(The accompanying notes are an integral part of these consolidated financial statements)
(The accompanying notes are an integral part of these consolidated financial statements)
(The accompanying notes are an integral part of these consolidated financial statements)
(The accompanying notes are an integral part of these consolidated financial statements)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.
Organization and Nature of Operations
Oroplata Resources Inc. (the “Company”) was incorporated under the laws of the state of Nevada on October 6, 2011 for the purpose of acquiring and developing mineral properties. The Company has a wholly-owned subsdiary called Oroplata Exploraciones E Ingenieria SRL, which was incorporated in the Dominican Republic on January 10, 2012. On July 26, 2016, the Company incorporated Lithortech Resources Inc., a Nevada company, as a wholly-owned subsidiary. The Company currently holds mineral rights in the Dominican Republic and in the Western Nevada Basin of Nye County in the state of Nevada.
Going Concern
These consolidated financial statements have been prepared on a going concern basis, which implies that the Company will continue to realize its assets and discharge its liabilities in the normal course of business. As at September 30, 2017, the Company has not earned revenue, has negative cash flows from operations, has a working capital deficit of $1,266,005 and an accumulated deficit of $31,217,242. The continuation of the Company as a going concern is dependent upon the continued financial support from its management, and its ability to identify future investment opportunities and obtain the necessary debt or equity financing, and generating profitable operations from the Company’s future operations. If the Company is able to obtain financing, there is no certainty that terms will be favorable to the Company. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
2.
Summary of Significant Accounting Policies
(a)
Basis of Presentation
The financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”) and are expressed in U.S. dollars. The Company’s fiscal year end is September 30.
(b)
Cash and Cash Equivalents
The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents. As of September 30, 2017 and 2016, there were no cash equivalents.
(c)
Use of Estimates
The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to the fair value of stock-based compensation, recoverability of long-lived assets, and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.
(d)
Long-Lived Assets
Long-lived assets, such as property and equipment, mineral properties, and purchased intangibles with finite lives (subject to amortization), are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable in accordance with Accounting Standards Codification topic 360 “Property, Plant, and Equipment”. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed significantly before the end of its estimated useful life.
F-6
OROPLATA RESOURCES, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2.
Summary of Significant Accounting Policies
(continued)
(d)
Long-Lived Assets (continued)
Recoverability of assets is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by an asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized as the amount by which the carrying amount exceeds the estimated fair value of the asset. The estimated fair value is determined using a discounted cash flow analysis. Any impairment in value is recognized as an expense in the period when the impairment occurs. Asset Retirement Obligations
The Company follows the provisions of ASC 410,
Asset Retirement and Environmental Obligations
, which establishes 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.
(e)
Loss per Share
The Company computes net income (loss) per share in accordance with ASC 260,
Earnings per Share
. ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. At September 30, 2017, the Company has 9,196,545 (2016 – 1,584,000) potentially dilutive shares.
(f)
Foreign Currency Translation
The Company’s functional and reporting currency is the United States dollar. Foreign currency transactions are primarily undertaken in Canadian dollars. Foreign currency transactions are translated to United States dollars in accordance with ASC 830,
Foreign Currency Translation Matters
, using the exchange rate prevailing at the balance sheet date. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income.
(g)
Comprehensive Loss
ASC 220,
Comprehensive Income
, establishes standards for the reporting and display of comprehensive loss and its components in the financial statements. As at September 30, 2017 and 2015, the Company has no items representing comprehensive income or loss.
(h)
Revenue Recognition
Revenue from the sale of minerals will be recognized when a contract is in place and minerals are delivered to the customer.
(i)
Financial Instruments
Pursuant to ASC 820,
Fair Value Measurements and Disclosures
, an entity is required to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value:
Level 1
Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.
F-7
OROPLATA RESOURCES, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2.
Summary of Significant Accounting Policies
(continued)
(i)
Financial Instruments (continued)
Level 2
Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.
Level 3
Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.
The Company’s financial instruments consist principally of cash, accounts payable and accrued liabilities, and amounts due to related parties. Pursuant to ASC 820, the fair value of cash is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. The recorded values of all other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.
(j)
Income Taxes
The Company accounts for income taxes using the asset and liability method in accordance with ASC 740,
Accounting for Income Taxes
. The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.
Due to the Company’s net loss position from inception on October 6, 2011 to September 30, 2017, there was no provision for income taxes recorded. As a result of the Company’s losses to date, there exists doubt as to the ultimate realization of the deferred tax assets. Accordingly, a valuation allowance equal to the total deferred tax assets has been recorded at September 30, 2017.
(k)
Stock-based Compensation
The Company records stock-based compensation in accordance with ASC 718,
Compensation – Stock Compensation
using the fair value method. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. Equity instruments issued to employees and the cost of the services received as consideration are measured and recognized based on the fair value of the equity instruments issued. As at September 30, 2017 and 2016, the Company did not grant any stock options.
(l)
Mineral Property Costs
Mineral property acquisition costs are capitalized as incurred. Exploration and evaluation costs are expensed as incurred until proven and probable reserves are established. The Company assesses the carrying costs for impairment under ASC 360, “Property, Plant, and Equipment” at each fiscal quarter end. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs then incurred to develop such property, are capitalized. Such costs will be amortized using the units-of-production method over the estimated life of the probable reserve. If mineral properties are subsequently abandoned or impaired, any capitalized costs will be charged to operations.
F-8
OROPLATA RESOURCES, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2.
Summary of Significant Accounting Policies
(continued)
(m)
Advertising and Marketing Costs
The Company expenses advertising and marketing development costs as incurred.
(n)
Recent Accounting Pronouncements
The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
3.
Mineral Property
(a)
The Company has acquired the mineral rights to the Mogollon claim located in the Province of San Juan near the villages of Solorin and El Toro in the Dominican Republic for $10,000 which included the cost of a geological report.
(b)
On June 15, 2016, the Company acquired the mineral rights to 500 lithium claims, with an option to purchase an additional 600 lithium claims, situated in the Railroad Valley in the Western Nevada Basin of Nye County, Nevada in exchange for $277,500.
Of the $277,500 payable, $100,000 was due immediately upon signing of the agreement and could be paid within 10 days, $100,000 was due after confirmation of the claims being free from all liens, encumbrances, and mortgages (within 30 days of signing the agreement), and $77,500 upon registration with the BLM for the claims that are due (to be completed on or before July 31, 2016).
The entire amount of $277,500 was advanced by various individuals and is recorded in accounts payable and accrued liabilities on the balance sheet. Due to payments being late and not paid on-time per the agreement, the Company agreed to issue 636,943 restricted shares of common stock. In November 2016, a settlement agreement related to the purchase of the Nye County properties was reached, in which, the parties settled on payment of $252,500, the return of the previously issued 636,943 restricted shares of common stock and the issuance of 2,000,000 unrestricted shares of common stock. The $25,000 reduction in the required payment was recorded as a gain on extinguishment of debt on the statement of operations.
The total consideration given for the mineral rights was $1,231,848 which includes the $200,000 payment ($77,500 was recorded as exploration expense) and the 636,943 shares of common stock valued at $1,031,848. The total amount of $1,231,848 was impaired and recorded as an impairment loss during the year ended September 30, 2016.
4.
Convertible Notes Payable
(a)
On July 18, 2016, the Company entered into a convertible note agreement, as amended, with a non-related party for proceeds of $75,000. The terms of the convertible note became effective on February 15, 2017. The amount owing is secured, bears interest at 10%, is convertible into common shares of the Company at $0.24 per share, and is due on February 18, 2017. In September 2017, the conversion price was amended to $0.11 per share and the due date extended to December 31, 2017. The initial amortized discount was $9,375 and as at September 30, 2017, the carrying value of the note payable is $75,000 (September 30, 2016 - $nil), the unamortized discount on the note is $nil (September 30, 2016 - $nil), and accrued interest of $4,685 (September 30, 2016 - $nil) has been recorded in accounts payable and accrued liabilities.
(b)
On July 18, 2016, the Company entered into a loan agreement, as amended, with a non-related party for proceeds of $121,000. The amount owing is secured, bears interest at 10%, is convertible into common shares of the Company at $0.50 per share, and is due on April 18, 2017. On January 31, 2017, the due date was extended to December 31, 2017. During the year ended September 30, 2016, the Company recorded a beneficial conversion feature of $121,000. In September 2017, the conversion price was amended to $0.11 per share. As at September 30, 2017, the carrying value of the note payable is $121,000 (2016 - $32,679), the unamortized discount on the note is $nil (2016 - $88,321), and accrued interest of $15,382 (2016 - $3,282) has been recorded in accounts payable and accrued liabilities.
F-9
OROPLATA RESOURCES, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
4.
Convertible Notes Payable (continued)
As an incentive for the loan, the Company issued 121,000 cashless warrants to the note holder as a bonus incentive, which has an exercise price of $0.50 per warrant until July 18, 2021. The fair value of the cashless warrants was $229,069, and was calculated using the Black-Scholes option pricing model assuming no expected dividends, volatility of 239%, and risk-free rate of 1%.
(c)
On September 28, 2016, the Company entered into a loan agreement, as amended with a non-related party for proceeds up to $550,000. On September 30, 2016, the Company received proceeds of $110,000, net of issuance fees of $10,000. The amount owing is secured, bears interest at 10%, and is due on September 30, 2017, and is convertible into common shares of the Company at $0.10 per share. During the year ended September 30, 2016, the Company recorded a beneficial conversion feature of $110,000. In September 2017, the conversion price was amended to $0.11 per share and the due date extended to December 31, 2017. As at September 30, 2017, the carrying value of the note payable is $110,000 (2016 - $nil), the unamortized discount on the note is $nil (2016 - $110,000), and accrued interest of $11,000 (2016 - $nil) has been recorded in accounts payable and accrued liabilities.
As an incentive for the loan, the Company issued 121,000 cashless warrants to the note holder as a bonus incentive, which has an exercise price of $0.50 per warrant until September 30, 2021. The fair value of the cashless warrants was $65,990, and was calculated using the Black-Scholes option pricing model assuming no expected dividends, volatility of 233%, and risk-free rate of 1%.
(d)
On February 16, 2017, the Company entered into a loan agreement with a non-related party for proceeds up to $250,000. On February 16, 2017, the Company received proceeds of $32,428, net of issuance fees of $2,948. On February 24, 2017, the Company received proceeds of $77,000, net of issuance fees of $7,000. On April 17, 2017, the Company received proceeds of $13,750, net of issuance fees of $1,250. On April 26, 2017, the Company received proceeds of $88,000, net of issuance fees of $8,000. On June 13, 2017, the Company received proceeds of $38,822 net of issuance fees of $3,882. The aggregate principal amount owed of $250,000 is secured, bears interest at 10%, is due one year after the date of funding for each tranche, and is convertible into common shares of the Company at $0.10 per share. In September 2017, the conversion price was amended to $0.11 per share. During the year ended September 30, 2017, the Company recorded a beneficial conversion feature of $262,353. As at September 30, 2017, the carrying value of the note payable is $250,000 (2016 - $nil), the unamortized discount on the note is $nil (2016 - $nil), and accrued interest of $12,236 (2016 - $nil) has been recorded in accounts payable and accrued liabilities.
(e)
On July 25, 2017, the Company entered into a loan agreement with a non-related party for proceeds up to $550,000. On July 25, 2017 the Company received proceeds of $44,000, net of issuance fees of $4,000. On August 17, 2017, the Company received proceeds of $110,000, net of issuance fees of $10,000. The aggregate principal amount owed of $154,000 is secured, bears interest at 10%, is due one year after the date of funding for each tranche, and is convertible into common shares of the Company at $0.10 per share. During the year ended September 30, 2017, the Company recorded a beneficial conversion feature of $16,000. As at September 30, 2017, the carrying value of the note payable is $140,937 (2016 - $nil), the unamortized discount on the note is $13,063 (2016 - $nil), and accrued interest of $2,507(2016 - $nil) has been recorded in accounts payable and accrued liabilities.
5.
Related Party Transactions
(a)
As of September 30, 2017, the Company owes $120,146 (2016 - $120,146) to the former Chief Executive Officer and Director of the Company for advances to the Company to fund day-to-day operations. The amounts owing are unsecured, non-interest bearing, and due on demand.
(b)
As of September 30, 2017, the Company owes $85,500 (2016 - $33,000) to the former Chief Executive Officer and Director of the Company for advances to the Company to fund day-to-day operations and accrued management fees. The amounts owing are unsecured, non-interest bearing, and due on demand. During the year ended September 30, 2017, the Company accrued $60,000 (2016 - $30,000) of management fees, received advances of $nil (2016 - $10,000), and repaid $7,500 (2016 - $7,000) to the former Chief Executive Officer of the Company.
F-10
OROPLATA RESOURCES, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
5.
Related Party Transactions (continued)
(c)
As of September 30, 2017, the Company owes $12,500 (2016 - $25,000) to directors of the Company for accrued management fees. The amounts owing are unsecured, non-interest bearing, and due on demand. During the year ended September 30, 2017, the Company recorded management fees of $nil and repaid $12,500 to the directors of the Company.
(d) As of September 30, 2017, the Company owes $100 (2016 - $nil) to the Secretary and director of the Company for cash advance for the Company’s new bank account. The amounts owing are unsecured, non-interest bearing, and due on demand.
6.
Common Shares
Authorized: 500,000,000 shares of common stock, with par value of $0.001.
Year Ended September 30, 2016
(a)
On May 31, 2016, the former Chief Executive Officer and Director of the Company sold 25,000,000 common shares of the Company to the Chief Executive Officer and Director of the Company for proceeds of $25,000 in a private sale. The transaction has no impact on the issued and outstanding common shares of the Company.
(b)
On June 15, 2016, the Company acquired mineral properties in Nye County, Nevada from Plateau Ventures LLC (“Plateau”), a non-related party, in exchange for the issuance of 636,943 common shares of the Company with a fair value of $1,031,848, which is the end of day trading price of the Company’s common shares on the date of the agreement which was the date that the shares became issuable. In addition, the Company issued 16,000,000 common shares with a fair value of $25,920,000 to individuals for no consideration received.
(c)
On August 19, 2016, the Company issued 500,000 common shares with a fair value of $425,000 to a consultant for services. The fair value of the common shares is based on the end of day trading price of the Company’s common shares on the date of issuance.
Year Ended September 30, 2017
(a)
On November 8, 2016, the Company issued 2,000,000 shares of common stock with a fair value of $600,000. The shares were issued as part of a settlement agreement related to the purchase of the Nye County properties, in which, the parties settled on payment of $252,500 and the return of the previously issued 636,943 shares of common stock. Refer to Note 3.
(b)
On January 31, 2017, the Company issued 300,000 shares of common stock with a fair value of $87,000 for consulting services.
(c)
On February 8, 2017, the Company issued 400,000 shares of common stock with a fair value of $96,000 to settle outstanding accounts payable of $60,000 resulting in a $36,000 loss on settlement of debt.
(d)
On February 16, 2017, the Company received 2,000,000 common shares which were cancelled and returned to treasury. Refer to Note 7.
(e)
On February 16, 2017, the Company issued 500,000 common shares with a fair value of $130,000 for services.
(f)
On February 23, 2017, the Company issued 300,000 common shares with a fair value of $75,000 for legal services.
(g)
On February 24, 2017, the Company received 636,943 common shares which were cancelled and returned to treasury. Refer to Note 3.
(h)
On July 31, 2017, the Company issued 500,000 common shares with a fair value of $65,000 for professional services.
F-11
OROPLATA RESOURCES, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
7.
Share Purchase Warrants
On February 15, 2017, the Company issued 500,000 share purchase warrants as bonus compensation for debt financing with an exercise price of $0.15 per share of common stock for a period of five years. The fair value of the share purchase warrants was $133,295, calculated using the Black-Scholes option pricing model assuming no expected dividends, volatility of 212%, expected life of 5 years, and a risk-free rate of 1%.
On February 16, 2017, the Company issued 2,000,000 share purchase warrants with an exercise price of $0.001 per share of common stock for a period of five years to replace 2,000,000 shares of common stock which were cancelled and returned to treasury (refer to Note 6). The fair value of the share purchase warrants was $519,682, calculated using the Black-Scholes option pricing model assuming no expected dividends, volatility of 212%, expected life of 5 years, and a risk-free rate of 1% and was recorded as an expense.
|
Number of
cashless warrants
|
|
Weighted average exercise price
$
|
|
|
|
|
Balance, September 30, 2016
|
242,000
|
|
0.50
|
|
|
|
|
Issued
|
2,500,000
|
|
0.03
|
|
|
|
|
Balance, September 30, 2017
|
2,742,000
|
|
0.07
|
Additional information regarding share purchase warrants as of September 30, 2017, is as follows:
|
Outstanding and exercisable
|
Range of
Exercise Prices
$
|
Number of Warrants
|
Weighted Average Remaining Contractual Life (years)
|
|
|
|
0.001
|
2,000,000
|
4.6
|
0.15
|
500,000
|
4.6
|
0.50
|
242,000
|
4.0
|
|
|
|
|
2,742,000
|
4.5
|
8.
Income Taxes
The Company has $2,588,674 of net operating losses carried forward to offset taxable income in future years which expire commencing in fiscal 2032. The income tax benefit differs from the amount computed by applying the US federal income tax rate of 30% to net loss before income taxes. As at September 30, 2017 and 2016, the Company had no uncertain tax positions. The Company’s last three years of tax returns are open for examination by taxing authorities.
|
September 30, 2017
$
|
|
September 30, 2016
$
|
|
|
|
|
Net loss before taxes
|
2,690,342
|
|
28,356,180
|
Statutory rate
|
30%
|
|
30%
|
|
|
|
|
Computed expected tax recovery
|
807,103
|
|
8,506,854
|
Permanent differences and other
|
(340,177)
|
|
(8,221,376)
|
Change in valuation allowance
|
(466,926)
|
|
(285,478)
|
Income tax provision
|
–
|
|
–
|
F-12
OROPLATA RESOURCES, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
8.
Income Taxes (continued)
The significant components of deferred income tax assets and liabilities as at September 30, 2017 and 2016 after applying enacted corporate income tax rates are as follows:
|
2017
$
|
|
2016
$
|
|
|
|
|
Net operating losses carried forward
|
776,602
|
|
336,694
|
Valuation allowance
|
(776,602)
|
|
(336,694)
|
|
|
|
|
Net deferred tax asset
|
–
|
|
–
|
9. Restatement
The Company has restated its consolidated financial statements as at September 30, 2016 and for the year then ended to reflect adjustments related to notes payable that were not valid obligations of the Company, and issuance of common shares for the acquisition of mineral properties that were not issued for proper consideration. This restatement resulted in an increase to net loss of $25,000 and no change to net loss per share.
The impact of the restatement as at September 30, 2016 and for the year then ended is summarized below:
Consolidated Balance Sheet
|
As at September 30, 2016
|
|
As reported
$
|
Adjustment
$
|
As restated
$
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
95,208
|
328,000
|
423,208
|
|
|
|
|
Total Current Liabilities
|
306,033
|
328,000
|
634,033
|
|
|
|
|
Notes payable
|
303,000
|
(303,000)
|
–
|
|
|
|
|
Total Liabilities
|
609,033
|
25,000
|
634,033
|
|
|
|
|
Stockholders’ Equity
|
|
|
|
|
|
|
|
Deficit
|
(28,501,900)
|
(25,000)
|
(28,526,900)
|
|
|
|
|
Total Stockholders’ Equity
|
(518,993)
|
(25,000)
|
(543,993)
|
F-13
OROPLATA RESOURCES, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
9. Restatement (continued)
Consolidated Statement of Operations
|
Year ended September 30, 2016
|
|
As reported
$
|
Adjustment
$
|
As restated
$
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
Exploration costs
|
152,500
|
(75,000)
|
77,500
|
Impairment of mineral property
|
27,051,848
|
(25,820,000)
|
1,231,848
|
|
|
|
|
Net loss before other expense
|
(28,293,931)
|
25,895,000
|
(2,398,931)
|
|
|
|
|
Other expenses
|
–
|
(25,920,000)
|
(25,920,000)
|
|
|
|
|
Total other income (expense)
|
(37,249)
|
(25,920,000)
|
(25,957,249)
|
|
|
|
|
Net loss for the year
|
(28,331,180)
|
(25,000)
|
(28,356,180)
|
Consolidated Statement of Stockholders’ Equity (Deficit)
|
Year ended September 30, 2016
|
|
As reported
$
|
Adjustment
$
|
As restated
$
|
|
|
|
|
Deficit
|
(28,501,900)
|
(25,000)
|
(28,526,900)
|
F-14
OROPLATA RESOURCES, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
9. Restatement (continued)
Consolidated Statement of Cash Flows
|
Year ended September 30, 2016
|
|
As reported
$
|
Adjustment
$
|
As restated
$
|
|
|
|
|
Operating Activities
|
|
|
|
|
|
|
|
Net loss for the year
|
(28,331,180)
|
(25,000)
|
(28,356,180)
|
|
|
|
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
|
|
Impairment loss on mineral property
|
27,051,848
|
(25,820,000)
|
1,231,848
|
Shares issued for other expenses
|
–
|
25,920,000
|
25,920,000
|
|
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
75,192
|
128,000
|
203,192
|
|
|
|
|
Net Cash Used In Operating Activities
|
(402,402)
|
203,000
|
(199,402)
|
|
|
|
|
Investing Activities
|
|
|
|
|
|
|
|
Mineral property acquisition costs
|
(100,000)
|
100,000
|
–
|
|
|
|
|
Net Cash Used in Investing Activities
|
(100,000)
|
100,000
|
–
|
|
|
|
|
Changes in financing activities
|
|
|
|
|
|
|
|
Proceeds from issuance of notes payable
|
534,000
|
(303,000)
|
231,000
|
|
|
|
|
Net Cash Provided by Financing Activities
|
582,496
|
(303,000)
|
279,496
|
F-15
OROPLATA RESOURCES, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
10. Subsequent Events
We have evaluated subsequent events through to the date of issuance of the consolidated financial statements, and did not have any material recognizable subsequent events after September 30, 2017 with the exception of the following:
(a)
On December 4, 2017, the Company granted 1,000,000 share purchase warrants to a non-related party for professional services. Each share purchase warrant is exercisable into one common share of the Company at $0.10 per share for a period of one year from the date of issuance.
(b)
On December 5, 2017, the Company issued 578,696 shares of common stock for the conversion of $66,550 of convertible notes payable.
(c)
On December 29, 2017, the Company issued 10,700,000 common shares to consultants of the Company for services rendered. In addition, the Company cancelled and reissued 1,000,000 common shares to the Chief Executive Officer of the Company (“CEO”).
(d)
On December 29, 2017, the Company issued 6,000,000 restricted common shares to directors of the Company for services rendered. In addition, the Company entered into consulting agreements with each director of the Company for $5,000 per month for a period of three years, and an additional issuance of 1,000,000 common shares per director on the first and second anniversary of the consulting agreement.
(e)
On December 29, 2017, the Company issued 4,000,000 common shares to the CEO upon finalization of a formal employment agreement (the “Agreement”). Under the terms of the Agreement, the Company will pay $70,000 as compensation for past services and receive future monthly payments of $20,833 per month. Furthermore, the Company will also issue an additional 1,000,000 common shares on August 7, 2018 and 2019 as long as the CEO is still providing services to the Company.
F-16