||||
Mine, exploration and pilot plant costs
|
1,796,246
|
2,232,191
|
||||||
Impairment of exploration property
|
1,607,608
|
—
|
||||||
Professional fees
|
16,597
|
210,896
|
||||||
Administrative consulting fees
|
350,000
|
240,000
|
||||||
Legal and accounting fees
|
139,486
|
216,028
|
||||||
Other general and administrative
|
151,132
|
260,337
|
||||||
Total Operating Expenses
|
4,061,069
|
3,159,452
|
||||||
|
||||||||
LOSS FROM OPERATIONS
|
(4,061,069
|
)
|
(3,159,452
|
)
|
||||
|
||||||||
OTHER INCOME (EXPENSE):
|
||||||||
Interest income
|
27
|
20
|
||||||
Net miscellaneous income (expense)
|
12,745
|
(350 |
)
|
|||||
Loss on derivative instruments
|
(314,751
|
)
|
(767,940
|
)
|
||||
Loss on debt extinguishment
|
(660,376
|
)
|
(80,396
|
)
|
||||
Interest expense – related party
|
(5,400
|
)
|
(4,438
|
)
|
||||
Interest expense
|
(189,690
|
)
|
(495,181
|
)
|
||||
Total Other Income (Expense), Net
|
(1,157,445
|
)
|
(1,348,285
|
)
|
||||
|
||||||||
LOSS BEFORE PROVISION FOR INCOME TAXES
|
(5,218,514
|
)
|
(4,507,737
|
)
|
||||
|
||||||||
PROVISION FOR INCOME TAXES
|
—
|
—
|
||||||
|
||||||||
NET LOSS
|
$
|
(5,218,514
|
)
|
$
|
(4,507,737
|
)
|
||
|
||||||||
Basic and Diluted Per Share Data:
|
||||||||
Net Loss Per Share - basic and diluted
|
$
|
(0.01
|
)
|
$
|
(0.01
|
)
|
||
|
||||||||
Weighted Average Common Shares Outstanding:
|
||||||||
Basic and diluted
|
398,910,972
|
318,237,726
|
|
Additional
|
|||||||||||||||||||||||||||
|
Common Stock
|
Preferred Stock
|
Paid-In
|
Accumulated
|
||||||||||||||||||||||||
|
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Deficit
|
Total
|
|||||||||||||||||||||
|
||||||||||||||||||||||||||||
Balances at September 30, 2015
|
285,398,000
|
$
|
285,398
|
51
|
$
|
—
|
$
|
207,701,091
|
$
|
(207,518,871
|
)
|
$
|
467,618
|
|||||||||||||||
Common stock issued for services
and to contract miners
|
38,026,842
|
38,027
|
—
|
—
|
2,232,629
|
—
|
2,270,656
|
|||||||||||||||||||||
Options expense
|
—
|
—
|
—
|
—
|
31,206
|
—
|
31,206
|
|||||||||||||||||||||
Sales of common stock for cash
|
13,072,636
|
13,073
|
—
|
—
|
858,606
|
—
|
871,679
|
|||||||||||||||||||||
Stock placement fees
|
—
|
—
|
—
|
—
|
(25,000
|
)
|
—
|
(25,000
|
)
|
|||||||||||||||||||
Common stock issued for conversion
of notes payable and accrued
interest |
23,120,702
|
23,121
|
—
|
—
|
686,430
|
—
|
709,551
|
|||||||||||||||||||||
Common stock issued for accrued
compensation and payable
|
4,339,324
|
4,339
|
—
|
—
|
219,497
|
—
|
223,836
|
|||||||||||||||||||||
Common stock issued for accrued
liability
|
2,147,273
|
2,147
|
—
|
—
|
111,659
|
—
|
113,806
|
|||||||||||||||||||||
Warrants issued with debt
extinguishment
|
—
|
—
|
—
|
—
|
16,775
|
—
|
16,775
|
|||||||||||||||||||||
Financial derivatives associated with
convertible notes
|
—
|
—
|
—
|
—
|
1,027,838
|
—
|
1,027,838
|
|||||||||||||||||||||
Common stock issued as deferred
financing cost
|
150,000
|
150
|
—
|
—
|
4,708
|
—
|
4,858
|
|||||||||||||||||||||
Net loss
|
—
|
—
|
—
|
—
|
—
|
(4,507,737
|
)
|
(4,507,737
|
)
|
|||||||||||||||||||
Balances at September 30, 2016
|
366,254,777
|
$
|
366,255
|
51
|
$
|
—
|
$
|
212,865,439
|
$
|
(212,026,608
|
)
|
$
|
1,205,086
|
|||||||||||||||
Common stock issued for services
to pilot plant operator
|
14,500,000
|
14,500
|
—
|
—
|
887,300
|
—
|
901,800
|
|||||||||||||||||||||
Options expense
|
—
|
—
|
—
|
—
|
5,388
|
—
|
5,388
|
|||||||||||||||||||||
Sales of common stock for cash
|
21,924,992
|
21,925
|
—
|
—
|
883,086
|
—
|
905,011
|
|||||||||||||||||||||
Common stock issued for conversion
of notes payable and accrued
interest |
7,001,597
|
7,002
|
—
|
—
|
387,267
|
—
|
394,269
|
|||||||||||||||||||||
Common stock issued for accrued
compensation and payable
|
13,595,124
|
13,595
|
—
|
—
|
951,314
|
—
|
964,909
|
|||||||||||||||||||||
Common stock issued for accrued
liability
|
7,157,057
|
7,157
|
—
|
—
|
558,585
|
—
|
565,742
|
|||||||||||||||||||||
Warrants issued with debt
extinguishment
|
—
|
—
|
—
|
—
|
16,260
|
—
|
16,260
|
|||||||||||||||||||||
Financial derivatives associated with
convertible notes
|
—
|
—
|
—
|
—
|
(91,579
|
) |
—
|
(91,579
|
)
|
|||||||||||||||||||
Net loss
|
—
|
—
|
—
|
—
|
—
|
(5,218,514
|
)
|
(5,218,514
|
)
|
|||||||||||||||||||
Balances at September 30, 2017
|
430,433,547
|
$
|
430,434
|
51
|
$
|
—
|
$
|
216,463,060
|
$
|
(217,245,122
|
)
|
$
|
(351,628
|
) |
|
Years Ended September 30,
|
|||||||
|
2017
|
2016
|
||||||
|
||||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net loss
|
$
|
(5,218,514
|
)
|
$
|
(4,507,737
|
)
|
||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Warrant and option expense
|
5,388
|
31,206
|
||||||
Stock-based compensation
|
940,992
|
1,884,102
|
||||||
Amortization of debt discounts
|
148,523
|
407,182
|
||||||
Non-cash financing costs
|
375
|
—
|
||||||
Depreciation
|
86,101
|
66,596
|
||||||
Impairment of exploration property
|
1,607,608
|
—
|
||||||
Loss on debt extinguishment
|
660,376
|
80,396
|
||||||
Loss on derivative instruments
|
314,751
|
767,940
|
||||||
Gain on disposition of fixed asset
|
—
|
(352
|
)
|
|||||
Net change in operating assets and liabilities:
|
||||||||
Prepaid expenses and other current assets
|
151,052
|
9,200
|
||||||
Inventory
|
119,519
|
—
|
||||||
Accounts payable
|
4,843
|
(14,305
|
)
|
|||||
Accrued compensation - related parties
|
72,700
|
380,000
|
||||||
Accrued liabilities
|
51,072
|
191,425
|
||||||
Net Cash Used in Operating Activities
|
(1,055,214
|
)
|
(704,347
|
)
|
||||
|
||||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Purchase of equipment
|
(46,718
|
)
|
(2,385
|
)
|
||||
Proceeds from asset disposition
|
—
|
6,937
|
||||||
Restricted cash
|
(5,357
|
)
|
(5
|
)
|
||||
Net Cash Provided by (Used in) Investing Activities
|
(52,075
|
)
|
4,547
|
|||||
|
||||||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Proceeds from sale of common stock
|
905,011
|
871,679
|
||||||
Proceeds from convertible notes payable, net of original issue discounts (2016)
|
200,000
|
321,800
|
||||||
Payments on notes payable
|
(150,000
|
)
|
(215,000
|
)
|
||||
Payments on finance contracts
|
(63,925
|
)
|
(53,453
|
)
|
||||
Net Cash Provided by Financing Activities
|
891,086
|
925,026
|
||||||
|
||||||||
NET INCREASE/(DECREASE) IN CASH
|
(216,203
|
)
|
225,226
|
|||||
CASH, BEGINNING OF YEAR
|
296,619
|
71,393
|
||||||
CASH, END OF YEAR
|
$
|
80,416
|
$
|
296,619
|
|
September 30,
|
|||||
|
2017
|
2016
|
||||
|
||||||
Mineralized material stockpile
|
$
|
66,863
|
$
|
87,840
|
||
Concentrate
|
81,718
|
146,738
|
||||
Iron ore
|
16,459
|
17,888
|
||||
Total
|
$
|
165,040
|
$
|
252,466
|
Usefu
l
|
September 30,
|
||||||||
Lives
|
2017
|
2016
|
|||||||
|
|
||||||||
Computers and office equipment
|
3 years
|
$
|
6,626
|
$
|
8,486
|
||||
Automotive equipment
|
5 years
|
58,852
|
15,042
|
||||||
Mine equipment
|
3-10 years
|
532,285
|
532,285
|
||||||
Equipment structures and other
|
7-10 years
|
102,583
|
73,979
|
||||||
Lab and equipment
|
5 years
|
69,127
|
60,612
|
||||||
Permits
|
15 years
|
16,227
|
16,227
|
||||||
|
|
785,700
|
706,631
|
||||||
Less: accumulated depreciation
|
|
(212,989
|
)
|
(128,748
|
)
|
||||
|
|
||||||||
Net property and equipment
|
|
$
|
572,711
|
$
|
577,883
|
|
September 30,
|
|||||||
|
2017
|
2016
|
||||||
|
||||||||
Accounting and legal
|
$
|
35,500
|
$
|
285,025
|
||||
Mining costs
|
—
|
60,613
|
||||||
Miscellaneous
|
6,510
|
—
|
||||||
Interest
|
88,706
|
61,694
|
||||||
|
$
|
130,716
|
$
|
407,332
|
|
Principal
|
Unamortized
|
||||||||||
|
Amount
|
Discount
|
Net
|
|||||||||
Current:
|
||||||||||||
Notes payable and current portion of long-term debt
|
$
|
460,781
|
$
|
—
|
$
|
460,781
|
||||||
Convertible note payable
|
96,684
|
(73,246
|
)
|
23,438
|
||||||||
Notes payable – related party
|
30,000
|
—
|
30,000
|
|||||||||
|
$
|
587,465
|
$
|
(73,246
|
)
|
$
|
514,219
|
|||||
Long-Term:
|
||||||||||||
Note payable, net of current portion
|
$
|
12,805
|
$
|
—
|
$
|
12,805
|
|
Principal
|
Unamortized
|
||||||||||
|
Amount
|
Discount
|
Net
|
|||||||||
Current:
|
||||||||||||
Notes payable
|
$
|
858,988
|
$
|
(1,769
|
)
|
$
|
857,219
|
|||||
Notes payable – related party
|
30,000
|
—
|
30,000
|
|||||||||
|
$
|
888,988
|
$
|
(1,769
|
)
|
$
|
887,219
|
Level 1
|
Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
|
Level 2
|
Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
|
Level 3
|
Pricing inputs that are generally unobservable inputs and not corroborated by market data.
|
September 30, 2017:
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
|
||||||||||||||||
Assets
|
||||||||||||||||
Exploration property
|
$
|
—
|
$
|
—
|
$
|
257,000
|
$
|
257,000
|
||||||||
Liabilities
|
||||||||||||||||
Derivative instruments liabilities
|
$
|
—
|
$
|
—
|
$
|
606,330
|
$
|
606,330
|
September 30, 2016:
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Assets
|
|
|
|
|
|
|
|
|
||||||||
Exploration property
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,864,608
|
|
|
$
|
1,864,608
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
None
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Change in Fair
|
|||
|
Value for
|
|||
|
Year Ended
|
|||
|
September 30, 2017
|
|||
|
||||
Fair value as of September 30, 2016
|
$
|
—
|
||
Additions recognized as note discounts at inception
|
200,000
|
|||
Additions recognized as derivative loss at inception
|
409,898
|
|||
Amount reclassified from equity at inception
|
100,894
|
|||
Amount reclassified to equity upon resolution
|
(9,315
|
)
|
||
Change in fair value
|
(95,147
|
)
|
||
Fair value as of September 30, 2017
|
$
|
606,330
|
|
Change in Fair
|
|||
|
Value for
|
|||
|
Year Ended
|
|||
|
September 30, 2016
|
|||
|
||||
Fair value as of September 30, 2015
|
$
|
—
|
||
Additions recognized as note discounts at inception
|
259,898
|
|||
Additions recognized as derivative loss at inception
|
338,925
|
|||
Amount reclassified from equity at inception
|
355,126
|
|||
Amount reclassified to equity upon resolution
|
(1,382,964
|
)
|
||
Change in fair value
|
429,015
|
|||
Fair value as of September 30, 2016
|
$
|
—
|
|
Years Ended September 30,
|
|||||||
|
2017
|
2016
|
||||||
|
||||||||
Tax benefit at the federal statutory rate
|
$
|
990,951
|
$
|
984,773
|
||||
State tax benefit
|
197,341
|
196,110
|
||||||
Cumulative effect of true up
|
4,623
|
42,041
|
||||||
Expiration of state operating losses
|
(110,411
|
)
|
(138,659
|
)
|
||||
Increase in valuation allowance
|
(1,082,504
|
)
|
(1,084,265
|
)
|
||||
Income tax expense
|
$
|
—
|
$
|
—
|
|
|
Years Ended September 30,
|
||||||
|
|
2017
|
|
2016
|
||||
|
|
|
|
|
||||
Deferred tax assets - NOLS and other
|
|
$
|
10,818,000
|
|
|
$
|
9,735,496
|
|
Valuation allowance
|
|
|
(10,818,000
|
)
|
|
|
(9,735,496
|
)
|
Net deferred tax asset after valuation allowance
|
|
$
|
—
|
|
|
$
|
—
|
|
(i) |
Issued 1,000,0000 shares of S-8 common stock for accrued compensation payable to a retired officer and director valued at $49,800 on the date of issuance;
|
(ii) |
Issued 6,097,562 shares of restricted common stock and 6,097,562 shares of S-8 common stock for accrued compensation payable to three officers valued at $885,110 on the date of issuances and recorded a loss on debt extinguishment of $385,110;
|
(iii) |
Issued 3,000,000 shares of S-8 common stock and 2,774,513 shares of restricted common stock for accrued legal services at a market value of $485,554 and recorded a loss on debt extinguishment of $248,799;
|
(iv) |
Issued 1,382,544 S-8 common shares to our corporate attorney to retire our current obligations for services aggregating $80,187. The shares were issued at the closing market price on July 13, 2017 at $0.058.
|
(v) |
Issued 14,500,000 shares of S-8 common stock to our contract miners at a market value of $901,800, including payment of $32,093 for inventory, payment of $8,515 for lab equipment, an advance of $456,313 for pilot plant equipment costs and $404,879 for pilot plant operating costs and MSHA consulting;
|
(vi) |
Issued 7,684,671 shares of common stock under the 2016 Purchase Agreement with River North for aggregate cash proceeds of $344,575;
|
(vii) |
Issued 14,240,321 shares of common stock under the 2017 Purchase Agreement with L2 Capital for aggregate cash proceeds of $560,436;
|
(viii) |
Issued 200,000 shares of S-8 common stock to a mine consultant at a market value of $18,000 on the date of issuance;
|
(ix) |
Issued 3,403,890 shares of common stock for the conversion of a note payable and accrued interest at a market value of $113,768;
|
(x) |
Issued 446,988 shares of common stock for the partial conversion of a note payable and accrued interest at a market value $14,265;
|
(xi)
|
Issued 3,150,719 shares of common stock for the conversion of a note payable and accrued interest at a market value of $266,236 and recorded a debt extinguishment of $10,209; and
|
(xii) |
Issued 200,000 shares of restricted common stock for loan fees to an officer and director at a market value of $12,000 on the date of issuance.
|
(i) |
Issued 7,272,728 shares of restricted common stock with a fair value of $402,673, in settlement of two notes payable and accrued interest valued of $307,982, resulting in a loss of $94,691;
|
(ii) |
Issued an aggregate of 26,826,842 shares of restricted stock and S-8 common stock to our contract miners at a fair value of $1,508,556, recognized as a payment of $103,626 for accrued mining cost, $177,999 for services, $1,185,396 for the mining of inventory, and a prepayment of $41,534 for services and issued an aggregate of 700,000 shares of restricted stock and S-8 common stock for mining services valued at $37,100;
|
(iii) |
Issued 15,847,974 shares of restricted common stock for the conversion of two convertible notes and accrued interest of $306,878;
|
(iv) |
Issued to two lenders in connection with a loan extension, 75,000 shares each of restricted common stock with an aggregate value of $4,858 on the date of issuance;
|
(v) |
Issued 10,000,000 shares of S-8 common stock pursuant to the terms of the January 5, 2016 agreement with Logistica and valued at $689,000;
|
(vi) |
Issued 600,000 shares of restricted common stock and 3,391,820 shares of S-8 stock in connection with a value of $186,480 for the conversion accrued expenses of $217,550, resulting in a gain of $31,070;
|
(vii) |
Issued 700,000 shares of restricted common stock and 1,794,777 shares of S-8 stock in connection with a value of $135,614 for the conversion of accrued compensation of $151,161 resulting in a gain of $15,547 that was recognized in equity;
|
(viii) |
Issued 500,000 shares of restricted common stock to a creditor for carrying a significant balance. The market value of the shares issued was $36,000 and was classified as non-cash financing costs in the fiscal year ended September 30, 2017; and
|
(ix) |
Issued 13,072,636 shares of common stock under the 2016 Purchase Agreement with River North for aggregate cash proceeds of $871,679.
|
(i) |
In connection with the conversion of a note payable on March 30, 2017, the Company issued a fully vested three year warrant to purchase 250,000 shares of common stock of the Company at an exercise price of $0.08126 per share. The fair value of the warrants was determined to be $16,258 using the Black-Scholes option pricing model and was expensed to a loss on extinguishment of debt.
|
(ii) |
Pursuant to the February 21, 2017 Securities Purchase Agreement with an accredited investor, the Company issued to the investor a three year warrant to purchase up to 602,406 shares of the Company’s common stock at an exercise price equal to $0.3652 per share (which price is subject to anti-dilution adjustment in the event the Company issues additional convertible securities with lower conversion prices). As of June 30, 2017, the warrant price was reset to $0.08126 and the number of warrants increased to 2,707,343.
|
(iii) |
Pursuant to the February 21, 2017 Securities Purchase Agreement with an accredited investor, the Company issued to the investor a three year warrant to purchase up to 891,410 shares of the Company’s common stock at an exercise price equal to $0.2468 per share (which price is subject to anti-dilution adjustment in the event the Company issues additional convertible securities with lower conversion prices).
|
(i) |
Issued to an investor in consideration of the extension of the 2014 note, the Company amended the common stock purchase warrant to purchase 4,714,286 shares (subject to adjustment) of our common stock at an exercise price of $0.07 per share. The warrant is a fully vested three-year warrant. The note was mutually extended from July 17, 2015 to January 17, 2016. The warrant dated October 17, 2014 was cancelled. On January 19, 2016, the amended 2014 Note was extended from January 17, 2016 to September 19, 2016. In consideration of the extension, we issued to the investor a fully vested three year common stock purchase warrant to purchase 471,429 shares (subject to adjustment) of common stock of the Company at an exercise price of $0.051 per share, the closing price on the date of the agreed extension agreement. . The fair value of the warrants was determined to be $16,775 using Black-Scholes option price model and was expensed during the three months ended March 31, 2016.
|
(i) |
The Company granted to former director, a 125,000 five-year fully vested stock option. The aggregate relative fair value of the options was determined to be $5,388 using the Black-Scholes option pricing model on the date of grant and was expensed in the current fiscal year.
|
(i) |
The Company granted to three new directors, each 250,000 ten-year fully vested stock options. The aggregate relative fair value of the options was determined to be $31,206 using the Black-Scholes option pricing model on the dates of grant and was expensed in the current fiscal year.
|
Year Ended September 30, 2017:
|
|
|
|
|
Exercise prices
|
|
|
$0.0498
|
|
Expected volatilities
|
|
|
131.97%
|
|
Risk free interest rates
|
|
|
1.65%
|
|
Expected terms
|
|
|
5.0 years
|
|
Expected dividends
|
|
|
—
|
|
Year Ended September 30, 2016:
|
|
|
|
|
Exercise prices
|
|
|
$0.02 – $0.17
|
|
Expected volatilities
|
|
|
105.11% – 139.77%
|
|
Risk free interest rates
|
|
|
10.51% – 1.68%
|
|
Expected terms
|
|
|
1.3 – 5.0 years
|
|
Expected dividends
|
|
|
—
|
|
|
Stock Options
|
Stock Warrants
|
||||||||||||||
|
Weighted
|
Weighted
|
||||||||||||||
|
Average
|
Exercise
|
||||||||||||||
|
Shares
|
Price
|
Shares
|
Price
|
||||||||||||
|
||||||||||||||||
Outstanding at September 30, 2015
|
10,387,500
|
$
|
0.30
|
4,861,344
|
$
|
0.07
|
||||||||||
Granted
|
750,000
|
0.051
|
471,429
|
0.051
|
||||||||||||
Canceled
|
—
|
—
|
—
|
—
|
||||||||||||
Expired
|
—
|
—
|
—
|
—
|
||||||||||||
Exercised
|
—
|
—
|
—
|
—
|
||||||||||||
|
||||||||||||||||
Outstanding at September 30, 2016
|
11,137,500
|
$
|
0.264
|
5,332,773
|
$
|
0.071
|
||||||||||
Granted
|
125,000
|
0.05
|
4,451,159
|
0.153
|
||||||||||||
Canceled
|
—
|
—
|
(602,406
|
)
|
0.365
|
|||||||||||
Expired
|
—
|
—
|
—
|
—
|
||||||||||||
Exercised
|
—
|
—
|
—
|
—
|
||||||||||||
|
||||||||||||||||
Outstanding at September 30, 2017
|
11,262,500
|
$
|
0.262
|
9,181,526
|
$
|
0.091
|
||||||||||
|
||||||||||||||||
Exercisable at September 30, 2017
|
11,262,500
|
$
|
0.262
|
9,181,526
|
$
|
0.091
|
• |
The Note prohibits the Company, without L2 Capital’s consent, from issuing any Variable Rate Security without simultaneously satisfying all payment obligations under the Note. A “Variable Rate Security” is any security of the Company that has conversion rights in which the number of shares that may be issued upon conversion varies with the market price of the common stock.
|
• |
The Note prohibits the Company from entering into a transaction with any party other than L2 Capital that is structured in accordance with, based on, or related or pursuant to Section 3(a)(9) of the Securities Act of 1933, as amended (the “Securities Act”), without prior consent of L2 Capital, and any Section 3(a)(9) transaction that does occur will result in a liquidated damage charge to the Company equal to 25% of the outstanding principal balance of the Note (but not less than $15,000).
|
• |
A “most favored nations” clause will apply, pursuant to which, if the Company issues securities with any term more favorable to the holder thereof than the terms of the Note, L2 Capital may require that such term become a part of the Securities Purchase Agreement and the Note. Types of terms to which the “most favored nations” clause may apply include without limitation terms addressing conversion discounts, prepayment rate, conversion look-back periods, interest rates, original issue discounts, stock sale price, private placement price per share and warrant coverage.
|
• |
L2 Capital has a right of first refusal with respect to any bona fide capital or financing from any other third party.
|
• |
The Replacement Note prohibits the Company, without L2 Capital’s consent, repurchasing or otherwise acquiring any shares of its capital stock or any warrants, rights or options to purchase of acquire any such shares.
|
• |
The Replacement Note prohibits the Company, without L2 Capital’s consent, from issuing any Variable Rate Security without simultaneously satisfying all payment obligations under the Replacement Note. A “Variable Rate Security” is any security of the Company that has conversion rights in which the number of shares that may be issued upon conversion varies with the market price of the common stock.
|
• |
The Replacement Note prohibits the Company from entering into a transaction structured in accordance with, based upon, or related or pursuant to, in whole or in part, Section 3(a)(10) of the Securities Act of 1933, as amended (the “Securities Act”) (a “3(a)(10) Transaction”). If a 3(a)(10) Transaction does occur, then a liquidated damages charge of 100% of the outstanding principal balance of the Replacement Note at that time will be assessed and will become immediately due and payable to L2 Capital, either in the form of cash payment, an addition to the balance of the Replacement Note, or a combination of both forms of payment, as determined by L2 Capital.
|
• |
If the Company effectuates a reverse split with respect to its Common Stock, then a liquidated damages charge of 30% of the outstanding principal balance of the Replacement Note at that time will be assessed and will become immediately due and payable to L2 Capital, either in the form of cash payment, an addition to the balance of the Replacement Note, or a combination of both forms of payment, as determined by L2 Capital.
|
• |
The Replacement Note prohibits the Company from entering into a transaction with any party other than L2 Capital that is structured in accordance with, based on, or related or pursuant to Section 3(a)(9) of the Securities Act without prior consent of L2 Capital, and any Section 3(a)(9) transaction that does occur will result in a liquidated damage charge to the Company equal to 25% of the outstanding principal balance of the Note (but not less than $15,000).
|
• |
A “most favored nations” clause will apply, pursuant to which, if the Company issues securities with any term more favorable to the holder thereof than the terms of the Replacement Note, L2 Capital may require that such term become a part of the transactions contemplated by the Assignment Agreement and Replacement Note. Types of terms to which the “most favored nations” clause may apply include without limitation terms addressing conversion discounts, prepayment rate, conversion look-back periods, interest rates, original issue discounts, stock sale price, private placement price per share and warrant coverage.
|
• |
L2 Capital has a right of first refusal with respect to any bona fide capital or financing from any other third party.
|
Name
|
|
Age
|
|
Position
|
|
Director Since
|
||
|
|
|
|
|
|
|
||
John F. Stapleton
|
|
|
74
|
|
|
President, Chief Executive Officer, Director,
|
|
April 21, 2009
|
|
|
|
|
|
|
Chairman of the Board, Secretary
|
|
|
Charles C. Mottley
|
|
|
83
|
|
|
Director, President Emeritus
|
|
April 21, 2009
|
Stephen J. Antol
|
|
|
75
|
|
|
Chief Financial Officer
|
|
|
Timothy J. Gay
|
|
|
73
|
|
|
Director
|
|
December 4, 2015
|
Daniel G. Martinez
|
|
|
73
|
|
|
Director
|
|
July 7, 2016
|
John R. Balding
|
75
|
Director
|
September 12, 2017
|
|||||
Robert W. Shirk
|
68
|
Director
|
September 12, 2017
|
|||||
Douglas R. Sanders
|
69
|
Director
|
February 20, 2018
|
Name and Principal Position
|
Fiscal Year
|
Salary
|
Total
Compensation |
|||||||
|
|
|||||||||
John F. Stapleton (1)
|
2017
|
$
|
180,000
|
$
|
180,000
|
|||||
Chief Executive Officer, President
|
2016
|
$
|
180,000
|
$
|
180,000
|
|||||
Director, Chairman of the Board
|
|
|||||||||
|
|
|||||||||
Charles C. Mottley
|
2017
|
$
|
90,000
|
$
|
90,000
|
|||||
President Emeritus
|
2016
|
$
|
160,000
|
$
|
160,000
|
|||||
Director
|
|
|||||||||
|
|
|||||||||
Stephen J. Antol
|
2017
|
$
|
80,000
|
$
|
80,000
|
|||||
Chief Financial Officer
|
2016
|
$
|
80,000
|
$
|
80,000
|
(1) |
Mr. Stapleton has served as Chairman of the Board since April 21, 2009, served as Chief Financial Officer from February 2012 until January 2016, and as Chief Executive Officer and President since August 4, 2016. Mr. Stapleton currently has no written employment contract with the Company and receives compensation from the Company indirectly through the Company’s consulting arrangement with MRI of $180,000 annually in 2017 and 2016.
See paragraph titled
“John F. Stapleton”
above.
|
Name
|
Number of Securities
Underlying
Unexercised Options
Exercisable
|
Number of Securities
Underlying
Unexercised Options
Unexercisable
|
Option Exercise
Price
|
Option Expiration
Date
|
|||||||||
|
|
||||||||||||
John F. Stapleton
|
500,000
|
—
|
$
|
1.02
|
2/7/18
|
||||||||
|
500,000
|
—
|
$
|
0.38
|
1/31/19
|
||||||||
|
500,000
|
—
|
$
|
0.21
|
7/6/22
|
||||||||
|
500,000
|
—
|
$
|
0.215
|
1/15/18
|
||||||||
|
500,000
|
—
|
$
|
0.16
|
12/12/18
|
||||||||
|
500,000
|
—
|
$
|
0.31
|
3/14/19
|
||||||||
|
500,000
|
—
|
$
|
0.15
|
11/3/24
|
||||||||
|
|
||||||||||||
Charles C. Mottley
|
500,000
|
—
|
$
|
1.02
|
2/7/18
|
||||||||
|
500,000
|
—
|
$
|
0.21
|
7/6/22
|
||||||||
|
500,000
|
—
|
$
|
0.215
|
1/15/18
|
||||||||
|
500,000
|
—
|
$
|
0.16
|
12/12/18
|
||||||||
|
500,000
|
—
|
$
|
0.31
|
3/14/19
|
||||||||
|
500,000
|
—
|
$
|
0.15
|
11/3/24
|
||||||||
|
|
||||||||||||
Stephen J. Antol
|
100,000
|
—
|
$
|
0.215
|
1/15/18
|
||||||||
|
250,000
|
—
|
$
|
0.15
|
11/3/24
|
(1) |
All option grants reflected in the table above were granted under to the Company’s 2005 Stock Incentive Plan, as amended, or the Company’s 2015 Equity Incentive Plan, as amended.
|
Name
|
|
Director Fees
Earned or
Paid in Cash |
|
|
Stock Awards
|
|
|
Option Awards (2)
|
|
|
Total
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charles C. Mottley (1)(3)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John F. Stapleton (1)(4)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Clyde L. Smith (1)(5)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Timothy J. Gay (1)(6)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Daniel G. Martinez (1)(7)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
John R. Balding(1)(8)
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||||
Robert W. Shirk (1)(9)
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
(1) |
Mr. Mottley and Mr. Stapleton were appointed to the Board of Directors and Mr. Stapleton as Chairman of the Board on April 21, 2009; Dr. Clyde L. Smith was appointed to the Board of Directors on November 23, 2015; Mr. Timothy J. Gay was appointed to the Board of Directors on December 4, 2015, Mr. Daniel G. Martinez was appointed to the Board of Directors on July 7, 2016, and Mr. John Balding and Mr. Robert Shirk became Directors on September 12, 2017.
|
(2) |
Amounts shown reflect the grant date fair value, computed in accordance with FASB ASC 718, for stock based incentives granted during the fiscal 2016. Pursuant to SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. For a discussion of the assumptions relating to our valuations of the option awards, see
Note 1
to the financial statements included in this Annual Report on Form 10-K. These amounts reflect our accounting expense for these stock options and do not correspond to the actual value that may be recognized by the director.
|
(3) |
At September 30, 2017, Mr. Mottley held options to purchase 3,000,000 shares at a weighted average exercise price of approximately $0.34 per share, all of which were fully vested.
|
(4) |
At September 30, 2017, Mr. Stapleton held options to purchase 3,500,000 shares at a weighted average exercise price of approximately $0.35 per share, all of which were fully vested.
|
(5) |
During fiscal 2015, Dr. Smith was awarded an option to purchase 250,000 shares of our common stock at $0.05 per share, which had a grant date fair value of $9,542. At September 30, 2017, Dr. Smith held options to purchase 250,000 shares at a weighted average exercise price of $0.05 per share, all of which were fully vested.
|
(6) |
During fiscal 2015, Mr. Gay was awarded an option to purchase 250,000 shares of our common stock at $0.062 per share, which had a grant date fair value of $12,825. At September 30, 2017, Mr. Gay held options to purchase 250,000 shares at a weighted average exercise price of $0.062 per share, all of which were fully vested.
|
(7) |
During fiscal 2016, Mr. Martinez was awarded an option to purchase 250,000 shares of our common stock at $0.042 per share, which had a grant date fair value of $8,839. At September 30, 2017, Mr. Martinez held options to purchase 250,000 shares at a weighted average exercise price of $0.042 per share, all of which were fully vested.
|
(8) |
During fiscal 2017, Mr. Balding was not awarded an option to purchase shares of our common stock.
|
(9) |
During fiscal 2017, Mr. Shirk was not awarded an option to purchase shares of our common stock.
|
ITEM 12. |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
|
Amount and Nature of Beneficial Ownership
|
|||||||||||||
|
Common Stock
|
Series B Convertible
Preferred Stock (1)
|
||||||||||||
Name and Address of Beneficial Owner
|
Shares
|
% of Class (2)
|
Shares
|
% of Class
(2) |
||||||||||
|
||||||||||||||
Charles C. Mottley
5871 Honeysuckle Road Prescott, Arizona 86305 |
4,218,293
|
(3)
|
0.96%
|
—
|
—
|
|||||||||
John F. Stapleton
5871 Honeysuckle Road Prescott, Arizona 86305 |
10,486,938
|
(4)
|
2.40%
|
51
|
100.0%
|
|||||||||
Douglas R. Sanders
5871 Honeysuckle Road Prescott, Arizona 86305 |
5,462,854
|
(5)
|
1.25%
|
—
|
—
|
|||||||||
Timothy J. Gay
5871 Honeysuckle Road Prescott, Arizona 86305 |
304,990
|
(6)
|
*
|
—
|
—
|
|||||||||
Daniel G. Martinez
5871 Honeysuckle Road Prescott, Arizona 86305 |
250,000
|
(7)
|
*
|
—
|
—
|
|||||||||
John R. Balding
5871 Honeysuckle Road Prescott, Arizona 86305 |
726,238
|
(8)
|
*
|
—
|
—
|
|||||||||
Robert W. Shirk
5871 Honeysuckle Road Prescott, Arizona 86305 |
2,427,028
|
(9)
|
*
|
—
|
—
|
|||||||||
Stephen J. Antol
5871 Honeysuckle Road Prescott, Arizona 86305 |
6,648,446
|
(10)
|
1.52%
|
—
|
—
|
|||||||||
All officers and directors as a group (8 persons)
|
30,524,787
|
6.97%
|
51
|
100.0%
|
* |
Less than 1%
|
(1) |
Each share of Series B Convertible Preferred Stock entitles the holder thereof to 7,835,871 votes solely in respect of matters that relate to Company capitalization (including, without limitation, increasing and/or decreasing the number of authorized shares of common stock and/or preferred stock, and implementing forward and/or reverse stock splits) and changes in the Company’s name. Holders of Series B Convertible Preferred Stock do not otherwise have the right to vote such shares on matters brought before the Company’s stockholders.
|
(2) |
Applicable percentage of ownership is based on 437,759,960 shares of common stock and 51 shares of Series B Convertible Preferred Stock outstanding as of March 30, 2018, together with securities exercisable or convertible into shares of common stock within sixty (60) days of March 30, 2018 for each stockholder. Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Shares of common stock subject to options or warrants exercisable or convertible into shares of common stock that are currently exercisable or exercisable within sixty (60) days of March 30, 2018 are deemed to be beneficially owned by the person holding such options or warrants for the purpose of computing the percentage of ownership of such person, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person.
|
(3) |
Mr. Mottley is President Emeritus and a Director of the Company. Includes (i) 2,000,000 shares issuable upon the exercise of outstanding stock options that are currently exercisable or will become exercisable within sixty (60) days following March 30, 2018; and (ii) 10,000 shares of common stock held by Mr. Mottley’s spouse.
|
(4) |
Mr. Stapleton is the Chairman of the Board, President and Chief Executive Officer of the Company. Includes (i) 2,500,000 shares issuable upon the exercise of outstanding stock options that are currently exercisable or will become exercisable within sixty (60) days following March 30, 2018, (ii) 200,000 shares held indirectly by Management Resource Initiatives, Inc. a corporation wholly-owned by Mr. Stapleton, and (iii) 51 shares of common stock that are issuable upon conversion of Series B Convertible Preferred Stock held by Mr. Stapleton.
|
(5)
|
Mr. Sanders is a Director of the Company as of February 20, 2018. Includes 4,096,370 shares held indirectly by family members.
|
(6) |
Mr. Gay is a Director of the Company as of December 4, 2015. Includes 250,000 shares issuable upon the exercise of outstanding stock options that are currently exercisable or will become exercisable within sixty (60) days following March 30, 2018.
|
(7) |
Mr. Martinez is a Director of the Company as of July 7, 2016. Includes 250,000 shares issuable upon the exercise of outstanding stock options that are currently exercisable or will become exercisable within sixty (60) days following March 30, 2018.
|
(8) |
Mr. Balding is a Director of the Company as of September 12, 2017.
|
(9) |
Mr. Shirk is a Director of the Company as of September 12, 2017.
|
(10) |
Mr. Antol is Chief Financial Officer of the Company as of January 18, 2016. Includes (i) 250,000 shares issuable upon the exercise of outstanding stock options that are currently exercisable or will become exercisable within sixty (60) days following March 30, 2018 and (ii) 125,000 shares held indirectly by Mr. Antol’s spouse.
|
Plan Category
|
Number of securities
to be issued upon exercise of outstanding options, warrants and rights (A) |
Weighted average
price of outstanding options, warrants and rights (B) |
Number of securities
remaining available for future issuance under equity compensation plans (excluding (A)) (C) |
|||||||||
|
||||||||||||
Equity compensation plans approved by security
holders:
|
||||||||||||
|
||||||||||||
2005 Stock Incentive Plan
|
8,387,500
|
$
|
0.312
|
—
|
||||||||
|
||||||||||||
Equity compensation plans not approved by
security holders:
|
||||||||||||
|
||||||||||||
2015 Equity Incentive Plan
|
750,000
|
0.05
|
6,356,455
|
|||||||||
|
||||||||||||
Stock options issued outside the Plans
|
2,125,000
|
0.15
|
—
|
|||||||||
|
||||||||||||
Total
|
11,262,500
|
$
|
0.263
|
6,356,455
|
Semple, Marchal
& Cooper, LLP
|
MaloneBailey,
LLP
|
MaloneBailey,
LLP
|
||||||||||
2017
|
2017
|
2016
|
||||||||||
Audit Fees (1)
|
$
|
60,000
|
$
|
24,000
|
$
|
54,750
|
||||||
Audit-Related Fees (2)
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||
Tax Fees (3)
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||
All Other Fees (4)
|
$
|
—
|
$
|
—
|
$
|
—
|
_______________
|
|
(1)
|
Audit Fees.
Audit fees include fees for professional services performed for the audit of our annual consolidated financial statements, review of quarterly consolidated financial statements included in our SEC filings, and assistance and issuance of consents associated with other SEC filings.
|
(2)
|
Audit-Related Fees.
Audit-related fees are fees for assurance and related services that are reasonably related to the audit. This category includes fees related to assistance consulting on financial accounting/reporting standards.
|
(3)
|
Tax Fees.
Tax fees primarily include professional services performed with respect to preparation of our federal and state tax returns for our consolidated subsidiaries.
|
(4)
|
All Other Fees.
All other fees include products and services provided, other than the services reported comprising Audit Fees, Audit Related Fees and Tax Fees.
|
Exhibit
Number
|
|
Description
|
|
|
|
2.1
|
|
Agreement and Plan of Merger between the Company, Gold and Minerals Company, Inc. and MergerCo, dated June 28, 2010
(incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed July 7, 2010)
.
|
3.1
|
|
Articles of Incorporation, as amended
(incorporated by reference to Exhibit 3.1 to the Company’s Form S-4 Registration Statement #333-170281 filed on November 2, 2010)
.
|
3.2
|
|
Certificate of Amendment to Articles of Incorporation
(incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed October 1, 2014).
|
3.3
|
|
Certificate of Amendment to Articles of Incorporation
(incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed October 4, 2016).
|
3.4
|
|
Certificate of Designation of Series A Junior Participating Preferred Stock
(incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed August 31, 2011).
|
3.5
|
|
Certificate of Designation of Series B Convertible Preferred Stock
(incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed August 1, 2014).
|
3.6a
|
|
Restated Bylaws
(incorporated by reference to Exhibit 3.5 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016 filed with the SEC on August 15, 2016).
|
4.1
|
|
Rights Agreement dated August 25, 2011 between the Company and OTR, Inc.
(incorporated by reference to Exhibit 4.2 to the Company’s Form 8-K filed on August 31, 2011)
.
|
10.1
|
|
2005 Stock Incentive Plan, as amended
(incorporated by reference to Exhibit 10.1 to the Company’s Form S-8 Registration Statement #333-177417 filed on October 20, 2011)
.
|
10.2
|
|
Form of Stock Option Agreement (Director)
(incorporated by reference to Exhibit 10.3 to the Company’s Annual Report on Form 10-K filed December 14, 2012)
.
|
10.3a
|
|
El Capitan Precious Metals, Inc. 2015 Equity Incentive Plan
(incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed on October 14, 2015)
|
10.3b
|
|
Amendment No. 1 to El Capitan Precious Metals, Inc. 2015 Equity Incentive Plan
(incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed on December 18, 2015)
|
10.3c
|
|
Amendment No. 2 to El Capitan Precious Metals, Inc. 2015 Equity Incentive Plan
(incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed on April 26, 2016)
|
10.3d
|
|
Amendment No. 3 to El Capitan Precious Metals, Inc. 2015 Equity Incentive Plan
(incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed on August 5, 2016)
|
10.3e
|
|
Amendment No. 4 to El Capitan Precious Metals, Inc. 2015 Equity Incentive Plan
(incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed on November 2, 2016)
|
10.4
|
|
Form of Stock Option Agreement (Director) under El Capitan Precious Metals, Inc. 2015 Equity Incentive Plan
(incorporated by reference to Exhibit 10.4 to the Company’s Annual Report on Form 10-K filed January 13, 2017)
.
|
10.5
|
|
Agreement dated March 10, 2014 between the Company and Glencore AG
(incorporated by reference to Exhibit 10.1 to Amendment No. 1 to the Company’s Quarterly Report on Form 10-Q filed on July 22, 2014)
.+
|
10.6
|
|
Master Service Agreement dated February 28, 2014 by and between the Company and Logistica, U.S. Terminals, LLC
, including the Iron Ore Processing Agreement attached as Appendix A thereto
(incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed on May 14, 2014)
. +
|
10.7a
|
|
Note and Warrant Purchase Agreement dated October 17, 2014, between the Company and Connelly Land LLC
, including the 8% Secured Promissory Note, Common Stock Purchase Warrant and Security Agreement attached as Exhibits A, B and C thereto
(incorporated by referenced to Exhibit 10.8 to the Company’s Annual Report on Form 10-K filed on December 29, 2014)
.
|
10.7b
|
|
Amended Note dated as of August 24, 2015 and Warrant Purchase Agreement between the Company and Connelly Land LLC
(incorporated by referenced to Exhibit 10.7b to the Company’s Annual Report on Form 10-K filed on January 11, 2016)
.
|
10.8a
|
|
Promissory Note dated February 4, 2015 between the Company and George Nesemeier and Robert J. Runck
(incorporated by referenced to Exhibit 10.8 to the Company’s Annual Report on Form 10-K filed on January 11, 2016)
.
|
10.8b | ||
10.8c | ||
10.9
|
|
Promissory Note dated February 4, 2015 between the Company and Management Resource Initiative, Inc.
(incorporated by referenced to Exhibit 10.9 to the Company’s Annual Report on Form 10-K filed on January 11, 2016)
.
|
10.10
|
|
Agreement dated April 16, 2015 between the Company and S&L Energy, LLC
(incorporated by referenced to Exhibit 10.10 to the Company’s Annual Report on Form 10-K filed on January 11, 2016)
.
|
Exhibit
Number
|
|
Description
|
10.11a
|
|
Securities Purchase Agreement dated December 2, 2015 between the Company and Union Capital, LLC
, including front-end and back-end Notes attached as Exhibits A and B, and Collateralized Secured Promissory Note
(incorporated by referenced to Exhibit 10.12 to the Company’s Annual Report on Form 10-K filed on January 11, 2016)
.
|
10.11b
|
|
Amendment No. 1 to Convertible Promissory Note dated January 12, 2016 between the Company and Union Capital, LLC
(incorporated by referenced to Exhibit 10.3b to the Company’s Quarterly Report on Form 10-Q filed on February 16, 2016)
.
|
10.12
|
|
Agreement dated January 5, 2016 between the Company and Logistica U.S. Terminals, LLC
(incorporated by referenced to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q filed on February 16, 2016)
.
|
10.13
|
|
Securities Purchase Agreement dated January 26, 2016 between the Company and Bay Private Equity Inc.
, including the $180,000 Convertible Redeemable Note as Exhibit A
(incorporated by referenced to Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q filed on February 16, 2016)
.
|
10.14a
|
|
Equity Purchase Agreement dated March 16, 2016 by and between the Company and River North Equity, LLC
(incorporated by referenced to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on March 21, 2016)
.
|
10.14b
|
|
Registration Rights Agreement dated March 16, 2016 by and between the Company and River North Equity, LLC
(incorporated by referenced to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on March 21, 2016)
.
|
10.14c
|
|
Commitment Convertible Promissory Note dated March 16, 2016, issued in favor of River North Equity, LLC
(incorporated by referenced to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on March 21, 2016)
.
|
10.14d
|
|
Securities Purchase Agreement dated March 16, 2016 by and between the Company and River North Equity, LLC
(incorporated by referenced to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on March 21, 2016)
.
|
10.14e
|
|
Bridge Convertible Promissory Note dated March 16, 2016, issued in favor of River North Equity, LLC
(incorporated by referenced to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed on March 21, 2016)
.
|
10.14f
|
|
Amendment No. 1 dated December 9, 2016 to Equity Purchase Agreement dated March 16, 2016 by and between El Capitan Precious Metals, Inc. and River North Equity, LLC
(incorporated by referenced to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 9, 2016)
.
|
10.14g
|
|
Termination dated February 21, 2017 by and between El Capitan Precious Metals, Inc. and River North Equity, LLC
(incorporated by referenced to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on February 23, 2017)
.
|
10.15*
|
||
10.16a
|
|
Securities Purchase Agreement dated February 21, 2017 by and between El Capitan Precious Metals, Inc. and Lucas Hoppel
(incorporated by referenced to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 23, 2017)
.
|
10.16b
|
|
Convertible Note dated February 21, 2017 issued in favor of Lucas Hoppel
(incorporated by referenced to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on February 23, 2017)
.
|
10.16c
|
|
Form of Common Stock Purchase Warrant to be issued in connection with advances under the Convertible Note filed as Exhibit 10.16b to this report
(incorporated by referenced to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on February 23, 2017)
.
|
10.16d
|
|
Amendment to the Securities Purchase Agreement dated July 24, 2017
between the Company and Lucas Hoppel (
incorporated by referenced to Exhibit 10.1(a) to the Company’s Quarterly Report on Form 10-Q filed on August 14, 2017)
.
|
10.16e
|
|
Common Stock Purchase Warrant for 891,410 Shares, dated July 28, 2017, issued to Lucas Hoppel
(
incorporated by referenced to Exhibit 10(b)1 to the Company’s Quarterly Report on Form 10-Q filed on May 18, 2017)
.
|
10.17a
|
|
Equity Purchase Agreement dated February 21, 2017 by and between El Capitan Precious Metals, Inc. and L2 Capital, LLC
(incorporated by referenced to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed on February 23, 2017)
.
|
10.17b
|
|
Registration Rights Agreement dated February 21, 2017 by and between El Capitan Precious Metals, Inc. and L2 Capital, LLC
(incorporated by referenced to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed on February 23, 2017)
.
|
10.18
|
Agreement of Exchange dated March 30, 2017 between El Capitan Precious Metals, Inc. and Connelly Land LLC
(incorporated by referenced to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on May 18, 2017)
.
|
|
10.19a
|
Securities Purchase Agreement dated December 18, 2017 by and between El Capitan Precious Metals, Inc. and L2 Capital, LLC
(incorporated by referenced to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on January 8, 2018)
.
|
|
10.19b
|
Promissory Note dated December 18, 2017, issued in favor of L2 Capital, LLC
(incorporated by referenced to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on January 8, 2018)
.
|
|
10.20
|
Promissory Note dated February 12, 2018, between El Capitan Precious Metals, Inc. and the Robert W. Shirk Revocable Trust dated January 2018 | |
14.1
|
|
Code of Ethics for Senior Financial Management
(incorporated by referenced to Exhibit 14.1 to the Company’s Annual Report on Form 10-K filed on January 11, 2016)
.
|
21.1
|
|
Subsidiaries of El Capitan Precious Metals, Inc.
(incorporated by referenced to Exhibit 21.1 to the Company’s Annual Report on Form 10-K filed on December 29, 2014)
.
|
Exhibit
Number
|
|
Description
|
23.1#
|
|
Consent of Semple, Marchal & Cooper, LLP
|
23.2* | Consent of MaloneBailey, LLP | |
31.1*
|
|
|
31.2*
|
|
|
32.1*
|
|
|
101.INS*
|
|
XBRL Instance Document**
|
101.SCH*
|
|
XBRL Extension Schema Document**
|
101.CAL*
|
|
XBRL Extension Calculation Linkbase Document**
|
101.DEF*
|
|
XBRL Extension Definition Linkbase Document**
|
101.LAB*
|
|
XBRL Extension Labels Linkbase Document**
|
101.LAB*
|
|
XBRL Extension Labels Linkbase Document**
|
101.PRE*
|
|
XBRL Extension Presentation Linkbase Document**
|
* |
Filed herewith.
|
** |
In accordance with Rule 406T of Regulation S-T, this information is deemed not “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.
|
+ |
Confidential treatment has been granted as to certain portions of this exhibit pursuant to Rule 406 of the Securities Act of 1933, as amended, or Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
|
# |
To be filed by amendment.
|
|
EL CAPITAN PRECIOUS METALS, INC.
|
|
|
|
|
|
|
|
Date: March 30, 2018
|
By:
|
/s/ John F. Stapleton
|
|
John F. Stapleton
|
|
|
Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
|
|
|
Date: March 30, 2018
|
By:
|
/s/ Stephen J. Antol
|
|
Stephen J. Antol
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial and Accounting Officer)
|
Name
|
|
Title
|
|
Date
|
|
|
|
|
|
|
|
|
|
|
/s/ John F. Stapleton
|
|
Chief Executive Officer, Director
|
|
March 30, 2018
|
John F. Stapleton
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Stephen J. Antol
|
|
Chief Financial Officer
|
|
March 30, 2018
|
Stephen J. Antol
|
|
(Principal Financial Officer)
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Charles C. Mottley
|
|
Director and President Emeritus
|
|
March 30, 2018
|
Charles C. Mottley
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Timothy J. Gay
|
|
Director
|
|
March 30, 2018
|
Timothy J. Gay
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Daniel G. Martinez
|
|
Director
|
|
March 30, 2018
|
Daniel G. Martinez
|
|
|
|
|
/s/ John R. Balding
|
|
Director
|
|
March 30, 2018
|
John R. Balding
|
|
|
|
|
/s/ Robert W. Shirk
|
|
Director
|
|
March 30, 2018
|
Robert W. Shirk
|
|
|
|
|
/s/ Douglas R. Sanders |
Director
|
March 30, 2018
|
||
Douglas R. Sanders |
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