As filed with the Securities and Exchange Commission on March 17, 2017
Registration No. 333- __________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
|
OROPLATA RESOURCES, INC.
|
(Exact name of registrant as specified in its charter)
|
|
|
|
|
|
Nevada
|
|
7372
|
|
33-1227980
|
(State or jurisdiction of
incorporation or organization)
|
|
(Primary Standard Industrial
Classification Code Number)
|
|
(I.R.S. Employer
Identification No.)
|
170 S Green Valley Parkway, Suite #300
Henderson, NV 89012
(702) 318-7218
(Address, including zip code and telephone number,
including area code, of registrants principal executive offices)
Michael Mason
Chief Executive Officer
170 S Green Valley Parkway, Suite #300
Henderson, NV 89012
(702) 318-7218
(Name including zip code and telephone number,
including area code, of agent for service)
With copies to:
Marc J. Ross, Esq.
Jay Yamamoto, Esq.
Sichenzia Ross Ference Kesner LLP
61 Broadway, 32
nd
Floor
New York, New York 10006
(212) 930-9700
Approximate date of proposed sale to the public:
From time to time after the effective date of this registration statement.
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.
X
.
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.
.
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.
.
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.
.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.
|
|
|
|
Large accelerated filer
|
.
|
Accelerated filer
|
.
|
Non-accelerated filer
|
.
|
Smaller reporting company
|
X
.
|
(Do not check if a smaller reporting company)
|
|
|
CALCULATION OF REGISTRATION FEE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Title of Each Class of Securities to be
Registered
|
|
Amount to be
Registered (1)
|
|
|
Proposed
Maximum
Aggregate
Offering
Price
Per Share (2)
|
|
|
Proposed
Maximum
Aggregate
Offering Price
|
|
|
Amount of
Registration
Fee (3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock, par value $0.001 per share, issuable pursuant to a certain investment agreement
|
|
|
5,000,000
|
|
|
$
|
0.24
|
|
|
$
|
1,200,000
|
|
|
$
|
139.08
|
(1) We are registering 5,000,000 shares of our common stock that we will put to Tangiers Investment Group, LLC pursuant to that certain investment agreement dated July 18, 2016 (the Investment Agreement). Additionally, pursuant to Rule 416(a) under the Securities Act of 1933, as amended (the Securities Act), the shares of common stock offered hereby also include an indeterminate number of additional shares of common stock as may from time to time become issuable by reason of stock splits, stock dividends, recapitalizations or other similar transactions that could affect the shares to be offered by the selling stockholders. In the event that the adjustment provisions of the Investment Agreement require the registrant to issue more shares than are being registered in this registration statement, for reasons other than those stated in Rule 416 of the Securities Act, the registrant will file a new registration statement to register those additional securities. Estimated pursuant to Rule 457(a) of the Securities Act solely for purposes of calculating the registration fee.
(2) Estimated solely for purposes of calculating the registration fee according to Rule 457(c) under the Securities Act on the basis of the closing price of the common stock of the registrant as reported on the OTC Markets Group on March 2, 2017.
(3) Calculated pursuant to Rule 457(o) of the Securities Act based on an estimate of the proposed maximum aggregate offering price.
WE HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL WE SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
The information in this prospectus is not complete and may be changed. The selling stockholders may not sell these securities until the registration statement filed with the Securities and Exchange Commission (the SEC) is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
|
|
|
PRELIMINARY PROSPECTUS
|
SUBJECT TO COMPLETION
|
DATED MARCH 17, 2017
|
5,000,000 Shares of Common Stock
OROPLATA RESOURCES, INC.
This prospectus relates to the offer and sale of up to 5,000,000 shares (the Resale Shares) of common stock, par value $0.001 per share (the Common Stock) of Oroplata Resources, Inc. (referred to herein as we, us, our, Oroplata Registrant or the Company), by Tangiers Investment Group, LLC, a Delaware limited liability company (Tangiers or the Selling Stockholder). The Resale Shares registered in accordance with this registration statement are being registered solely pursuant to the terms of that certain Investment Agreement dated July 18, 2016 (the Investment Agreement), which is further described elsewhere in this prospectus. The Investment Agreement permits us to put up to $5,000,000 in shares of our Common Stock to Tangiers over a period of up to 36 months.
The resale of such shares by Tangiers pursuant to this prospectus is referred to herein as the Offering. Provided that the registration statement of which this prospectus forms a part is declared effective by the SEC, we may sell to the Selling Stockholder a presently indeterminate number of shares from time to time, as and when we determine appropriate in accordance with the terms and conditions of the Investment Agreement.
The Selling Stockholder may offer all or a portion of the shares for resale from time to time through public or private transactions, at either fixed prices, at prevailing market prices at the time of sale or at privately negotiated prices. For additional information regarding the methods of sale you should refer to the section entitled Plan of Distribution on page 13 of this prospectus.
Tangiers is an underwriter within the meaning of Section 2(a)(11) of the Securities Act of 1933, as amended (the Securities Act), and any broker-dealers or agents that are involved in selling the shares may be deemed to be underwriters within the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act.
We will not receive any of the proceeds from the sale of shares of our Common Stock by the Selling Stockholder. However, we will receive proceeds from the sale of shares of our Common Stock pursuant to our exercise of the put right offered by Tangiers under the Investment Agreement. When we put an amount of shares to Tangiers, the per-share purchase price that Tangiers will pay to us in respect of the put will be equal to 80% of the lowest trading price of our Common Stock during the five (5) consecutive Trading Days (as defined in the Investment Agreement) including and immediately following the applicable Put Notice Date (as defined in the Investment Agreement). All expenses of registration in connection with this Offering are being borne by us, but all selling and other expenses incurred by the Selling Stockholder will be borne by the Selling Stockholder.
Our Common Stock is quoted on the OTC Markets Group under the symbol ORRP. On March 2, 2017, the closing price of our Common Stock was $0.24 per share.
In addition, we qualify as an emerging growth company as defined in Section 2(a)(19) of the Securities Act and, as such, are allowed to provide in this prospectus more limited disclosures than an issuer would not so qualify. Furthermore, for as long as we remain an emerging growth company, we will qualify for certain limited exceptions from investor protection laws such as the Sarbanes Oxley Act of 2002 and the Investor Protection and Securities Reform Act of 2010. Please see Implications of Being an Emerging Growth Company on page 2.
Investing in our Common Stock involves a high degree of risk. See Risk Factors beginning on page 5 of this prospectus.
Neither the SEC nor any state securities commission has approved or disapproved of these securities or determined if this Prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The date of this prospectus is March 17, 2017.
TABLE OF CONTENTS
|
|
|
|
|
|
Page
|
|
|
|
|
|
PART I - INFORMATION REQUIRED IN PROSPECTUS
|
|
|
|
|
Prospectus Summary
|
|
1
|
|
Risk Factors
|
|
5
|
|
Cautionary Note Regarding Forward-Looking Statements
|
|
10
|
|
Use Of Proceeds
|
|
11
|
|
Selling Stockholder
|
|
11
|
|
Plan of Distribution
|
|
13
|
|
Description of Securities
|
|
15
|
|
Shares Eligible for Future Sale
|
|
16
|
|
Description of Business
|
|
17
|
|
Description of Properties
|
|
23
|
|
Legal Proceedings
|
|
28
|
|
Market for Common Equity and Related Stockholder Matters
|
|
29
|
|
Managements Discussion and Analysis of Financial Condition and Results of Operations
|
|
31
|
|
Quantitative and Qualitative Disclosures About Market Risk
|
|
35
|
|
Directors and Executive Officers
|
|
36
|
|
Executive Compensation
|
|
39
|
|
Security Ownership Of Certain Beneficial Owners And Management
|
|
40
|
|
Certain Relationships And Related Party Transactions And Director Independence
|
|
40
|
|
Legal Matters
|
|
41
|
|
Experts
|
|
41
|
|
Disclosure of Commission Position of Indemnification for Securities Act Liabilities
|
|
41
|
|
Where You Can Find More Information
|
|
41
|
|
Financial Statements
|
|
F-1
|
|
|
PART II - INFORMATION NOT REQUIRED IN PROSPECTUS
|
|
|
|
|
Other Expenses of Issuance and Distribution
|
|
II-1
|
|
Indemnification of Directors and Officers
|
|
II-1
|
|
Recent Sales of Unregistered Securities
|
|
II-3
|
|
Exhibit Index
|
|
II-4
|
|
Undertakings
|
|
II-5
|
|
Signatures
|
|
II-7
|
|
You should rely only on the information contained in this prospectus or in any free writing prospectus that we may specifically authorize to be delivered or made available to you. We have not authorized anyone to provide you with any information other than that contained in this prospectus or in any free writing prospectus we may authorize to be delivered or made available to you. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. This prospectus may only be used where it is legal to offer and sell our securities. The information in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or any sale of our securities. Our business, financial condition, results of operations and prospects may have changed since that date. We are not making an offer of these securities in any jurisdiction where the offer is not permitted.
PROSPECTUS SUMMARY
This summary highlights information contained elsewhere in this prospectus and does not contain all of the information that you should consider in making your investment decision. Before investing in our Common Stock, you should carefully read this entire prospectus, including our financial statements and the related notes and the information set forth under the headings Risk Factors and Managements Discussion and Analysis of Financial Condition and Results of Operations in each case included elsewhere in this prospectus.
Unless the context indicates or suggests otherwise, references to we, our, us, the Company, Oroplata, or the Registrant refer to Oroplata Resources, Inc., a Nevada corporation, and its wholly-owned subsidiary Oroplata Exploraciones E Ingeniera SRL.
Business Overview
We are a start-up, exploration mining company formed to explore mineral properties in the Dominican Republic or elsewhere in the world which, hopefully, will contain gold and other economic minerals. We were incorporated under the laws of the State of Nevada on October 6, 2011 for the purpose of acquiring rights to mineral properties with the eventual objective of being a producing mineral company, if and when it ever occurs. See Business Description on page 16 of this prospectus for more information.
The Offering
The Selling Stockholder identified in this prospectus may offer and sell up to 5,000,000 shares of our Common Stock issuable pursuant to that certain Investment Agreement dated July 18, 2016 (the Investment Agreement). All shares registered in accordance with this registration statement are being registered solely pursuant to the Investment Agreement, which permits us to put up to $5,000,000 in shares of our Common Stock to Tangiers over a period of up to 36 months.
Investment Agreement with Tangiers Investment Group, LLC
On July 18, 2016, we entered into the Investment Agreement with Tangiers pursuant to which we have agreed to issue and sell to Tangiers an indeterminate number of shares of our Common Stock, previously defined as the Resale Shares, in exchange for Tangiers commitment to invest up to an aggregate of Five Million Dollars ($5,000,000) over a 36-month term commencing from the effectiveness of this registration statement (the Open Period), we may deliver a put notice to Tangiers which states the amount of shares that we intend to sell to Tangiers on a date specified in the put notice (the Put Notice). The maximum investment amount per notice shall be equal to one hundred percent (100%) of the average of the daily trading volume (U.S. market only) of the Common Stock for the ten (10) consecutive trading days immediately prior to the date of the applicable Put Notice, so long as such amount is at least $5,000 and does not exceed $150,000, as calculated by multiplying the put amount by the average daily VWAP for the ten (10) consecutive Trading Days immediately prior to the submission of the Put Notice to Tangiers. The purchase price per share to be paid by Tangiers will be 80% of the lowest trading price of our Common Stock during the five (5) consecutive trading days including and immediately following the applicable Put Notice date, provided, however, an additional 10% will be added to the discount of each Put if (i) we are not DWAC eligible and (ii) an additional 15% will be added to the discount of each Put if we are under DTC chill status on the applicable date of the Put Notice.
In connection with the Investment Agreement, we also entered into that certain registration rights agreement dated July 18, 2016 (the Registration Rights Agreement) with Tangiers pursuant to which we are obligated to file a registration statement with the SEC providing Tangiers with certain registration rights under the Securities Act with respect to the Resale Shares. Upon becoming effective, such registration statement shall remain effective at all times until the date that the Selling Stockholder no longer owns any of the Resale Shares. We must also take such action as is necessary to register and/or qualify the Resale Shares under such other securities or blue sky laws of all applicable jurisdictions in the United States.
Subject to the terms of this Offering, from time to time during the Open Period, the Company may, in its sole discretion, deliver a written notice to Tangiers which states the share amount (designated in whole shares of the our Common Stock which the we intend to sell to Tangiers (the Put Notice) on that Closing Date (as defined in the Investment Agreement) (such action, a Put).
If we were to draw down on the entire 5,000,000 shares of Common Stock being registered hereunder as of the date of this filing it would represent approximately 8% of our issued and outstanding Common Stock at such time.
1
The Investment Agreement contains customary representations, warranties, and covenants by, among, and for the benefit of the parties. Unless earlier terminated, the Investment Agreement will terminate automatically on the earlier to occur of: (i) the first day of the month next following the 36-month anniversary of the date on which the Registration Statement of which this prospectus is a part becomes effective or (ii) the date on which Tangiers has purchased or acquired shares of our Common Stock pursuant to the Investment Agreement equal to $5,000,000, which represents the Commitment Amount under the Investment Agreement.
Under certain circumstances set forth in the Investment Agreement, we and Tangiers each may terminate the Investment Agreement on fifteen (15) days prior written notice to the other, without fee, penalty, or cost.
Upon the termination of the Investment Agreement for any of the above-mentioned reasons, any and all shares, or penalties, if any, due under the Investment Agreement shall be immediately payable and due.
Neither the Company nor Tangiers may transfer its obligations under the Investment Agreement.
In making sales of our Common Stock to Tangiers under the Investment Agreement, we are relying on an exemption from the registration requirements of Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated thereunder. The Resale Shares are being registered for resale in the Registration Statement of which this prospectus is a part. In addition, the Investment Agreement limits the percentage of beneficial ownership of our Common Stock by Tangiers at any given time to 9.99%. Any shares of Common Stock remaining unissued to Tangiers at the expiration of the Investment Agreement will be removed from registration and will not be offered for sale under this prospectus.
Registration Rights
As noted above, we entered into a Registration Rights Agreement with Tangiers pursuant to which we are obligated to file a registration statement with the SEC. We are obligated to use our best efforts to file and to maintain an effective registration statement until termination of the Investment Agreement.
We agreed to file with the SEC one or more additional registration statements to cover all of the securities required to be registered under the Investment Agreement that are not covered by this Prospectus, in each case, as soon as practicable, but in no event later than the applicable filing deadline for such additional registration statement as provided in the Registration Rights Agreement.
The Registration Rights Agreement also provides for our indemnification of Tangiers and its affiliates in the event that Tangiers incurs losses, liabilities, obligations, claims, contingencies, damages, costs, and expenses related to a breach by us of any of our representations, warranties, covenants, or agreements under the Registration Rights Agreement or the other related transaction documents or any action, suit, claim, or proceeding instituted against Tangiers or its affiliates due to the transactions contemplated by the Registration Rights Agreement or other transaction documents, subject to certain limitations.
Commitment Fee
In connection with the Investment Agreement, we issued to Tangiers a 10% fixed convertible promissory note in the principal amount of $75,000 as a commitment fee to evidence our commitment to file this registration statement. The Commitment Fee Note has a seven (7) month maturity, which will be extended to a ten (10) month maturity in the event that the Registration Statement goes effective within the time set forth in the Registration Rights Agreement.
Implications of Being an Emerging Growth Company
We qualify as an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. As an emerging growth company, we intend to take advantage of specified reduced disclosure and other requirements that are otherwise applicable generally to public companies. These provisions include:
·
allowance to provide only two years of audited financial statements in addition to any required unaudited interim financial statements with correspondingly reduced Managements Discussion and Analysis of Financial Condition and Results of Operations disclosure;
·
reduced disclosure about our executive compensation arrangements;
·
no non-binding advisory votes on executive compensation or golden parachute arrangements; and
·
exemption from the auditor attestation requirement in the assessment of our internal control over financial reporting.
2
We may take advantage of these provisions for up to five years or such earlier time that we are no longer an emerging growth company. We would cease to be an emerging growth company on the date that is the earliest of (i) the last day of the fiscal year in which we have total annual gross revenues of $1 billion or more; (ii) the last day of our fiscal year following the fifth anniversary of the date of the completion of our initial public offering (our IPO); (iii) the date on which we have issued more than $1 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the Securities and Exchange Commission. We have taken advantage of reduced reporting requirements in this prospectus. Accordingly, the information contained herein may be different than the information you receive from other public companies in which you have beneficial ownership. In addition, we have elected to opt out of the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the Exchange Act. As a result, our financial statements may not be comparable to those of companies that comply with public company effective dates.
Corporate Information
We were incorporated on October 6, 2011 under the laws of the State of Nevada. Our fiscal year ends September 30 of each year. Our principal executive office is located at 170 S Green Valley Parkway, Suite #300, Henderson, NV 89012 and our registered agent's office is located at 123 West Nye Lane, Suite 129, Carson City, Nevada 89706. Our telephone number is (702) 318-7218 and our e-mail address is info@oroplataresourcesinc.com. Our website address is
www.oroplataresourcesinc.com
. The information contained on, or that can be accessed through, our website is not incorporated by reference in this prospectus and should not be considered a part of this prospectus. We have included our website address in this prospectus solely as an inactive textual reference.
Transfer Agent
The transfer agent for our common stock is Action Stock Transfer at 2469 E. Fort Union Blvd, Suite 214, Salt Lake City, UT 84121. The transfer agents telephone number is (801) 274-1088.
3
THE OFFERING
|
|
|
Securities offered by the Selling Stockholder
|
|
5,000,000 shares of common stock, par value $0.001 per share
|
|
|
|
Common Stock outstanding before this offering
|
|
58,000,000 shares (1)
|
|
|
|
Common Stock outstanding after this offering
|
|
63,000,000 shares (2)
|
|
|
|
Use of proceeds
|
|
We will not receive any of the proceeds from the sale of the securities owned by the Selling Stockholder. However, we will receive proceeds from the sale of shares of our Common Stock pursuant to our exercise of the put right offered by the Selling Stockholder pursuant to the Investment Agreement. We intend to use the proceeds received, if any, from any drawdowns tendered to the Selling Stockholder under the Investment Agreement for general corporate and working capital purposes and acquisitions or assets, businesses or operations or for other purposes that our Board of Directors , in its good faith deem to be in the best interest of the Company. See Use of Proceeds beginning on page 11.
|
|
|
|
Risk factors
|
|
An investment in our securities involves a high degree of risk and could result in a loss of your entire investment. Prior to making an investment decision, you should carefully consider all of the information in this Prospectus and, in particular, you should evaluate the risk factors set forth under the caption Risk Factors beginning on page 5.
|
|
|
|
Symbol on the OTC Markets Group
|
|
ORRP
|
(1) The number of shares outstanding before the offering is based upon 58,000,000 shares outstanding as of March 13, 2017 and excludes:
·
2,742,000 shares of our Common Stock issuable upon exercise of an outstanding warrant held by the Selling Stockholder; and
·
An indeterminable number of shares issuable upon conversion of four convertible promissory notes in the aggregate principal amount of $996,000 held by the Selling Stockholder as of March 13, 2017.
(2) The number of shares of Common Stock outstanding after this offering assumes the Selling Stockholder sells all 5,000,000 Resale Shares being registered in this registration statement.
4
RISK FACTORS
An investment in our securities is subject to numerous risks, including the risk factors described below. You should carefully consider the risks, uncertainties and other factors described below, in addition to the other information set forth in this prospectus, before making an investment decision with regard to our securities. Any of these risks, uncertainties and other factors could materially and adversely affect our business, financial condition, results of operations, cash flows or prospects. In that case, the trading price of our Common Stock could decline, and you may lose all or part of your investment. See also Cautionary Note Regarding Forward-Looking Statements.
RISKS RELATING TO OUR COMPANY
Our independent auditors have expressed substantial doubt about our ability to continue as a going concern. If we do not continue as a going concern, investors will lose their entire investment
.
In their report on our financial statements included in this prospectus, our independent auditors have expressed substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is an issue raised as a result of ongoing operating losses and a lack of financing commitments then in place to meet expected cash requirements. Our ability to continue as a going concern is subject to our ability to generate a profit and/or obtain necessary funding from outside sources, including obtaining additional funding from the sale of our securities, increasing sales or obtaining loans and grants from various financial institutions where possible. If we do not continue as a going concern, investors will lose their entire investment.
We must effectively manage the growth of our operations, or our company will suffer
.
Our ability to successfully implement our business plan requires an effective planning and management process. If funding is available, we may elect to increase the scope of our operations and acquire complimentary businesses. Implementing our business plan will require significant additional funding and resources. If we grow our operations, we will need to hire additional employees and make significant capital investments. If we grow our operations, it will place a significant strain on our existing management and resources. If we grow, we will need to improve our financial and managerial controls and reporting systems and procedures, and we will need to expand, train and manage our workforce. Any failure to manage any of the foregoing areas efficiently and effectively would cause our business to suffer.
Our results of operations may fluctuate from quarter to quarter, which could affect our business, financial condition and results of operations
.
Our results of operations may fluctuate from quarter to quarter depending upon several factors, some of which are beyond our control. These factors include, but are not limited to:
·
Risks relating to the exploration efforts to expand our mineral deposits, determining the feasibility and economic viability of commencing mining, discover any deposits of minerals which can be mined at a profit, raise the necessary capital to finance exploration and potential expansion, and our ability to obtain or amend the necessary permits, consents, or authorizations needed to advance expansion of the deposit or any processing facility;
·
Our ability to acquire additional mineral targets;
·
Our ability to obtain additional external funding;
·
Our ability to achieve any meaningful revenue;
·
Our ability to engage or retain geologists, engineers, consultants and other key management and mining personnel necessary to successfully operate and grow our business;
·
The volatility of the market price of our common stock or our intention not to pay any cash dividends in the foreseeable future;
·
Changes in any federal, state or local laws and regulations or possible challenges by third parties or contests by the federal government that increase costs of operation or limit our ability to explore on certain portions of our property;
·
The market price for minerals and political events affecting the market prices for minerals which may be found on our exploration properties; and
·
The other factors set forth under this Risk Factors section.
These, as well as other factors, could affect our business, financial condition and results of operations, and this makes the prediction of our financial results on a quarterly basis difficult. Also, it is possible that our quarterly financial results may be below the expectations of public market analysts.
5
We may be unable to maintain an effective system of internal control over financial reporting, and as a result we may be unable to accurately report our financial results
.
Our reporting obligations as a public company place a significant strain on our management, operational and financial resources and systems. We do not currently have effective internal controls. If we fail to maintain an effective system of internal control over financial reporting, we could experience delays or inaccuracies in our reporting of financial information, or non-compliance with the Commission, reporting and other regulatory requirements. This could subject us to regulatory scrutiny and result in a loss of public confidence in our management, which could, among other things, cause our stock price to drop.
RISKS RELATING TO OUR BUSINESS AND INDUSTRY
Mineral exploration is a highly competitive and speculative business and we may not be successful in seeking available opportunities.
The process of mineral exploration is a highly competitive and speculative business. In seeking available opportunities, we will compete with a number of other companies, including established, multi-national companies that have more experience and resources than us. We compete with other exploration companies looking for mineral deposits. Because we may not have the financial and managerial resources to compete with other companies, we may not be successful in our efforts to acquire projects of value, which, ultimately, become productive. However, while we compete with other exploration companies, there is no competition for the exploration or removal of mineral from our claims.
Since mineral exploration is a highly speculative venture, any potential investor purchasing our stock under this offering might likely lose their entire investment.
Potential investors should be aware of the difficulties normally encountered by new mineral exploration companies such Oroplata and the high rate of failure of companies such as ours. Exploration for minerals is a speculative venture necessarily involving substantial risk. The expenditures to be made by us on our exploration program may not result in the discovery of commercially exploitable reserves of valuable minerals.
We are sensitive to fluctuations in the price of minerals, which is beyond our control. The price of minerals is volatile and price changes are beyond our control.
The price of minerals can fluctuate. The prices of minerals have been and will continue to be affected by numerous factors beyond our control. Factors that affect the price of minerals include the demand from consumers for products that use minerals, economic conditions, over supply from secondary sources and costs of production. Price volatility and downward price pressure, which can lead to lower prices, could have a material adverse effect on the costs or the viability of our projects.
Compliance with environmental considerations and permitting could have a material adverse effect on the costs of the viability of our projects. The historical trend toward stricter environmental regulation may continue, and, as such, represents an unknown factor in our planning process.
All mining is regulated by the government agencies. Compliance with such regulation has a material effect on the economics of our operations and the timing of project development. Our primary regulatory costs have been related to obtaining licenses and permits from government agencies before the commencement of mining activities. An environmental impact study that must be obtained on each property in order to obtain governmental approval to mine on the properties is also a part of the overall operating costs of a mining company.
The possibility of more stringent regulations exists in the areas of worker health and safety, the dispositions of wastes, the decommissioning and reclamation of mining and milling sites and other environmental matters, each of which could have an adverse material effect on the costs or the viability of a particular project. Compliance with environmental considerations and permitting could have a material adverse effect on the costs or the viability of our projects.
6
Mining and exploration activities are subject to extensive governmental regulation. Future changes in governments, regulations and policies, could adversely affect our result of operations for a particular period and our long-term business prospects.
Mining and exploration activities are subject to extensive regulation by government. Such regulation relates to production, development, exploration, exports, taxes and royalties, labor standards, occupational health, waste disposal, protection and remediation of the environment, mine and mill reclamation, mine and mill safety, toxic substances and other matters. Compliance with such laws and regulations has increased the costs of exploring, drilling, developing, constructing, operating mines and other facilities. Furthermore, future changes in governments, regulations and policies, could adversely affect our results of operations in a particular period and our long-term business prospects.
The development of mines and related facilities is contingent upon governmental approvals, which are complex and time consuming to obtain and which, depending upon the location of the project, involve various governmental agencies. The duration and success of such approvals are subject to many variables outside our control.
RISKS RELATED TO AN INVESTMENT IN OUR SECURITIES
We expect to experience volatility in the price of our Common Stock, which could negatively affect stockholders investments.
The trading price of our Common Stock may be highly volatile and could be subject to wide fluctuations in response to various factors, some of which are beyond our control. The stock market in general has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of companies with securities traded in those markets. Broad market and industry factors may seriously affect the market price of companies stock, including ours, regardless of actual operating performance. All of these factors could adversely affect your ability to sell your shares of Common Stock or, if you are able to sell your shares, to sell your shares at a price that you determine to be fair or favorable.
The relative lack of public company experience of our management team could adversely impact our ability to comply with the reporting requirements of U.S. securities laws.
Our management team lacks public company experience, which could impair our ability to comply with legal and regulatory requirements such as those imposed by the Sarbanes-Oxley Act of 2002. Our senior management has little experience in managing a publicly traded company. Such responsibilities include complying with federal securities laws and making required disclosures on a timely basis. Our senior management may not be able to implement programs and policies in an effective and timely manner that adequately respond to such increased legal, regulatory compliance and reporting requirements, including the establishing and maintaining of internal controls over financial reporting. Any such deficiencies, weaknesses or lack of compliance could have a materially adverse effect on our ability to comply with the reporting requirements of the Securities Exchange Act of 1934, as amended (the Exchange Act), which is necessary to maintain our public company status. If we were to fail to fulfill those obligations, our ability to continue as a U.S. public company would be in jeopardy, we could be subject to the imposition of fines and penalties and our management would have to divert resources from attending to our business plan.
Our Common Stock is categorized as penny stock, which may make it more difficult for investors to sell their shares of Common Stock due to suitability requirements.
Our Common Stock is categorized as penny stock. The SEC has adopted Rule 15g-9 which generally defines penny stock to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. The price of our Common Stock is significantly less than $5.00 per share, and is therefore considered penny stock. This designation imposes additional sales practice requirements on broker-dealers who sell to persons other than established customers and accredited investors. The penny stock rules require a broker-dealer buying our securities to disclose certain information concerning the transaction, obtain a written agreement from the purchaser and determine that the purchaser is reasonably suitable to purchase the securities given the increased risks generally inherent in penny stocks. These rules may restrict the ability and/or willingness of brokers or dealers to buy or sell our Common Stock, either directly or on behalf of their clients, may discourage potential stockholders from purchasing our Common Stock, or may adversely affect the ability of stockholders to sell their shares.
7
Financial Industry Regulatory Authority, Inc. (FINRA) sales practice requirements may also limit a stockholders ability to buy and sell our Common Stock, which could depress the price of our Common Stock.
In addition to the penny stock rules described above, the FINRA has adopted rules that require a broker-dealer to have reasonable grounds for believing that the investment is suitable for that customer before recommending an investment to a customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customers financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. Thus, the FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our Common Stock, which may limit your ability to buy and sell our shares of Common Stock, have an adverse effect on the market for our shares of Common Stock, and thereby depress our price per share of Common Stock.
The elimination of monetary liability against our directors, officers and employees under Nevada law and the existence of indemnification rights for or obligations to our directors, officers and employees may result in substantial expenditures by us and may discourage lawsuits against our directors, officers and employees.
Our Articles of Incorporation contain a provision permitting us to eliminate the personal liability of our directors to us and our stockholders for damages for the breach of a fiduciary duty as a director or officer to the extent provided by Nevada law. We may also have contractual indemnification obligations under any future employment agreements with our officers. The foregoing indemnification obligations could result in us incurring substantial expenditures to cover the cost of settlement or damage awards against directors and officers, which we may be unable to recoup. These provisions and the resulting costs may also discourage us from bringing a lawsuit against directors and officers for breaches of their fiduciary duties, and may similarly discourage the filing of derivative litigation by our stockholders against our directors and officers even though such actions, if successful, might otherwise benefit us and our stockholders.
Tangiers may sell a large number of shares, resulting in substantial diminution to the value of shares held by existing stockholders.
We are prohibited, from delivering a Put Notice to Tangiers to the extent that the issuance of shares would cause Tangiers to beneficially own more than 9.99% of our then-outstanding Common Stock. These restrictions however, do not prevent Tangiers from selling shares of Common Stock received in connection with a draw down, and then receiving additional shares of Common Stock in connection with a subsequent draw down. In this way, Tangiers could sell more than 9.99% of the outstanding Common Stock in a relatively short time frame while never holding more than 9.99% at any one time. As a result, existing stockholders and new investors could experience substantial diminution in the value of their shares of Common Stock. In addition, please see the risk factor entitled
We may not have access to the full amount under, or be able to benefit from, the Investment Agreement
.
We may issue additional shares of Common Stock or preferred stock in the future, which could cause significant dilution to all stockholders.
Our Articles of Incorporation authorize the issuance of up to 500,000,000 shares of Common Stock with a par value of $0.001 per share. As of March 13, 2017, we had 58,000,000 shares of Common Stock outstanding; however, we may issue additional shares of Common Stock in the future in connection with a financing, whether or not in connection with the Investment Agreement, or an acquisition. Such issuances may not require the approval of our stockholders. In addition, certain of our outstanding rights to purchase additional shares of Common Stock or securities convertible into our Common Stock are subject to full-ratchet anti-dilution protection, which could result in the right to purchase significantly more shares of Common Stock being issued or a reduction in the purchase price for any such shares or both. Any issuance of additional shares of our Common Stock, or equity securities convertible into our Common Stock, including but not limited to, preferred stock, warrants and options, will dilute the percentage ownership interest of all stockholders, may dilute the book value per share of our Common Stock, and may negatively impact the market price of our Common Stock.
Anti-takeover effects of certain provisions of Nevada state law hinder a potential takeover of us.
Certain provisions of the Nevada Revised Statutes have anti-takeover effects and may inhibit a non-negotiated merger or other business combination. These provisions are intended to encourage any person interested in acquiring us to negotiate with, and to obtain the approval of, our board of directors in connection with such a transaction. However, certain of these provisions may discourage a future acquisition of us, including an acquisition in which the stockholders might otherwise receive a premium for their shares. As a result, stockholders who might desire to participate in such a transaction may not have the opportunity to do so.
8
Because we do not intend to pay any cash dividends on our Common Stock, our stockholders will not be able to receive a return on their shares unless they sell them.
We intend to retain any future earnings to finance the development and expansion of our business. We do not anticipate paying any cash dividends on our Common Stock in the foreseeable future. Declaring and paying future dividends, if any, will be determined by our Board, based upon earnings, financial condition, capital resources, capital requirements, restrictions in our Articles of Incorporation, contractual restrictions, and such other factors as our Board deems relevant. Unless we pay dividends, our stockholders will not be able to receive a return on their shares unless they sell them. There is no assurance that stockholders will be able to sell shares when desired.
RISKS RELATED TO THE INVESTMENT AGREEMENT
We are registering 5,000,000 shares of Common Stock to be issued under the Investment Agreement. The sale of such shares could depress the market price of our common stock.
We are registering an aggregate of 5,000,000 shares of Common Stock under the registration statement of which this prospectus forms a part for sale by the Selling Stockholder. The sale of these shares into the public market by the Selling Stockholder could depress the market price of our common stock.
Our Common Stock price may decline by our Put the shares issuable under the Investment Agreement.
Effective July 18, 2016, we entered into the Investment Agreement with Tangiers. Pursuant to the Investment Agreement, when we deem it necessary, we may raise capital through the private sale of our Common Stock to Tangiers at a price equal to 80% of the low trading price of our Common Stock during the five (5) trading days including and immediately following the applicable Put Notice date. Because this price is lower than the prevailing market price of our Common Stock, to the extent that the Put right is exercised, your ownership interest will be diluted in direct proportion.
There may not be a sufficient price of our Common Stock to permit us to acquire adequate funds, which may adversely affect our liquidity.
The Investment Agreement provides that the number of shares sold pursuant to each Put Notice
plus
the shares held by Tangiers at that time shall not exceed 9.99% of the issued and outstanding shares of Common Stock of the Company. If the price our Common Stock is too low, it is possible that we may not be permitted to draw the full amount of proceeds of the drawdown request, which may not provide adequate funding for our planned operations and may materially decrease our liquidity. Analysis shows that an initial drawdown at current market prices will result in a drawdown of 5,000,000 shares of stock resulting in approximately $1,200,000 of actual available funds. While the Company cannot predict a quantitative risk factor in specific numbers, it can quantify its initial drawdown expectation.
Tangiers Investment Group, LLC will pay less than the then-prevailing market price for our Common Stock.
Our Common Stock to be issued to Tangiers Investment Group, LLC pursuant to the Investment Agreement will be purchased at the 80% of the lowest trading price of our Common Stock during the five (5) trading days including and immediately following the applicable put notice date, provided, however, an additional 10% will be added to the discount of each put if (i) we are not DWAC eligible and (ii) an additional 15% will be added to the discount of each put if we are under DTC chill status on the applicable date of the put notice. Tangiers Investment Group, LLC has a financial incentive to sell our Common Stock immediately upon receiving the shares to realize the profit equal to the difference between the discounted price and the market price. If Tangiers Investment Group, LLC sells the shares, the price of our Common Stock could decrease. If our stock price decreases, Tangiers Investment Group, LLC may have a further incentive to sell the shares of our Common Stock that it holds. These sales may have a further impact on our stock price.
Your ownership interest may be diluted and the value of our Common Stock may decline by exercising the put right pursuant to the investment agreement with Tangiers Investment Group, LLC
.
Pursuant to the Investment Agreement with Tangiers Investment Group, LLC, when we deem it necessary, we may raise capital through the private sale of our Common Stock to Tangiers Investment Group, LLC at a discounted price. Because the put price is lower than the prevailing market price of our Common Stock, to the extent that the put right is exercised, your ownership interest may be diluted.
9
We may not have access to the full amount available under the investment agreement with Tangiers Investment Group, LLC
.
Our ability to draw down funds and sell shares under the Investment Agreement with Tangiers Investment Group, LLC requires that the registration statement of which this prospectus forms a part to be declared effective and continue to be effective. The registration statement of which this prospectus forms a part registers the resale of 5,000,000 shares issuable under the Investment Agreement with Tangiers Investment Group, LLC, and our ability to sell any remaining shares issuable under the investment with Tangiers Investment Group, LLC is subject to our ability to prepare and file one or more additional registration statements registering the resale of these shares. These registration statements may be subject to review and comment by the staff of the Securities and Exchange Commission, and will require the consent of our independent registered public accounting firm. Therefore, the timing of effectiveness of these registration statements cannot be assured. The effectiveness of these registration statements is a condition precedent to our ability to sell all of the shares of our common stock to Tangiers Investment Group, LLC under the Investment Agreement. Even if we are successful in causing one or more registration statements registering the resale of some or all of the shares issuable under the Investment Agreement with Tangiers Investment Group, LLC to be declared effective by the Securities and Exchange Commission in a timely manner, we may not be able to sell the shares unless certain other conditions are met. For example, we might have to increase the number of our authorized shares in order to issue the shares to Tangiers Investment Group, LLC. Increasing the number of our authorized shares will require board and stockholder approval. Accordingly, because our ability to draw down any amounts under the Investment Agreement with Tangiers Investment Group, LLC is subject to a number of conditions, there is no guarantee that we will be able to draw down any portion or all of the proceeds of $5,000,000 under the investment with Tangiers Investment Group, LLC.
Certain restrictions on the extent of puts and the delivery of advance notices may have little, if any, effect on the adverse impact of our issuance of shares in connection with the Investment Agreement with Tangiers Investment Group, LLC, and as such, Tangiers Investment Group, LLC may sell a large number of shares, resulting in substantial dilution to the value of shares held by existing stockholders.
Tangiers Investment Group, LLC has agreed, subject to certain exceptions listed in the Investment Agreement with Tangiers Investment Group, LLC, to refrain from holding an amount of shares which would result in Tangiers Investment Group, LLC or its affiliates owning more than 9.99% of the then-outstanding shares of our Common Stock at any one time. These restrictions, however, do not prevent Tangiers Investment Group, LLC from selling shares of our Common Stock received in connection with a put, and then receiving additional shares of our Common Stock in connection with a subsequent put. In this way, Tangiers Investment Group, LLC could sell more than 9.99% of the outstanding Common Stock in a relatively short time frame while never holding more than 9.99% at one time.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Except for statements of historical facts, this Prospectus contains forward-looking statements involving risks and uncertainties. The words anticipate, believe, estimate, expect, future, intend, plan or the negative of these terms and similar expressions or variations thereof are intended to identify forward-looking statements. Such statements reflect our current view with respect to future events and are subject to risks, uncertainties, assumptions and other factors (including the risks contained in the section of this Prospectus entitled Risk Factors) relating to our industries, operations and results of operations and any businesses that may be acquired by us. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended or planned. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date stated, or if no date is stated, as of the date hereof.
Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results. The following discussion should be read in conjunction with the Registrants financial statements and the related notes included in this Registration Statement.
10
USE OF PROCEEDS
This prospectus relates to shares of our Common Stock that may be offered from time to time by the Selling Stockholder. We will not receive any of the proceeds from the sale of the securities owned by the Selling Stockholder. However, we will receive proceeds from the sale of shares of our Common Stock pursuant to our exercise of the put right offered by the Selling Stockholder pursuant to the Investment Agreement. We intend to use the proceeds received, if any, from any drawdowns tendered to the Selling Stockholder under the Investment Agreement for general corporate and working capital purposes and acquisitions or assets, businesses or operations or for other purposes that our Board of Directors, in its good faith deem to be in the best interest of the Company.
We will pay for expenses of this Offering, except that the Selling Stockholder will pay any broker discounts or commissions or equivalent expenses and expenses of its legal counsel applicable to the sale of the Resale Shares.
DILUTION
The sale of our Common Stock to Tangiers in accordance with the Investment Agreement will have a dilutive impact on our shareholders. As a result, our net income per share could decrease or net loss per share could increase in future periods and the market price of our Common Stock could decline. In addition, the lower our stock price is at the time we exercise our put options, the more shares of our Common Stock we will have to issue to Tangiers in order to drawdown on the Investment Agreement, to the extent our stock price further decreases due to the issuance of Common Stock to Tangiers, then our existing stockholders would experience greater dilution.
SELLING STOCKHOLDER
The Selling Stockholder may offer and sell, from time to time, any or all of the shares of our Common Stock that have been or may be issued by us to the Selling Stockholder under the Investment Agreement. For additional information regarding the issuance of Common Stock covered by this prospectus, see Prospectus SummaryInvestment Agreement with Tangiers above. We are registering the shares of Common Stock pursuant to the provisions of the Registration Rights Agreement in order to permit the Selling Stockholder to offer the shares for resale when and as it deems appropriate.
The following table sets forth:
·
the name of the Selling Stockholder;
·
the number and percent of shares of our Common Stock that the Selling Stockholder beneficially owned prior to the offering for resale of the shares under this prospectus;
·
the number of shares of our Common Stock that may be offered for resale for the account of the Selling Stockholder under this prospectus; and
·
the number and percent of shares of our Common Stock to be beneficially owned by the Selling Stockholders after the offering of the Resale Shares (assuming all of the offered Resale Shares are sold by the Selling Stockholder).
As used in this prospectus, the term Selling Stockholder includes Tangiers, its affiliates and any donees, pledgees, transferees or other successors in interest selling shares received after the date of this prospectus from the Selling Stockholder as a gift, pledge, or other non-sale related transfer.
The number of shares in the column Maximum Number of Shares of Common Stock to be Offered Pursuant to this Prospectus represents all of the shares of Common Stock that the Selling Stockholder may offer under this prospectus. The Selling Stockholder may sell some, all or none of its shares in this Offering. We do not know how long the Selling Stockholder will hold the shares before selling them, and we currently have no agreements, arrangements or understandings with the Selling Stockholder regarding the sale of Resale Shares.
This table is prepared based solely on information supplied to us by the Selling Stockholder and any other public documents filed with the SEC. The percentage of shares of Common Stock beneficially owned by the Selling Stockholder prior to the Offering is based on an aggregate of 58,000,000 shares of our Common Stock issued and outstanding as of March 13, 2017.
11
Except as noted herein, to our knowledge, the Selling Stockholder has never held any position or office or had any other material relationship with us or any of our predecessors or affiliates within the past three years other than as a result of the ownership of our securities. To our knowledge, the Selling Stockholder is neither a broker-dealer nor affiliate of a broker-dealer. See Plan of Distribution for additional information about the Selling Stockholder and the manner in which the Selling Stockholder may dispose of its shares. Beneficial ownership has been determined in accordance with the rules of the SEC, and generally means that a person has beneficial ownership of a security if he, she or it possesses sole or shares voting or investment power of that security, and includes options that are currently exercisable or exercisable within 60 days. Our registration of these securities does not necessarily mean that the Selling Stockholders will sell any or all of the securities covered by this prospectus.
Because the purchase price of the shares of Common Stock issuable under the Investment Agreement is determined on each settlement date, the number of shares that may actually be sold by the Company under the Investment Agreement may be fewer than the number of shares being offered by this prospectus. The fourth column assumes the sale of all of the shares offered by the Selling Stockholder pursuant to this prospectus.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name of Selling
|
|
Number of Shares of
Common Stock
Owned Prior to Offering
(1)
|
|
|
Maximum
Number of Shares
of Common Stock
to be Offered
Pursuant to this
|
|
|
Number of Shares of
Common Stock
Owned After Offering
|
|
Stockholder
|
|
Number
|
|
|
Percent
|
|
|
Prospectus
|
|
|
Number
|
|
|
Percent
|
|
Tangiers Investment Group, LLC
(2)
|
|
|
3,600,000
|
(3)
|
|
|
6.2%
|
|
|
|
5,000,000
|
|
|
|
3,600,000
|
(4)
|
|
|
5.7%
|
(5)
|
(1) In accordance with Rule 13d-3(d) under the Exchange Act, we have excluded from the number of shares beneficially owned prior to the Offering all of the shares that the Selling Stockholder may be required to purchase under the Investment Agreement, because the issuance of such shares is solely at our discretion and is subject to certain conditions, the satisfaction of all of which are outside of Tangierss control, including the registration statement of which this prospectus is a part becoming and remaining effective. Furthermore, the maximum dollar value of each put of Common Stock to the Selling Stockholder under the Investment Agreement is subject to certain agreed upon threshold limitations set forth in the Investment Agreement. Also, under the terms of the Investment Agreement, we may not issue shares of our Common Stock to Tangiers to the extent that Selling Stockholder or any of its affiliates would, at any time, beneficially own more than 9.99% of our outstanding Common Stock.
(2) The business address of Tangiers Investment Group, LLC is 2251 San Diego Ave., Suite B150, San Diego, CA 92110. Tangierss principal business is that of a private investment firm. We have been advised that Tangiers is not a member of FINRA, or an independent broker-dealer, and that neither Tangiers nor any of its affiliates is an affiliate or an associated person of any FINRA member or independent broker-dealer.
(3) As of March 13, 2017, the Selling Stockholder held 0 shares of our Common Stock pursuant to the puts made under the Investment Agreement. The number of shares of Common Stock beneficially owned by the Selling Stockholder prior to the Offering represents shares purchased by the Selling Stockholder on July 22, 2016. Excludes an indeterminate number of shares: (i) issuable upon conversion of an outstanding 10 convertible promissory note in the aggregate principal amount of $121,000; (ii) issuable upon conversion of an outstanding 10% convertible promissory note in the aggregate principal amount of $75,000; (iii) issuable upon conversion of an outstanding 10% convertible promissory note (total face value of $550,000) in the aggregate principal amount of $110,000; (iv) issuable upon conversion of an outstanding 10% convertible promissory note (total face value of $250,000) in the aggregate principal amount of $109,428; and (v) 2,742,000 shares of Common Stock underlying warrants. Such derivative securities held by the Selling Stockholder are currently exercisable or exercisable within 60 days; however, the terms of each of the convertible notes and warrants provide that the Selling Stockholder may not convert or exercise such derivative securities to the extent that the Selling Stockholder would, at any time, beneficially own more than 9.99% of our outstanding Common Stock.
(4) Represents the number of shares that will be held by the Selling Stockholder after completion of the Offering based on the assumptions that (a) all shares of Common Stock registered for sale by this registration statement of which this prospectus is part will be issued and sold and (b) that no other shares of our Common Stock beneficially owned by the Selling Stockholders are acquired or are sold prior to completion of this Offering by the Selling Stockholder.
(5) In determining the percent of Common Stock beneficially owned by the Selling Stockholder following the Offering, (a) the numerator is the number of shares of Common Stock beneficially owned by the Selling Stockholder (excluding such number of shares set forth in Footnote 3 for the reasons stated therein), and (b) the denominator is 63,000,000 shares outstanding after this Offering based upon 58,000,000 shares of our Common Stock issued and outstanding as of March 13, 2017.
12
PLAN OF DISTRIBUTION
We are registering shares of Common Stock that have been or may be issued by us from time to time to Tangiers under the Investment Agreement to permit the sale of the Resale Shares after the issuance thereof by the Selling Stockholder from time to time after the date of this prospectus. We will not receive any of the proceeds from the sale by the Selling Stockholder of the Resale Shares. We will bear all fees and expenses incident to our obligation to register the Resale Shares.
The Selling Stockholder may decide not to sell any of the Resale Shares. The Selling Stockholder may sell all or a portion of the Resale Shares beneficially owned by it and offered hereby from time to time directly or through one or more underwriters, broker-dealers or agents, who may receive compensation in the form of discounts, concessions or commissions from the Selling Stockholder and/or the purchasers of the Resale Shares for whom they may act as agent. In effecting sales, broker-dealers that are engaged by the Selling Stockholder may arrange for other broker-dealers to participate. Tangiers is an underwriter within the meaning of the Securities Act. Any brokers, dealers or agents who participate in the distribution of the shares of Common Stock by the Selling Stockholder may also be deemed to be underwriters, and any profits on the sale of the shares of Common Stock by them and any discounts, commissions or concessions received by any such brokers, dealers or agents may be deemed to be underwriting discounts and commissions under the Securities Act. Tangiers has advised us that it will use an unaffiliated broker-dealer to effectuate all sales of the Resale Shares. To our knowledge, Tangiers has not entered into any agreement, arrangement or understanding with any particular broker-dealer or market maker with respect to the Resale Shares offered hereby, nor do we know the identity of the broker-dealers or market makers that may participate in the resale of the shares. Because Tangiers is, and any other selling stockholder, broker, dealer or agent may be, deemed to be, an underwriter within the meaning of the Securities Act, Tangiers will (and any other selling stockholder, broker, dealer or agent may) be subject to the prospectus delivery requirements of the Securities Act and may be subject to certain statutory liabilities of the Securities Act (including, without limitation, Sections 11, 12 and 17 thereof) and Rule 10b-5 under the Exchange Act.
The Selling Stockholder will act independently of us in making decisions with respect to the timing, manner and size of each sale. The Resale Shares may be sold in one or more public or private transactions, at either fixed prices, at prevailing market prices at the time of the sale, at privately negotiated prices. These sales may be effected in transactions, which may involve crosses or block transactions, pursuant to one or more of the following methods:
·
on any national securities exchange or quotation service on which the securities may be listed or quoted at the time of sale;
·
in the over-the-counter market in accordance with the rules of OTC Markets Group;
·
in transactions otherwise than on these exchanges or systems or in the over-the-counter market;
·
through the writing or settlement of options, whether such options are listed on an options exchange or otherwise;
·
ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;
·
block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;
·
purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
·
an exchange distribution in accordance with the rules of the applicable exchange;
·
privately negotiated transactions;
·
broker-dealers may agree with the Selling Stockholder to sell a specified number of such shares at a stipulated price per share;
·
a combination of any such methods of sale; and
·
any other method permitted pursuant to applicable law.
The Selling Stockholder may transfer the Resale Shares by other means not described in this prospectus.
Any broker-dealer participating in such transactions as agent may receive commissions from the Selling Stockholder (and, if they act as agent for the purchaser of such shares, from such purchaser). Tangiers has informed us that each such broker-dealer will receive commissions from Tangiers which will not exceed customary brokerage commissions. Broker-dealers may agree with the Selling Stockholder to sell a specified number of shares at a stipulated price per share, and, to the extent such a broker-dealer is unable to do so acting as agent for the Selling Stockholder, to purchase as principal any unsold shares at the price required to fulfill the broker-dealer commitment to the Selling Stockholder. Broker-dealers who acquire shares as principal may thereafter resell such shares from time to time in one or more transactions (which may involve crosses and block transactions and which may involve sales to and through other broker-dealers, including transactions of the nature described above and pursuant to the one or more of the methods described above) at fixed prices, at prevailing market prices at the time of the sale, at varying prices determined at the time of sale, or at negotiated prices, and in connection with such resales may pay to or receive from the purchasers of such shares commissions computed as described above. To the extent required under the Securities Act, an amendment to this prospectus or a supplemental prospectus will be filed, disclosing:
13
·
the name of any such broker-dealers;
·
the number of shares involved;
·
the price at which such shares are to be sold;
·
the commission paid or discounts or concessions allowed to such broker-dealers, where applicable;
·
that such broker-dealers did not conduct any investigation to verify the information set out or incorporated by reference in this prospectus, as supplemented; and
·
other facts material to the transaction.
Tangiers has informed us that it does not have any written or oral agreement or understanding, directly or indirectly, with any person to distribute the Resale Shares. Pursuant to a requirement of FINRA, the maximum commission or discount and other compensation to be received by any FINRA member or independent broker-dealer shall not be greater than eight percent (8%) of the gross proceeds received by us for the sale of any securities being registered pursuant to Rule 415 under the Securities Act.
Under the securities laws of some states, the Resale Shares may be sold in such states only through registered or licensed brokers or dealers. In addition, in some states the Resale Shares may not be sold unless such shares have been registered or qualified for sale in such state or an exemption from registration or qualification is available and is complied with.
There can be no assurance that the Selling Stockholder will sell any or all of the Resale Shares registered pursuant to the Registration Statement, of which this prospectus forms a part.
Underwriters and purchasers that are deemed underwriters under the Securities Act may engage in transactions that stabilize, maintain or otherwise affect the price of the Resale Shares, including the entry of stabilizing bids or syndicate covering transactions or the imposition of penalty bids. The Selling Stockholder and any other person participating in the sale or distribution of the Resale Shares will be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder (including, without limitation, Regulation M of the Exchange Act), which may restrict certain activities of, and limit the timing of purchases and sales of any of the Resale Shares by, the Selling Stockholder and any other participating person. To the extent applicable, Regulation M may also restrict the ability of any person engaged in the distribution of the Resale Shares to engage in market-making and certain other activities with respect to the shares of Common Stock. In addition, the anti-manipulation rules under the Exchange Act may apply to sales of the Resale Shares in the market. All of the foregoing may affect the marketability of the Resale Shares and the ability of any person or entity to engage in market-making activities with respect to the Resale Shares.
We have agreed to indemnify Tangiers and certain other persons against certain liabilities in connection with the offering of the Resale Shares offered hereby, including liabilities arising under the Securities Act or, if such indemnity is unavailable, to contribute amounts required to be paid in respect of such liabilities. Tangiers has agreed to indemnify us against liabilities under the Securities Act that may arise from any written information furnished to us by Tangiers specifically for use in this Prospectus or, if such indemnity is unavailable, to contribute amounts required to be paid in respect of such liabilities.
At any time a particular offer of the Resale Shares is made by the Selling Stockholder, a revised prospectus or prospectus supplement, if required, will be distributed. Such prospectus supplement or post-effective amendment will be filed with the SEC to reflect the disclosure of any required additional information with respect to the distribution of the Resale Shares. We may suspend the sale of shares by the Selling Stockholder pursuant to this prospectus for certain periods of time for certain reasons, including if the prospectus is required to be supplemented or amended to include additional material information.
14
DESCRIPTION OF SECURITIES
General
The following summary includes a description of material provisions of our capital stock, however the description does not purport to be complete and is subject to, and is qualified by, our Articles of Incorporation and Bylaws, which are filed as exhibits to this Registration Statement of which this prospectus is a part.
Authorized and Outstanding Securities
We have the authority to issue up to 500,000,000 shares of Common Stock, $0.001 par value. As of March 13, 2017, there were 58,000,000 shares of Common Stock issued and outstanding.
Common Stock
The holders of our Common Stock are entitled to one vote per share on all matters requiring a vote of the stockholders, including the election of directors. Holders of Common Stock do not have cumulative voting rights. Holders of Common Stock are entitled to share ratably in dividends, if any, as may be declared from time to time by the Board in its discretion from funds legally available therefor, subject to preferences that may be applicable to preferred stock, if any, then outstanding. At present, we have no plans to issue dividends. See Dividend Policy for additional information. In the event of a liquidation, dissolution or winding up of the Company, the holders of Common Stock are entitled to share pro rata all assets remaining after payment in full of all liabilities, subject to prior distribution rights of preferred stock, if any, then outstanding. The Common Stock has no preemptive or conversion rights or other subscription rights. There are no redemption or sinking fund provisions applicable to the Common Stock.
Dividend Policy
We have never declared or paid any cash dividends on our capital stock. We currently intend to retain all available funds and any future earnings to support our operations and finance the growth and development of our business. We do not intend to pay cash dividends on our Common Stock for the foreseeable future. Any future determination related to dividend policy will be made at the discretion of our Board of Directors.
The current and future holders of our Common Stock are entitled to receive dividends pro rata based on the number of shares held, when and if declared by our board of directors, from funds legally available for that purpose. Nevada Revised Statutes prohibits us from declaring dividends where, after giving effect to the distribution of the dividend, we would not be able to pay our debts as they become due in the ordinary course of business, or our total assets would be less than the sum of our total liabilities.
Our Articles of Incorporation and Bylaws do not contain provisions restricting our ability to pay dividends of our Common Stock.
Warrants
As of March 13, 2017, the following warrants are outstanding:
·
Warrant to purchase up to 121,000 shares of our Common Stock at an exercise price of $0.50 per share (subject to adjustment upon the occurrence of certain events relating to a change in capital stock, including, but not limited to, in the case of stock splits, reclassifications or combination of common stock, and certain other business combinations) exercisable for a period of (5) years from the date of issuance on July 18, 2016;
·
Warrant to purchase up to 121,000 shares of our Common Stock at an exercise price of $0.50 per share (subject to adjustment upon the occurrence of certain events relating to a change in capital stock, including, but not limited to, in the case of stock splits, reclassifications or combination of common stock, and certain other business combinations) exercisable for a period of (5) years from the date of issuance on September 28, 2016;
·
Warrant to purchase up to 500,000 shares of our Common Stock at an exercise price of $0.15 per share (subject to adjustment upon the occurrence of certain events relating to a change in capital stock, including, but not limited to, in the case of stock splits, reclassifications or combination of common stock, and certain other business combinations) exercisable for a period of (5) years from the date of issuance on February 15, 2017; and
15
·
Warrant to purchase up to 2,000,000 shares of our Common Stock at an exercise price of $0.001 per share (subject to adjustment upon the occurrence of certain events relating to a change in capital stock, including, but not limited to, in the case of stock splits, reclassifications or combination of common stock, and certain other business combinations) exercisable for a period of (5) years from the date of issuance on February 16, 2017.
Each of the foregoing warrants are held by the Selling Stockholder and include a beneficial ownership limitation whereby the Selling Stockholder shall not have the right to exercise any portion of such warrants to the extent that after giving effect to such issuance after the exercise, the Selling Stockholder would beneficially own in excess of 9.99% of the total number of shares of our Common Stock outstanding immediately after the issuance of shares upon exercise of such warrants.
Options
The Company presently has no options outstanding.
SHARES ELIGIBLE FOR FUTURE SALE
We cannot predict the effect, if any, that market sales of shares of our Common Stock or the availability of shares of our Common Stock for sale will have on the market price of our Common Stock prevailing from time to time. Future sales of our Common Stock in the public market, or the availability of such shares for sale in the public market, could adversely affect market prices prevailing from time to time. The availability for sale of a substantial number of shares of our Common Stock acquired through the exercise of outstanding warrants could materially adversely affect the market price of our Common Stock. In addition, sales of our Common Stock in the public market after the restrictions lapse as described below, or the perception that those sales may occur, could cause the prevailing market price to decrease or to be lower than it might be in the absence of those sales or perceptions.
Rule 144
In general, under Rule 144 as currently in effect, a person (or persons whose shares are required to be aggregated), including a person who may be deemed an affiliate of the company, who has beneficially owned restricted securities for at least six months may sell, within any three-month period, a number of shares that does not exceed the greater of: (1) 1% of the then outstanding shares of common stock, or (2) if and when the Common Stock is listed on a national securities exchange, the average weekly trading volume of the common stock during the four calendar weeks preceding the date on which notice of such sale was filed under Rule 144. Sales of shares held by our affiliates that are not restricted are subject to such volume limitations, but are not subject to the holding period requirement. Sales under Rule 144 are also subject to certain requirements as to the manner of sale, notice and availability of current public information about our company. A person who is not deemed to have been an affiliate of our company at any time during the 90 days preceding a sale by such person, and who has beneficially owned the restricted shares for at least one year, is entitled to sell such shares under Rule 144 without regard to any of the restrictions described above.
We cannot estimate the number of shares of our Common Stock that our existing stockholders will elect to sell under Rule 144. Because Tangiers can be deemed to be an underwriter within the meaning of the Securities Act, Tangiers will be subject to the prospectus delivery requirements of the Securities Act and will be prohibited from selling shares under Rule 144.
Anti-Takeover Effects of Nevada Law and Our Charter Documents
Certain provisions of Nevada law and our Articles of Incorporation and Bylaws could make more difficult the acquisition of us by means of a tender offer or otherwise, and the removal of incumbent officers and directors. These provisions are expected to discourage certain types of coercive takeover practices and inadequate takeover bids and to encourage persons seeking to acquire control of us.
Transfer Agent
The transfer agent for our Common Stock is Action Stock Transfer at 2469 E. Fort Union Blvd, Suite 214, Salt Lake City, UT 84121. The transfer agents telephone number is (801) 274-1088.
16
DESCRIPTION OF BUSINESS
Overview
We are a start-up, exploration mining company formed to explore mineral properties in the Dominican Republic or elsewhere in the world which, hopefully, will contain gold and other economic minerals. We were incorporated under the laws of the State of Nevada on October 6, 2011 for the purpose of acquiring rights to mineral properties with the eventual objective of being a producing mineral company, if and when it ever occurs.
We have limited operating history and have not yet generated or realized any revenues from our activities. We have performed limited exploration work on our former property, the Leomary Gold Claim located in the Dominican Republic. To date we have not performed any exploration work on our new mineral claim called the Mogollon located in the Dominican Republic.
On January 10, 2012 we incorporated a wholly-owned subsidiary under the laws of the Dominican Republic named "Oroplata Exploraciones E Ingenieria, Orexi, SRL" (Oroplata Exploraciones) in order to hold the mineral rights to a claim named "Leomary Gold Claim" consisting of 4,500 mining hectors (approximately 11,100 acres) located in the province of Monseñor Nouelan, municipality of Bonao. After performing limited exploration work, in September 2014, we lost the rights to the Leomary Gold Claim.
We subsequently acquired rights to a new mineral claim in the Dominican Republic called Mogollon (the Mogollon Claim) whereby the Company paid $10,000 for the rights to the minerals on the Mogollon Claim and for the completion of a geological report thereon. To date we have not performed, and do not expect to perform, any exploration on the Mogollon Claim.
On June 1, 2016, we entered into a Mineral Claim Purchase Agreement with Plateau Ventures LLC., a Utah corporation (PVL) to acquire five hundred (500) lithium mineral claims, totaling 10,000 acres, called the Western Nevada Basin, situated in Railroad Valley in Nye County, Nevada (the WNB Claim). In the second half of 2016, we engaged experts to evaluate the region and the WNB Claim to target on-site exploration efforts, which we expect to begin in 2017.
We have two wholly-owned subsidiaries: Oroplata Exploraciones, which was incorporated under the laws of the Dominican Republic on January 10, 2012; and Lithortech Resources Inc., which we incorporated under the laws of Nevada on August 8, 2016.
We own no real estate, other than the mineral rights to the Mogollon concession located in the Dominican Republic and the Nye County properties located in Nevada, United States.
Oroplata has not earned any revenues to date and we do not anticipate earning revenues until such time as we have undertaken sufficient exploration work to identify an ore body. Exploration work will take a number of years and there is no certainty we will ever reach a production stage. Our Company is considered to be in the exploration stage due to not having done exploration work which would result in a development decision.
Our former director has advanced $120,146 by way of paying on behalf of the Company certain expenses relating to office and past exploration work on the former Leomary mineral claim as well as providing additional funds for working capital. As of December 31, 2016, the Company owes $55,500 (September 30, 2016 - $33,000) to our Chief Operating 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 period ended December 31, 2016, the Company accrued $30,000 of management fees and paid $7,500 to the Chief Operating Officer (former Chief Executive Officer) of the Company.
As of December 31, 2016, we had $5,568 in cash on hand and current liabilities of $460,025 resulting in a working capital deficit of $454,457.
Oroplata's Main Product
Oroplata's main product will be the sale of Lithium Carbonate or Lithium Hydroxide that can be extracted from its Western Nevada Basin Project once the claim has been explored. Since the Western Nevada Basin has yet to be explored by us, we have yet to find an ore body and therefore cannot sell any ore.
17
Implications of Being an Emerging Growth Company
We qualify as an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. As an emerging growth company, we intend to take advantage of specified reduced disclosure and other requirements that are otherwise applicable generally to public companies. These provisions include:
·
allowance to provide only two years of audited financial statements in addition to any required unaudited interim financial statements with correspondingly reduced Managements Discussion and Analysis of Financial Condition and Results of Operations disclosure;
·
reduced disclosure about our executive compensation arrangements;
·
no non-binding advisory votes on executive compensation or golden parachute arrangements; and
·
exemption from the auditor attestation requirement in the assessment of our internal control over financial reporting.
We may take advantage of these provisions for up to five years or such earlier time that we are no longer an emerging growth company. We would cease to be an emerging growth company on the date that is the earliest of (i) the last day of the fiscal year in which we have total annual gross revenues of $1 billion or more; (ii) the last day of our fiscal year following the fifth anniversary of the date of the completion of our initial public offering (our IPO); (iii) the date on which we have issued more than $1 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the Securities and Exchange Commission. We have taken advantage of reduced reporting requirements in this prospectus. Accordingly, the information contained herein may be different than the information you receive from other public companies in which you have beneficial ownership. In addition, we have elected to opt out of the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the Exchange Act. As a result, our financial statements may not be comparable to those of companies that comply with public company effective dates.
Our auditors have issued a going concern opinion on the September 30, 2016 financial statements. This means that our auditors believe there is substantial doubt that it can continue as an on-going business for the next twelve months unless it obtains additional capital to pay for its operations. This is because it has not generated any revenues and no revenues are anticipated until it begins removing and selling minerals, if ever. Accordingly, it must raise cash from sources other than the sale of minerals found on the Mogollon concession. That cash must be raised from other sources. Our only other source for cash at this time is investment by others in our Company, advances from its sole director or institutional financing. We must raise cash to implement its planned exploration program
We review and evaluate long-lived assets, such as its former and present mineral claims, for impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. Our assets are subject to impairment consideration under ASC 360-10-35-17 if events or circumstances indicate that their carrying amounts might not be recoverable. When we determines that an impairment analysis should be done, the analysis will be performed using rules of ASC 930-360-35, Asset Impairment, and 360-10-15-3 through 15-5, Impairment or Disposal of Long-Lived Assets.
18
Recent Developments
Recent Appointments
On the same date, the Board of Directors appointed Mr. Douglas Cole to serve as Controller, interim Treasurer and interim Secretary, effective March 14, 2017, until such time as the Company appoints a qualified, permanent replacement to such positions. Mr. Cole will also continue to serve the Company as a member of the Board of Directors.
Also effective March 14, 2017, the Board of Directors appointed Mr. Michel Mason, the Companys Chief Executive Officer and director, to act as interim Chief Financial Officer and to assume such related duties of Principal Financial Officer until such time as the Company appoints a qualified, permanent replacement Chief Financial Officer.
Appointment of Mr. Douglas Cole
On February 20, 2017, the Board of Directors of the Company appointed Douglas Cole to serve as a member of the Board of Directors, effective February 28, 2017.
Appointment of Mr. Michael Mason and Resignation of Mr. Craig Alford
On February 15, 2017, Craig Alford resigned from his officer positions with the Company and was simultaneously appointed Chief Operating Officer of the Company. Mr. Alford will continue to serve on the Board of Directors of the Company.
On February 15, 2017, Michael Mason was appointed Chief Executive Officer of the Company. Mr. Mason will continue to serve on the Board of Directors of the Company.
Appointments of Mr. William Hunter
One June 10, 2016, the Board of Directors of the Company appointed William Hunter to the Board of Directors.
Appointment of Mr. Gregory Kuzma
One June 10, 2016 the Board of Directors of the Company appointed Gregory Kuzma to the Board of Directors.
Appointment of Mr. Michael Mason
On July 22, 2016 the Board of Directors of the Company appointed Michael Mason to the Board of Directors.
Preceding the above appointments, the following developments occurred
:
Appointment of Mr. Craig Alford and Resignation of Mr. Ruben Ricardo Vasquez
On May 31, 2016, Craig Alford acquired control of twenty-five million (25,000,000) shares (the Purchased Shares) of the Companys issued and outstanding common stock, representing approximately 62.5% of the Companys total then issued and outstanding common stock, from Ruben Ricardo Vasquez in accordance with a stock purchase agreement between Mr. Alford and Mr. Vasquez (the Stock Purchase Agreement). Pursuant to the Stock Purchase Agreement, Mr. Alford paid an aggregate purchase price of twenty-five thousand dollars ($25,000.00) to Mr. Vasquez in exchange for the Purchased Shares.
As a result of the Stock Purchase Agreement, the following changes to the Company's directors and officers have occurred:
·
As of May 31, 2016, Ruben Ricardo Vasquez resigned from all officer positions with the Company, including but not limited to those of President, Chief Executive Officer, Chief Financial Officer and Secretary.
·
On May 31, 2016, Craig Alford was appointed as the Companys President, Chief Executive Officer, Chief Financial Officer, Treasurer, and Secretary.
·
On June 13, 2016, Mr. Vasquez resigned from his position as the sole director of the Company and Mr. Alford was appointed as the sole director of the Company.
19
As a result of these transactions, control of the Company passed to Mr. Alford. The Shares acquired by Mr. Alford constituted 62.5% of the then issued and outstanding common stock of the Company.
Entrance into Mineral Claim Purchase Agreement with Plateau Ventures LLC
On June 1, 2016, the Company entered into Mineral Claim Purchase Agreement (the Agreement) with Plateau Ventures LLC., a Utah corporation (PVL). Pursuant to the Agreement, upon the satisfaction of various closing conditions, PVL will sell to the Company the title to three hundred (300) lithium mineral claims, called the Western Nevada Basin, situated in Railroad Valley in Nye County, Nevada (the WNB Claims).
The terms of the Agreement are as follows:
Purchase Price:
As consideration for the sale of the Claims, the Company:
i.
Issue sixteen million (16,000,000) shares of common stock to PVL or its designee(s);
ii.
Pay PVL one hundred thousand dollars ($100,000); and
iii.
Pay PVL a royalty equal to two percent (2%) of the Net Smelter Returns (NSR) from the production or sale of Minerals from the Property. The Royalty may be reduced to one percent (1%) of NSR with payment of one million dollars ($1,000,000) to PVL at any time prior to commencement of commercial production.
Expenditures:
i.
The Company paid seventy-seven thousand, five hundred dollars ($77,500), or $155 per claim, to the US Bureau of Land Management; and
ii.
Shall pay annual maintenance fees as applicable.
The Company has full entitlement to the Claims as all filing requirements have been processed and accepted by the Bureau of Land Management (BLM) in Nevada. The Company is required to make payments of $155 per claim for the BLM maintenance fee, on September 1, each year to maintain the claims. Although no assurances can be made, the Company believes it will be compliant with all BLM procedures.
Plans for the WNB Claims:
If we are successful in acquiring full entitlement of the WNB Claims, we expect to initiate an exploration program during 2017. The results of the initial exploration program will dictate subsequent work on the property.
Market and Industry
Lithium is extracted from primarily two sources: pegmatite crystals and lithium salt from brine pools. Currently the worlds five top producers of Lithium are Australia, Chile, China, Argentina and Zimbabwe.
In 2015 worldwide production totaled approximately 33,600 metric tons, with the top 3 countries contributing roughly 89% of the global production. Most of the worlds lithium supply is produced by three companies: FMC Corp., Sociedad Quimica y Minera de Chile (SQM) and the Albemarle Corporation.
Much of the current production of Lithium (i.e. Australia) is from conventional mining techniques of ancient Precambrian rocks containing Lithium ore which is crushed and fed into capital intensive processing plants which upgrade the lithium mineral using gravity, flotation, magnetic and roasting processes.
Alternatively Lithium production from Chile and Argentina uses a much less capital intense method. Lithium is located beneath flat, arid salt flats. The Lithium is leached from nearby source rocks and becomes concentrated in salty brines just under the surface.
Here Lithium enriched brines are pumped up to settle on hundreds of shallow surface evaporation pools which produces a thicker Lithium rich liquid. That liquid is treated with sodium carbonate, precipitating lithium carbonate.
20
Lithium (Li) is a soft silver-white metal. With an atomic number of 3, it is the lightest of the metals, only the gases, Hydrogen (atomic number 1) and Helium (atomic number 2) are lighter.
Light weight Lithium has many applications but the metal is a perfect replacement of the much heavier Nickel used in most large batteries. Lithium batteries also have a high charge density, a longer life and lithium-ion batteries are rechargeable.
The Lithium market has typically been dominated by the ceramic and medical sectors, however, 2015 presented a marked change in the market as the demand for Lithium for the battery market outstripped any other sector.
At the moment, the main lithium-ion battery-makers are Samsung and LG of South Korea, Panasonic and Sony of Japan, and ATL of Hong Kong. But China, also has many battery- factories being built which will further its demand for lithium.
Lithium is not traded publicly and is usually distributed in a chemical form such as lithium carbonate (Li2CO3) instead it's sold directly to end users for a negotiated price per ton of Lithium carbonate. Recently that price has spiked, exceeding expectations and is project to rise.
General Market Analysis
Lithium-ion batteries have become the rechargeable battery of choice in cell phones, computers, electric cars and now larger scale electric storage. The growth in demand for lithium batteries is predicted to far outpace lithium production in the coming decade, in particular, Lithium-ion batteries for the automotive industry is expected to advance demand to nearly unserviceable levels.
Recently Japan and South Korea have both recorded high levels of Lithium-ion battery exports in 1-H of 2016 as auto companies ramp up battery consumption to power all-electric vehicle offerings. Lithium ion battery shipments from Japan, the worlds leading producer topped 33,500 tonnes in 1-H of 2016, an increase of 31% year to year.
Goldman Sachs predicted that the market consumption could very well triple from the current production by 2025. Just a 1% increase of Electric Vehicles hitting the market could increase lithium demand by roughly half of the current production of lithium today.
SQMs CEO Patricio de Solminihac said in a 2015 interview with Benchmark Mineral Intelligence that the company could increase production within 12 months, if necessary, to meet higher demand.
FMC and Albemarle have decided not to wait. FMC announced in May it would triple its production of lithium hydroxide by 2019, increasing to 30,000 tonnes from 10,000. Albemarle also announced it would be increasing production of lithium carbonate to 70,000 tonnes from 24,000 over 27 years.
Teslas mile long Gigafactory is expected to start producing powerful Lithium-ion batteries by 2017 with their partner Panasonic. The Gigafactory will supply batteries for the 500,000 cars Tesla hopes to produce by the end of the decade, as well as to power homes. This is no one shot, Chrysler, Dodge, Ford, GM, Mercedes-Benz, Mitsubishi, Nissan, Saturn, Tesla and Toyota have all announced plans to build lithium-ion battery powered cars.
Preorders of the new Tesla model 3 have sold out to 400,000 and production is starting 2 years ahead of schedule. Elon Musk has stated that Tesla will have to acquire the entire lithium market to meet the current demands.
Thus, the global lithium market is approaching a major shortage, which has made it the worlds hottest commodity and mineral explorers have launched a frantic effort to locate and bring new supply to a hungry marketplace.
Lithium brine exploration and development has proven to be much more cost effective and faster to be put into production than the hard rock mine counterparts.
Lithium brine deposits are considered placer deposits and are easier to permit. Brine is also a liquid which means that drilling to find it is more akin to drilling for water. Its also typically located relatively close to surface, which limits the amount of meters drilled. Once a Lithium Brine is found, the continuity is more straightforward to understand and quantify.
As the brines are found in large flat areas, the construction of numerous flat evaporation pools or direct solvent extraction can be achieved at relatively low cost. Environmental impact is minimized as the excess residual brines can be pumped back into the salt flats.
21
Competition
Oroplata has to compete with other companies searching for minerals in Nevada and seeking financing for the development of their specific properties. Often, not in all cases, these other mineral companies are better financed, have properties which have had sufficient exploration work done on them to warrant a future investor to consider investing in their company rather than ours. There are only a limited number of investors willing to invest in a company which had no proven reserves and has just started its exploration work. These other mineral exploration companies might induce investors to consider their properties and not ours. Hence, any additional funds they receive will be directed to the future exploration work on their properties whereas our company might be strapped for funds and unable to do any worthwhile exploration work on the Western Nevada Basin claim. We might never be able to compete against these other companies and hence never bring the Western Nevada Basin project into a stage where a production decision is to be made. In addition, we will have to compete with both large and small exploration companies for other resources we will need; professional geologists, transportation to and from the Western Nevada Basin Project, materials to set up a camp if required and supplies including drill rigs.
Patents and Trademarks
Oroplata does not have any patents or trademarks
Employees
Other than our Board of Directors and our three officers, Messrs. Mason, Cole and Alford, who are engaged by the Company as consultants, we do not have any employees. Our officers devote approximately 20 hours a month, collectively, to our operations but will increase the number of hours when an exploration program is undertaken on our mineral properties.
Address and Telephone Number
Our executive office is located at 170 S. Green Valley Parkway, Suite #300, Henderson, NV 89012, and our phone number is (702) 318-7218. Our website, www.oroplataresourcesinc.com, contains a description of our company, but such website and the information contained on our website should not be viewed as part of this Prospectus.
22
DESCRIPTION OF PROPERTIES
DESCRIPTION OF PROPERTIES
The Western Nevada Basin (WNB) Property is located in east central Nye County, Nevada (Figure 1) approximately 93 miles northeast of the county seat of Tonopah, NV, the major commercial center for the region; 56 miles southwest of the town of Ely, NV and 120 miles northeast of the village of Silver Peak the only currently operating Lithium producer in the State.
Figure 1. Location Map. The Western Nevada Basin Project is located within the central portion of the Railroad Valley playa about approximately 169 miles north-northwest of Las Vegas, NV and 234 miles east-southeast of Reno, NV.
23
(Figure 2). The Western Nevada Basin Property covers just over 6,000 acres. It consists of a total of three hundred and four (304) placer claims (Figure 2). Each claim covers approximately 20 acres and was laid out by aliquot parts as required by the Bureau of Land Management.
Lithium is a locatable mineral according to the Code of Federal Regulations. Rights to Lithium are to be held by lode claims where it occurs in bedrock and by placer claims where it occurs in sediments. A body of legal precedence set during the original development of lithium brines in the area provides that lithium in valley sediments by nature of the unconsolidated host rock are staked by and produced from placer claims.
The WNB project is held by 304, 20 acre placer claims, which are located on public Federal lands managed by the Bureau of Land Management. The placer claims are located on U.S. Surveyed lands and fit to aliquot parts.
In Nevada the claim staking procedure requires recording documents with both the county Recorders Office and then with the state Bureau of Land Management office. Claims must be held by posts at the claims four corners and Notice of Location which describe the claims legal description of location and owner. The claims are required to be recorded at the county courthouse within the proper jurisdiction within 90 days from the staking date.
Placer claims on Federal lands are held to a September 1 to August 31 assessment year when Intent to Hold or Proof of Labor documents need to be filed with the county for the annual assessment work. The pertinent documents are filed with the Nye County Recorders Office.
The claims were staked by the 3
rd
Party, Plateau Ventures LLC of Moab Utah and official rights to the claims by Oroplata is subject to Quit Claim Deed Transfer Approval by BLM. Oroplata, through its 100% owned subsidiary, Lithortech Resources, Inc., received full entitlement to the Western Nevada Basin property by way of the Quit Claim Deed on January 2
nd
2017. The signed and approved Quit Claim Deed document is attached.
The current annual maintenance fee is $155 per 20 acre (or a portion thereof) placer claim (http://www.blm.gov/ca/st/en/info/iac/miningfacts.html). Payment of those fees allows the claim to stay on the BLM active data base. Non-payment results in the claims moving to closed status. Before August 31st each year, a payment of $155 per claims is made to the BLM to hold the claims in good standing for the following assessment year. The total cost for the 304 WNB claims was $47,120. All fees for the current year have been paid to the BLM.
24
When fees are paid a claim is deemed active. Active and approved claims are listed and can be viewed on the BLM interactive website LR2000 (http://www.blm.gov/lr2000/)
Before October 31
st
of each year, it is necessary to make a payment to the county of $10 per claim to file an affidavit of assessment fees paid and notice of intent to hold the claims into the next assessment year. The total cost for the current 304 WNB claims is $3,040.
As public lands, there is right of free access and both surface and mineral rights are held by the Federal government. Public records (Management, Bureau of Land) show no military withdrawals or Areas of Critical Environmental Concern. The Railroad Valley Wildlife Management Area is located to the west of the WNB claim boundary and has no effect on any planned work on the WNB claim area.
There is free access to the Federal land in Railroad Valley and there are no restrictions on casual prospecting. New exploration drilling will trigger a permitting process. There are two major levels of permitting: Notice of Intent (NOI) and Plan of Operations (POO). Historically, if the proposed disturbance was less than 5 acres or 1,000 tons, then the work can proceed under a NOI if there are no complications such as ancient ruins or endangered species. Application for a NOI is relatively simple with requirements like bonding the access route and re-seeding afterwards. A NOI is valid for two years and may be renewed on a two year basis. Maintaining it requires maintaining bonds and seeding disturbed areas when the work is complete. A POO is more complicated with requirements like an archeological survey, environmental assessment, etc. The BLM may respond within 15 days to a NOI application whereas a POO may require several months to years for final acceptance.
Any drilling planned will require a NOI filed with the Tonopah office of the BLM. To the best of the Companys knowledge, there are no known environmental liabilities to which the property is subject or other significant factors and risks that may affect access, title, or the right or ability to perform work on the property.
Accessibility
The main route of access to the WNB project is Nevada State U.S. Route 6 which provides all year access to Railroad Valley and the project area. U.S. Route 6 provides direct access to the two nearby commercial centers; Tonopah, located southwest of the project at the junction of Routes 6 and 95, approximately 90 minutes away, and Ely, a slightly larger commercial center with a population of over 4,200 approximately, located northeast of the project approximately 60 minutes away. US Highway 95 is the main highway linking Las Vegas and Reno, the two largest metropolitan areas in Nevada.
Climate
Railroad Valley is in the rain shadow of the Sierra Nevada Mountains. The region is arid to almost semiarid. Winters are cold while summers are hot. Average annual precipitation is approximately 5 inches; however, variations occur at differing altitudes.
Exploration can be conducted year around.
Local Resources
The Railroad Valley contains several small communities; which include Currant, Crows Nest, Green Springs, Lockes, and Nyala. Electrical power is available within the valley area.
The larger population centers of Ely and Tonopah are connected via U.S. Route 6 to the project area. Tonopah has a population of approximately 2,500 and is the governmental center for the region. Ely has a population of approximately 4,250 and is the closest commercial center. Groceries, hardware, a bank and a choice of motels and restaurants are available in both Ely and Tonopah.
The area has a long history of mining. Mining personnel can be sourced mostly from the larger towns of Tonopah or Ely.
Infrastructure
A reasonable network of 4x4, graded and paved roads connects the claim area to the rest of Nevada. Electrical power is available at several sites throughout the valley and could easily provide power to any operation at the project area. The nearest rail and large commercial airline service is to Las Vegas, NV approximately 169 miles to the south.
25
Physiography
Railroad Valley is one of the longest topographically closed drainage basins in Nevada, extending more than 110 miles in a north-south direction and up to 20 miles wide. The Valley is one of the Central Nevada Desert Basins in the Tonopah Basin. The southern end of the valley begins near Gray Top Mountain (7,036 feet) and stretches north all the way to Mount Hamilton (10,745 feet). The mountain masses are dominated by the White Pine, Grant and Quinn Canyon ranges east of the valley.
Railroad Valley comprises and an area of approximately 2,750 square miles. Two playa areas occur within the valley. The Property is located on the huge Northern Playa on the valley floor at elevations generally of 4400 4700 feet. The valley floor is characterized by subdued topography with washes eroding into slightly older valley-fill sediments.
The claims are located on the playa and vegetation is scarce. There is sufficient surface area for recovery facilities within the claim group. Water in the basin is unallocated, which is an advantage for processing in the future.
Geologic Setting
The claims are located in the Basin and Range physiographic province which stretches from southern Oregon and Idaho to Mexico. It is characterized by extreme elevation changes between mountains and flat intermountain valleys or basins.
Plate tectonics powered by crustal spreading broadly generates two types of forces: compression as plates are moved together and extension as those forces relax. Compression was the dominant geologic force affecting the western United States beginning about 200 million years ago as the Pacific Ocean plate moved eastward under the North American continent. Those forces compressed the overlying pile of sedimentary rocks accumulated over hundreds of millions of years into a thick stack reaching up to elevations of 10 14,000 feet, similar to the altiplano of Mexico and South America which formed at the same time from similar forces. That highland plateau stretched west east from the Sierra Nevada Mountains in California to the Wasatch Range in Utah.
Extension became the dominant force beginning in the Eocene - Oligocene epochs approximately 55 to 25 million years ago. Also, the relative movement of the tectonic plates changed about 30 million years ago with the movement becoming more oblique to the continent. That relaxed the compressional forces and also tended to tear the crust apart, creating diagonal extensions.
The resulting compressional and extensional tectonics have created throughout Nevada a classical Basin and Range province consisting of narrow, N- to NE-trending, fault block mountain chains separated by flat, linear valleys. This geological pattern is repeated across the State and has created a number of currently arid, trapped or closed basins with respect to drainage that have the potential of containing Lithium Brine deposits.
Geology of Lithium Brines
Lithium brine deposits are accumulations of saline groundwater that are enriched in dissolved lithium. All producing lithium brine deposits share a number of first-order characteristics: (1) arid climate; (2) closed basin containing a salt flat (Playa or Salar); (3) tectonically driven subsidence; (4) associated igneous or geothermal activity; (5) suitable lithium source-rocks; (6) one or more adequate aquifers; and (7) sufficient time to concentrate a brine.
The single most important factor determining if a nonmarine basin can accumulate lithium brine is whether or not the basin is closed.
Lithium enriched brines are formed by complex and multiple processes of evaporation, re-mobilization, and salt and lithium clay dissolution and precipitation. In essence, lithium is liberated by weathering or derived from hydrothermal fluids from a variety of rock sources within a closed basin where Lithium, a lightweight element, cannot escape.
Lithium is highly soluble and, unlike sodium (Na), potassium (K), or calcium (Ca), does not readily produce evaporite minerals when concentrated by evaporation. Instead it ends up in residual brines in the shallow subsurface. Economic brines have Li concentrations in the range of 200 to 4,000 milligrams per liter (mg/l). 1 mg/l = 1 ppm.
Clayton Valley contains the only currently producing Lithium Brine project in Nevada. Production has been on-going since 1967. The production at Clayton Valley is located approximately 120 miles west of the Railroad Valley. Evidence from Clayton Valley suggests that felsic vitric tuffs are a particularly favorable primary source of Lithium as well, uplifted Neogene lake beds from earlier in the basins history, which have been altered to hectorite, may provide a source of Lithium.
26
Geology of Railroad Valley
Railroad Valley has produced about 44 million barrels of oil (MMBO) from nine fields and has been extensively studied to determine relations between structure and oil production. Several interpretations of basin configuration have evolved, based on improved seismic acquisition and processing and better understanding of deformation styles and kinetics.
Oil was first discovered at Railroad Valley by Shell Oil in 1954. The discovery well reached a depth of 10,360 feet before being completed at a productive interval between 6,450 and 6,730 feet. The valley fill is essentially wedge shaped with the wedge increasing in thickness from west to east. A low-angle attenuation fault has been reported to underlie Railroad Valley which has been interpreted to be a result of asymmetric arching rather than a series of down-to-the-west high-angle normal faults.
The stratigraphy of the valley is known to contain Paleozoic platform carbonate rocks, Tertiary volcanic rocks, and Tertiary lacustrine sediments. In comparison to Clayton Valley, the Railroad Valley has a large endowment of Neogene volcanic flows and tuffaceous rocks.
Oil exploration has reported a number of laterally continuous thick Brine horizons throughout Railroad Valley. Sampling for Lithium from the brines was not conducted by the oil industry. Good reservoir rocks for oil may not represent good reservoir hosts for Lithium. The underlying brine-waters of the Railroad Valley were at one time examined as a potential reservoir for Las Vegas.
Volcanic rocks form a large part of the Neogene rock sequence: ash-flow tuffs and basalt flows from major calderas in eastern and central Nevada. Thickness of the volcanic section can vary greatly because of Neogene erosion and faulting. The thickness of ash flow tuffs in Railroad Valley can range from less than 1,000 ft to more than 3,000 ft. These rocks have shown good porosity and may represent an enormous source for Lithium.
Tertiary lacustrine formations consists of varying proportions of fresh-water carbonate, shale, sandstone, and volcanic debris. To date, oil production from Tertiary lacustrine reservoirs is limited, but there is production from the Sheep Pass Formation in the Eagle Springs field, and formerly there was production from Currant field; both in Railroad Valley.
The northern Playa area of Railroad Valley contained a large lake during the Pleistocene Epoch, more than 7,000 years ago. The lake has subsequently evaporated within the valley; however, at one point it reportedly covered an area of over 525 square miles and attained a maximum depth of 315 feet.
The large Railroad Valley north playa today is partly covered by young erosional alluvium.
Mineral Resources and Mineral Reserves
The Railroad Valley has demonstrated enrichment in lithium in the nearby dry sediments as evidenced from the NURE sample database from the U.S. Geologic Survey. However, the project is at an exploration stage. There are no lithium brine mineral resources or reserves for the property.
27
Exploration and Development
A proposed budget of US$800,000 for a 2017 Phase One exploration program is shown in the following table. Any subsequent work would be contingent upon favorable results from the program and would fall under a separate future budget.
|
|
|
2017
|
Office and Exploration Expenditures
|
|
•
General and Administrative
|
55,000
|
•
Staking, Surveying and Land Admin
|
30,000
|
•
Drilling and Mobilization
|
540,000
|
•
Assaying and Shipping
|
20,000
|
•
Geologic team & Field Personnel
|
75,000
|
•
Vehicles, Travel & Field Supplies
|
30,000
|
•
Contingency
|
50,000
|
|
|
Total Short Program Budget
|
800,000
|
The work would consist of direct sampling and analysis of Lithium both laterally and vertically across the project area from both Volcanic horizons and underground Brines contained within the Playa. Drilling and mobilization represent the largest costs of the program. Every effort would be made to minimize costs and maximize the sampling of brine from either re-entry and perforation of shut-in oil wells or testing of current water wells in the project area.
Exploration Time Table
The work for the Phase One exploration program will be designed over the following 2 to 3 months. Surficial sampling will be performed from February to March and Drilling and sampling from April to June. Analytical analysis will follow each program.
Mogollon Mineral Property
Prior to June 1st, 2016, Oroplata Resources, Inc. was engaged in the exploration and development of the Mogollon gold concession located in the province of San Juan, in the Dominican Republic. The Mogollon gold project was without known resources or reserves.
Other than obtaining the mineral rights to the Mogollon claim and having a geologist prepare a report on the claim no exploration work was undertaken.
Presently the Company is engaged in the exploration and development of Lithium projects and is not considering pursuing any further expenditures or exploration on the Mogollon claim.
Other Mineral Properties
We are not contemplating any other mineral properties at this time
LEGAL PROCEEDINGS
In the ordinary course of business, we may be involved in legal proceedings from time to time. As of the date hereof, except as set forth herein, there are no known legal proceedings against the Company. No governmental agency has instituted proceedings, served, or threatened the Company with any complaints.
28
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Market Information
Our shares of common stock are eligible for quotation on the OTC Markets Group under the symbol ORRP. However, our shares do not trade other than on an extremely limited and sporadic basis. The following table sets forth for the periods indicated the range of high and low bid quotations per share as reported on the OTC Markets Group since the first period for which figures are available. These quotations represent inter-dealer prices, without retail markups, markdowns or commissions and may not necessarily represent actual transactions. Our shares of common stock first began trading on February 1, 2016.
|
|
|
|
|
|
|
|
|
|
High
|
|
Low
|
|
Year 2017
|
|
|
|
|
|
First Quarter
|
|
$
|
0.55
|
|
$
|
0.16
|
|
|
|
|
|
|
|
|
|
Year 2016
|
|
|
|
|
|
|
|
Fourth Quarter
|
|
$
|
1.90
|
|
$
|
0.21
|
|
Third Quarter
|
|
$
|
1.65
|
|
$
|
0.25
|
|
Second Quarter (beginning February 1, 2016)
|
|
$
|
0.50
|
|
$
|
0.35
|
|
First Quarter
|
|
$
|
-
|
|
$
|
-
|
|
On March 2, 2017, the closing price of our Common Stock as reported by the OTC Markets Group was $0.24 per share.
Holders
.
As of March 13, 2017, we have approximately 31 shareholders including our directors and officers. One such holder is Cede & Co., a nominee for Depository Trust Company, or DTC. Shares of Common Stock that are held by financial institutions as nominees for beneficial owners are deposited into participant accounts at DTC, and are considered to be held of record by Cede & Co. as one stockholder.
Dividends
We have never declared or paid any cash dividends on our capital stock. We currently intend to retain all available funds and any future earnings to support our operations and finance the growth and development of our business. We do not intend to pay cash dividends on our common stock for the foreseeable future. Any future determination related to dividend policy will be made at the discretion of our Board of Directors. The Nevada Revised Statutes, however, prohibits us from declaring dividends where, after giving effect to the distribution of the dividend:
·
we would not be able to pay our debts as they become due in the usual course of business; or
·
our total assets would be less than the sum of our total liabilities plus the amount that would be needed to satisfy the rights of stockholders who have preferential rights superior to those receiving the distribution, unless otherwise permitted under our Articles of Incorporation.
Securities Authorized for Issuance under Equity Compensation Plans
There are no shares being offered pursuant to an employee benefit plan or a dividend reinvestment plan as no such plans exist. We have not approved such compensation plans nor are any anticipated. See Description of Securities on page 15 for further information related to outstanding securities convertible into shares of our Common Stock.
Penny Stock Regulations
The SEC has adopted regulations which generally define penny stock to be an equity security that has a market price of less than $5.00 per share. Our Common Stock, when and if a trading market develops, may fall within the definition of penny stock and be subject to rules that impose additional sales practice requirements on broker-dealers who sell such securities to persons other than established customers and accredited investors (generally those with assets in excess of $1,000,000, or annual incomes exceeding $200,000 individually, or $300,000, together with their spouse).
29
For transactions covered by these rules, the broker-dealer must make a special suitability determination for the purchase of such securities and have received the purchasers prior written consent to the transaction. Additionally, for any transaction, other than exempt transactions, involving a penny stock, the rules require the delivery, prior to the transaction, of a risk disclosure document mandated by the SEC relating to the penny stock market. The broker-dealer also must disclose the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and, if the broker-dealer is the sole market-maker, the broker-dealer must disclose this fact and the broker-dealers presumed control over the market. Finally, monthly statements must be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks. Consequently, the penny stock rules may restrict the ability of broker-dealers to sell our Common Stock and may affect the ability of investors to sell their Common Stock in the secondary market.
Corporate Information
We were incorporated on October 6, 2011 under the laws of the State of Nevada. Our fiscal year ends September 30 of each year. Our principal executive office is located at 170 S Green Valley Parkway, Suite #300, Henderson, NV 89012 and our registered agent's office is located at 123 West Nye Lane, Suite 129, Carson City, Nevada 89706. Our telephone number is (702) 318-7218 and our e-mail address is info@oroplataresourcesinc.com. Our website address is
www.oroplataresourcesinc.com.
The information contained on, or that can be accessed through, our website is not incorporated by reference in this prospectus and should not be considered a part of this prospectus. We have included our website address in this prospectus solely as an inactive textual reference.
Transfer Agent
The transfer agent for our common stock is Action Stock Transfer at 2469 E. Fort Union Blvd, Suite 214, Salt Lake City, UT 84121. The transfer agents telephone number is (801) 274-1088.
30
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of the results of operations and financial condition for the three months ended December 31, 2016 and 2015 and for the fiscal years ended September 30, 2016 and 2015 should be read in conjunction with the financial statements and related notes and the other financial information that are included elsewhere in this Prospectus. This discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Forward-looking statements are statements not based on historical information and which relate to future operations, strategies, financial results or other developments. Forward-looking statements are based upon estimates, forecasts, and assumptions that are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control and many of which, with respect to future business decisions, are subject to change. These uncertainties and contingencies can affect actual results and could cause actual results to differ materially from those expressed in any forward-looking statements made by us, or on our behalf. We disclaim any obligation to update forward-looking statements. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those set forth under the Risk Factors, Cautionary Note Regarding Forward-Looking Statements and Business sections in this Registration Statement. We use words such as anticipate, estimate, plan, project, continuing, ongoing, expect, believe, intend, may, will, should, could, and similar expressions to identify forward-looking statements.
We and our representatives may from time to time make written or oral statements that are forward-looking, including statements contained in this Prospectus and other filings with the SEC, reports to our stockholders and news releases. All statements that express expectations, estimates, forecasts or projections are forward-looking statements. In addition, other written or oral statements which constitute forward-looking statements may be made by us or on our behalf. Words such as expect, anticipate, intend, plan, believe, seek, estimate, project, forecast, may, should, variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in or suggested by such forward-looking statements. We undertake no obligation to update or revise any of the forward-looking statements after the date of this Prospectus to conform forward-looking statements to actual results. Important factors on which such statements are based are assumptions concerning uncertainties, including but not limited to, uncertainties associated with the following:
·
Inadequate capital and barriers to raising the additional capital or to obtaining the financing needed to implement our business plans;
·
Our failure to earn revenues or profits;
·
Inadequate capital to continue business;
·
Volatility or decline of our stock price;
·
Potential fluctuation in quarterly results;
·
Rapid and significant changes in markets;
·
Litigation with or legal claims and allegations by outside parties; and
·
Insufficient revenues to cover operating costs.
The following discussion should be read in conjunction with the financial statements and the notes thereto which are included in this Prospectus. This discussion contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ substantially from those anticipated in any forward-looking statements included in this discussion as a result of various factors.
31
RESULTS OF OPERATIONS
THREE MONTHS ENDED DECEMBER 31, 2016 AND 2015
Oroplata has not realized any revenue from its exploration activities on the Mogollon concession or the Nye County properties and it is extremely doubtful that the mineral property will be able to produce any revenue for many years. Without an ore reserve Oroplata cannot seek substantial investors to further fund the Company so that production can be achieved. Not until commercial production is realized will Oroplata have any chance of recognizing any form of revenue.
Results of Operations
Revenues
During the three month periods ended December 31, 2016 and 2015, the Company has not realized any revenues.
Expenses
Three months ended December 31, 2016 and 2015
During the three months ended December 31, 2016, the Company incurred operating expenses of $760,378 compared to $20,758 during the three months ended December 31, 2015. The increase in operating expenses is due to $600,000 for the fair value of the issuance of 2,000,000 common shares to Plateau Ventures Inc. as part of the amendment of the acquisition of the Nye County Claims to remove the royalty payments relating to the NSR. Furthermore, the Company incurred $160,378 of general and administrative costs which is comprised of management and consulting fees for due diligence work and service work relating to the Companys mineral properties and increase day-to-day operating activities.
Net Loss
The Company incurred a net loss of $836,464 or $0.01 loss per share during the three months ended December 31, 2016 compared to a net loss of $20,758 or $nil loss per share during the three months ended December 31, 2015. In addition to operating expenses, the Company also incurred interest and accretion expense of $76,086 relating to interest due on outstanding loans and convertible notes, as well as accretion expense for the discount on the face value of convertible notes to account for the beneficial conversion feature.
Liquidity and Capital Resources
At December 31, 2016, the Company had cash of $5,568 and total assets of $7,568 compared to cash and total assets of $90,040 at September 30, 2016. The decrease in cash and total assets was due to the fact that the Company used more cash for operating activities during the period and did not have any new financing proceeds during the three months ended December 31, 2016.
The Company has a working capital deficit of $452,457 at December 31, 2016 compared to a working capital deficit of $215,993 at September 30, 2016. The increase in the working capital deficit was due to the fact that the Company incurred more operating expense and costs than available cash, which increased the overall working capital deficit.
During the three months ended December 31, 2016, the Company issued 2,000,000 common shares to Plateau Ventures Inc. as part of the amendment to remove the NSR payments originally signed in the agreement. Originally, the Company issued 636,943 common shares to Plateau, but the number of shares to settle the NSR payment was increased due to the overall decrease in the Companys share price. Plateau returned the original 636,943 common shares in February 2017 and those shares were returned to treasury.
Cash Flows
Cash from Operating Activities
During the three months ended December 31, 2016, the Company used cash of $84,472 for operating activities compared to $17,973 during the three months ended December 31, 2015. The increase in the use of cash for operating activities was due to costs incurred with the acquisition of the Nye County claims which included management fees, professional fees, and consulting fees related to the acquisition and operation of the property.
32
Cash from Investing Activities
During the three months ended December 31, 2016 and 2015, the Company did not have any investing activities.
Cash from Financing Activities
During the three months ended December 31, 2016, the Company had no financing activities compared to the receipt of $20,155 from related parties during the three months ended December 31, 2015. The amounts received from related parties are unsecured, non-interest bearing, and due on demand.
YEARS ENDED SEPTEMBER 30, 2016 AND 2015
Working Capital
|
|
|
|
September 30, 2016
$
|
September 30, 2015
$
|
Current Assets
|
90,040
|
10,946
|
Current Liabilities
|
306,033
|
101,666
|
Working Capital (Deficit)
|
(215,993)
|
(90,720)
|
Cash Flows
|
|
|
|
September 30, 2016
$
|
September 30, 2015
$
|
Cash Flows used in Operating Activities
|
(402,402)
|
(32,941)
|
Cash Flows used in Investing Activities
|
(100,000)
|
-
|
Cash Flows from Financing Activities
|
582,496
|
20,639
|
Net increase (decrease) in Cash During Period
|
80,094
|
(12,302)
|
Operating Revenues
During the years ended September 30, 2016 and 2015, the Company did not record any revenues from operations.
Operating Expenses and Net Loss
During the year ended September 30, 2016, the Company incurred operating expenses of $28,293,931 compared to $37,988 during the year ended September 30, 2015. The increase in operating expenses is due to an impairment charged against the acquisition of the Nye Claims during the year of $27,051,848, and an increase in exploration costs of $141,800 related to costs incurred on the Nye Claims that were acquired in fiscal 2016. Furthermore, there was an increase in general and administrative costs of $1,062,295 related to consulting costs incurred to consultants as part of the Companys operations, $295,059 of stock-based compensation costs relating to bonus cashless warrants issued to note holders for issuance of convertible notes, $425,000 for the issuance of common shares for consulting services, and $60,000 for management fees incurred to officers and directors of the Company.
Net loss for the year ended September 30, 2016 was $28,331,180 compared with $37,988 during the year ended September 30, 2015. In addition to operating expenses, the Company incurred $37,249 of interest expense during fiscal 2016 for interest accrued on the convertible notes and the loan payable issued during the year.
For the year ended September 30, 2016, the Company recorded a loss per share of $0.66 per share compared with a loss per share of $0.00 per share for the year ended September 30, 2015.
Liquidity and Capital Resources
As of September 30, 2016, the Companys total asset balance was $90,040, comprised primarily of cash, compared to $10,946 for the year ended September 30, 2015 which included $9,946 of cash and $1,000 of prepaid expenses. The increase in total assets is largely due to an increase in cash from proceeds received from the issuance of convertible notes and a loan payable of $534,000 of which a portion of the cash remained unspent as at September 30, 2016.
33
As of September 30, 2016, the Company had total liabilities of $609,033 compared with total liabilities of $101,666 as at September 30, 2015. The increase in total liabilities was attributed to an increase of $303,000 for the issuance of a note payable during the year, which is unsecured, bears interest at 2.5% per annum, and is due on or before June 15, 2018, and $32,679 of convertible notes payable net of unamortized discount of $198,321 which are unsecured, and bears interest at 10% per annum. There was an increase in accounts payable and accrued liabilities of $75,192 due primarily to consulting fees that were unpaid, and $96,496 for amounts due to related parties for outstanding management fees and additional investments into the Companys working capital during the year.
As of September 30, 2016, the Company had a working capital deficit of $215,993 compared with $90,720 as of September 30, 2015. The increase in working capital deficit is due to additional long-term funding received from a loan holder which was used for operating activities.
During the year ended September 30, 2016, the Company issued 16,636,934 common shares with a fair value of $26,951,848 as part of the acquisition costs of the Nye Claims, and issued 500,000 common shares with a fair value of $425,000 for consulting services.
Cash Flows from Operating Activities
During the year ended September 30 2016, the Company used $402,402 of cash for operating activities compared to $32,941 during the year ended September 30, 2015. The increase in cash used for operating activities was due to the fact that the Company raised $582,496 of cash from financing activities which was used to acquire a new claim in Nye County, Nevada which resulted in additional consulting and overhead operating costs incurred during the year.
Cash Flows from Investing Activities
During the year ended September 30, 2016, the Company used $100,000 as part of the acquisition costs for the Nye County Claims. During the year ended September 30, 2015, the Company had no investing activities.
Cash Flows from Financing Activities
During the year ended September 30, 2016, the Company received $582,496 from financing activities including $534,000 from the issuance of convertible notes and loan payable, and $48,496 from related parties. During the year ended September 30, 2015, the Company received $20,639 of financing proceeds which were primarily from related parties.
Going Concern
We have not attained profitable operations and are dependent upon obtaining financing to pursue any extensive acquisitions and activities. For these reasons, our auditors stated in their report on our audited financial statements that they have substantial doubt that we will be able to continue as a going concern without further financing.
Off-Balance Sheet Arrangements
We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.
Future Financings
We will continue to rely on equity sales of our common shares in order to continue to fund our business operations. Issuances of additional shares will result in dilution to existing stockholders. There is no assurance that we will achieve any additional sales of the equity securities or arrange for debt or other financing to fund planned acquisitions and exploration activities.
Critical Accounting Policies
Our financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.
34
We regularly evaluate the accounting policies and estimates that we use to prepare our financial statements. A complete summary of these policies is included in the notes to our financial statements. In general, management's estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.
Recently Issued 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.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act), we are not required to provide the information called for by Item 304 of Regulation S-K.
35
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the names and ages of our current directors and executive officers, the principal offices and positions held by each person:
|
|
|
|
|
Name
|
|
Age
|
|
Positions
|
Michael Mason
|
|
71
|
|
Chief Executive Officer, Interim Chief Financial Officer and Director.
|
William Hunter
|
|
47
|
|
Director
|
Gregory Kuzma
|
|
63
|
|
Director
|
Craig Alford
|
|
54
|
|
Director and Chief Operating Officer
|
Douglas Cole
|
|
61
|
|
Director, Controller, Interim Treasurer and Interim Secretary
|
Michael Mason
, Chief Executive Officer, Interim Chief Financial Officer and Director
Mr. Mason, age 71, received his Bachelor of Science Degree in Metallurgical Engineering from the University of Arizona and a Master's Degree in Business Administration specializing in Finance, from the University of California at Los Angeles. Mike is a seasoned mining executive with extensive experience worldwide in project due diligence, mine development, strategic planning, metals marketing, risk management and project financing as well as international trade and off-take agreements. He has worked on some of the worlds largest deposits including the Escondida Copper project in Chile, the Olympic Dam project in Australia, La Candelaria in Chile, and the San Cristobal Mine in Bolivia. Mike has also been associated with the commissioning, evaluation and management of large smelting operations across South America, India, Korea, Mexico, Canada and the U.S.
Throughout a career that has spanned 50 years Mike has held numerous senior and executive management positions. He has served as a director of Euromax Resources Ltd; President and COO of Global Gold Corporation; President of MBMI Intl; CEO, President & Director of Metals Concentrates International; Managing Director, Senior Trader for Marc Rich as well as others.
There have been no transactions since the beginning of the Company's last fiscal year, and there are no currently proposed transactions, in which the Company was or is to be a participant and in which Mr. Mason (or any member of his immediate family) had or will have any interest, that are required to be reported under Item 404(a) of Regulation S-K. The appointment of Mr. Mason was not pursuant to any arrangement or understanding between him and any person, other than a director or executive officer of the Company acting in his or her official capacity.
William Hunter
, Director
Mr. Hunter, age 47, received his B.Sc. from DePaul University in Chicago and an MBA with distinction from the Kellstadt School of Business at DePaul University. Mr. Hunter is a seasoned financial executive with over 20 years of advisory and capital markets experience. Bill has been involved in over $20 billion of transactions throughout his career in the natural resources and industrial industries. Bill led the Americas Banking team at Nomura where he advised Mitsui in their acquisition of a minority interest in the Moatize Coal Mining complex from Vale and Globe Specialty Metals in their $3.1 billion merger of equals transaction with FerroAtlantica. Before Nomura he led the team at Jefferies and did numerous transactions for companies like Alpha Natural Resources, Fortescue Metals Group and Murray Energy.
There have been no transactions since the beginning of the Company's last fiscal year, and there are no currently proposed transactions, in which the Company was or is to be a participant and in which Mr. Hunter (or any member of his immediate family) had or will have any interest, that are required to be reported under Item 404(a) of Regulation S-K. The appointment of Mr. Hunter was not pursuant to any arrangement or understanding between him and any person, other than a director or executive officer of the Company acting in his or her official capacity.
Gregory Kuzma
, Director
Mr. Kuzma, age 63, received his B.Sc. in Geology from the University of Southern California. Mr. Kuzma is well-respected and highly skilled exploration geologist with over 30 years experience. Greg has operated as a consultant with numerous mining groups and spent 12 years as Senior Project Geologist in Nevada for Teck Resources. Mr. Kuzma has extensive mining experience in the Southwest United States, Mexico, El Salvador and Argentina. He has evaluated, designed, managed and implemented over 40 drill programs within Nevadas Great Basin.
36
There have been no transactions since the beginning of the Company's last fiscal year, and there are no currently proposed transactions, in which the Company was or is to be a participant and in which Mr. Kuzma (or any member of his immediate family) had or will have any interest, that are required to be reported under Item 404(a) of Regulation S-K. The appointment of Mr. Kuzma was not pursuant to any arrangement or understanding between him and any person, other than a director or executive officer of the Company acting in his or her official capacity.
Craig Alford
,
Chief Operating Officer and Director
Mr. Alford holds both a Bachelor of Science (Hons) and a Master of Science in Geology. He is a registered Professional Geoscientist (P.Geo) in Ontario and is a Qualified Person, as defined in National Instrument 43-101. During his 30 years of experience worldwide, Mr. Alford has designed, managed and provided technical direction for projects throughout North and South America, China, Central Asia, Russia, Australia and Africa. Mr. Alford's experience has included senior positions for a number of large mining companies including, Zijin Mining Group, China Railway, and Teck Mining Ltd. During Mr. Alford's tenure with the Zijin Mining Group he was part of the team that was responsible for an approximate $80 million investment in Pretium Resources Inc. Pretium now has production targeted for its Northern BC, Canada site in 2017. The other major investments Mr. Alford was involved with at Zijin was the $298 million investment into Barrick Gold Porgera mine and the $412 million investment into Ivanhoe Mines Ltds' Kamoa Copper Project. The Kamoa project is expected to be one of the biggest copper mines in the world. Mr. Alford has negotiated with several Heads of State, as well as assisting the World Bank and the China-Africa Development Fund in tax policy, planning and investment risk.
There have been no transactions since the beginning of the Company's last fiscal year, and there are no currently proposed transactions, in which the Company was or is to be a participant and in which Mr. Alford (or any member of his immediate family) had or will have any interest, that are required to be reported under Item 404(a) of Regulation S-K. The appointment of Mr. Alford was not pursuant to any arrangement or understanding between him and any person, other than a director or executive officer of the Company acting in his or her official capacity.
Douglas Cole,
Director
Mr. Cole, age 61, has been a Partner overseeing all ongoing deal activities with Objective Equity LLC since 2005, a boutique investment bank focused on the high technology, data analytics and the mining sector. Mr. Cole currently serves on the Board of Directors of eWellness Healthcare Corporation. From 2002 to 2005 Mr. Cole has held various executive roles, including Chairman, Executive Vice Chairman, Chief Executive Officer and President of multiple public corporations. From May 2000 to September 2005, he was also the Director of Lair of the Bear, The University of California Family Camp located in Pinecrest, California. During the period between 1991 and 1998 he was the CEO of HealthSoft and he also founded and operated Great Bear Technology, which acquired Sony Image Soft and Starpress, then went public and eventually sold to Graphix Zone. In 1995 Mr. Cole was honored by NEA, a leading venture capital firm, as CEO of the year for his work in the Starpress integration. Since 1982 he has been very active with the University of California, Berkeley mentoring early-stage technology companies. Mr. Cole has extensive experience in global M&A and global distributions. He obtained his BA in Social Sciences from UC Berkeley in 1978.
There have been no transactions since the beginning of the Company's last fiscal year, and there are no currently proposed transactions, in which the Company was or is to be a participant and in which Mr. Cole (or any member of his immediate family) had or will have any interest, that are required to be reported under Item 404(a) of Regulation S-K. The appointment of Mr. Mason was not pursuant to any arrangement or understanding between him and any person, other than a director or executive officer of the Company acting in his or her official capacity.
Director Qualifications
We believe that our directors should have the highest professional and personal ethics and values, consistent with our longstanding values and standards. They should have broad experience at the policy-making level in business or banking. They should be committed to enhancing stockholder value and should have sufficient time to carry out their duties and to provide insight and practical wisdom based on experience. Their service on other boards of public companies should be limited to a number that permits them, given their individual circumstances, to perform responsibly all director duties for us. Each director must represent the interests of all stockholders. When considering potential director candidates, the Board also considers the candidates character, judgment, diversity, age and skills, including financial literacy and experience in the context of our needs and the needs of the Board.
Family Relationships
None.
37
Involvement in Certain Legal Proceedings
Our directors and executive officers have not been involved in any of the following events during the past ten years:
·
Any bankruptcy petition filed by or against such person or any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;
·
Any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
·
Being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from or otherwise limiting his involvement in any type of business, securities or banking activities or to be associated with any person practicing in banking or securities activities;
·
Being found by a court of competent jurisdiction in a civil action, the SEC or the Commodity Futures Trading Commission to have violated a Federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated
·
Being subject of, or a party to, any Federal or state judicial or administrative order, judgment decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of any Federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or
·
Being subject of or party to any sanction or order, not subsequently reversed, suspended, or vacated, of any self-regulatory organization, any registered entity or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.
Code of Ethics
The Company has not adopted a Code of Ethics and Business Conduct. Management intends to adopt a Code of Ethics and Business Conduct in the near future.
Term of Office
Our directors are appointed to hold office until the next annual general meeting of our stockholders or until removed from office in accordance with our Bylaws. Our officers are appointed by our Board and hold office until removed by the Board, absent an employment agreement.
Conflicts of Interest
Since we do not have an audit or compensation committee comprised of independent directors, the functions that would have been performed by such committees are performed by our directors. The Board has not established an audit committee and does not have an audit committee financial expert, nor has the Board established a nominating committee. The Board is of the opinion that such committees are not necessary since the Company is the early stages of operations. The Company has one director, and to date, such director has been performing the functions of such committees. Thus, there is a potential conflict of interest in that our sole director and officer has the authority to determine issues concerning management compensation, nominations, and audit issues that may affect management decisions.
38
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table provides certain summary information concerning compensation awarded to, earned by or paid to our Chief Executive Officer for fiscal years 2016 and 2015.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name & Principal
Position
|
|
|
Year
|
|
|
|
Salary ($)
|
|
|
|
Bonus ($)
|
|
|
|
Option Awards ($)*
|
|
|
|
All Other
Compensation($)
|
|
|
|
Total ($)
|
Michael Mason
|
|
|
2016
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
Chief Executive Officer
|
|
|
2015
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
Craig Alford
|
|
|
2016
|
|
|
|
30,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
30,000
|
Former Chief Executive Officer
|
|
|
2015
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
Ruben Ricardo Vasquez
|
|
|
2016
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
Former Chief Executive Officer
|
|
|
2015
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
Compensation of Directors
We have not established standard compensation arrangements for our director and do not have any agreements or understandings to compensate him or any future director for their services as such.
Outstanding Equity Awards
No such plans or options exist. None have been approved or are anticipated.
Employment Agreements
None.
Director Compensation
Our directors not received any compensation for service as a director or for any special assignments. The following table sets forth director compensation as of December 31, 2016: