# U.S. Gold Corp.: Form 10-Q for the period ended Oct 31, 2022

- Company: [U.S. Gold Corp.](/companies/usau.md) (CIK 27093)
- Form: 10-Q
- Filed: 2022-12-15
- Accepted by EDGAR: Dec 15, 2022, 20:53 ET
- Period: 2022-10-31
- Accession: 0001493152-22-035554
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/27093/000149315222035554/form10-q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/27093/000149315222035554/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2022-10-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Operating income | 3 months, 2022-08-01 to 2022-10-31 | −$2.1m | us-gaap:OperatingIncomeLoss |
| Operating income | 6 months, 2022-05-01 to 2022-10-31 | −$5.0m | us-gaap:OperatingIncomeLoss |
| Net income | 3 months, 2022-08-01 to 2022-10-31 | −$1.9m | us-gaap:NetIncomeLoss |
| Net income | 6 months, 2022-05-01 to 2022-10-31 | −$3.8m | us-gaap:NetIncomeLoss |
| Basic EPS | 3 months, 2022-08-01 to 2022-10-31 | −$0.23 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months, 2022-05-01 to 2022-10-31 | −$0.46 | us-gaap:EarningsPerShareBasic |
| Operating cash flow | 6 months, 2022-05-01 to 2022-10-31 | −$4.9m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Cash and equivalents | at 2022-10-31 | $4.2m | us-gaap:Cash |
| Current assets | at 2022-10-31 | $4.8m | us-gaap:AssetsCurrent |
| Total assets | at 2022-10-31 | $22.3m | us-gaap:Assets |
| Current liabilities | at 2022-10-31 | $586.8k | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2022-10-31 | $2.1m | us-gaap:Liabilities |
| Shareholders' equity | at 2022-10-31 | $20.2m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 17,418 characters.

The interim unaudited condensed consolidated financial statements included herein have been prepared by U.S. Gold Corp. (the “Company”, “we”, “us”, or “our”) without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “Commission”). Certain information and footnote disclosure normally included in interim unaudited consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which are duplicate to the disclosures in the audited consolidated financial statement have been omitted pursuant to such rules and regulations, although we believe that the disclosures are adequate to make the information presented not misleading. These interim unaudited condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto in the Form 10-K for the year ended April 30, 2022 filed with the Commission.

In the opinion of management, all adjustments have been made consisting of normal recurring adjustments and consolidating entries, necessary to present fairly the unaudited interim condensed consolidated financial position of us and our subsidiaries as of October 31, 2022, the results of our unaudited interim condensed consolidated statements of operations and changes in stockholders’ equity for the six months ended October 31, 2022 and 2021, and our unaudited interim condensed consolidated cash flows for the six months ended October 31, 2022 and 2021. The results of unaudited interim condensed consolidated operations for the interim periods are not necessarily indicative of the results for the full year.

The preparation of interim unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

### Forward-Looking Statements

In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. See “Forward-Looking Statements.” Our results and the timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of many factors, including the risk factors described in this report and in “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended April 30, 2022.

### Overview

U.S. Gold Corp., formerly known as Dataram Corporation (the “Company”), was originally incorporated in the State of New Jersey in 1967 and was subsequently re-incorporated under the laws of the State of Nevada in 2016. Effective June 26, 2017, the Company changed its legal name to U.S. Gold Corp. from Dataram Corporation. On May 23, 2017, the Company merged with Gold King Corp. (“Gold King”), in a transaction treated as a reverse acquisition and recapitalization, and the business of Gold King became the business of the Company. We are a gold and precious metals exploration company pursuing exploration and development properties. We own certain mining leases and other mineral rights comprising the CK Gold Project in Wyoming, the Keystone Project in Nevada and the Challis Gold project in Idaho. Our CK Gold Project contains proven and probable mineral reserves under S-K 1300 where we are conducting exploration and pre-development activities, and all of our activities on our other properties are exploratory in nature.

On March 17, 2020, we filed a certificate of amendment to our Articles of Incorporation with the Secretary of State of Nevada in order to effectuate a reverse stock split of our issued and outstanding common stock per share on a one-for-ten basis, effective as of 5:00 p.m. (Eastern Time) on March 19, 2020. All share and per share values of our common stock for all periods presented in the accompanying consolidated financial statements are retroactively restated for the effect of the reverse stock splits.

### Summary of Activities for the three months ended October 31, 2022

During the three months ended October 31, 2022, we focused primarily on continued progress in the preparation of our permit to mine application submittal and further engineering studies towards the completion of a feasibility study.

An overview of certain significant events during the quarter ended October 31, 2022 are as follows:

- On September 9, 2022, we submitted an application for a Permit to Mine and the Mine Reclamation Plan to the Wyoming Department of Environmental Quality (“WDEQ”) for our CK Gold project.
- On September 13, 2022, we submitted an internal electronic transfer of the information supporting the application to WDEQ.
- On November 16, 2022, we received notification from WDEQ that they had successfully performed the requisite completeness review of our application submission. Accordingly, the steps of public notice and WDEQ’s technical review will commence.

### Recent Developments

On November 9, 2022, the Company entered into an Assignment and Assumption Agreement (the “Assignment and Assumption Agreement”) with and among Orevada Metals, Inc., the Company’s indirectly wholly-owned subsidiary (“Orevada”), Nevada Gold Mines LLC (“NGM”), Orogen Royalties Inc. (“Orogen”) and Renaissance Exploration, Inc., a wholly-owned subsidiary of Orogen (“RenEx”) whereby Orevada assigned its interest in that certain Exploration Earn-In Agreement with RenEx, dated February 19, 2019 (the “Original Earn-In Agreement”), to NGM. Pursuant to the Original Earn-In Agreement, Orevada, by making certain payments and incurring certain exploration expenditures, had the right to earn at least a 50% interest and up to a 70% interest in the Maggie Creek Property, owned by RenEx, in Eureka County, Nevada. Simultaneous with this assignment, NGM and RenEx entered into an Amended and Restated Exploration Earn-In Agreement, pursuant to which NGM can earn a 100% interest in the Maggie Creek Property (the “NGM Option”).

As consideration for the assignment of the Original Earn-In Agreement to NGM, U.S. Gold received an upfront cash payment of $2.75 million dollars from NGM, and NGM agreed that if it exercises the NGM Option and acquires the Maggie Creek Property, it will grant to U.S. Gold a 0.5% Net Smelter Returns royalty on all gold and other recovered and saleable minerals from the Maggie Creek Property (the “U.S. Gold Royalty”), pursuant to a separate royalty agreement (the “U.S. Gold Royalty Agreement”) between NGM and the Company, the terms of which have been fully agreed as part of this assignment. Under the U.S. Gold Royalty Agreement, NGM will have the right to buy back one-half of the U.S. Gold Royalty (reducing the royalty to 0.25% of Net Smelter Returns) for a fixed price of $500,000. In addition, the U.S. Gold Royalty Agreement will provide that the Company waives the first $800,000 of production royalty payments owed to it, regardless of whether NGM exercises its buy-back rights. Under the U.S. Gold Royalty Agreement, NGM will also have a right of first refusal to purchase the U.S. Gold Royalty if the Company decides to sell that royalty.

### Results of Operations

Three and six months ended October 31, 2022 compared to the three and six months ended October 31, 2021:

### Net Revenues

We are a development stage company with no operations, and we generated no revenues for the three and six months ended October 31, 2022 and 2021.

### Operating Expenses

Total operating expenses for the six months ended October 31, 2022 as compared to the six months ended October 31, 2021, were approximately $4,996,000 and $7,843,000, respectively. The approximate $2,847,000 decrease in operating expenses for the six months ended October 31, 2022 as compared to the six months ended October 31, 2021, is comprised of (i) an increase in compensation of approximately $38,000 primarily due to an increase in cash compensation of $46,000 offset by a decrease in stock-based compensation from RSU’s and stock option grants to our officers as compared to prior period of $8,000 (ii) a decrease of approximately $3,555,000 in exploration expenses on our mineral properties due to a decrease in exploration activities on our CK Gold property and also at our Maggie Creek property, (iii) an increase in professional and consulting fees of approximately $543,000 primarily due to increases in general strategic and permitting consulting services of $434,000, an increase in legal fees of $152,000, and an increase in accounting fees of $90,000, offset by a decrease in investor relation fees of $78,000 and stock-based consulting fees of $55,000 and (iv) an increase in general and administrative expenses of approximately $127,000 due primarily to increases related to insurance, travel, lease expense, option expense, conference expense, advertising expenses and office expenses.

Total operating expenses for the three months ended October 31, 2022 as compared to the three months ended October 31, 2021, were approximately $2,111,000 and $4,293,000, respectively. The approximate $2,183,000 decrease in operating expenses for the three months ended October 31, 2022 as compared to the three months ended October 31, 2021, is comprised of (i) an increase in compensation of approximately $26,000 primarily due to an increase in cash compensation of $19,000 and an increase in stock-based compensation from stock option grants to our officers as compared to prior period of $7,000 (ii) a decrease of approximately $2,486,000 in exploration expenses on our mineral properties due to a decrease in exploration activities on our CK Gold property and also at our Maggie Creek property, (iii) an increase in professional and consulting fees of approximately $293,000 primarily due to increases in general strategic and permitting consulting services of $15,000, an increase in legal fees of $121,000, an increase in accounting fees of $48,000, and an increase in investor relation fees of $122,000, offset by a decrease in stock-based consulting fees of $13,000 and (iv) a decrease in general and administrative expenses of approximately $16,000 due primarily to decreases related to public company expenses and travel expenses.

### Loss from Operations

We reported loss from operations of approximately $4,996,000 and $7,843,000 for the six months ended October 31, 2022 and 2021, respectively. We reported loss from operations of approximately $2,111,000 and $4,293,000 for the three months ended October 31, 2022 and 2021, respectively.

### Other Income

We reported a change in fair value of warrant liability of approximately $1,154,000 and $0 for the six months ended October 31, 2022 and 2021, respectively. We reported a change in fair value of warrant liability of approximately $214,000 and $0 for the three months ended October 31, 2022 and 2021, respectively.

### Net Loss

We reported a net loss of approximately $3,842,000 and $7,843,000 for the six months ended October 31, 2022 and 2021, respectively. We reported a net loss of approximately $1,897,000 and $4,293,000 for the three months ended October 31, 2022 and 2021, respectively.

### Liquidity and Capital Resources

The following table summarizes total current assets, liabilities and working capital at October 31, 2022 compared to April 30, 2022, and the changes between those periods:

|  | October 31, 2022 | April 30, 2022 | Increase (decrease) |
| --- | ---: | ---: | ---: |
| Current Assets | $4,788,146 | $9,899,414 | $(5,111,268) |
| Current Liabilities | $586,830 | $1,136,035 | $(549,205) |
| Working Capital | $4,201,316 | $8,763,379 | $(4,562,063) |

As of October 31, 2022, we had working capital of $4,201,316, as compared to working capital of $8,763,379 as of April 30, 2022, a decrease of $4,562,063.

We are obligated to file annual, quarterly and current reports with the Commission pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In addition, the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”) and the rules subsequently implemented by the Commission and the Public Company Accounting Oversight Board have imposed various requirements on public companies, including requiring changes in corporate governance practices. We expect to spend between $175,000 and $250,000 in legal and accounting expenses annually to comply with our reporting obligations and Sarbanes-Oxley. These costs could affect profitability and our results of operations.

Our unaudited condensed consolidated financial statements are prepared using the accrual method of accounting in accordance with U.S. GAAP and have been prepared assuming that we will continue as a going concern, which contemplates the realization of assets and the settlement of liabilities in the normal course of business. For the six months ended October 31, 2022 and 2021, we incurred net losses in the amounts of approximately $3.8 million and $7.8 million, respectively. As of October 31, 2022, we had cash of approximately $4.2 million, working capital of approximately $4.2 million, and an accumulated deficit of approximately $61.7 million. As a result of the utilization of cash in our operating activities, and the development of our assets, we have incurred losses since we commenced operations. Our primary source of operating funds since inception has been equity financings. As of October 31, 2022, we have sufficient cash to fund our corporate activities and general and administrative costs and currently undertaken project activities related to permitting and engineering studies over the next twelve months. However, in order to advance any of our projects past the aforementioned objectives, we do not have sufficient cash and will need to raise additional funds. These matters raise substantial doubt about our ability to continue as a going concern for the twelve months following the issuance of these financial statements.

We have based this estimate on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect. Our future capital requirements will depend on many factors, including potential acquisitions, changes in exploration programs and related studies and other operating strategies. In addition, we continue to assess the impact of the COVID-19 pandemic, which may adversely affect our ability to obtain additional future capital. To the extent we require additional funding, we cannot be certain that additional funding will be available on acceptable terms, or at all. To the extent we raise additional funds by issuing equity securities, our stockholders may experience significant dilution. Any debt financing, if available, may involve restrictive covenants that impact our ability to conduct business. If unable to raise additional capital when required or on acceptable terms, we may have to delay, scale back or discontinue the exploration activities or programs.

### Cash Used in Operating Activities

Net cash used in operating activities totaled $4.9 million and $6.5 million for the six months ended October 31, 2022 and 2021, respectively. Net cash used in operating activities during the six months ended October 31, 2022 decreased primarily due to net changes in accounts payable and accrued liabilities as compared to the six months ended October 31, 2021 and the change in fair value of warrant liability of $1,154,000. Additionally, we expensed approximately $384,000 in stock-based compensation for shares, RSU’s, and stock options issued to officers, employee, and consultants during the six months ended October 31, 2022 as compared to approximately $464,000 for the six months ended October 31, 2021. Net changes of approximately $553,000 in operating assets and liabilities are primarily due to a decrease of approximately $532,000 in accounts payable and accrued liabilities.

### Cash Used in Investing Activities

Net cash used in investing activities was $0 for the six months ended October 31, 2022 as compared to approximately $3,800 primarily for purchase of property and equipment for the six months ended October 31, 2021.

### Cash Provided by Financing Activities

Net cash provided by financing activities during the six months ended October 31, 2022 and 2021 were both $0.

### Off-Balance Sheet Arrangements

As of October 31, 2022, we did not have, and do not have any present plans to implement, any off-balance sheet arrangements.

### Recently Issued Accounting Pronouncements

See Note 2, Summary of Significant Accounting Policies, to the unaudited condensed consolidated financial statements for a summary of recently issued accounting pronouncements.

### Critical Accounting Policies

There have been no changes to our critical accounting policies during the three months ended October 31, 2022. Critical accounting policies and the significant accounting estimates made in accordance with such policies are regularly discussed with the Audit Committee of the Company’s board of directors. Those policies are discussed under “Critical Accounting Policies” in our “Management’s Discussion and Analysis of the Financial Condition and Results of Operations” included in Item 7, as well as Note 2 to our consolidated financial statements thereto, included in our Annual Report on Form 10-K, filed with the Commission on August 15, 2022.

## Controls and procedures

As filed, 2,936 characters.

### (a) Evaluation of Disclosure Controls and Procedures

At the end of the period covered by this Quarterly Report, an evaluation was carried out under the supervision of, and with the participation of, the Company’s management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a–15(e) and Rule 15d–15(e) of the Exchange Act). Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that as of the end of the period covered by this Quarterly Report, the Company’s disclosure controls and procedures were not effective in ensuring that information required to be disclosed by the Company in its reports that it files or submits to the SEC under the Exchange Act, is recorded, processed, summarized and reported within the time period specified in applicable rules and forms due to the material weaknesses in the Company’s internal control over financial reporting as discussed in Item 9A. Controls and Procedures in the Company’s Form 10-K for the fiscal year ended April 30, 2022, under the heading “Management’s Report on Internal Control over Financial Reporting”.

### (b) Changes in Internal Control Over Financial Reporting

There have been no changes in the Company’s internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting; however, management has determined that for the sake of transparency and conservancy, it cannot state that internal controls over financial reporting are effective at this time.

While present in the Company’s design of internal controls, the Company’s internal controls over financial reporting and disclosure are not written; however, the operation of many controls are in place and are applied on a consistent basis. Company personnel perform controls standards to: 1) approve all Company expenditures, 2) approve and sign contractual obligations, 3) reconcile bank accounts and other general ledger accounts, 4) review of complex accounting items, and 5) many other similar rudimentary controls applied as best practice. Historically, management has concluded that due to the Company’s small size and limited personnel available to perform control functions, the Company is precluded from applying adequate segregation of duties in financial transactions. These are material weaknesses common to companies of similar size and staffing in the Company’s industry. The Company has engaged an independent firm to assist with the design, implementation, documentation and testing of internal controls. The Company expects these material weakness conditions to continue for the foreseeable future, or until significant Company growth results in additional personnel to perform financial functions.

Filed Dec 15, 2022.
Source: SEC EDGAR, the filing index for accession 0001493152-22-035554. Last ingested by Listed: Oct 24, 2026, 14:52 ET. No prices; not investment advice.