Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Mar. 31, 2015 | Jun. 30, 2014 | |
Document and Entity Information: | |||
Entity Registrant Name | Athena Silver Corporation | ||
Document Type | 10-K | ||
Document Period End Date | 31-Dec-14 | ||
Amendment Flag | FALSE | ||
Entity Central Index Key | 1304409 | ||
Current Fiscal Year End Date | -19 | ||
Entity Common Stock, Shares Outstanding | 36,202,320 | ||
Entity Public Float | $1,115,781 | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Entity Incorporation, State Country Name | Delaware | ||
Entity Incorporation, Date of Incorporation | 23-Dec-03 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | ||
Current Assets | ||||
Cash and cash equivalents | $8,122 | $16,934 | ||
Total current assets | 8,122 | 16,934 | ||
Mineral rights and properties - unproven | 1,758,820 | 1,689,297 | ||
Total assets | 1,766,942 | 1,706,231 | ||
Current liabilities: | ||||
Accounts payable | 68,726 | 70,195 | ||
Accrued liabilities | 23,750 | 71,250 | ||
Accrued interest - related parties | 107,926 | 50,735 | ||
Derivative warrant liability | 7,320 | 17,500 | ||
Convertible notes payable - related parties | 1,246,000 | 990,000 | ||
Total current liabilities | 1,453,722 | 1,199,680 | ||
Commitments and contingencies | ||||
Shareholders' equity: | ||||
Preferred stock | [1] | [1] | ||
Common stock | 3,600 | [2] | 3,600 | [2] |
Additional paid-in capital | 6,580,048 | 6,580,048 | ||
Accumulated deficit | -6,270,428 | -6,077,097 | ||
Total shareholders' equity | 313,220 | 506,551 | ||
Total liabilities and shareholders' equity | $1,766,942 | $1,706,231 | ||
[1] | Preferred stock, $.0001 par value, 5,000,000 shares authorized, none outstanding | |||
[2] | Common stock, $0.0001 par value; 100,000,000 shares authorized, 36,002,320 issued and outstanding |
CONSOLIDATED_BALANCE_SHEETS_PA
CONSOLIDATED BALANCE SHEETS - PARENTHETICAL (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
CONSOLIDATED BALANCE SHEETS | ||
Preferred Stock, Par Value | $0.00 | $0.00 |
Preferred Stock, Shares Authorized | 5,000,000 | 5,000,000 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Common Stock, Par Value | $0.00 | $0.00 |
Common Stock, Shares Authorized | 100,000,000 | 100,000,000 |
Common Stock, Shares Issued | 36,002,320 | 35,002,320 |
Common Stock, Shares Outstanding | 36,002,320 | 35,002,320 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Operating expenses: | ||
Exploration costs | $19,080 | $49,517 |
Other operating costs | 1,490 | |
General and administrative expenses | 127,240 | 298,414 |
Total operating expenses | 146,320 | 349,421 |
Operating Income (Loss) | -146,320 | -349,421 |
Other income (expense): | ||
Interest expense | -57,191 | -43,011 |
Change in fair value of warrant liability | 10,180 | 34,323 |
Other income | 1 | |
Total other income (expense) | -47,011 | -8,687 |
Net Income (Loss) | ($193,331) | ($358,108) |
Basic and diluted net income (loss) per common share | ($0.01) | ($0.02) |
Basic and diluted weighted-average common shares outstanding | 36,002,320 | 35,859,854 |
CONSOLIDATED_STATEMENTS_OF_STO
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) (USD $) | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total |
Balance, Value at Dec. 31, 2012 | $3,500 | $6,086,148 | ($5,718,989) | $370,659 |
Balance, Shares at Dec. 31, 2012 | 35,002,320 | |||
Common stock issued for mineral rights, Value | 100 | 339,900 | 340,000 | |
Common stock issued for mineral rights, Shares | 1,000,000 | |||
Share based compensation - Directior options | 154,000 | 154,000 | ||
Net Income (Loss) | -358,108 | -358,108 | ||
Balance, Value at Dec. 31, 2013 | 3,600 | 6,580,048 | -6,077,097 | 506,551 |
Balance, Shares at Dec. 31, 2013 | 36,002,320 | |||
Net Income (Loss) | -193,331 | -193,331 | ||
Balance, Value at Dec. 31, 2014 | $3,600 | $6,580,048 | ($6,270,428) | $313,220 |
Balance, Shares at Dec. 31, 2014 | 36,002,320 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Cash flows from operating activities: | ||
Net Income (Loss) | ($193,331) | ($358,108) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Share-based compensation expense | 154,000 | |
Change in fair value of derivative warrant liability | -10,180 | -34,323 |
Changes in operating assets and liabilities: | ||
Change in Prepaid expenses | 37,000 | |
Change in Accounts payable | -1,469 | -58,740 |
Change in Accrued liabilities and other liabilities | 57,191 | 35,876 |
Net cash used in operating activities | -147,789 | -224,295 |
Cash flows from investing activities: | ||
Acquisition of mineral rights | -117,023 | -205,000 |
Net cash used in investing activities | -117,023 | -205,000 |
Cash flows from financing activities: | ||
Net change in advances payable - related parties | -1,000 | |
Borrowings from notes payable - related parties | 256,000 | 435,000 |
Net cash provided by financing activities | 256,000 | 434,000 |
Net increase (decrease) in cash | -8,812 | 4,705 |
Cash at beginning of period | 16,934 | 12,229 |
Cash at end of period | 8,122 | 16,934 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Increase in accrued liabilities applicable to mineral rights | 47,500 | 7,916 |
Common stock issued for mineral rights | $340,000 |
Note_1_Organization_Liquidity_
Note 1: Organization, Liquidity and Going Concern | 12 Months Ended |
Dec. 31, 2014 | |
Notes | |
Note 1: Organization, Liquidity and Going Concern | Note 1 – Organization, Liquidity and Going Concern |
Nature of Operations | |
Athena Silver Corporation (“we,” “our,” “us,” or “Athena”) is engaged in the acquisition and exploration of mineral resources. We were incorporated in Delaware on December 23, 2003, and began our mining operations in 2010. | |
In December 2009, we formed and organized a new wholly-owned subsidiary, Athena Minerals, Inc. (“Athena Minerals”) which owns and operates our mining interests. Since its formation, we have acquired various properties and rights and are currently determining whether those rights and properties could sustain profitable mining operations. We have not presently determined whether our mineral properties contain mineral reserves that are economically recoverable. | |
Our primary focus going forward will be to continue our evaluation of our properties, and the possible acquisition of additional mineral rights and additional exploration, development and permitting activities. Our mineral lease payments, permitting applications and exploration and development efforts will require additional capital. Further information regarding our mining properties and rights are discussed below in Note 3 – Mineral Rights and Properties. | |
Liquidity and Going Concern | |
Our consolidated financial statements have been prepared on a going concern basis, which assumes that we will be able to meet our obligations and continue our operations during the next fiscal year. Asset realization values may be significantly different from carrying values as shown in our condensed consolidated financial statements and do not give effect to adjustments that would be necessary to the carrying values of assets and liabilities should we be unable to continue as a going concern. | |
At December 31, 2014, we had not yet achieved profitable operations and we have accumulated losses of $6,270,428 since our inception. We expect to incur further losses in the development of our business, all of which casts substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern depends on our ability to generate future profits and/or to obtain the necessary financing to meet our obligations arising from normal business operations when they come due. On December 31, 2014 we amended our credit agreement with Mr. John Gibbs, a related party, to increase the borrowing limit under the line of credit to $1,500,000, which provides the Company an additional $254,000 available under the credit line at December 31, 2014. We anticipate that additional funding will be in the form of additional loans from officers, directors or significant shareholders, or equity financing from the sale of our common stock. Currently, there are no arrangements in place for additional equity funding or new loans. |
Note_2_Summary_of_Significant_
Note 2: Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2014 | |
Notes | |
Note 2: Summary of Significant Accounting Policies | Note 2 - Summary of Significant Accounting Policies |
Basis of Presentation and Principles of Consolidation | |
Our consolidated financial statements include our accounts and the accounts of our wholly-owned subsidiary, Athena Minerals, Inc. All intercompany transactions and balances have been eliminated. Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). | |
Reclassifications | |
Certain reclassifications may have been made to our prior year’s consolidated financial statements to conform to our current year presentation. These reclassifications had no effect on our previously reported results of operations or accumulated deficit. | |
Use of Estimates | |
The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates, assumptions and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of expenses during the periods presented. | |
We make our estimate of the ultimate outcome for these items based on historical trends and other information available when the financial statements are prepared. Changes in estimates are recognized in accordance with the accounting rules for the estimate, which is typically in the period when new information becomes available. | |
We believe that our significant estimates, assumptions and judgments are reasonable, based upon information available at the time they were made. Actual results could differ from these estimates, making it possible that a change in these estimates could occur in the near term. | |
Fair Value of Financial Instruments | |
We value our financial assets and liabilities using fair value measurements. Our financial instruments primarily consist of cash and cash equivalents, accounts payable, accrued liabilities, amounts due to related parties and notes payable to related parties. Fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The carrying amount of cash and cash equivalents, accounts payable, accrued liabilities, notes payable to related parties and other amounts due to related parties approximates fair value because of the short-term nature of these financial instruments. | |
Concentrations of Credit Risk | |
Our financial instruments which potentially subject us to credit risk are our cash and cash equivalents. We maintain our cash and cash equivalents at reputable financial institutions and currently, we are not exposed to significant credit risk. | |
Cash and Cash Equivalents | |
We consider all amounts on deposit with financial institutions and highly liquid investments with an original maturity of three months or less to be cash equivalents. | |
Deferred Financing Costs | |
Transaction fees, if any, incurred in connection with our related-party debt are recorded as deferred financing costs in the consolidated balance sheets and amortized to interest expense in the accompanying consolidated statements of operations using the straight-line method, which approximates the effective interest method, over the term of the underlying debt agreement. When a loan is paid in full, any unamortized financing costs are removed from the related accounts and charged to operations. | |
Mineral Rights - Unproven | |
We have determined that our mining rights meet the definition of mineral rights, as defined by accounting standards, and are tangible assets. As a result, our direct costs to acquire or lease mineral rights are initially capitalized as tangible assets. Mineral rights include costs associated with: leasing or acquiring patented and unpatented mining claims; leasing mining rights including lease signature bonuses, lease rental payments and advance minimum royalty payments; and options to purchase or lease mineral properties. | |
If we establish proven and probable reserves for a mineral property and establish that the mineral property can be economically developed, mineral rights will be amortized over the estimated useful life of the property following the commencement of commercial production or expensed if it is determined that the mineral property has no future economic value or if the property is sold or abandoned. For mineral rights in which proven and probable reserves have not yet been established, we assess the carrying values for impairment at the end of each reporting period and whenever events or changes in circumstances indicate that the carrying value may not be recoverable. | |
The net carrying value of our mineral rights represents the fair value at the time the mineral rights were acquired less accumulated depletion and any impairment losses. Proven and probable reserves have not been established for mineral rights as of December 31, 2014. No impairment loss was recognized during the years ended December 31, 2014 and 2013, and mineral rights are net of $0 of impairment losses as of December 31, 2014. | |
Impairment of Long-lived Assets | |
We continually monitor events and changes in circumstances that could indicate that our carrying amounts of long-lived assets, including mineral rights, may not be recoverable. When such events or changes in circumstances occur, we assess the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through their undiscounted expected future cash flows. If the future undiscounted cash flows are less than the carrying amount of these assets, we recognize an impairment loss based on the excess of the carrying amount over the fair value of the assets. | |
Notes Payable and Credit Facility– Related Parties | |
Notes payable and the credit facility payable to related parties are classified as current liabilities as the note holders are control persons and have the ability to control the repayment dates of the notes. | |
Exploration Costs | |
Mineral exploration costs are expensed as incurred. When it has been determined that it is economically feasible to extract minerals and the permitting process has been initiated, exploration costs incurred to further delineate and develop the property are considered pre-commercial production costs and will be capitalized and included as mine development costs in our consolidated balance sheets. | |
Share-based Payments | |
We measure and recognize compensation expense or professional services expense for all share-based payment awards made to employees, directors and non-employee consultants based on estimated fair values. We estimate the fair value of stock options on the date of grant using the Black-Scholes-Merton option pricing model, which includes assumptions for expected dividends, expected share price volatility, risk-free interest rate, and expected life of the options. Our expected volatility assumption is based on our historical weekly closing price of our stock over a period equivalent to the expected life of the options. | |
We expense share-based compensation, adjusted for estimated forfeitures, using the straight-line method over the vesting term of the award for our employees and directors and over the expected service term for our non-employee consultants. We estimate forfeitures at the time of grant and revise those estimates in subsequent periods if actual forfeitures differ from our estimates. Our excess tax benefits, if any, cannot be credited to stockholders’ equity until the deduction reduces cash taxes payable; accordingly, we realized no excess tax benefits during any of the periods presented in the accompanying consolidated financial statements. | |
Income Taxes | |
We account for income taxes through the use of the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis, and for income tax carry-forwards. A valuation allowance is recorded to the extent that we cannot conclude that realization of deferred tax assets is more likely than not. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. | |
We follow a two-step approach to recognizing and measuring tax benefits associated with uncertain tax positions taken or expected to be taken in a tax return. The first step is to determine if, based on the technical merits, it is more likely than not that the tax position will be sustained upon examination by a taxing authority, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement with a taxing authority. We recognize interest and penalties, if any, related to uncertain tax positions in our provision for income taxes in the consolidated statements of operations. To date, we have not recognized any tax benefits from uncertain tax positions. | |
Net Loss per Common Share | |
We compute basic net loss per common share by dividing our net loss attributable to common shareholders by our weighted-average number of common shares outstanding during the period. Computation of diluted net loss per common share is similar to our computation of basic net loss per common share except that the numerator is increased to exclude charges which would not have been incurred, and the denominator is increased to include the number of additional common shares that would have been outstanding (using the if-converted and treasury stock methods) if securities containing potentially dilutive common shares (stock options and convertible debt) had been converted to common shares, and if such assumed conversion is dilutive. | |
At December 31, 2014 and 2013, 893,000 potentially dilutive shares comprised of common stock purchase warrants and shares underlying outstanding stock options have been excluded from diluted net loss per common share because the impact of such inclusion would be anti-dilutive. | |
Recently Adopted Accounting Standards | |
During the year ended December 31, 2014, the Company elected to early adopt Accounting Standards Update No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements. The adoption of this ASU allowed the company to remove the inception to date information and all references to development stage. | |
We do not expect the adoption of recently issued accounting pronouncements to have a significant impact on our results of operations, financial position or cash flow. |
Note_3_Mineral_Rights_and_Prop
Note 3 - Mineral Rights and Properties | 12 Months Ended | |||||
Dec. 31, 2014 | ||||||
Notes | ||||||
Note 3 - Mineral Rights and Properties: | Note 3 – Mineral Rights and Properties | |||||
Our mineral rights and mineral properties consist of: | ||||||
31-Dec-14 | 31-Dec-13 | |||||
Mineral properties | $ | 156,707 | $ | 135,684 | ||
Mineral rights – Langtry Project | 1,602,113 | 1,553,613 | ||||
Mineral rights and properties | $ | 1,758,820 | $ | 1,689,297 | ||
Mineral Properties | ||||||
During the second quarter of 2014, we purchased of 160 acres of land, located in the eastern Calico Mining District, San Bernardino County, California. The parcel is the SE quarter of Section 25, Township 10 North, Range 1 East and is mostly surrounded by public lands. It was purchased for $21,023 in a property tax auction conducted on behalf of the County. The eastern part of the Calico Mining District is best known for industrial minerals and is not known to have any precious metal deposits. It is not known at this time if there has ever been any mineral exploration or production on the acquired property. | ||||||
In 2012, we purchased 661 acres of land (“Section 13 Property”) in fee simple for $135,684 cash, located in San Bernardino County, California, that was sold in a property tax auction conducted on behalf of the County. The parcel is all of Section 13 located in Township 7 North, Range 4 East, San Bernardino Base & Meridian. | ||||||
The Section 13 property is near the Lava Beds Mining District and has evidence of historic mining. It is adjacent to both the Silver Cliffs and Silver Bell historic mines. The property is located in the same regional geologic area known as the Western Mojave Block that includes our flagship Langtry Project. The property is approximately 28 miles southeast of our Langtry Project. | ||||||
Mineral Rights | ||||||
In 2010, we entered into a 20 year Mining Lease with Option to Purchase (the “Langtry Lease” or the “Lease”) granting us the exclusive right to explore, develop and conduct mining operations on a group of 20 patented mining claims consisting of approximately 413 acres that comprise our Langtry Property. Effective November 28, 2012, December 19, 2013 and January 21, 2015, we executed Amendments No. 1, 2 and 3, respectively, to the Langtry Lease modifying certain terms. | ||||||
Under Amendment No. 3 to the Lease, the Lessor was issued 200,000 shares of restricted Athena common stock as compensation for the modifications. | ||||||
The following summarizes the current significant provisions of the Lease, as amended: | ||||||
The Lease commenced March 15, 2010, and has a term of 20 years expiring March 15, 2030; with an option to extend an additional five years to 2035, and thereafter for so long as there is Commercial Silver Production, defined as at least 100,000 troy ounces of aggregate production per year. | ||||||
· The Lease requires us to pay annual cash lease rental payments, in arrears, of $60,000 to $100,000 on March 15th of each year during the first five years of the Lease. | ||||||
· The Lease requires us to pay annual cash lease rental payments, in arrears, of $100,000 to $200,000 (or the market price of 10,000 to 20,000 troy ounces of silver, whichever is higher (the “Silver Price Link to Rent”)) on March 15th of each year during the final 15 years of the Lease (i.e. 2016 through 2030). | ||||||
· Rent for the years 2016 through 2025 is capped at $100,000 per year unless Commercial Silver Production has been achieved, in which case the Silver Price Link to Rent shall apply. | ||||||
· The annual cap on rent of $100,000 shall be eliminated, and the Silver Price Link to Rent shall apply, for any year ending December 31 (for the following March 15 rent payment) in which the London Silver Fix is $60 or more for the continuous six month period beginning July 1 and ending December 31. | ||||||
· The annual lease payment of $100,000 due on March 15, 2015 will be payable $30,000 in cash and $70,000 deferred until 12 months after Commercial Silver Production is achieved. | ||||||
· The annual lease payment of $100,000 due on March 15, 2016 will be payable $40,000 in cash and $60,000 deferred until 12 months after Commercial Silver Production is achieved. | ||||||
· We have the right to eliminate the Silver Price Link to Rent from 2020 through March 15, 2026 by making a one-time payment to the Lessor in an amount equal to the London Silver Fix price of 25,000 troy ounces of silver. The elimination of the Silver Price Link to Rent will be rescinded, however, if and when we achieve Commercial Silver Production. | ||||||
· The lessor is entitled to a net smelter royalty of 3% of mineral production beginning in the sixth year of the Lease. | ||||||
· Upon payment in full of both the Equity Consideration (which was completed in 2013), and Cash Consideration payments totaling $1,750,000 (of which a total of $250,000 was paid during 2012 and 2013), the Lessor’s 3% net smelter royalty on production will be eliminated entirely. Any payments already made, or made in the future, towards the Cash Consideration will reduce the 3% net smelter production royalty to the Lessor on a pro-rata basis. The remaining optional Cash Consideration payments of $250,000, $250,000, $500,000 and $500,000 are due on January 15th of 2017, 2018, 2019 and 2020, respectively. | ||||||
· We shall have the option to purchase the Langtry patented claims during the period beginning January 15, 2015 and ending March 15, 2020 for $10 million plus transaction costs upon 30 days written notice to the Lessor provided that all payments due to the lessor are current as of the date of the exercise of the option to purchase. | ||||||
· If we are in breach of the Lease, the Lessor will have the option to terminate the Lease by giving us 30 days written notice. The Lease also provides us with the right to terminate the Lease without penalty on March 15th of each year during the Lease term by giving the lessor 30 days written notice of termination on or before February 13th of each year. | ||||||
· The Langtry Property is also subject to a three percent (3%) net smelter royalty in favor of Mobil Exploration and Producing North America Inc. from the sale of concentrates, precipitates or metals produced from ores mined from the royalty acreage. In addition, there is an additional incremental 2% royalty on net smelter proceeds from silver sales above $10.00 per troy ounce plus an additional incremental 2% royalty on net smelter proceeds from silver sales above $15.00 per troy ounce. | ||||||
During the term of the Lease, Athena Minerals has the exclusive right to develop and conduct mining operations on the Langtry Property. Future lease payments and/or exploration and development of this property will require new equity and/or debt capital. | ||||||
During the year ended December 31, 2014 we capitalized a total of $69,523 as mineral properties and rights. This amount included the purchase of the 160 acres located in the Calico Mining District in San Bernardino County, California as discussed above in Mineral properties. It also includes various other payments and accruals for obligations related to our Langtry lease also as discussed above. | ||||||
During the year ended December 31, 2013 we capitalized $559,135 of lease rental and lease amendment payments related to an amendment of the lease and associated buy-down of a royalty payable to the lessor. These amounts are an increase to mineral rights and properties. | ||||||
All commitments and obligations under the Lease have been fulfilled to date. Future lease payments and/or exploration and development of this property will require new equity and/or debt capital. |
Note_4_Fair_Value_of_Financial
Note 4 - Fair Value of Financial Instruments | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Notes | ||||||||||||||
Note 4 - Fair Value of Financial Instruments: | Note 4 - Fair Value of Financial Instruments | |||||||||||||
Financial assets and liabilities recorded at fair value in our condensed consolidated balance sheets are categorized based upon a fair value hierarchy established by GAAP, which prioritizes the inputs used to measure fair value into the following levels: | ||||||||||||||
Level 1— Quoted market prices in active markets for identical assets or liabilities at the measurement date. | ||||||||||||||
Level 2— Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable and can be corroborated by observable market data. | ||||||||||||||
Level 3— Inputs reflecting management’s best estimates and assumptions of what market participants would use in pricing assets or liabilities at the measurement date. The inputs are unobservable in the market and significant to the valuation of the instruments. | ||||||||||||||
A financial instrument's categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. | ||||||||||||||
Financial assets and liabilities measured at fair value on a recurring basis are summarized below: | ||||||||||||||
Carrying Value at December 31, 2014 | Fair Value Measurement at December 31, 2014 | |||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||||
Derivative warrant liability | $ | 7,320 | $ | — | $ | — | $ | 7,320 | ||||||
Carrying Value at December 31, 2013 | Fair Value Measurement at December 31, 2013 | |||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||||
Derivative warrant liability | $ | 17,500 | $ | — | $ | — | $ | 17,500 | ||||||
The carrying amount of cash and cash equivalents, prepaid expenses, accounts payable, and accrued liabilities, approximates fair value because of the short-term nature of these financial instruments. We are unable to estimate the fair value of amounts due to related parties, including advances payable and our credit facility to related parties, without incurring excessive costs because quoted market prices are not available, we have not developed the valuation model necessary to make these estimates, and the cost of obtaining independent valuations would be excessive. |
Note_5_Derivative_Warrant_Liab
Note 5 - Derivative Warrant Liability | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Notes | ||||
Note 5 - Derivative Warrant Liability: | Note 5 – Derivative Warrant Liability | |||
Effective February 7, 2012, and pursuant to an Advisor Agreement with GVC Capital, LLC dated January 30, 2012, we sold and issued warrants exercisable to purchase an aggregate of 143,000 common shares at an exercise price of $0.25 per share at any time within five years of the date of their issuance in consideration of $100 cash and investor relation services with a fair value of $35,793. The warrants have anti-dilution provisions, including a provision for adjustments to the exercise price and to the number of warrant shares purchasable if we issue or sell common shares at a price less than the then current exercise price. | ||||
We determined that the warrants were not afforded equity classification because the warrants are not considered to be indexed to our own stock due to the anti-dilution provision. Accordingly, the warrants are treated as a derivative liability and are carried at fair value. We estimate the fair value of these derivative warrants at each balance sheet date and the changes in fair value are recognized in earnings in our condensed consolidated statement of operations under the caption “change in fair value of derivative warrant liability” until such time as the derivative warrants are exercised or expire. | ||||
The change in fair value of our derivative warrant liability is as follows: | ||||
Balance, December 31, 2012 | $ 51,823 | |||
Total gains (unrealized/realized) ncluded in net loss | -34,323 | |||
Balance, December 31, 2013 | 17,500 | |||
Total gains (unrealized/realized) ncluded in net loss | -10,180 | |||
Balance, December 31, 2014 | $ 7,320 | |||
We estimate the fair value of our derivative warrants on the date of issuance and each subsequent balance sheet date using the Black-Scholes option pricing model, which includes assumptions for expected dividends, expected share price volatility, risk-free interest rate, and expected life of the warrants. Currently, we believe that the potential impact to the fair value of our derivative warrants attributable to the anti-dilution provision is insignificant and we will consider using a lattice model for purposes of valuation if and when the fair value of the anti-dilution provision becomes significant. Our expected volatility assumption is based on our historical weekly closing price of our stock over a period equivalent to the expected remaining life of the derivative warrants. | ||||
The following table summarizes the assumptions used to value our derivative warrants at December 31, 2014: | ||||
Fair value assumptions – derivative warrants: | Year Ended December 31, 2014 | |||
Risk free interest rate | 0.67% | |||
Expected term (years) | 2.1 | |||
Expected volatility | 112% | |||
Expected dividends | 0% | |||
The following table summarizes the assumptions used to value our derivative warrants at December 31, 2013: | ||||
Fair value assumptions – derivative warrants: | Year Ended December 31, 2013 | |||
Risk free interest rate | 0.78% | |||
Expected term (years) | 3.1 | |||
Expected volatility | 91% | |||
Expected dividends | 0% |
Note_6_Convertible_Notes_Payab
Note 6 - Convertible Notes Payable - Related Party | 12 Months Ended |
Dec. 31, 2014 | |
Notes | |
Note 6 - Convertible Notes Payable - Related Party: | Note 6 – Convertible Notes Payable – Related Party |
Notes Payable – Related Parties | |
Effective July 18, 2012, we entered into a Credit Agreement with Mr. Gibbs, a significant shareholder, providing us with an unsecured credit facility in the maximum amount of $1,000,000. The aggregate principal amount borrowed, together with interest at the rate of 5% per annum, was due in full on July 31, 2014, and is convertible, at the option of the lender, into common shares at a conversion price of $0.50 per share. On December 31, 2013 we amended the credit agreement to increase the borrowing limit under the line of credit to $1,250,000 and extend the maturity date to December 31, 2014. Again, on December 31, 2014 we amended the credit agreement to increase the borrowing limit under the line of credit to $1,500,000 and extended the maturity date to December 31, 2015. All other provisions under the agreement remained unchanged. The Company evaluated the convertible line of credit for derivative and beneficial feature conversion and concluded that there is no beneficial conversion as the market price and conversion price are the same. | |
The credit facility also contains customary representations and warranties (including those relating to organization and authorization, compliance with laws, payment of taxes and other obligations, absence of defaults, material agreements and litigation) and customary events of default (including those relating to monetary defaults, covenant defaults, cross defaults and bankruptcy events). | |
Total principal amounts owed under the credit facility notes payable were $1,246,000 and $990,000 at December 31, 2014 and 2013, respectively. | |
Borrowings under our convertible note payable to Mr. Gibbs for the year ended December 31, 2014 totaled $256,000, which was used to pay certain mining lease obligations and property as discussed in Note 2 – Mineral Rights and Properties and operating expenses. No principal or interest payments were made to Mr. Gibbs during either the years ended December 31, 2014 or 2013. | |
Total accrued interest on the notes payable to Mr. Gibbs were $107,926 and $50,735 at December 31, 2014 and 2013, respectively, and are included in Accrued interest - related parties on the accompanying balance sheets. | |
Interest Expense – Related Parties | |
Total related party interest expense was $57,191 and $43,011 for the years ended December 31, 2014 and 2013, respectively. |
Note_7_Commitments_and_Conting
Note 7 - Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2014 | |
Notes | |
Note 7 - Commitments and Contingencies: | Note 7 - Commitments and Contingencies |
We are subject to various commitments and contingencies under the Langtry Lease as discussed in Note 3 – Mining Rights and Properties. All commitments and obligations under the Lease have been fulfilled to date. |
Note_8_Sharebased_Compensation
Note 8 - Share-based Compensation | 12 Months Ended | |||||
Dec. 31, 2014 | ||||||
Notes | ||||||
Note 8 - Share-based Compensation | Note 8 - Share-based Compensation | |||||
2004 Equity Incentive Plan | ||||||
The 2004 Equity Incentive Plan terminated on December 10, 2014. As of December 31, 2014, there were 150,000 incentive stock options outstanding under the Plan with an exercise price of $0.43 and expire on August 1, 2016. | ||||||
Stock Options | ||||||
A summary of our stock option activity for the years ended December 31, 2014 and 2013 is as follows: | ||||||
Shares | Weighted Average Exercise Price | |||||
Outstanding at December 31, 2012 | 150,000 | $0.43 | ||||
Options granted | 600,000 | $0.26 | ||||
Outstanding at December 31, 2013 | 750,000 | $0.29 | ||||
Options granted or expired | - | - | ||||
Outstanding at December 31, 2014 | 750,000 | $0.29 | ||||
On April 8, 2013, we granted 200,000 options with a grant date fair value of $0.26 per share to each of our three directors, which were 100% vested on the grant date. These options expire on April 8, 2018, and have an exercise price of $0.26 per share, which was the market price of our common stock on the date of grant. At December 31, 2014, these options have a weighted average remaining contractual life of 3.3 years. The options were determined to have a fair value of $154,000, which was charged to share based compensation expense on the grant date. The weighted average contractual life of all outstanding options was 2.9 years at December 31, 2014. | ||||||
No share based compensation expense was recorded for the year ended December 31, 2014. |
Note_9_Related_Party_Transacti
Note 9 - Related Party Transactions | 12 Months Ended |
Dec. 31, 2014 | |
Notes | |
Note 9 - Related Party Transactions: | Note 9 – Related Party Transactions |
Conflicts of Interests | |
Magellan Gold Corporation (“Magellan”) is a company under common control. Mr. Power is a significant shareholder, director and CEO of both Athena and Magellan. Mr. Gibbs is a significant shareholder and creditor (see Note 6 – Convertible Notes Payable – Related Party), in both Athena and Magellan. Athena and Magellan are both involved in the business of acquisition and exploration of mineral resources. | |
Silver Saddle Resources, LLC (“Silver Saddle”) is also a company under common control. Mr. Power and Mr. Gibbs are the owners and managing members of Silver Saddle. Athena and Silver Saddle are both involved in the business of acquisition and exploration of mineral resources. | |
During early 2014, we pursued an opportunity to lease certain BLM lode claims in Esmeralda County, Nevada from an unrelated third party. As part of this effort, we incurred costs to evaluate the potential opportunity. Based on the evaluation, the Board of Directors decided to not pursue this lease opportunity. Subsequently, Silver Saddle Resources, LLC decided to pursue this opportunity and agreed to pay us for certain costs we had incurred during the evaluation, and on March 31, 2014 Silver Saddle paid the Company $586 for those expenditures. The payment was recorded as a reduction of the expenditures incurred. | |
The existence of common ownership and common management could result in significantly different operating results or financial position from those that could have resulted had Athena, Magellan and Silver Saddle been autonomous. | |
Management Fees – Related Parties | |
The Company is subject to a month-to-month management agreement with Mr. Power requiring a monthly payment, in advance, of $2,500 as consideration for the day-to-day management of Athena. For each of the years ended December 31, 2014 and 2013, a total of $30,000 was recorded as management fees and are included in general and administrative expenses in the accompanying Consolidated Statements of Operations. As of December 31, 2014 all management fees due Mr. Power had been paid. | |
Accrued Interest - Related Parties | |
At December 31, 2014 and 2013, Accrued interest - related parties represented accrued interest payable to Mr. Gibbs in the amounts of $107,926 and $50,735, respectively. | |
Advances Payable - Related Parties | |
Mr. Power has on occasion advanced the Company funds generally utilized for day-to-day operating requirements. These advances are non-interest bearing and are generally repaid as cash becomes available. | |
During the year ended December 31, 2014, Mr. Power advanced the Company a total of $334, all of which was repaid during the period. There were no outstanding advances at either December 31, 2014 or 2013. | |
During the year ended December 31, 2013, Mr. Power advanced the Company an additional $5,750 and was repaid the outstanding balance of $6,750. | |
The Company also utilizes credit cards owned by Mr. Power to pay various obligations when an online payment is required, the availability of cash is limited, or the timing of the payments is considered critical. At December 31, 2014 a total of $806 of Company charges was outstanding on his credit cards and is included in the accounts payable balance at December 31, 2014. No such amounts were outstanding at December 31, 2013. |
Note_10_Income_Taxes
Note 10 - Income Taxes | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Notes | ||||||||
Note 10 - Income Taxes | Note 10 - Income Taxes | |||||||
Our net operating loss carry forward as of December 31, 2014 is $6,000,648 which may be used to offset future income taxes through 2035. Our reconciliation between the expected federal income tax benefit computed by applying the federal statutory rate to our net loss and the actual benefit for taxes on net loss for 2014 and 2013 is as follows: | ||||||||
Years Ended December 31, | ||||||||
2014 | 2013 | |||||||
Expected federal income tax benefit at statutory rate | $ | 65,733 | $ | 69,397 | ||||
State taxes | 6,767 | 7,144 | ||||||
Change in valuation allowance | (72,500) | (76,541) | ||||||
Income tax benefit | $ | — | $ | — | ||||
Our deferred tax assets as of December 31, 2014 and 2013 were as follows: | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Net operating loss | $ | 2,250,243 | $ | 2,177,744 | ||||
Valuation allowance | (2,250,243) | (2,177,744) | ||||||
Deferred tax assets, net of allowance | $ | — | $ | — | ||||
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. We have provided a valuation allowance of 100% of our net deferred tax asset due to the uncertainty of generating future profits that would allow us to realize our deferred tax assets. |
Note_11_Subsequent_Events
Note 11: Subsequent Events | 12 Months Ended |
Dec. 31, 2014 | |
Notes | |
Note 11: Subsequent Events | Note 11 - Subsequent Events |
Effective January 21, 2015 we executed Amendment 3 to the Langtry Lease which, among other things, deferred certain required and optional payments due the lessor. As compensation for the modifications under Amendment 3, on January 28, 2015 we issued 200,000 shares of the Company’s common stock to the lessor. Further information regarding these transactions is included in Note 3 – Mineral Rights and Properties. | |
Subsequent to December 31, 2014 the Company borrowed an additional $45,000 under the credit agreement from Mr. Gibbs. |
Note_1_Organization_Liquidity_1
Note 1: Organization, Liquidity and Going Concern: Nature of Operations (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Policies | |
Nature of Operations | Nature of Operations |
Athena Silver Corporation (“we,” “our,” “us,” or “Athena”) is engaged in the acquisition and exploration of mineral resources. We were incorporated in Delaware on December 23, 2003, and began our mining operations in 2010. | |
In December 2009, we formed and organized a new wholly-owned subsidiary, Athena Minerals, Inc. (“Athena Minerals”) which owns and operates our mining interests. Since its formation, we have acquired various properties and rights and are currently determining whether those rights and properties could sustain profitable mining operations. We have not presently determined whether our mineral properties contain mineral reserves that are economically recoverable. | |
Our primary focus going forward will be to continue our evaluation of our properties, and the possible acquisition of additional mineral rights and additional exploration, development and permitting activities. Our mineral lease payments, permitting applications and exploration and development efforts will require additional capital. Further information regarding our mining properties and rights are discussed below in Note 3 – Mineral Rights and Properties. |
Note_1_Organization_Liquidity_2
Note 1: Organization, Liquidity and Going Concern: Liquidity and Going Concern (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Policies | |
Liquidity and Going Concern | Liquidity and Going Concern |
Our consolidated financial statements have been prepared on a going concern basis, which assumes that we will be able to meet our obligations and continue our operations during the next fiscal year. Asset realization values may be significantly different from carrying values as shown in our condensed consolidated financial statements and do not give effect to adjustments that would be necessary to the carrying values of assets and liabilities should we be unable to continue as a going concern. | |
At December 31, 2014, we had not yet achieved profitable operations and we have accumulated losses of $6,270,428 since our inception. We expect to incur further losses in the development of our business, all of which casts substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern depends on our ability to generate future profits and/or to obtain the necessary financing to meet our obligations arising from normal business operations when they come due. On December 31, 2014 we amended our credit agreement with Mr. John Gibbs, a related party, to increase the borrowing limit under the line of credit to $1,500,000, which provides the Company an additional $254,000 available under the credit line at December 31, 2014. We anticipate that additional funding will be in the form of additional loans from officers, directors or significant shareholders, or equity financing from the sale of our common stock. Currently, there are no arrangements in place for additional equity funding or new loans. |
Note_2_Summary_of_Significant_1
Note 2: Summary of Significant Accounting Policies: Basis of Presentation and Principles of Consolidation (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Policies | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation |
Our consolidated financial statements include our accounts and the accounts of our wholly-owned subsidiary, Athena Minerals, Inc. All intercompany transactions and balances have been eliminated. Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). |
Note_2_Summary_of_Significant_2
Note 2: Summary of Significant Accounting Policies: Reclassifications (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Policies | |
Reclassifications | Reclassifications |
Certain reclassifications may have been made to our prior year’s consolidated financial statements to conform to our current year presentation. These reclassifications had no effect on our previously reported results of operations or accumulated deficit. |
Note_2_Summary_of_Significant_3
Note 2: Summary of Significant Accounting Policies: Use of Estimates (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Policies | |
Use of Estimates | Use of Estimates |
The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates, assumptions and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of expenses during the periods presented. | |
We make our estimate of the ultimate outcome for these items based on historical trends and other information available when the financial statements are prepared. Changes in estimates are recognized in accordance with the accounting rules for the estimate, which is typically in the period when new information becomes available. | |
We believe that our significant estimates, assumptions and judgments are reasonable, based upon information available at the time they were made. Actual results could differ from these estimates, making it possible that a change in these estimates could occur in the near term. |
Note_2_Summary_of_Significant_4
Note 2: Summary of Significant Accounting Policies: Fair Value of Financial Instruments (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Policies | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments |
We value our financial assets and liabilities using fair value measurements. Our financial instruments primarily consist of cash and cash equivalents, accounts payable, accrued liabilities, amounts due to related parties and notes payable to related parties. Fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The carrying amount of cash and cash equivalents, accounts payable, accrued liabilities, notes payable to related parties and other amounts due to related parties approximates fair value because of the short-term nature of these financial instruments. |
Note_2_Summary_of_Significant_5
Note 2: Summary of Significant Accounting Policies: Concentrations of Credit Risk (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Policies | |
Concentrations of Credit Risk | Concentrations of Credit Risk |
Our financial instruments which potentially subject us to credit risk are our cash and cash equivalents. We maintain our cash and cash equivalents at reputable financial institutions and currently, we are not exposed to significant credit risk. |
Note_2_Summary_of_Significant_6
Note 2: Summary of Significant Accounting Policies: Cash and Cash Equivalents (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Policies | |
Cash and Cash Equivalents | Cash and Cash Equivalents |
We consider all amounts on deposit with financial institutions and highly liquid investments with an original maturity of three months or less to be cash equivalents. |
Note_2_Summary_of_Significant_7
Note 2: Summary of Significant Accounting Policies: Deferred Financing Costs (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Policies | |
Deferred Financing Costs | Deferred Financing Costs |
Transaction fees, if any, incurred in connection with our related-party debt are recorded as deferred financing costs in the consolidated balance sheets and amortized to interest expense in the accompanying consolidated statements of operations using the straight-line method, which approximates the effective interest method, over the term of the underlying debt agreement. When a loan is paid in full, any unamortized financing costs are removed from the related accounts and charged to operations. |
Note_2_Summary_of_Significant_8
Note 2: Summary of Significant Accounting Policies: Mineral Rights - Unproven (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Policies | |
Mineral Rights - Unproven | Mineral Rights - Unproven |
We have determined that our mining rights meet the definition of mineral rights, as defined by accounting standards, and are tangible assets. As a result, our direct costs to acquire or lease mineral rights are initially capitalized as tangible assets. Mineral rights include costs associated with: leasing or acquiring patented and unpatented mining claims; leasing mining rights including lease signature bonuses, lease rental payments and advance minimum royalty payments; and options to purchase or lease mineral properties. | |
If we establish proven and probable reserves for a mineral property and establish that the mineral property can be economically developed, mineral rights will be amortized over the estimated useful life of the property following the commencement of commercial production or expensed if it is determined that the mineral property has no future economic value or if the property is sold or abandoned. For mineral rights in which proven and probable reserves have not yet been established, we assess the carrying values for impairment at the end of each reporting period and whenever events or changes in circumstances indicate that the carrying value may not be recoverable. | |
The net carrying value of our mineral rights represents the fair value at the time the mineral rights were acquired less accumulated depletion and any impairment losses. Proven and probable reserves have not been established for mineral rights as of December 31, 2014. No impairment loss was recognized during the years ended December 31, 2014 and 2013, and mineral rights are net of $0 of impairment losses as of December 31, 2014. |
Note_2_Summary_of_Significant_9
Note 2: Summary of Significant Accounting Policies: Impairment of Long-lived Assets (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Policies | |
Impairment of Long-lived Assets | Impairment of Long-lived Assets |
We continually monitor events and changes in circumstances that could indicate that our carrying amounts of long-lived assets, including mineral rights, may not be recoverable. When such events or changes in circumstances occur, we assess the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through their undiscounted expected future cash flows. If the future undiscounted cash flows are less than the carrying amount of these assets, we recognize an impairment loss based on the excess of the carrying amount over the fair value of the assets. |
Recovered_Sheet1
Note 2: Summary of Significant Accounting Policies: Notes Payable and Credit Facility- Related Parties (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Policies | |
Notes Payable and Credit Facility- Related Parties | Notes Payable and Credit Facility– Related Parties |
Notes payable and the credit facility payable to related parties are classified as current liabilities as the note holders are control persons and have the ability to control the repayment dates of the notes. |
Recovered_Sheet2
Note 2: Summary of Significant Accounting Policies: Exploration Costs (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Policies | |
Exploration Costs | Exploration Costs |
Mineral exploration costs are expensed as incurred. When it has been determined that it is economically feasible to extract minerals and the permitting process has been initiated, exploration costs incurred to further delineate and develop the property are considered pre-commercial production costs and will be capitalized and included as mine development costs in our consolidated balance sheets. |
Recovered_Sheet3
Note 2: Summary of Significant Accounting Policies: Share-based Payments (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Policies | |
Share-based Payments | Share-based Payments |
We measure and recognize compensation expense or professional services expense for all share-based payment awards made to employees, directors and non-employee consultants based on estimated fair values. We estimate the fair value of stock options on the date of grant using the Black-Scholes-Merton option pricing model, which includes assumptions for expected dividends, expected share price volatility, risk-free interest rate, and expected life of the options. Our expected volatility assumption is based on our historical weekly closing price of our stock over a period equivalent to the expected life of the options. | |
We expense share-based compensation, adjusted for estimated forfeitures, using the straight-line method over the vesting term of the award for our employees and directors and over the expected service term for our non-employee consultants. We estimate forfeitures at the time of grant and revise those estimates in subsequent periods if actual forfeitures differ from our estimates. Our excess tax benefits, if any, cannot be credited to stockholders’ equity until the deduction reduces cash taxes payable; accordingly, we realized no excess tax benefits during any of the periods presented in the accompanying consolidated financial statements. |
Recovered_Sheet4
Note 2: Summary of Significant Accounting Policies: Income Taxes (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Policies | |
Income Taxes | Income Taxes |
We account for income taxes through the use of the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis, and for income tax carry-forwards. A valuation allowance is recorded to the extent that we cannot conclude that realization of deferred tax assets is more likely than not. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. | |
We follow a two-step approach to recognizing and measuring tax benefits associated with uncertain tax positions taken or expected to be taken in a tax return. The first step is to determine if, based on the technical merits, it is more likely than not that the tax position will be sustained upon examination by a taxing authority, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement with a taxing authority. We recognize interest and penalties, if any, related to uncertain tax positions in our provision for income taxes in the consolidated statements of operations. To date, we have not recognized any tax benefits from uncertain tax positions. |
Recovered_Sheet5
Note 2: Summary of Significant Accounting Policies: Net Loss Per Common Share (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Policies | |
Net Loss Per Common Share | Net Loss per Common Share |
We compute basic net loss per common share by dividing our net loss attributable to common shareholders by our weighted-average number of common shares outstanding during the period. Computation of diluted net loss per common share is similar to our computation of basic net loss per common share except that the numerator is increased to exclude charges which would not have been incurred, and the denominator is increased to include the number of additional common shares that would have been outstanding (using the if-converted and treasury stock methods) if securities containing potentially dilutive common shares (stock options and convertible debt) had been converted to common shares, and if such assumed conversion is dilutive. | |
At December 31, 2014 and 2013, 893,000 potentially dilutive shares comprised of common stock purchase warrants and shares underlying outstanding stock options have been excluded from diluted net loss per common share because the impact of such inclusion would be anti-dilutive. |
Recovered_Sheet6
Note 2: Summary of Significant Accounting Policies: Recently Adopted Accounting Standards (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Policies | |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards |
During the year ended December 31, 2014, the Company elected to early adopt Accounting Standards Update No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements. The adoption of this ASU allowed the company to remove the inception to date information and all references to development stage. | |
We do not expect the adoption of recently issued accounting pronouncements to have a significant impact on our results of operations, financial position or cash flow. |
Note_3_Mineral_Rights_and_Prop1
Note 3 - Mineral Rights and Properties: Schedule of Mineral Rights and Properties (Tables) | 12 Months Ended | |||||
Dec. 31, 2014 | ||||||
Tables/Schedules | ||||||
Schedule of Mineral Rights and Properties | ||||||
31-Dec-14 | 31-Dec-13 | |||||
Mineral properties | $ | 156,707 | $ | 135,684 | ||
Mineral rights – Langtry Project | 1,602,113 | 1,553,613 | ||||
Mineral rights and properties | $ | 1,758,820 | $ | 1,689,297 |
Note_4_Fair_Value_of_Financial1
Note 4 - Fair Value of Financial Instruments: Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Tables/Schedules | ||||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | ||||||||||||||
Carrying Value at December 31, 2014 | Fair Value Measurement at December 31, 2014 | |||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||||
Derivative warrant liability | $ | 7,320 | $ | — | $ | — | $ | 7,320 | ||||||
Carrying Value at December 31, 2013 | Fair Value Measurement at December 31, 2013 | |||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||||
Derivative warrant liability | $ | 17,500 | $ | — | $ | — | $ | 17,500 |
Note_5_Derivative_Warrant_Liab1
Note 5 - Derivative Warrant Liability: Schedule of Change in fair value of derivative warrant liability (Tables) | 12 Months Ended | |
Dec. 31, 2014 | ||
Tables/Schedules | ||
Schedule of Change in fair value of derivative warrant liability | ||
Balance, December 31, 2012 | $ 51,823 | |
Total gains (unrealized/realized) ncluded in net loss | -34,323 | |
Balance, December 31, 2013 | 17,500 | |
Total gains (unrealized/realized) ncluded in net loss | -10,180 | |
Balance, December 31, 2014 | $ 7,320 |
Note_5_Derivative_Warrant_Liab2
Note 5 - Derivative Warrant Liability: Schedule of Assumptions used to value derivative warrants (Tables) | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Tables/Schedules | ||||
Schedule of Assumptions used to value derivative warrants | ||||
The following table summarizes the assumptions used to value our derivative warrants at December 31, 2014: | ||||
Fair value assumptions – derivative warrants: | Year Ended December 31, 2014 | |||
Risk free interest rate | 0.67% | |||
Expected term (years) | 2.1 | |||
Expected volatility | 112% | |||
Expected dividends | 0% | |||
The following table summarizes the assumptions used to value our derivative warrants at December 31, 2013: | ||||
Fair value assumptions – derivative warrants: | Year Ended December 31, 2013 | |||
Risk free interest rate | 0.78% | |||
Expected term (years) | 3.1 | |||
Expected volatility | 91% | |||
Expected dividends | 0% |
Note_8_Sharebased_Compensation1
Note 8 - Share-based Compensation: Schedule of Share-based Compensation, Stock Options, Activity (Tables) | 12 Months Ended | |||||
Dec. 31, 2014 | ||||||
Tables/Schedules | ||||||
Schedule of Share-based Compensation, Stock Options, Activity | ||||||
Shares | Weighted Average Exercise Price | |||||
Outstanding at December 31, 2012 | 150,000 | $0.43 | ||||
Options granted | 600,000 | $0.26 | ||||
Outstanding at December 31, 2013 | 750,000 | $0.29 | ||||
Options granted or expired | - | - | ||||
Outstanding at December 31, 2014 | 750,000 | $0.29 |
Note_10_Income_Taxes_Schedule_
Note 10 - Income Taxes: Schedule of Effective Income Tax Rate Reconciliation (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Tables/Schedules | ||||||||
Schedule of Effective Income Tax Rate Reconciliation | ||||||||
Years Ended December 31, | ||||||||
2014 | 2013 | |||||||
Expected federal income tax benefit at statutory rate | $ | 65,733 | $ | 69,397 | ||||
State taxes | 6,767 | 7,144 | ||||||
Change in valuation allowance | (72,500) | (76,541) | ||||||
Income tax benefit | $ | — | $ | — |
Note_10_Income_Taxes_Schedule_1
Note 10 - Income Taxes: Schedule of Deferred Tax Assets (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Tables/Schedules | ||||||||
Schedule of Deferred Tax Assets | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Net operating loss | $ | 2,250,243 | $ | 2,177,744 | ||||
Valuation allowance | (2,250,243) | (2,177,744) | ||||||
Deferred tax assets, net of allowance | $ | — | $ | — |
Note_1_Organization_Liquidity_3
Note 1: Organization, Liquidity and Going Concern: Nature of Operations (Details) | 12 Months Ended |
Dec. 31, 2014 | |
Details | |
Entity Incorporation, State Country Name | Delaware |
Entity Incorporation, Date of Incorporation | 23-Dec-03 |
Note_1_Organization_Liquidity_4
Note 1: Organization, Liquidity and Going Concern: Liquidity and Going Concern (Details) (USD $) | Dec. 31, 2014 |
Details | |
Retained Earnings (Accumulated Deficit) | ($6,270,428) |
Recovered_Sheet7
Note 2: Summary of Significant Accounting Policies: Mineral Rights - Unproven (Details) (MineralRights1Member, USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
MineralRights1Member | ||
Indefinite-lived Intangible Assets, Impairment Losses | $0 | $0 |
Recovered_Sheet8
Note 2: Summary of Significant Accounting Policies: Net Loss Per Common Share (Details) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Details | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 893,000 | 893,000 |
Note_3_Mineral_Rights_and_Prop2
Note 3 - Mineral Rights and Properties: Schedule of Mineral Rights and Properties (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Mineral properties | ||
Property, Plant and Equipment, Gross | $156,707 | $135,684 |
Mineral rights - Langtry Project | ||
Property, Plant and Equipment, Gross | 1,602,113 | 1,553,613 |
Mineral rights and properties | ||
Property, Plant and Equipment, Gross | $1,758,820 | $1,689,297 |
Note_3_Mineral_Rights_and_Prop3
Note 3 - Mineral Rights and Properties: Mineral Properties (Details) (Mineral properties - Section 13 Property, USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Mineral properties - Section 13 Property | |
Significant Acquisitions and Disposals, Description | In 2012, we purchased 661 acres of land (“Section 13 Property”) in fee simple |
Significant Acquisitions and Disposals, Acquisition Costs or Sale Proceeds | $135,684 |
Note_3_Mineral_Rights_and_Prop4
Note 3 - Mineral Rights and Properties: Mineral Rights (Details) (Mineral rights and properties, USD $) | 12 Months Ended |
Dec. 31, 2013 | |
Mineral rights and properties | |
Operating Leases, Rent Expense | $559,135 |
Note_4_Fair_Value_of_Financial2
Note 4 - Fair Value of Financial Instruments: Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Derivative warrant liability | $7,320 | $17,500 |
Fair Value, Inputs, Level 3 | ||
Derivative warrant liability | $7,320 | $17,500 |
Note_5_Derivative_Warrant_Liab3
Note 5 - Derivative Warrant Liability: Schedule of Change in fair value of derivative warrant liability (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Details | ||
Derivative Warrant Liability, Fair Value, Starting Balance | $17,500 | $51,823 |
Derivative Warrant Liability, Fair Value, Total (gains) or losses (realized/unrealized) included in net income (loss) | -10,180 | -34,323 |
Derivative Warrant Liability, Fair Value, Starting Balance | $7,320 | $17,500 |
Note_5_Derivative_Warrant_Liab4
Note 5 - Derivative Warrant Liability: Schedule of Assumptions used to value derivative warrants (Details) (Derivative Warrants) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Derivative Warrants | ||
Fair Value Assumptions, Risk Free Interest Rate | 0.67% | 0.78% |
Fair Value Assumptions, Expected Term | 2 years 1 month 6 days | 3 years 1 month 6 days |
Fair Value Assumptions, Expected Volatility Rate | 112.00% | 91.00% |
Fair Value Assumptions, Expected Dividend Rate | 0.00% | 0.00% |
Note_6_Convertible_Notes_Payab1
Note 6 - Convertible Notes Payable - Related Party: Line of Credit Agreement (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Line of Credit Facility, Covenant Terms | The credit facility also contains customary representations and warranties (including those relating to organization and authorization, compliance with laws, payment of taxes and other obligations, absence of defaults, material agreements and litigation) and customary events of default (including those relating to monetary defaults, covenant defaults, cross defaults and bankruptcy events). | |
John D. Gibbs, a significant shareholder | July182012Member | ||
Line of Credit Facility, Initiation Date | 18-Jul-12 | |
Line of Credit Facility, Borrowing Capacity, Description | maximum amount of $1,000,000 | |
Line of Credit Facility, Maximum Borrowing Capacity | $1,000,000 | |
Line of Credit Facility, Interest Rate During Period | 5.00% | |
Line of Credit Facility, Expiration Date | 31-Jul-14 | |
Line of Credit Facility, Description | convertible, at the option of the lender, into common shares at a conversion price of $0.50 per share. | |
Line of Credit Facility, Amount Outstanding | $1,246,000 | $990,000 |
Note_6_Convertible_Notes_Payab2
Note 6 - Convertible Notes Payable - Related Party: Borrowings under Convertible Note payable to Related Party (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Borrowings from notes payable - related parties | $256,000 | $435,000 |
Accrued interest - related parties | 107,926 | 50,735 |
John D. Gibbs, a significant shareholder | ||
Borrowings from notes payable - related parties | 256,000 | |
Repayments of Debt | $0 | $0 |
Note_6_Convertible_Notes_Payab3
Note 6 - Convertible Notes Payable - Related Party: Interest Expense - Related Parties (Details) (Related Parties, USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Related Parties | ||
Interest Expense | $57,191 | $43,011 |
Note_8_Sharebased_Compensation2
Note 8 - Share-based Compensation: 2004 Equity Incentive Plan (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 750,000 | 750,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | $0.29 | $0.29 |
2004 Equity Incentive Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award, Description | The 2004 Equity Incentive Plan terminated on December 10, 2014. | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 150,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | $0.43 | |
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Date | 1-Aug-16 |
Note_8_Sharebased_Compensation3
Note 8 - Share-based Compensation: Schedule of Share-based Compensation, Stock Options, Activity (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2014 | |
Details | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Beginning Balance | 750,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price, Beginning Balance | $0.29 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 600,000 | |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $0.26 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Ending Balance | 750,000 | 750,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price, Ending Balance | $0.29 | $0.29 |
Note_8_Sharebased_Compensation4
Note 8 - Share-based Compensation (Details) (April 8, 2013, USD $) | 12 Months Ended |
Dec. 31, 2014 | |
8-Apr-13 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Number | 200,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $0.26 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Exercise Price | $0.26 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Remaining Contractual Term | 3 years 3 months 18 days |
Options Granted, Fair Value | $154,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 2 years 10 months 24 days |
Note_9_Related_Party_Transacti1
Note 9 - Related Party Transactions: Management Fees - Related Parties (Details) (Mr. Power, USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Mr. Power | ||
Management Fee, Amount Paid | $30,000 | $30,000 |
Note_10_Income_Taxes_Schedule_2
Note 10 - Income Taxes: Schedule of Effective Income Tax Rate Reconciliation (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Details | ||
Effective Income Tax Rate Reconciliation at Federal Statutory Income Tax Rate, Amount | $65,733 | $69,397 |
Effective Income Tax Rate Reconciliation, State and Local Income Taxes, Amount | 6,767 | 7,144 |
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | ($72,500) | ($76,541) |
Note_10_Income_Taxes_Schedule_3
Note 10 - Income Taxes: Schedule of Deferred Tax Assets (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Details | ||
Deferred Tax Assets, Net Opeating (Income) Loss | $2,250,243 | $2,177,744 |
Deferred Tax Assets, Valuation Allowance | ($2,250,243) | ($2,177,744) |
Note_11_Subsequent_Events_Deta
Note 11: Subsequent Events (Details) | 12 Months Ended |
Dec. 31, 2014 | |
Event 1 | |
Subsequent Event, Date | 21-Jan-15 |
Subsequent Event, Description | executed Amendment 3 to the Langtry Lease which, among other things, deferred certain required and optional payments due the lessor |
Event 2 | |
Subsequent Event, Description | Subsequent to December 31, 2014 the Company borrowed an additional $45,000 under the credit agreement from Mr. Gibbs |