Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Aug. 05, 2020 | |
Document And Entity Information | ||
Entity Registrant Name | CAN CAL RESOURCES LTD | |
Entity Central Index Key | 0001083848 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity's Reporting Status Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 43,667,060 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2019 | |
Small Business Entity | true | |
Entity Emerging Growth | false | |
Entity Interactive Data Current | Yes | |
Entity File Number | 000-26669 | |
Entity Incorporation State Code | NV | |
Entity shell company | false |
BALANCE SHEETS (Unaudited)
BALANCE SHEETS (Unaudited) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Current Assets: | ||
Cash | $ 59,764 | $ 54 |
Prepaids & Deposits | 10,431 | 0 |
Total Current Assets | 70,195 | 54 |
Total Assets | 70,195 | 54 |
Current Liabilities: | ||
Accounts payable | 316,657 | 258,029 |
Accounts payable, related party | 102,025 | 62,673 |
Accrued expenses | 19,930 | 19,930 |
Accrued expenses, related party | 107,403 | 101,122 |
Unearned revenues | 100,123 | 0 |
Unearned revenues, related party | 583,066 | 583,066 |
Notes payable, related parties | 149,078 | 149,078 |
Total Current Liabilities | 1,378,282 | 1,173,898 |
Total Liabilities | 1,378,282 | 1,173,898 |
Commitments and Contingencies | ||
Stockholders' Deficit: | ||
Preferred stock, $0.001 par value, 10,000,000 shares authorized; no shares issued and outstanding | 0 | 0 |
Common stock, $0.001 par value, 100,000,000 shares authorized; 43,667,060 shares issued and outstanding as at September 30, 2019 and December 31, 2018 | 43,667 | 43,667 |
Additional paid-in capital | 10,595,697 | 10,595,697 |
Accumulated deficit | (11,947,451) | (11,813,208) |
Total Stockholders' Deficit | (1,308,087) | (1,173,844) |
Total Liabilities and Stockholders' Deficit | $ 70,195 | $ 54 |
BALANCE SHEETS (Unaudited) (Par
BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Preferred Stock, Par Value | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Common Stock, Par Value | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 100,000,000 | 100,000,000 |
Common Stock, Shares Issued | 43,667,060 | 43,667,060 |
Common Stock, Shares Outstanding | 43,667,060 | 43,667,060 |
STATEMENT OF OPERATIONS (Unaudi
STATEMENT OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenue | $ 0 | $ 0 | $ 29,992 | $ 0 |
Operating expenses | ||||
Exploration costs | 0 | 0 | 0 | 1,251 |
General and administrative expense | 28,581 | 28,374 | 99,587 | 142,947 |
Director fees | 18,750 | 18,750 | 56,250 | 56,250 |
Total operating expenses | 47,331 | 47,124 | 155,837 | 200,448 |
Net loss from operations | (47,331) | (47,124) | (125,845) | (200,448) |
Other income (expense) | ||||
Interest (expense) income, related party | (2,116) | (2,283) | (6,280) | 8,943 |
Gain from sale of assets | 0 | 0 | 0 | 0 |
Other income | 0 | 0 | 0 | 0 |
Foreign exchange loss | (3,158) | (528) | (2,118) | (137) |
Liability write-off | 0 | 0 | 0 | 58,985 |
Total other income (expense) | (5,274) | (2,811) | (8,398) | 67,791 |
Loss before provision for income taxes | (52,605) | (49,935) | (134,243) | (132,657) |
Provision for taxes | 0 | 0 | 0 | 0 |
Net loss | $ (52,605) | $ (49,935) | $ (134,243) | $ (132,657) |
Weighted average number of common shares outstanding, basic and diluted | 43,667,060 | 43,667,060 | 43,667,060 | 43,667,060 |
Sales revenue [Member] | ||||
Revenue | $ 0 | $ 0 | $ 29,992 | $ 0 |
STATEMENTS OF CHANGES IN STOCKH
STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT - USD ($) | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Beginning balance, shares at Dec. 31, 2017 | 43,667,060 | |||
Beginning balance, value at Dec. 31, 2017 | $ 43,667 | $ 10,595,697 | $ (11,613,029) | $ (973,664) |
Net loss | (132,657) | (132,657) | ||
Ending balance, shares at Sep. 30, 2018 | 43,667,060 | |||
Ending balance, value at Sep. 30, 2018 | $ 43,667 | 10,595,697 | (11,745,648) | (1,106,284) |
Beginning balance, shares at Jun. 30, 2018 | 43,667,060 | |||
Beginning balance, value at Jun. 30, 2018 | $ 43,667 | 10,595,697 | (11,695,751) | (1,056,386) |
Net loss | (49,935) | (49,935) | ||
Ending balance, shares at Sep. 30, 2018 | 43,667,060 | |||
Ending balance, value at Sep. 30, 2018 | $ 43,667 | 10,595,697 | (11,745,648) | (1,106,284) |
Beginning balance, shares at Dec. 31, 2018 | 43,667,060 | |||
Beginning balance, value at Dec. 31, 2018 | $ 43,667 | 10,595,697 | (11,813,208) | (1,173,844) |
Net loss | (134,243) | (134,243) | ||
Ending balance, shares at Sep. 30, 2019 | 43,667,060 | |||
Ending balance, value at Sep. 30, 2019 | $ 43,667 | 10,595,697 | (11,947,451) | (1,308,087) |
Beginning balance, shares at Jun. 30, 2019 | 43,667,060 | |||
Beginning balance, value at Jun. 30, 2019 | $ 43,667 | 10,595,697 | (11,894,846) | (1,255,482) |
Net loss | (52,605) | (52,605) | ||
Ending balance, shares at Sep. 30, 2019 | 43,667,060 | |||
Ending balance, value at Sep. 30, 2019 | $ 43,667 | $ 10,595,697 | $ (11,947,451) | $ (1,308,087) |
STATEMENTS OF CASH FLOWS (Unaud
STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
OPERATING ACTIVITIES | ||
Net loss | $ (134,243) | $ (132,657) |
Changes in operating assets and liabilities | ||
Other receivables | (10,431) | 0 |
Accounts payable and accrued expenses | 97,981 | (5,203) |
Accounts payable and accrued expenses, related party | 0 | (15,108) |
Gain on debt forgiveness | 0 | (58,895) |
Unearned revenues, related party | 100,123 | 155,062 |
Net cash (used in) operating activities | 53,430 | (56,801) |
Liquidation of AP | 0 | 58,895 |
Subtotal | 53,430 | 2,094 |
FINANCING ACTIVITIES | ||
Proceeds from issuance of loans payable, related party | 6,281 | 7,014 |
Net cash provided by financing activities | 6,281 | 7,014 |
Net changes in cash and equivalents | 59,711 | 9,108 |
Cash and equivalents at beginning of the period | 54 | 769 |
Cash and equivalents at end of the period | 59,764 | 9,877 |
SUPPLEMENTAL CASH FLOW INFORMATION | ||
Cash paid in interest | 0 | 0 |
Cash paid for income taxes | 0 | $ 0 |
Non-cash gain on elimination of payables | $ 0 |
1. NATURE OF BUSINESS AND SUMMA
1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Business Can-Cal Resources Ltd. (“Can-Cal” or the “Company”) is a Nevada corporation incorporated on March 22, 1995. The Company is an exploration company engaged in the exploration for precious metals, specifically focused on mineral exploration projects. We have examined various prospective mineral properties for precious metals and acquired those deemed promising. We currenty own, lease or have mining interest in one mineral property in California, United States. The Company previously had mineral rights in Owl Canyon, California as well as Cerbat and Wikieup, Arizona, which have now been abandoned. As an exploration stage enterprise, the Company discloses the deficit accumulated during the exploration stage. An entity remains in the exploration stage until such time as proven or probable reserves have been established for its deposits. Upon the location of commercially mineable reserves, the Company plans to prepare for mineral extraction and enter the development stage. To date, the exploration stage of the Company’s operations consists of contracting with geologists who sample and assess the mining viability of the Company’s claims. Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited interim financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and with the rules and regulations of the United States Securities and Exchange Commission set forth in Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. Unaudited interim results are not necessarily indicative of the results for the full fiscal year. These financial statements should be read in conjunction with the financial statements of the Company for the fiscal year ended December 31, 2017 and notes thereto contained in the Company’s Annual Report on Form 10-K. The Company’s functional and reporting currency is the United States dollar (USD). Monetary assets and liabilities denominated in foreign currencies are translated in accordance with ASC 820, using the exchange rate prevailing at the balance sheet date. Gains and losses arising on settlement of foreign currency denominated transactions or balances are included in the determination of income. Foreign currency transactions are primarily undertaken in the Canadian dollar (CDN). The Company has not, to the date of these financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations. Certain amounts in the prior periods presented have been reclassified to conform to the current period financial statement presentation. In December 2019, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (ASU 2019-12), which simplifies the accounting for income taxes. This guidance will be effective for entities for the fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020 on a prospective basis, with early adoption permitted. We will adopt the new standard effective January 1, 2021 and do not expect the adoption of this guidance to have a material impact on our financial statements. Exploration Stage Company The Company is currently an exploration stage company. As an exploration stage enterprise, the Company discloses the deficit accumulated during the exploration stage and the cumulative statements of operations and cash flows from inception to the current balance sheet date. The Company has incurred an accumulated deficit of $11,947,451 for the period from inception (March 22, 1995) through September 30, 2019. An entity remains in the exploration stage until such time as proven or probable reserves have been established for its deposits. Upon the location of commercially mineable reserves, the Company plans to prepare for mineral extraction and enter the development stage. To date, the exploration stage of the Company’s operations consists of contracting with geologists who sample and assess the mining viability of the Company’s claims. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. Revenue Recognition Policy The Company adopted ASC 606, Revenue from Contracts with Customers (Topic 606). Under this standard the Company will account for revenue from contracts with customers by evaluating the five steps of Topic 606, which are as follows: (1) identify the contract with the customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations; and (5) recognize revenue when (or as) performance obligations are satisfied. The adoption of this standard does not have a material impact on the financial statements. Gains and Losses from Debt Extinguishment Gain from extinguishment of debt. The Company reflects gain on extinguishment of debt as a credit to earnings from operations in the period in which it is determined that the liability has been forgiven either by the vendor, judicial authority, or the passing of the stature of limitations. Gains from related parties are credited to paid in capital. Basic and Diluted Loss per Share The basic net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding. Diluted net loss per common share is computed by dividing the net loss adjusted on an “as if converted” basis, by the weighted average number of common shares outstanding plus potential dilutive securities. For 2019 and 2018 potential dilutive securities had an anti-dilutive effect and were not included in the calculation of diluted net loss per common share. |
2. GOING CONCERN
2. GOING CONCERN | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
GOING CONCERN | 2. GOING CONCERN The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As shown in the accompanying financial statements, the Company had a net loss of $52,605 and $134,243 for the three and nine months ended September 30, 2019, respectively, and had a working capital deficit of $1,308,087 as at September 30, 2019. The future of the Company is dependent upon its ability to obtain financing and upon future profitable operations from the development of its new business opportunities. Management may seek additional capital through private placements and public offerings of its common stock. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence. The ability of the Company to continue as a going concern is dependent on securing additional sources of capital and the success of the Company’s plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. |
3. RELATED PARTY TRANSACTIONS
3. RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 3. RELATED PARTY TRANSACTIONS Material Supply Agreement On April 9, 2013, the Company entered into a material supply agreement (the “the Original MSA”) with Candeo Lava Products Inc. (“Candeo”), which was amended on March 3, 2014 (the “Amended MSA”). Pursuant to the Amended MSA, Candeo is entitled to purchase material (“Material”) from the Pisgah Property at a price equal to the greater of $15 per ton and the net sales margin per ton removed from the Pisgah Property realized as follows: (i) 35% of the net sales margins during the first year of mining; and (ii) 50% of the net sales margins for the subsequent years during the term of the Amended MSA. Under the Amended MSA, Candeo has the right to remove an Initial Amount of up to 1,000,000 tons of Material from the Pisgah Property and Additional Amounts of 1,000,000 tons each, upon the successful removal of the Initial Amount from the Pisgah Property. Candeo’s right to remove the Additional Amounts from the Pisgah Property is on the basis that once Candeo has removed the first Additional Amount of the Material from the Pisgah Property, it shall have the right to remove subsequent Additional Amounts of Material from the Property, so long as it removes its then current Additional Amount. As such, Candeo’s right to extend the term of the Amended MSA is entirely based on Candeo’s successful performance of its Material removal commitments under the terms of the Amended MSA. Under the Amended MSA, Candeo is required to purchase a minimum of ten thousand (10,000) tons of Material during each of the first three years of the term of the agreement, all at a purchase price of $15.00 per ton, for a total payment of $150,000 per year in each of the first three years of the Term, with credit being given by the Company to Candeo for all pre-paid tons of Material that have already been purchased and paid for under the Original MSA. The Pre-Purchased Material will remain on the Pisgah Property until Candeo commences its production operations or engages the Company to mine and remove Material on Candeo’s behalf. In the event that Candeo engages the Company to mine and remove any of the Material, Candeo shall pay all of the Company’s reasonable costs and expenses in conducting such mining and removal operations plus a fee of 15%. All mining and removal operations on the Pisgah Property will be subject to all necessary regulatory and other third-party approvals being obtained. The Pre-Purchased Payments will not be refundable to Candeo but shall be credited against the first Production Payments. The term of the Amended MSA has been extended from an initial term of ten (10) years to twenty (20) years (the “Primary Term”) and Candeo has the option to extend the term for an additional thirty (30) years exercisable at any time with no less than three (3) months written notice prior to the expiration of the Primary Term, provided that Candeo is not in default under any of the provisions of the Amended MSA and that the whole of the Initial Amount has been removed from the Property. Unearned revenues as reflected on the Balance Sheet are a reflection of amounts received from Candeo based on the Amended MSA. Subsequently, a Court decision rendered on July 9, 2018 incorporated the Terms of the “Stipulation and Agreement of Settlement” and set the terms of the second amended material supply agreement (“Second Amended MSA”). The terms thereof include the following: PURCHASE PAYMENT. The price or ‘royalty advance’, that Candeo shall pay to Can-Cal per ton of Material (“Purchase Payment”) purchased by Candeo (or its assign or assigns) following the date hereof, shall be as follows: (a) With respect to the sale of Material that is not a Minimum Purchase (as hereafter defined), 20% of the Gross Sale Revenue; and (b) With respect to the sale of Material that is a Minimum Purchase, fifteen U.S. dollars (US$15.00) per ton ‘royalty advance’; and (c) In respect of Minimum Purchases referred to in section 7(b) and (c) below only, in the event that the Gross Sale Revenue per ton is greater than U.S.$15.00 per ton, an amount equal to 20% of the amount that the Gross Sale Revenue per ton exceeds US$15.00 per ton. Candeo (or its assign or assigns) shall pay such Purchase Payment to Can-Cal quarterly, with each Purchase Payment being made on or before the January 15, April 15, July 15 or October 15 immediately following the date the subject Material has been purchased by Candeo, except where a more specific date for payment is set forth in Paragraph 7 below. MINIMUM PURCHASES OF MATERIAL. Candeo will purchase a minimum amount of Material (the “Minimum Purchases”) as follows: (a) twenty-five thousand (25,000) tons of Material shall be paid for within five (5) days following the Start Date, with an option of Candeo to purchase an additional twenty thousand (20,000) tons of Material exercisable and payable by Candeo within 180 days following the Start Date (“Option 1”), and only upon the prior exercise and payment in full under Option 1, then Candeo shall be granted the right to purchase an additional forty thousand (40,000) tons of Material exercisable and payable by Candeo within 365 days following the Start Date (“Option 2”); (b) ten thousand (10,000) tons of Material during each of the first three years following the first anniversary of the Start Date, unless Option 1 has not been exercised and paid in full by Candeo, in which case this Minimum Purchase obligation (10,000 tons per year) commences upon the Start Date and payment in full for the first year ($150,000) thereunder must be made within 180 days following the Start Date; and (c) in each year following the three year period referred to in section 7(b) above, the Minimum Purchase amount will increase (or decrease) from ten thousand (10,000) tons of Material by an amount equal to the increase (or decrease) in the Consumer Price Index for the calendar year ended immediately prior to the calculation (“the CPI adjustment”). For greater clarity, only in respect of the Minimum Purchases referenced in section 7(a) above, the Purchase Payment shall be limited to and shall not exceed the amount of US$15.00 per ton. The Material purchased as part of the Minimum Purchases by Candeo currently remain on the Property until Candeo commences its production operations, which will be subject to all necessary regulatory and other approvals required to remove Material from the Property, such as permits, certified weigh scale, productions plan, environmental reclamation plan (if applicable) and insurance all of which shall be the responsibility and at the sole cost of Candeo. Candeo hereby agrees that it will provide thirty (30) days prior written notice to Can-Cal of the commencement of the operations on the Property, which notice will state the anticipated amount of Material to be removed, the period of time during which the removal will occur and the means that will be used to effect such removal. A separate License Agreement shall secure Candeo’s irrevocable right to access and remove Material purchased and paid for, but not removed from the Property. Pursuant to the Stipulation & Settlement Agreement, Can-Cal must also restructure its Board of Directors and amend its Articles of Incorporation, at shareholder meeting to be held in the foreseeable future, by adding a new Article 14 to read as follows: “FOURTEENTH: Notwithstanding any other provision of this Certificate of Amendment of Articles of Incorporation or the By-laws of the corporation, and in addition to any affirmative vote of the holders of any particular class of stock of the corporation required by applicable law, the Articles of Incorporation or the By-laws of the corporation, the affirmative vote of the holders of at least 90% of the voting power of the shares of the then outstanding voting stock of the corporation, voting together as a single class, shall be required to authorize any of the Supermajority Matters. For purposes hereof, the “Supermajority Matters” are: (i) authorization of the corporation to file a voluntary petition for relief under the provisions of Chapter 11 of Title 11 of the United States Code (i.e., the U.S. Bankruptcy Code); (ii) modification of that certain Second Amended Material Supply Agreement by and between the corporation and Candeo Lava Products, Inc.; (iii) increase to the corporation’s outstanding voting capital securities to more than 100 million outstanding votes, in the aggregate; and (iv) the Amendment or repeal of any provisions of this Article FOURTEENTH or the adoption of any provisions inconsistent with this Article FOURTEENTH.” Unearned revenues as reflected on the Balance Sheet are a reflection of amounts received from Candeo based on the Amended MSA. Balances as at September 30, 2019 and December 31, 2018 were $583,066 and $583,066, respectively. Compensation On June 30, 2010, the Company entered into a consulting agreement, with a Board of Director’s consulting firm, FutureWorth Capital Corp. The terms of the agreement include annual compensation of $60,000, payable monthly. The Company may elect to satisfy payment in shares of common stock in lieu of cash at a market value equal to $0.10 above the average closing trading price of the common stock for the preceding five (5) days from the date of such election. No payments have been made in cash or stock to date. As of December 31, 2017, the Company owed FutureWorth Capital Corp. $506 (2016 - $506) as included in accounts payable, related parties, for service prior to, and during the service period under the consulting agreement. The consulting agreement was terminated on February 27, 2013 with Mr. William Hogan’s resignation from the Board of Directors. On June 10, 2016, the Company entered into an office rental & administration agreement, with a Board of Director’s consulting firm, For Life Financial. For Life Financial is owned by Mr. Casey Douglass, the terms of the agreement include monthly compensation of $2,100 CAD. Additionally, on September 10, 2016, the Company entered into a Management Consulting Agreement with annual compensation of $50,000 USD, payable monthly as the scope of work had increased. Stock-Based Compensation All warrants previously issued by the Company have expired as of the fiscal year ending December 31, 2014. No new warrants have been issued as of March 31, 2019. |
4. NOTES PAYABLE, RELATED PARTI
4. NOTES PAYABLE, RELATED PARTIES | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE, RELATED PARTIES | 4. NOTES PAYABLE, RELATED PARTIES Notes payable, related parties consisted of the following as of September 30, 2018 and December 31, 2017, respectively: September 30, 2019 December 31, 2018 Note payable (1) $ 149,078 $ 149,078 Total related party notes payable $ 149,078 $ 149,078 (1) Note payable to the former CEO, unsecured, bearing interest at 10% and due on demand. Per the settlement of a lawsuit, the terms of this note were adjusted. Legal expenses incurred as a result of the lawsuit would bear interest at 10%, however, all other expenses would bear interest at 5%. The following presents components of interest expense by instrument type: Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended Interest on notes payable, related parties $ (2,116 ) $ (2,283 ) $ (6,280 ) $ 8,943 Total interest (expense) income $ (2,116 ) $ (2,283 ) $ (6,280 ) $ 8,943 The negative interest recognized in the nine months ended September 30, 2018 is due to a recalculation on the loan per revisions to the agreement from the lawyers of the lawsuit recognized in the first three months of 2018. Previously omitted costs were added to the outstanding loan and the interest rate was left at 10% for legal expenses incurred but adjusted to 5% for all other expenses. |
5. COMMITMENTS AND CONTINGENCIE
5. COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 5. COMMITMENTS AND CONTINGENCIES A) Mining claims The Company had a lease and purchase option agreement that began in March 1998 which has since expired, covering six patented claims in the Cerbat Mountains, Hualapai Mining District and Mohave County Arizona. The Company paid $1,500 per quarter as minimum advance royalties. The Company forfeited the option to purchase the property for $250,000 plus interest at a rate of 8% compounded annually from and after the date of its exercise of the option to purchase the property. If the Lessee exercises its option to purchase, all funds paid to Lessors would be credited toward the purchase price as of the date the payments were made. B) Mining reclamation costs Mining and reclamation permits, and an air quality permit have been issued by the California regulatory agencies in the names of both Twin Mountain, our joint venture partner, and the Company on August 25, 2016 for a 5 year permit. The Company posted a cash bond in the amount of $1,379 (1% of the total bond amount) and Twin Mountain has posted the remainder of the $137,886 bond. If Twin Mountain defaults, we would be responsible for reclamation of the property, but reclamation costs incurred in that event would be paid in whole or part by the bond posted by us and Twin Mountain. Can-Cal & Candeo Growth Solutions are now joint owners of this Permit which has been extended to December 31, 2048. C) Litigation On June 3, 2014, a group of Company shareholders under the direction of Ronald D. Sloan (a former Chief Executive Officer and director of the Company) (collectively the “Plaintiffs”) filed a shareholder derivative complaint in Nevada State Court against the Company, as well as its then current directors (Thompson MacDonald, G. Michael Hogan, and Ron Schinnour), William Hogan, FutureWorth Capital Corp. and Candeo (collectively the “Defendants”). The Plaintiffs are alleging, among other things, that the Defendants caused the Company to enter into a transaction with Candeo involving the Pisgah Property that was not in the best interests of the Company. However, the transaction with Candeo is in the best interests of the Company (see above in "Note 3 – Related Party - Material Supply Agreement”). There are many other allegations made by the Plaintiffs, all of which are considered by the Defendants to be frivolous with no basis in fact. In fact, due to the actions of the prior management of the Company, the Company would not have been able to continue operations and would have failed without the intervention of new management, including certain of the Defendants, and without entering into the transaction with Candeo. Accordingly, no provision has been recorded in the financial statements of the Company for any payment to the Plaintiffs pursuant to the claim or otherwise. Legal counsel for the Company is Justin C. Jones, Esq., currently of Jones Lovelock of Las Vegas, Nevada. Can-Cal Resources Ltd., as one of several Defendants in Derivative Lawsuit reached “Settlement Agreement in Principle” mid-November 2017, on July 9, 2018, the courts approved the Stipulation and Agreement of Settlement. Terms of the Agreement include: · A new Board was constituted as of May 13, 2019, with Mr. Casey Douglass, appointee of Defendants and Mr. Hugo Bondi, appointee of Plaintiffs, whom then unanimously voted in Mr. Gary Oosterhoff as third Director. · Anvance Royalty payments on minimum tonnage of lava material to Candeo Lava Products within certain time frames. · Proceeds from lava material income are budgeted towards Plaintiff’s legal costs, acute Accounts Payables and Management Fees. An annual minimum was established to cover base costs of keeping Can-Cal from insolvency. · As Candeo develops its marketing, it expects to substantially increase volumes of lava material sales and thus future purchases from Can-Cal. After the first 60-75,000 tons are purchased and or advance royalty paid, then Can-Cal will begin to receive 20% of gross revenues, or ORI (Overriding Royalty Interest) from Candeo’s sales of lava material. · Can-Cal Resources will be able to focus on developing any other resource potential. In or about June 2017, the Securities and Exchange Commission initiated an administrative proceeding before an administrative law judge seeking to revoke Can-Cal’s registration as a publicly traded security. In November 2017, the SEC’s Division of Enforcement sought summary adjudication on the issue of permanent revocation of Cal-Cal’s securities registration. Can-Cal opposed the motion and the matter has been fully briefed; however, as of April 5, 2019, the SEC has moved to dismiss this proceeding. In January 2020, after several motions and procedural delays, the SEC administrative law judge in the matter issued a decision revoking Can-Cal’s United States securities registration. In the ordinary course of business, we are from time to time involved in various pending or threatened legal actions. The litigation process is inherently uncertain and it is possible that the resolution of such matters might have a material adverse effect upon our financial condition and/or results of operations. However, in the opinion of our Board of Directors, matters currently pending or threatened against us are not expected to have a material adverse effect on our financial position or results of operations. |
6. SUBSEQUENT EVENTS
6. SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 6. SUBSEQUENT EVENTS October 21, 2019, the Company filed an 8-K reporting that funds had been received in the amount of $100,000 from a third party with whom they executed a Memorandum of Understanding with. That company is Archemetrix Mineral Resources LLC, with subsequent Definitive Agreement details described below. On March 31, 2020, Richmond (Dick) Graham was appointed to the Can-Cal Advisory Board. With over 25 years of mineral and energy development experience and consulting experience to boards and management teams Mr. Graham brings experience that is well suited to Can-Cal. Richmond’s past private and public company experience is rich in senior management and board roles. His experience includes the Board of Moss Lake Gold Mines (TSXV.MOK sold to Wesdome), Officer of Landis Energy (TSXV.LIS formerly Landis Mining sold to AltaGas TSX.ALA), Co-Founder/President/CEO/Board member of Banyan Gold Corp (TSXV.BYN). He currently provides advisory services to Boards and sits on the Boards of private international and North American companies. In addition, he Chairs the Saskatchewan Science Center Board of Directors and is active on other charity boards. Mr. Graham is a Professional Engineer (P.Eng.), Project Management Professional (PMP), Certified Management Consultant (CMC), and holds the designation of ICD.D from the Institute of Corporate Directors. Richmond is a graduate of Saskatchewan Polytech (Diploma Mechanical Engineering Technology), Lakehead University (B.Eng.), and Royal Roads University (MBA). On March 31, 2020, Can-Cal issued a press release regarding the election of Mr. Graham. The press release is filed herewith as Exhibit 99.1. On May 15th, 2020 , Company Can-Cal we us The Board of Directors believes that the share-based compensation payable to Mr. Richmond is appropriate due to the fact that the Company has very limited cash and funding resources. We claim an exemption from registration for the issuance pursuant to Section 4(a)(2) and/or Rule 506 of Regulation D of the Securities Act of 1933, as amended (the “ Securities Act accredited investor The Company continued to negotiate an agreement with a third-party to develop Can-Cal’s Pisgah resource. Additionally, Mr. Graham has brought his considerable engineering, business, exploration, mining, and public company experience to bear on these efforts. The Company plans to take steps to bring its filings current with the Securities and Exchange Commission (SEC). Assuming the Company becomes current in its SEC filings, it then plans to take steps to comply with the rules and regulations of the provincial jurisdictions of Alberta and British Columbia, Canada. On May 24th, 2020, Can-Cal Resources Ltd. (the “ Company we us AMR Pisgah Property Pursuant to the Definitive Agreement, AMR had agreed to mine resources from the Pisgah Property. The Mineral Lease calls for up to 9 million tons of material to be processed by AMR for commercial markets and remains in place until such 9 million tons are processed, or 15 years from the date of the Mineral Lease. The Definitive Agreement remains in place until the end of the Mineral Lease. The initial processing under the Definitive Agreement is anticipated to commence in the third quarter of 2020 with the start of a pilot program. In the event the pilot program is successful, and subject to certain conditions, the processing of the Pisgah Property pursuant to the terms of the Definitive Agreement is expected to begin during the first half of 2021. Under the Definitive Agreement all capital costs are borne by AMR. Profits from the sale of any metals processed by AMR under the Definitive Agreement provide a royalty share to Can-Cal consisting of a minimum of 40% of net profits from the sale of mineral concentrate, increasing incrementally based on certain milestones of gross tonnage of material processed. Additionally, prior to the first 8 million tons being processed, an optional right may be exercised whereby an additional 4.5 million tons of material, above the initial 9 million tons, can be processed under the Definitive Agreements with terms yet to be agreed upon by the parties, at which time the term of the Mineral Lease will be extended by 15 years. Profits from byproducts remaining from the process to derive a concentrate for smelter-refiners, are to be split 50/50 between the parties. Specific minimum as well as ongoing performance requirements are to be met through out the duration of the Definitive Agreements. The Definitive Agreement requires AMR to pay a Royalty Advance of $1.2 million to the Company, payable as follows: (a) $100,000 which was paid by AMR in the third quarter of 2019; (b) $100,000 payable by June 22, 2020, pursuant to certain conditions being met as described in the Definitive Agreement; (c) $150,000 prior to commencement of Pilot Program expected in Q3 of 2020; (d) $350,000 no later than 60 days after the pilot program or commercial activity at the Pisgah Property has started; and (e) $500,000 at the earlier In recognition of the Royalty Advance, the Company agreed to grant AMR a Warrant to purchase up to 5 million shares of common stock (the " AMR Warrants The Definitive Agreements include certain indemnification and other requirements of the parties typical of transactions of this type. The Mineral Lease may be terminated by AMR in certain situations including our breach of the representations of the Mineral Lease and our failure to cure such breaches 30 days after notice thereof is provided to the Company. In certain circumstances we also have the right to terminate the Mineral Lease, including upon AMR's breach of the agreement (and failure to cure 30 days after notice thereof is provided to AMR) and AMR's failure to meet certain minimum volume requirements relating to the processing of materials. |
1. NATURE OF BUSINESS AND SUM_2
1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Nature of Business | Nature of Business Can-Cal Resources Ltd. (“Can-Cal” or the “Company”) is a Nevada corporation incorporated on March 22, 1995. The Company is an exploration company engaged in the exploration for precious metals, specifically focused on mineral exploration projects. We have examined various prospective mineral properties for precious metals and acquired those deemed promising. We currenty own, lease or have mining interest in one mineral property in California, United States. The Company previously had mineral rights in Owl Canyon, California as well as Cerbat and Wikieup, Arizona, which have now been abandoned. As an exploration stage enterprise, the Company discloses the deficit accumulated during the exploration stage. An entity remains in the exploration stage until such time as proven or probable reserves have been established for its deposits. Upon the location of commercially mineable reserves, the Company plans to prepare for mineral extraction and enter the development stage. To date, the exploration stage of the Company’s operations consists of contracting with geologists who sample and assess the mining viability of the Company’s claims. |
Basis of Presentation | Basis of Presentation The accompanying unaudited interim financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and with the rules and regulations of the United States Securities and Exchange Commission set forth in Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. Unaudited interim results are not necessarily indicative of the results for the full fiscal year. These financial statements should be read in conjunction with the financial statements of the Company for the fiscal year ended December 31, 2017 and notes thereto contained in the Company’s Annual Report on Form 10-K. The Company’s functional and reporting currency is the United States dollar (USD). Monetary assets and liabilities denominated in foreign currencies are translated in accordance with ASC 820, using the exchange rate prevailing at the balance sheet date. Gains and losses arising on settlement of foreign currency denominated transactions or balances are included in the determination of income. Foreign currency transactions are primarily undertaken in the Canadian dollar (CDN). The Company has not, to the date of these financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations. Certain amounts in the prior periods presented have been reclassified to conform to the current period financial statement presentation. In December 2019, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (ASU 2019-12), which simplifies the accounting for income taxes. This guidance will be effective for entities for the fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020 on a prospective basis, with early adoption permitted. We will adopt the new standard effective January 1, 2021 and do not expect the adoption of this guidance to have a material impact on our financial statements. |
Exploration Stage Company | Exploration Stage Company The Company is currently an exploration stage company. As an exploration stage enterprise, the Company discloses the deficit accumulated during the exploration stage and the cumulative statements of operations and cash flows from inception to the current balance sheet date. The Company has incurred an accumulated deficit of $11,947,451 for the period from inception (March 22, 1995) through September 30, 2019. An entity remains in the exploration stage until such time as proven or probable reserves have been established for its deposits. Upon the location of commercially mineable reserves, the Company plans to prepare for mineral extraction and enter the development stage. To date, the exploration stage of the Company’s operations consists of contracting with geologists who sample and assess the mining viability of the Company’s claims. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Revenue Recognition | Revenue Recognition Policy The Company adopted ASC 606, Revenue from Contracts with Customers (Topic 606). Under this standard the Company will account for revenue from contracts with customers by evaluating the five steps of Topic 606, which are as follows: (1) identify the contract with the customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations; and (5) recognize revenue when (or as) performance obligations are satisfied. The adoption of this standard does not have a material impact on the financial statements. |
Gains and Losses from Debt Extinguishment | Gains and Losses from Debt Extinguishment Gain from extinguishment of debt. The Company reflects gain on extinguishment of debt as a credit to earnings from operations in the period in which it is determined that the liability has been forgiven either by the vendor, judicial authority, or the passing of the stature of limitations. Gains from related parties are credited to paid in capital. |
Basic and Diluted Loss per Share | Basic and Diluted Loss per Share The basic net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding. Diluted net loss per common share is computed by dividing the net loss adjusted on an “as if converted” basis, by the weighted average number of common shares outstanding plus potential dilutive securities. For 2019 and 2018 potential dilutive securities had an anti-dilutive effect and were not included in the calculation of diluted net loss per common share. |
4. NOTES PAYABLE, RELATED PAR_2
4. NOTES PAYABLE, RELATED PARTIES (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Notes payable, related parties | Notes payable, related parties consisted of the following as of September 30, 2018 and December 31, 2017, respectively: September 30, 2019 December 31, 2018 Note payable (1) $ 149,078 $ 149,078 Total related party notes payable $ 149,078 $ 149,078 (1) Note payable to the former CEO, unsecured, bearing interest at 10% and due on demand. Per the settlement of a lawsuit, the terms of this note were adjusted. Legal expenses incurred as a result of the lawsuit would bear interest at 10%, however, all other expenses would bear interest at 5%. The following presents components of interest expense by instrument type: Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended Interest on notes payable, related parties $ (2,116 ) $ (2,283 ) $ (6,280 ) $ 8,943 Total interest (expense) income $ (2,116 ) $ (2,283 ) $ (6,280 ) $ 8,943 |
1. NATURE OF BUSINESS AND SUM_3
1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Accounting Policies [Abstract] | ||
Accumulated deficit | $ (11,947,451) | $ (11,813,208) |
2. GOING CONCERN (Details Narra
2. GOING CONCERN (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Net loss | $ (52,605) | $ (49,935) | $ (134,243) | $ (132,657) |
Working capital | $ (1,308,087) | $ (1,308,087) |
3. RELATED PARTY TRANSACTIONS (
3. RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Unearned revenues, related party | $ 583,066 | $ 583,066 | ||
Accounts payable, related parties | $ 102,025 | $ 62,673 | ||
Consulting Agreement [Member] | Future Worth Capital Corp [Member] | ||||
Accounts payable, related parties | $ 506 | $ 506 |
4. NOTES PAYABLE, RELATED PAR_3
4. NOTES PAYABLE, RELATED PARTIES (Details - Notes Payable) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | ||
Total related party notes payable | $ 149,078 | $ 149,078 | $ 149,078 | |||
Interest on notes payable, related parties | (2,116) | $ (2,283) | (6,280) | $ 8,943 | ||
Former CEO [Member] | ||||||
Total related party notes payable | [1] | $ 149,078 | $ 149,078 | $ 149,078 | ||
[1] | Note payable to the former CEO, unsecured, bearing interest at 10% and due on demand. Per the settlement of a lawsuit, the terms of this note were adjusted. Legal expenses incurred as a result of the lawsuit would bear interest at 10%, however, all other expenses would bear interest at 5%. |