Filing identity and period
The supplied filing is Great West Resources, Inc.’s unaudited Form 10-Q for the quarter ended September 30, 2014, filed November 12, 2014. This does not match the request metadata identifying Nextplat Corp; verify the issuer and filing before relying on this summary. The company reported itself as a shell company and a smaller reporting company. It focused on mineral exploration, principally silver, and had no revenue or active mining operations.
Financial results and liquidity
| Metric | Three months ended September 30, 2014 | Nine months ended September 30, 2014 |
|---|---|---|
| Revenue | $0 | $0 |
| Operating expenses | $82,993 | $580,961 |
| Operating loss | $82,993 | $580,961 |
| Other income, net | $393,112 | $380,407 |
| Net income (loss) | $310,119 | $(200,554) |
| Basic and diluted earnings (loss) per share | $0.19 | $(0.13) |
For the nine months, operating cash flow was $(34,900), financing cash flow was $435,000, and cash increased to $400,100 from zero at year-end 2013. At September 30, cash was $400,100 against current liabilities of $786,652; working capital deficit was approximately $387,000. Total assets were $400,100, and stockholders’ deficit was $386,552. The company reported an accumulated deficit of approximately $49.2 million. The filing reports no interest expense in 2014 periods shown and no material capital-expenditure commitments. No gross margin or debt ratio is clearly provided; there was no revenue.
Changes versus prior comparable periods
- Quarterly operating expenses fell 49% to $82,993 from $163,412; nine-month expenses rose 19% to $580,961 from $487,639. The nine-month increase was driven chiefly by professional and consulting expense, including approximately $179,834 of director option compensation and higher legal and accounting costs. Management fees fell to zero from $225,000 for the nine months after a prior services agreement ended.
- Quarterly net income of $310,119 compared with a $144,203 loss; nine-month net loss narrowed to $200,554 from $510,128. The change chiefly reflects unusual, non-operating items rather than sales: $178,345 of income from aged liabilities written off and a $195,000 gain from forgiveness of the former CEO’s accrued salary.
- Nine-month operating cash use was $34,900, compared with $20 in the prior-year period. The company raised $400,000 through a September private placement and received a $35,000 related-party loan.
Outlook, risks, and unusual items
- Management said it did not expect to be profitable for the remainder of 2014. It had no revenue, available credit, or other external working-capital source and said further financing was necessary; failure to obtain funding could require curtailing operations. Management’s plan to raise capital was not assured. The filing states that substantial doubt exists about the company’s ability to continue as a going concern.
- On October 27, 2014, the company learned that annual BLM maintenance payments for its 76 and COD mining claims had not been made in August 2013; it may have lost rights to both properties. The properties had no reserves. A third party also disputed the company’s rights to nine COD claims.
- After quarter-end, the company raised another $100,000 in a private placement. Related parties exchanged $35,000 of notes and former debenture holders exchanged $98,274 of unpaid interest for Series D preferred shares. Series C and D preferred shares carry voting rights and are convertible into common stock, creating potential dilution and voting changes.
- Management concluded disclosure controls were ineffective as of September 30 because of limited resources and insufficient independent transaction review. The filing also disclosed bank balances above the $250,000 FDIC insurance limit.
- Other significant post-quarter changes included a new CEO/CFO appointment and resignations by directors and the Secretary. The filing says those resignations were not due to disagreements with the company.
Most important facts to verify
- Confirm the issuer: the provided filing names Great West Resources, Inc., not Nextplat Corp.
- Confirm the status and legal rights to the 76 and COD claims, including whether late maintenance payments can preserve or restore them.
- Verify cash availability, current obligations, and the terms and completion of post-quarter financing and preferred-stock exchanges.
- Reconcile reported share counts and potential dilution: the balance sheet lists 9,510,950 common shares at September 30, while the cover lists 11,510,950 as of November 12.
- Assess whether the company obtained adequate financing and remediated the ineffective disclosure controls; the filing provides no assurance of either outcome.