Filing identity and period
The supplied filing is Oroplata Resources, Inc.’s Form 10-K for the fiscal year ended September 30, 2016—not a filing for American Battery Technology Co. The filing describes a pre-revenue mineral exploration company shifting focus from a Dominican Republic gold claim to lithium claims in Nevada.
Financial results and position
| Metric | FY2016 / September 30, 2016 | FY2015 / September 30, 2015 |
|---|---|---|
| Revenue | $0 | $0 |
| Net loss | $28,331,180 | $37,988 |
| Operating expenses | $28,293,931 | $37,988 |
| Cash used in operations | $402,402 | $32,941 |
| Cash used in investing | $100,000 | $0 |
| Cash from financing | $582,496 | $20,639 |
| Cash | $90,040 | $9,946 |
| Total assets | $90,040 | $10,946 |
| Total liabilities | $609,033 | $101,666 |
| Working capital deficit | $215,993 | $90,720 |
The loss included a $27,051,848 mineral-property impairment, $152,500 in exploration costs, $1,089,583 in general and administrative expenses, and $37,249 of interest expense. The filing reports loss per share of $0.66 for FY2016 versus $0.00 for FY2015.
Material changes and financing
- In June 2016, the company agreed to acquire 500 lithium placer claims covering 10,000 acres in Nye County, Nevada, for $100,000 and shares. It later issued an additional 636,943 shares in connection with removing a proposed royalty. The filing says the total consideration was $27,051,848 and that the property was impaired in FY2016.
- The company ceased plans for further work on its Mogollon gold claim and reported no known lithium resources or reserves on the Nevada property.
- Financing included $534,000 in note proceeds and $48,496 in related-party advances. Liabilities included a $303,000 unsecured note bearing 2.5% interest, due on or before June 15, 2018, and convertible financing bearing 10% interest. Convertible balances and discounts are described inconsistently in the filing.
- The company reported 57,136,943 shares outstanding at September 30, 2016; elsewhere it reports 59,136,943 as of December 7, 2016. It also discloses 1,594,000 potentially issuable shares from convertible debt and warrants. A November 2016 issuance of 2,000,000 shares to Plateau Ventures is disclosed as subsequent to year-end.
Outlook, risks, and unusual items
Management expected to rely on further equity or debt financing to fund operations and exploration; it gave no revenue or production guidance. It said exploration could take years and there is no certainty the company will identify an economic deposit or reach production. Drilling would require permits, and a Plan of Operations could take months to years for approval. The company warned that additional share issuance could dilute existing holders and that financing may not be available on favorable terms.
The auditor expressed substantial doubt about the company’s ability to continue as a going concern, citing no revenue and negative working capital. Management also concluded disclosure controls and internal control over financial reporting were ineffective, citing material weaknesses including inadequate monitoring and no separate audit committee. The auditor did not attest to internal-control effectiveness. The filing reports no legal proceedings or material off-balance-sheet arrangements.
Important facts to verify
- Confirm the issuer identity: this filing names Oroplata Resources, Inc., not American Battery Technology Co.
- Reconcile the reported share counts at year-end and December 7, 2016, including the timing and terms of the subsequent 2,000,000-share issuance.
- Verify the Nevada claims’ acquisition consideration, share valuation, ownership transfer, required fees, and the extent and basis of the impairment. The filing’s impairment amounts differ: $27,051,848 in the statements and MD&A versus $27,051,548 in the mineral-property note.
- Reconcile convertible-note principal, carrying values, discounts, conversion prices, and warrants across the financial statements and notes.
- Assess available liquidity, related-party support, debt maturities, and the company’s ability to secure funding and obtain exploration permits.