Attached files

file filename
EX-32.1 - EXHIBIT 32.1 SECTION 906 CERTIFICATION - Oroplata Resources, Inc.f10q033117_ex32z1.htm
EX-31.1 - EXHIBIT 31.1 SECTION 302 CERTIFICATION - Oroplata Resources, Inc.f10q033117_ex31z1.htm


UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

 X . QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITES EXCHANGE ACT OF 1934

 

For the quarter period ended March 31, 2017

 

     . TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE EXCHANGE ACT OF 1934

 

For the transition period from ____________ to ____________

 

Commission File number: 000-55088


OROPLATA RESOURCES, INC.

(Exact name of registrant as specified in its charter)


Nevada

 

33-1227980

(State or other jurisdiction

of incorporation or organization)

 

(I.R.S. Employer

Identification No.)


170 S Green Valley Parkway, Suite #300, Henderson, NV 89012

(Address of principal executive offices)

 

(702) 318-7218

(Registrant's telephone number)

 

N/A

(Former name, former address and former fiscal year, if changed since last report)

 

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  X . No      .

 

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 definition of "large accelerated filer", "accelerated filer" and "smaller reporting company" Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

     .

Accelerated filer

     .

Non-accelerated filer

     . (Do not check if a small reporting company)

Smaller reporting company

 X .

Emerging growth company

 X .

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.     .


Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes      . No  X .

 

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date:

 

The number of shares of the Registrant’s common stock, par value $0.001 per share, outstanding as of May 19, 2017 was 58,000,000.

 







 

 

Page

Number

PART I. FINANCIAL INFORMATION

 

 

 

 

ITEM I.

Financial Statements

 

3

 

 

 

 

 

Consolidated Balance Sheets as at March 31, 2017 (unaudited) and September 30, 2016

 

4

 

 

 

 

 

Consolidated Statements of Operations for the three and six months ended March 31, 2017 and 2016 ( unaudited)

 

5

 

 

 

 

 

Consolidated Statements of Cash Flows for the six months ended March 31, 2017 and 2016 ( unaudited)

 

6

 

 

 

 

 

Notes to the Consolidated Financial Statements (unaudited)

 

7

 

 

 

 

ITEM 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

 

12

 

 

 

 

ITEM 3.

Quantitative and Qualitative Disclosures about Market Risk

 

22

 

 

 

 

ITEM 4.

Controls and Procedures

 

22

 

 

 

 

PART II. OTHER INFORMATION

 

 

 

 

 

 

ITEM 1.

Legal Proceedings

 

23

 

 

 

 

ITEM 1A.

Risk Factors

 

23

 

 

 

 

ITEM 2.

Unregistered Sales of Equity Securities and Use of Proceeds

 

23

 

 

 

 

ITEM 3.

Defaults Upon Senior Securities

 

23

 

 

 

 

ITEM 4.

Mine Safety Disclosure

 

23

 

 

 

 

ITEM 5.

Other Information

 

23

 

 

 

 

ITEM 6.

Exhibits

 

23

 

 

 

 

 SIGNATURES

 

 

24

 



2






PART I – FINANCIAL STATEMENTS

 

ITEM 1. FINANCIAL STATEMENTS

 

The accompanying unaudited consolidated balance sheets of Oroplata Resources, Inc. at March 31, 2017 (with comparative figures as at September 30, 2016) and the consolidated statements of operations for the three and six months ended March 31, 2017 and 2016 and the statements of cash flows for the six months ended March 31, 2017 and 2016 have been prepared by the Company's management in conformity with accounting principles generally accepted in the United States of America. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature.

 

Operating results for the six months ended March 31, 2017 are not necessarily indicative of the results that can be expected for the year ended September 30, 2017.

 


OROPLATA RESOURCES, INC.

Condensed Consolidated Financial Statements

For the Period Ended March 31, 2017 (unaudited) and September 30, 2016


Condensed Consolidated Balance Sheets (unaudited)

4

 

 

Condensed Consolidated Statements of Operations (unaudited)

5

 

 

Condensed Consolidated Statements of Cash Flows (unaudited)

6

 

 

Notes to the Condensed Consolidated Financial Statements (unaudited)

7




3






OROPLATA RESOURCES, INC.

Condensed Consolidated Balance Sheets


 

 March 31,

2017

$

 

 September 30,

2016

$

 

(unaudited)

 

 

ASSETS

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

Cash

28,810

 

90,040

 

 

 

 

Total assets

28,810

 

90,040

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

126,031

 

95,208

Due to related parties

223,146

 

178,146

Convertible notes payable, net of unamortized discount of $192,964 and $198,321, respectively

222,464

 

32,679

 

 

 

 

Total current liabilities

571,641

 

306,033

 

 

 

 

Note payable

274,932

 

303,000

 

 

 

 

Total liabilities

846,573

 

609,033

 

 

 

 

STOCKHOLDERS’ EQUITY (DEFICIT)

 

 

 

 

 

 

 

Common Stock

Authorized: 500,000,000 common shares with a par value of $0.001 per share

 

 

 

Issued and outstanding: 58,000,000 and 57,136,943 common shares, respectively

58,000

 

57,137

 

 

 

 

Additional paid-in capital

29,684,687

 

27,925,770

 

 

 

 

Deficit

(30,560,450)

 

(28,501,900)

 

 

 

 

Total stockholders’ equity (deficit)

(817,763)

 

(518,993)

 

 

 

 

Total liabilities and stockholders’ equity (deficit)

28,810

 

90,040




4






OROPLATA RESOURCES, INC.

Condensed Consolidated Statements of Operations

(unaudited)


 

For the three months ended

March 31,

2017

$

 

For the three months ended

March 31,

2016

$

 

For the six months ended

March 31,

2017

$

 

For the six months ended

March 31,

2016

$

 








Revenues

 

 

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exploration costs

 –

 

 –

 

 600,000

 

 –

General and administrative

 1,120,744

 

 5,613

 

 1,281,122

 

 26,371

 

 

 

 

 

 

 

 

Net loss before other expenses

(1,120,744)

 

(5,613)

 

(1,881,122)

 

(26,371)

 

 

 

 

 

 

 

 

Other expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

(65,342)

 

 

(141,428)

 

Loss on settlement of debt

(36,000)

 

 

(36,000)

 

 

 

 

 

 

 

 

 

Net loss

(1,222,086)

 

(5,613)

 

(2,058,550)

 

(26,371)

Net loss per share, basic and diluted

(0.02)

 

(0.00)

 

(0.04)

 

(0.00)

Weighted average shares outstanding

58,715,910

 

40,000,000

 

58,500,168

 

40,000,000

 

 

 

 

 

 

 

 




5





OROPLATA RESOURCES, INC.

Condensed Consolidated Statements of Cash Flows

(unaudited)


 

For the

six months ended

March 31,

2017

$

 

For the

six months ended

March 31,

2016

$

 

 

 

 

Operating Activities

 

 

 

 

 

 

 

Net loss

(2,058,550)

 

(26,371)

 

 

 

 

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

Accretion expense

124,160

 

Fair value of share purchase warrants issued

652,977

 

Issuance costs of convertible debt

9,948

 

Convertible note issued for commitment fee

75,000

 

Loss on settlement of debt

36,000

 

Shares issued for mineral property exploration costs

600,000

 

Shares issued for services

292,000

 

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

Prepaid expenses

 

1,000

Accounts payable and accrued liabilities

90,823

 

3,763

Due to related parties

45,000

 

 

 

 

 

Net Cash Used In Operating Activities

(132,642)

 

(21,608)

 

 

 

 

Financing Activities

 

 

 

 

 

 

 

 Advances from related parties

 –

 

 20,190

Proceeds from issuance of convertible debentures

 99,480

 

 –

Proceeds from issuance of note payable

 6,000

 

 

Repayment on note payable

 (34,068)

 

 –

 

 

 

 

Net Cash Provided By Financing Activities

71,412

 

20,190

 

 

 

 

Change in Cash

(61,230)

 

(1,418)

 

 

 

 

Cash – Beginning of Period

90,040

 

9,946

 

 

 

 

Cash – End of Period

28,810

 

8,528

 

 

 

 

Non-cash investing and financing activities:

 

 

 

 

 

 

 

Discount on convertible debenture

109,428

 

Convertible note issued to settle commitment fee

75,000

 

Shares issued to settle accounts payable

60,000

 

Original issue discount on convertible debentures

9,948

 

 

 

 

 

Supplemental Disclosures

 

 

 

 

 

 

 

Interest paid

 

Income tax paid

 




6






OROPLATA RESOURCES, INC.

Notes to the Consolidated Financial Statements

For the period ended March 31, 2017

(unaudited)


1. Organization and Nature of Operations


The accompanying unaudited consolidated financial statements of Oroplata Resources, Inc. and its subsidiary (“Oroplata” or the “Company”) have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission, or the SEC, including the instructions to Form 10-Q and Regulation S-X. Certain information and note disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America have been condensed or omitted from these statements pursuant to such rules and regulations and, accordingly, they do not include all the information and notes necessary for comprehensive consolidated financial statements and should be read in conjunction with our audited consolidated financial statements for the year ended September 30, 2016, included in our Annual Report on Form 10-K for the year ended September 30, 2016. 


The Company was incorporated under the laws of the state of Nevada on October 6, 2011 for the purpose of acquiring and developing mineral properties. The Company has a wholly-owned subsidiary called Oroplata Exploraciones E Ingenieria SRL, which was incorporated in the Dominican Republic on January 10, 2012. On July 26, 2016, the Company incorporated Lithortech Resources Inc., a Nevada company, as a wholly-owned subsidiary. The Company currently holds mineral rights in the Dominican Republic and in the Western Nevada Basin of Nye County in the state of Nevada.


Going Concern


These unaudited consolidated financial statements have been prepared on a going concern basis, which implies that the Company will continue to realize its assets and discharge its liabilities in the normal course of business. As at March 31, 2017, the Company has not earned revenue, has a working capital deficit of $542,831, and an accumulated deficit of $30,560,450. The continuation of the Company as a going concern is dependent upon the continued financial support from its management, and its ability to identify future investment opportunities and obtain the necessary debt or equity financing, and generating profitable operations from the Company’s future operations. If the Company is able to obtain financing, there is no certainty that terms will be favorable to the Company. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These unaudited consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.


2. Summary of Significant Accounting Policies


Basis of Presentation


The financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”) and are expressed in U.S. dollars. The Company’s fiscal year end is September 30.


Principles of Consolidation


These condensed consolidated financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States and are expressed in U.S. dollars. These condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Oroplata Exploraciones E Ingenieria SRL and Lithortech Resources Inc. All inter-company accounts and transactions have been eliminated on consolidation.



7






OROPLATA RESOURCES, INC.

Notes to the Consolidated Financial Statements

For the period ended March 31, 2017

(unaudited)


3. Mineral Property


(a)

The Company has acquired the mineral rights to the Mogollon claim located in the Province of San Juan near the villages of Solorin and El Toro in the Dominican Republic for a price of $10,000 which included the cost of a geological report.


(b)

On June 1, 2016, the Company acquired the mineral rights to 500 lithium claims situated in the Railroad Valley in the Western Nevada Basin of Nye County, Nevada in exchange for $100,000 and the issuance of 16,000,000 common shares of the Company to be issued on June 15, 2016. The agreement is subject to a 2% net smelter return from the production or sale of minerals from the claims and may be reduced to 1% on a one-time payment of $1,000,000 at any time prior to commencement of commercial production. Furthermore, the Company is required to incur exploration expenditures of $77,500 prior to July 31, 2016. In July 2016, the agreement was amended to remove the net smelter return and in exchange, the Company issued an additional 636,943 common shares.


The total consideration given for the mineral rights was $27,051,548 which includes the $100,000 payment and the 16,636,943 shares of common stock valued at $26,951,848. The total amount of $27,051,548 was impaired and recorded as an impairment loss for the year ended September 30, 2016.


In November 2016, the agreement was amended and the number of shares to be issued for removal of the net smelter return was increased from 636,943 common shares to 2,000,000 common shares. In November 2016, the Company issued 2,000,000 common shares with a fair value of $600,000 as an amendment to the July 2016 issuance of common shares to remove the net smelter return. On February 24, 2017, the original 636,943 common shares that were issued by the Company were returned to treasury.


4. Notes Payable


(a)

On June 15, 2016, the Company entered into a loan agreement with a non-related party for proceeds up to $400,000. During the year ended September 30, 2016, the Company received proceeds of $303,000 (2015 - $nil) on the loan. The loan is unsecured, bears interest at 2.5%, and is due on or before June 15, 2018. During the period ended March 31, 2017, the Company received additional proceeds of $6,000 and repaid $34,068 to the note. As at March 31, 2017, the principal balance on the note payable is $274,932 (September 30, 2016 - $303,000) and accrued interest of $4,972 (September 30, 2016 - $1,289) has been recorded in accounts payable and accrued liabilities.


(b)

On July 18, 2016, the Company entered into a convertible note agreement, as amended, with a non-related party for proceeds of $75,000. The terms of the convertible note became effective on February 15, 2017. The amount owing is secured, bears interest at 10%, is convertible into common shares of the Company, and is due on December 31, 2017. As at March 31, 2017, the carrying value of the note payable is $66,918 (September 30, 2016 - $nil), the unamortized discount on the note is $8,082 (September 30, 2016 - $nil), and accrued interest of $925 (September 30, 2016 - $nil) has been recorded in accounts payable and accrued liabilities.

 

(c)

On July 18, 2016, the Company entered into a loan agreement, as amended, with a non-related party for proceeds of $121,000. The amount owing is secured, bears interest at 10%, is convertible into common shares of the Company at $0.50 per share, and is due on December 31, 2017. During the year ended September 30, 2016, the Company recorded a beneficial conversion feature of $121,000. During the period ended March 31, 2017, the Company recorded accretion expense of $80,372 (March 31, 2016 - $nil). As at March 31, 2017, the carrying value of the note payable is $93,003 (September 30, 2016 - $32,679), the unamortized discount on the note is $27,997 (September 30, 2016 - $88,321), and accrued interest of $9,316 (September 30, 2016 - $3,282) has been recorded in accounts payable and accrued liabilities.


As an incentive for the loan, the Company issued 121,000 cashless warrants to the note holder as a bonus incentive, which has an exercise price of $0.50 per warrant until July 18, 2021. The fair value of the cashless warrants was $229,069, and was calculated using the Black-Scholes option pricing model assuming no expected dividends, volatility of 239%, and risk-free rate of 1%.



8





OROPLATA RESOURCES, INC.

Notes to the Consolidated Financial Statements

For the period ended March 31, 2017

(unaudited)


4. Notes Payable (continued)


(d)

On September 28, 2016, the Company entered into a loan agreement, as amended with a non-related party for proceeds up to $550,000. On September 30, 2016, the Company received proceeds of $110,000, net of issuance fees of $10,000. The amount owing is secured, bears interest at 10%, and is due on December 31, 2017, and is convertible into common shares of the Company at $0.10 per share. During the year ended September 30, 2016, the Company recorded a beneficial conversion feature of $110,000. As at March 31, 2017, the carrying value of the note payable is $49,952 (September 30, 2016 - $nil), the unamortized discount on the note is $60,048 (September 30, 2016 - $110,000), and accrued interest of $5,485 (September 30, 2016 - $nil) has been recorded in accounts payable and accrued liabilities.


As an incentive for the loan, the Company issued 121,000 cashless warrants to the note holder as a bonus incentive, which has an exercise price of $0.50 per warrant until September 30, 2021. The fair value of the cashless warrants was $65,990, and was calculated using the Black-Scholes option pricing model assuming no expected dividends, volatility of 233%, and risk-free rate of 1%.


(e)

On February 16, 2017, the Company entered into a loan agreement with a non-related party for proceeds up to $250,000. On February 16, 2017, the Company received proceeds of $32,428, net of issuance fees of $2,948. On February 24, 2017, the Company received proceeds of $77,000, net of issuance fees of $7,000. The aggregate principal amount owed of $109,428 is secured, bears interest at 10%, is due on February 17, 2018, and is convertible into common shares of the Company at $0.10 per share. During the period ended March 31, 2017, the Company recorded a beneficial conversion feature of $109,428. As at March 31, 2017, the carrying value of the note payable is $12,592 (September 30, 2016 - $nil), the unamortized discount on the note is $96,836 (September 30, 2016 - $nil), and accrued interest of $1,141 (September 30, 2016 - $nil) has been recorded in accounts payable and accrued liabilities.


5. Related Party Transactions


(a)

As of March 31, 2017, the Company owes $120,146 (September 30, 2016 - $81,650) to the former Chief Executive Officer and Director of the Company for advances to the Company to fund day-to-day operations. The amounts owing are unsecured, non-interest bearing, and due on demand.


(b)

As of March 31, 2017, the Company owes $85,500 (September 30, 2016 - $33,000) to the former Chief Executive Officer and Director of the Company for advances to the Company to fund day-to-day operations and accrued management fees. The amounts owing are unsecured, non-interest bearing, and due on demand. During the period ended March 31, 2017, the Company accrued $60,000 of management fees and paid $7,500 to the Chief Executive Officer of the Company.


(c)

As of March 31, 2017, the Company owes $17,500 (September 30, 2016 - $25,000) to directors of the Company for accrued management fees. The amounts owing are unsecured, non-interest bearing, and due on demand. During the period ended March 31, 2017, the Company recorded management fees of $nil and repaid $7,500 to the directors of the Company.


6. Common Shares


The Company’s authorized common stock consists of 500,000,000 shares of common stock, with par value of $0.001. 


(a)

On November 8, 2016, the Company issued 2,000,000 shares of common stock with a fair value of $600,000 to remove the net smelter return of the Nye County properties. Refer to Note 3.


(b)

On January 31, 2017, the Company issued 300,000 shares of common stock with a fair value of $87,000 for consulting services.


(c)

On February 8, 2017, the Company issued 400,000 shares of common stock with a fair value of $96,000 to settle outstanding accounts payable of $60,000 resulting in a $36,000 loss on settlement of debt.


(d)

On February 16, 2017, the Company received 2,000,000 common shares which were cancelled and returned to treasury. Refer to Note 7.


(e)

On February 16, 2017, the Company issued 500,000 common shares with a fair value of $130,000 for services.


(f)

On February 23, 2017, the Company issued 300,000 common shares with a fair value of $75,000 for legal services.



9






OROPLATA RESOURCES, INC.

Notes to the Consolidated Financial Statements

For the period ended March 31, 2017

(unaudited)

6. Common Shares (continued)


(g)

On February 24, 2017, the Company received 636,943 common shares which were cancelled and returned to treasury. Refer to Note 3.


7. Share Purchase Warrants


On February 15, 2017, the Company issued 500,000 share purchase warrants with an exercise price of $0.15 per share of common stock for a period of five years. The fair value of the share purchase warrants was $133,295, calculated using the Black-Scholes option pricing model assuming no expected dividends, volatility of 212%, expected life of 5 years, and a risk-free rate of 1%.


On February 16, 2017, the Company issued 2,000,000 share purchase warrants with an exercise price of $0.001 per share of common stock for a period of five years to replace 2,000,000 shares of common stock which were cancelled and returned to treasury (refer to Note 6). The fair value of the share purchase warrants was $519,682, calculated using the Black-Scholes option pricing model assuming no expected dividends, volatility of 212%, expected life of 5 years, and a risk-free rate of 1%.


 

Number of

cashless warrants

 

Weighted average exercise price

$

 




Balance, September 30, 2016

242,000

 

0.50

Issued

2,500,000

 

0.03

 

 

 

 

Balance, March 31, 2017

2,742,000

 

0.07


Additional information regarding share purchase warrants as of March 31, 2017, is as follows:


 

 

Outstanding and exercisable

Range of

Exercise Prices

$

 

Number of Warrants

 

Weighted Average Remaining Contractual Life (years)

 

 

 

 

 

 

 

0.001

 

2,000,000

 

4.9

 

0.15

 

500,000

 

4.9

 

0.50

 

242,000

 

4.3

 

 

 

 

 

 

 

 

 

2,742,000

 

4.8

 


8. Commitments


On July 1, 2016, the Company entered into a management agreement with the former Chief Executive Officer and Director of the Company for a twelve month term with monthly management fees of $10,000 in addition to reasonable out-of-pocket expenses and any pre-approved travel expenses.




10






OROPLATA RESOURCES, INC.

Notes to the Consolidated Financial Statements

For the period ended March 31, 2017

(unaudited)


9. Subsequent Events


On April 17, 2017, the Company received proceeds of 13,750, net of issuance fees of $1,250 pursuant to an amendment to its February 16, 2017 loan agreement with a non-related third party. On April 26, 2017, the Company received additional proceeds of $88,000, net of issuance fees of $8,000 pursuant to an additional amendment to its February 16, 2017 loan agreement with the same non-related third party. The aggregate principal amount of $211,178 is secured, bears interest at 10%, is due on February 17, 2018, and is convertible into common shares of the Company at $0.10 per share.


On May 18, 2017, the Company entered into a second waiver and amendment agreement with a non-related third party to waive certain events of default relating to an investment agreement between both parties.




11






ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

Forward-Looking Statements


You should read the following discussion of our financial condition and results of operations in conjunction with the financial statements and the notes thereto included elsewhere in the Form 10-Q. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Form 10-Q.

 

Background


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.

 



12






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 “Management’s 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.


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 Company’s 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.



13






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.


Appointment of Mr. William Hunter


On June 10, 2016, the Board of Directors of the Company appointed William Hunter to the Board of Directors.


Appointment of Mr. Gregory Kuzma


On 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 Company’s issued and outstanding common stock, representing approximately 62.5% of the Company’s 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 Company’s 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.


As a result of these transactions, control of the Company passed to Mr. Alford. The Purchased 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 five hundred (500) lithium mineral claims situated in Railroad Valley in the Western Nevada Basin of Nye County, Nevada (the “Claims”).



14






The terms of the Agreement are as follows:


Purchase Price:


As consideration for the sale of the Claims, the Company:


·

Issue sixteen million (16,000,000) shares of common stock to PVL or its designee(s);


·

Pay PVL one hundred thousand dollars ($100,000); and


·

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:


·

The Company paid seventy seven thousand, five hundred dollars ($77,500), or $155 per claim, to the US Bureau of Land Management; and


·

Shall pay annual maintenance fees as applicable.


In July 2016, the Company amended the terms of the Agreement to remove the royalty payment of the NSR in exchange for the issuance of 636,943 common shares. In November 2016, the terms of the Agreement were again amended to increase the payment to 2,000,000 common shares, which were issued on November 8, 2016. In February 2017, PVL returned the original 636,943 common shares to the Company.


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.


Overview of Oroplata

 

Oroplata was 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. On January 10, 2012 Oroplata incorporated a wholly-owned subsidiary under the laws of the Dominican Republic named "Oroplata Exploraciones E Ingenieria, Orexi, SRL" in order to hold the mineral rights to a claim named "Leomary Gold Claim". In order to determine what mineralization was present on the Leomary the Company hired Ismael Martinez, Professional Geologist, to undertake an exploration program on the Leomary at a cost of $25,800. The exploration program centered mainly on obtaining soil, sediment and rock samples from various areas within the Leomary Gold Claim to determine what minerals were present. Based on the results on these initial findings, Oroplata undertook a further exploration program during the summer of 2013, at a cost of $18,800, to identify mineralization in other parts of the Leomary and to resample the previous high grade samples. This additional exploration work was completed at the end of August 2013. Unfortunately the Company lost the rights to any minerals on the Leomary in September 2014.

 

The Company 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.

 

Oroplata owns no real estate as such other than the mineral rights to the Mogollon concession located in the Dominican Republic and the Nye County properties located in Nevada, United States.



15






Western Nevada Basin Property


On June 1, 2016, the Company entered into an agreement to acquire the mineral rights to 500 Placer claims situated in the Railroad Valley, Nye County, Nevada in exchange for $100,000 and the issuance of 16,000,000 common shares of the Company. The original agreement was subject to a 2% net smelter return from the production or sale of minerals from the claims which could be reduced to 1% on a one-time payment of $1,000,000 at any time prior to commencement of commercial production. In July 2016, the agreement was amended to remove the net smelter return and in exchange, the Company issued an additional 636,943 common shares.


The Western Nevada Basin (WNB) Property is located in east central Nye County 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. The Western Nevada Basin Property covers a total of 10,000 acres. Each of the 500 Placer claims 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. Lithium should be located 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 500, 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 Recorder’s 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 Recorder’s Office.


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 500 WNB claims is $77,500.


The claims were transferred to the Company by a transfer method of a ‘Quit Claim Deed’ which transfers official title to the Company. Before Oct 31st 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 500 WNB claims will be $5,000.

 

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.



16






Any drilling planned will require a NOI filed with the Tonopah office of the BLM. To the best of the Company’s 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.


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 non-marine 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 basin’s history, which have been altered to hectorite, may provide a source of Lithium.


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






Exploration and Office Facilities

 

The Company has no plans to construct a mine or smelter on the Mogollon until an ore body of reasonable worth is found; which might never happen. While in the exploration stage, the crew of workers will be housed in a nearby town or tent facilities will be established on the property itself. This will initially avoid building any structures either permanent or removable on the Mogollon concession.

 

Oroplata's office is at 170 S Green Valley Parkway, Suite #300, Henderson, Nevada 89012. At the present time Oroplata does not require its own office space due to having no employees, other than our three officers, Mr. Mason, Mr. Cole and Mr. Alford, but will consider renting office space once our exploration and staff requirements demand it.

 

Other Mineral Properties

 

The Company has no other properties other than the Mogollon property located in the Dominican Republic, and the Nye County mineral claims located in Nevada, United States.

 

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.

 

Significant Accounting Policies

 

Research and Development Expenditures


Oroplata has not expended any money on research and development since its inception.

 

Patents and Trademarks


Oroplata does not have any patents or trademarks.

 

RESULTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED MARCH 31, 2017 AND 2016

 

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 and six months ended March 31, 2017 and 2016, the Company has not realized any revenues.



18






Expenses


Three months ended March 31, 2017 and 2016


During the three months ended March 31, 2017, the Company incurred $1,120,744 of general and administrative expense compared to $5,613 during the three months ended March 31, 2016. The increase in operating expenses is due to increased activity including the issuance of stock-based compensation for share purchase warrants of 500,000 warrants with an exercise price of $0.15 and 2,000,000 warrants with an exercise price of $0.001 (issued in conjunction with the cancellation of 2,000,000 common shares) with a fair value of $652,977. Furthermore, during the period, the Company issued a convertible note of $75,000 for a commitment fee, 300,000 common shares for investor relation services with a fair value of $87,000, 500,000 common shares for consulting services with a fair value of $130,000, and 300,000 common shares for legal services with a fair value of $75,000. In addition to share-based compensation, the Company also incurred $30,000 of management fees to the former Chief Executive Officer and Director of the Company, $20,000 of consulting fees for consulting services, $10,500 of investor relation services, and $10,400 of payroll costs relating to operating activity of its wholly-owned subsidiary, Lithortech Resources. During the comparative period ended March 31, 2016, the Company had minimal operations.


In addition to operating expenses, the Company incurred interest and accretion expense of $65,342 with respect to outstanding loans and convertible notes payable issued and outstanding and settled $60,000 of outstanding accounts payable with the issuance of 400,000 common shares with a fair value of $96,000 which resulted in a loss on settlement of debt of $36,000. Comparatively, the Company had no outstanding loans and convertible debts during the three month period ended March 31, 2016 and did not settle any outstanding accounts payable with the issuance of common shares.


Net Loss


During the three months ended March 31, 2017, the Company incurred a net loss of $1,222,086 or $0.02 loss per share compared to a net loss of $5,613 or $nil loss per share during the three months ended March 31, 2016.


Six months ended March 31, 2017 and 2016


During the six months ended March 31, 2017, the Company incurred $1,881,122 of operating expenses which included $600,000 of exploration costs for the issuance of 2,000,000 common shares for a fair value of $600,000 to remove the net smelter return of the Nye County properties. The remaining amount of $1,281,122 was related to general and administrative expense which was a result of increased operating activity including the issuance of a convertible note for $75,000 for a commitment fee, stock-based compensation for share purchase warrants of 500,000 warrants with an exercise price of $0.15 and 2,000,000 warrants with an exercise price of $0.001 (issued in conjunction with the cancellation of 2,000,000 common shares) with a fair value of $652,977. Furthermore, during the period, the Company issued 300,000 common shares for investor relation services with a fair value of $87,000, 500,000 common shares for consulting services with a fair value of $130,000, and 300,000 common shares for legal services with a fair value of $75,000. In addition to share-based compensation, the Company also incurred management fees of $60,000 to the former Chief Executive Officer and Director of the Company, $115,495 of consulting fees to consultants for services, $10,500 of investor relation services, $24,000 of professional fees for accounting, audit, and legal services, and $10,400 of payroll costs relating to operating activity of its wholly-owned subsidiary, Lithortech Resources. During the comparative six month period ended March 31, 2016, the Company incurred no exploration costs and $26,371 of operating expenses which consisted primarily of professional services for the Company’s SEC filing requirements and day-to-day operating costs which were minimal given that the Company had limited operations and cash flows.


In addition to operating expenses, the Company incurred interest and accretion expense of $141,428 with respect to outstanding loans and convertible notes payable issued and outstanding and settled $60,000 of outstanding accounts payable with the issuance of 400,000 common shares with a fair value of $96,000 which resulted in a loss on settlement of debt of $36,000. Comparatively, the Company had no outstanding loans and convertible debts during the six month period ended March 31, 2016 and did not settle any outstanding accounts payable with the issuance of common shares.


Net Loss


During the six months ended March 31, 2017, the Company incurred a net loss of $2,058,550 or $0.04 loss per share compared to a net loss of $26,371 or $nil loss per share during the six months ended March 31, 2016.



19






Liquidity and Capital Resources


At March 31, 2017, the Company had cash and total assets of $28,810 compared to $90,040 as at September 30, 2016. The decrease in cash and total assets were due to the use of cash at a higher rate than funding, as the Company currently earns no cash from operations and is reliant on cash received from financing activities until such time that the Company earns revenue from its operating activities.


The Company had total current liabilities of $571,641 at March 31, 2017 compared to $306,033 at September 30, 2016. The increase in current liabilities is due to a $30,823 increase in accounts payable and accrued liabilities for outstanding day-to-day operating costs for which the Company has not repaid, $45,000 increase in amounts due to related parties for unpaid management fees, and $189,785 increase in the carrying value of convertible notes payable which is due to an increase in the overall issuance of convertible notes payable from $231,000 of notes issued as at September 30, 2016 to $415,428 of notes issued as at March 31, 2017.


As at March 31, 2017, the Company had a working capital deficit of $542,831 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 financed its operating costs, including acquisition of mineral properties, through the issuance of loans and notes payable and did not earn any cash flow from operating activities.


In addition, as at March 31, 2017, the Company also has $274,932 of outstanding notes payable, which are unsecured, bears interest at 2.5% per annum, and is due June 15, 2018. During the six months ended March 31, 2017, the Company received an additional $6,000 of funding from this note while repaying $34,068 on the principal balance of the note.


During the period ended March 31, 2017, the Company issued 2,000,000 common shares to remove the net smelter return on the Nye County properties that were acquired during fiscal 2016, issued 800,000 common shares for services, issued 300,000 common shares for legal fees, issued 400,000 shares to settle outstanding accounts payable, and cancelled 636,943 common shares that were returned due to an amendment in the acquisition of the Nye County properties, and 2,000,000 common shares which were returned to treasury and replaced with the issuance of 2,000,000 share purchase warrants. As at March 31, 2017, the Company had 58,000,000 common shares outstanding compared to 57,136,943 common shares outstanding as at September 30, 2016.


During the six months ended March 31, 2017, the Company issued 500,000 share purchase warrants which are exercisable at $0.15 per share until February 15, 2022 as compensation to waive certain events of default relating to an agreement between the Company and the convertible note holder which included the extension of the July 18, 2016 and the September 30, 2016 notes to December 31, 2017. Furthermore, the Company issued 2,000,000 share purchase warrants which are exercisable at $0.001 per share until February 16, 2022 in exchange for the cancellation of 2,000,000 common shares. As at March 31, 2017, the Company had 2,742,000 outstanding share purchase warrants compared to 242,000 outstanding share purchase warrants at September 30, 2016.


As at March 31, 2017 and September 30, 2016, the Company does not have any issued or outstanding stock options.


Cash Flows


Cash from Operating Activities.


During the six months ended March 31, 2017, the Company used $132,642 of cash for operating activities compared to $21,608 of cash during the six months ended March 31, 2016. The increase in the use of cash for operating activities is due to the fact that the Company received more cash funding from financing activities during the period which was used to settle outstanding day-to-day operating costs incurred by the Company.


Cash from Investing Activities


During the six months ended March 31, 2017 and 2016, the Company did not have any investing activities.


Cash from Financing Activities


During the six months ended March 31, 2017, the Company received $71,412 of cash from financing activities compared to $20,190 received during the six months ended March 31, 2016. The increase in the cash received from financing activities is due to $99,480 received from the issuance of convertible notes payable and $6,000 from a note payable during the current period compared to $nil funds received from loans and notes during the prior year as the Company relied solely on $20,190 of funding from related parties to support the limited operations from prior year. In addition, the Company repaid $34,068 of outstanding note payable during the current period.



20






Off-Balance Sheet Arrangements


None.

 

Trends

 

From Oroplata's date of inception it has produced no revenue and maybe will not be able to produce revenue. To the knowledge of its management Oroplata is unaware of any trends or past and future events which will have a material effect upon it, its income and business, both in the long and short term. Please refer to Oroplata's assessment of Risk Factors as noted below.

 

Critical Accounting Policies and Estimates

 

In presenting Oroplata's financial statements in conformity with U.S. generally accepting accounting principles, or GAAP, Oroplata is required to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses and related disclosures.

 

Some of the estimates and assumptions Oroplata is required to make relate to matters that are inherently uncertain as they pertain to future events. Oroplata bases these estimates and assumptions on historical experience or on various other factors that it believes to be reasonable and appropriate under the circumstances. On an ongoing basis, Oroplata reconsiders and evaluates its estimates and assumptions. Actual results may differ significantly from these estimates.

 

Oroplata believes that the critical accounting policies listed below involve its more significant judgments, assumptions and estimates and, therefore, could have the greatest potential impact on its financial statements. In addition, Oroplata believes that a discussion of these policies is necessary to understand and evaluate the financial statements contained in this filing.

 

Estimates and Assumptions

 

Management uses estimates and assumptions in preparing financial statements in accordance with generally accepted accounting principles. Those estimates and assumptions affect the reported amounts of the assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could vary from the estimates that were assumed in preparing these financial statements.

 

Mineral claim acquisition and exploration costs

 

The cost of acquiring mineral properties or claims is initially capitalized and then tested for recoverability whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. Mineral exploration costs are expensed as incurred.

 

Income Taxes

 

Oroplata utilizes the liability method of accounting for income taxes. Under the liability method deferred tax assets and liabilities are determined based on differences between financial reporting and the tax bases of the assets and liabilities and are measured using the enacted tax rates and laws that will be in effect, when the differences are expected to be reversed. An allowance against deferred tax assets is recorded, when it is more likely than not, that such tax benefits will not be realized.

 

Recent Accounting Pronouncements

 

Oroplata does not expect the adoption of any recent accounting pronouncements to have a material impact on its financial statements.

 

Foreign Currency

 

The Company’s functional and reporting currency is the United States dollar. Foreign currency transactions are primarily undertaken in Canadian dollars. Foreign currency transactions are translated to United States dollars in accordance with ASC 830, Foreign Currency Translation Matters, using the exchange rate prevailing at the balance sheet date. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income.




21






ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURESABOUT MARKET RISK.

 

Not Applicable.

 

ITEM 4. CONTROLS AND PROCEDURES.

 

Evaluation of Disclosure Controls and Procedures

 

Under the supervision and with the participation of our management, we have evaluated the effectiveness of our disclosure controls and procedures as required by Exchange Act Rule 13a-15(b) as of March 31, 2017 (the "Evaluation Date"). Based on that evaluation, our management has concluded that these disclosure controls and procedures were not effective as of the Evaluation Date as a result of the material weaknesses in internal control over financial reporting discussed below.

 

Disclosure controls and procedures are those controls and procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act are recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to our management to allow timely decisions regarding required disclosure.

 

Notwithstanding the assessment that our internal control over financial reporting was not effective and that there were material weaknesses as identified below, we believe that our financial statements contained in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2017 fairly present our financial condition, results of operations and cash flows in all material respects.

 

The material weakness identified is described below.

 

1. Certain entity level controls establishing a "tone at the top" were considered material weaknesses. As of March 31, 2017, the Company did not have a separate audit committee or a policy on fraud. A whistleblower policy is not necessary given the small size of the organization.


2. Due to the significant number and magnitude of out-of-period adjustments identified during the year- end closing process, management has concluded that the controls over the period-end financial reporting process were not operating effectively. A material weakness in the period-end financial reporting process could result in us not being able to meet our regulatory filing deadlines and, if not remediated, has the potential to cause a material misstatement or to miss a filing deadline in the future. Management override of existing controls is possible given the small size of the organization and lack of personnel.


3. There is no system in place to review and monitor internal control over financial reporting. The Company maintains an insufficient complement of personnel to carry out ongoing monitoring responsibilities and ensure effective internal control over financial reporting.

 

As a result of the material weakness in internal control over financial reporting described above, the Company's management has concluded that, as of Mach 31, 2017, the Company's internal control over financial reporting was not effective based on the criteria in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organization of the Treadway Commission.

 

Changes in Internal Controls Over Financial Reporting

 

There were no changes in our internal control over financial reporting during the quarter ended March 31, 2017 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 



22






PART II – OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

To the best of our knowledge, we are not currently a party to any legal proceedings that, individually or in the aggregate, are deemed to be material to our financial condition or results of operations.

 

We are required by Section 78.090 of the Nevada Revised Statutes (the "NRS") to maintain a registered agent in the State of Nevada. Our registered agent for this purpose is American Corporate Enterprises, Inc 123 West Nye Lane, Station 129, Carson City, NV 89706. All legal process and any demand or notice authorized by law to be served upon us may be served upon our registered agent in the State of Nevada in the manner provided in NRS 14.020(2).

 

ITEM 1A. RISK FACTORS.


We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

None

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

None

 

ITEM 4. MINE SAFETY DISCLOSURE

 

Not Applicable

 

ITEM 5. OTHER INFORMATION

 

None

 

ITEM 6. EXHIBITS

 

(a) (3) Exhibits

 

The following exhibits are either provided with this Quarterly Report or are incorporated herein by reference:

 

Exhibit Number

 

Description of Exhibits

31.1*

 

Certification of Chief Executive Officer as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 

 

 

32.1*

 

Certification of Chief Executive Officer as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

 

 

101.INS*

 

XBRL Instance Document

 

 

 

101.SCH*

 

XBRL Taxonomy Extension Schema Document

 

 

 

101.CAL*

 

XBRL Taxonomy Extension Calculation Linkbase Document

 

 

 

101.LAB*

 

XRBL Taxonomy Label Linkbase Document

 

 

 

101.PRE*

 

XBRL Taxonomy Extension Presentation Linkbase Document

 

 

 

101.DEF*

 

XBRL Taxonomy Extension Definition Linkbase Document

_______________ 

* filed herewith



23






SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

OROPLATA RESOURCES, INC.

(Registrant)

 

 

 

 

 

Date: May 19, 2017

By:

/s/ Michael Mason

 

 

 

Michael Mason

 

 

 

Chief Executive Officer,

Principal Financial Officer

 

 

 

 

 




24