Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | 13-May-15 | |
Document and Entity Information: | ||
Entity Registrant Name | Athena Silver Corporation | |
Document Type | 10-Q | |
Document Period End Date | 31-Mar-15 | |
Amendment Flag | FALSE | |
Entity Central Index Key | 1304409 | |
Current Fiscal Year End Date | -19 | |
Entity Common Stock, Shares Outstanding | 36,002,320 | |
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 | 2015 | |
Document Fiscal Period Focus | Q1 | |
Entity Incorporation, State Country Name | Delaware | |
Entity Incorporation, Date of Incorporation | 23-Dec-03 |
CONSOLIDATED_BALANCE_SHEETS_Ma
CONSOLIDATED BALANCE SHEETS (March 31, 2015 Unaudited) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | ||
Current Assets | ||||
Cash and cash equivalents | $3,662 | $8,122 | ||
Prepaid expenses | 6,570 | |||
Total current assets | 10,232 | 8,122 | ||
Mineral rights and properties - unproven | 1,788,737 | 1,758,820 | ||
Total assets | 1,798,969 | 1,766,942 | ||
Current liabilities: | ||||
Accounts payable | 102,775 | 68,726 | ||
Accrued liabilities | 4,667 | 23,750 | ||
Accrued interest - related parties | 123,607 | 107,926 | ||
Derivative warrant liability | 6,320 | 7,320 | ||
Convertible notes payable - related parties | 1,321,000 | 1,246,000 | ||
Total current liabilities | 1,558,369 | 1,453,722 | ||
Shareholders' equity: | ||||
Preferred stock | [1] | [1] | ||
Common stock | 3,620 | [2] | 3,600 | [3] |
Additional paid-in capital | 6,602,028 | 6,580,048 | ||
Accumulated deficit | -6,365,048 | -6,270,428 | ||
Total shareholders' equity | 240,600 | 313,220 | ||
Total liabilities and shareholders' equity | $1,798,969 | $1,766,942 | ||
[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, 36,202,320 issued and outstanding. | |||
[3] | 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 (March 31, 2015 Unaudited) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
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 | 36,202,320 | 35,002,320 |
Common Stock, Shares Outstanding | 36,202,320 | 35,002,320 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Operating expenses: | ||
Exploration costs | $28,671 | $463 |
General and administrative expenses | 51,270 | 49,191 |
Total operating expenses | 79,941 | 49,654 |
Operating Income (Loss) | -79,941 | -49,654 |
Other income (expense): | ||
Interest expense | -15,679 | -12,491 |
Change in fair value of warrant liability | 1,000 | -22,900 |
Total other income (expense) | -14,679 | -35,391 |
Net Income (Loss) | ($94,620) | ($85,045) |
Basic and diluted net income (loss) per common share | $0 | $0 |
Basic and diluted weighted-average common shares outstanding | 36,140,098 | 36,002,320 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Cash flows from operating activities: | ||
Net Income (Loss) | ($94,620) | ($85,045) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Change in fair value of derivative warrant liability | -1,000 | 22,900 |
Changes in operating assets and liabilities: | ||
Change in Prepaid expenses | -6,570 | -300 |
Change in Accounts payable | 34,049 | 6,651 |
Change in Accrued liabilities and other liabilities | 18,681 | 12,491 |
Net cash used in operating activities | -49,460 | -43,303 |
Cash flows from investing activities: | ||
Acquisition of mineral rights | -30,000 | -90,000 |
Net cash used in investing activities | -30,000 | -90,000 |
Cash flows from financing activities: | ||
Borrowings from notes payable - related parties | 75,000 | 120,000 |
Net cash provided by financing activities | 75,000 | 120,000 |
Net increase (decrease) in cash | -4,460 | -13,303 |
Cash at beginning of period | 8,122 | 16,934 |
Cash at end of period | 3,662 | 3,631 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Increase (Decrease) in accrued liabilities applicable to mineral rights | -22,083 | -67,083 |
Common stock issued for mineral rights | $22,000 |
Note_1_Organization_Basis_of_P
Note 1 - Organization, Basis of Presentation, and Going Concern | 3 Months Ended |
Mar. 31, 2015 | |
Notes | |
Note 1 - Organization, Basis of Presentation, and Going Concern: | Note 1 – Organization, Basis of Presentation, and Going Concern: |
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 2 – Mineral Rights and Properties. | |
Basis of Presentation | |
We prepared these condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”). The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with GAAP for interim financial information in accordance with Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In our opinion, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three month period ended March 31, 2015 are not necessarily indicative of the results for the full year. While we believe that the disclosures presented herein are adequate and not misleading, these interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the footnotes thereto contained in our Annual Report on Form 10-K for the year ended December 31, 2014. | |
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 March 31, 2015, we had not yet achieved profitable operations and we have accumulated losses of $6,365,048 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 $179,000 available under the credit line at March 31, 2015. 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_Mineral_Rights_and_Prop
Note 2 - Mineral Rights and Properties | 3 Months Ended | |||||
Mar. 31, 2015 | ||||||
Notes | ||||||
Note 2 - Mineral Rights and Properties: | Note 2 – Mineral Rights and Properties | |||||
Our mineral rights and mineral properties consist of: | ||||||
31-Mar-15 | 31-Dec-14 | |||||
Mineral properties | $ | $ 156,707 | $ | $ 156,707 | ||
Mineral rights – Langtry Project | 1,632,030 | 1,602,113 | ||||
Mineral rights and properties | $ | $ 1,788,737 | $ | $ 1,758,820 | ||
Mineral Properties | ||||||
In 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 was paid $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 three months ended March 31, 2015 we capitalized a total of $29,917 of lease rental obligations and lease amendment payments related to Amendment 3 of the lease. This amount includes the issuance of 200,000 shares of Athena common stock valued at $0.11 per share issued as consideration for modifications to the lease. These amounts are an increase to mineral rights and properties. The Company accrues amounts monthly for lease obligations due and paid in March each year. For the three months ended March 31, 2015 we realized a $22,083 decrease in our accrued lease obligations. | ||||||
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. The Company accrues amounts monthly for lease obligations due and paid in March each year. For the three months ended March 31, 2014 we realized a $67,083 decrease in our accrued lease obligations. | ||||||
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_3_Fair_Value_of_Financial
Note 3 - Fair Value of Financial Instruments | 3 Months Ended | ||||||||||||||
Mar. 31, 2015 | |||||||||||||||
Notes | |||||||||||||||
Note 3 - Fair Value of Financial Instruments: | Note 3 - 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: | |||||||||||||||
Fair Value at | Fair Value Measurement at March 31, 2015 | ||||||||||||||
31-Mar-15 | Level 1 | Level 2 | Level 3 | ||||||||||||
Derivative warrant liability | $ | 6,320 | $ | — | $ | — | $ | 6,320 | |||||||
Fair Value at | Fair Value Measurement at December 31, 2014 | ||||||||||||||
31-Dec-14 | Level 1 | Level 2 | Level 3 | ||||||||||||
Derivative warrant liability | $ | 7,320 | $ | — | $ | — | $ | 7,320 | |||||||
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_4_Derivative_Warrant_Liab
Note 4 - Derivative Warrant Liability | 3 Months Ended | |||
Mar. 31, 2015 | ||||
Notes | ||||
Note 4 - Derivative Warrant Liability: | Note 4 – 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, 2013 | $ 17,500 | |||
Total gains (unrealized/realized) included in net loss | (10,180) | |||
Balance, December 31, 2014 | 7,320 | |||
Total gains (unrealized/realized) included in net loss | (1,000) | |||
Balance, March 31, 2015 | $ 6,320 | |||
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 March 31, 2015: | ||||
Fair value assumptions – derivative warrants: | 31-Mar-15 | |||
Risk free interest rate | 0.56% | |||
Expected term (years) | 1.9 | |||
Expected volatility | 143% | |||
Expected dividends | 0% | |||
The following table summarizes the assumptions used to value our derivative warrants at December 31, 2014: | ||||
Fair value assumptions – derivative warrants: | 31-Dec-14 | |||
Risk free interest rate | 0.67% | |||
Expected term (years) | 2.1 | |||
Expected volatility | 112% | |||
Expected dividends | 0% |
Note_5_Convertible_Notes_Payab
Note 5 - Convertible Notes Payable - Related Parties | 3 Months Ended |
Mar. 31, 2015 | |
Notes | |
Note 5 - Convertible Notes Payable - Related Parties: | Note 5 – 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 since the conversion price at inception was greater than the market value of shares that would be issued upon conversion.. | |
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 $1,321,000 and $1,246,000 at March 31, 2015 and December 31, 2014, respectively. | |
Borrowings under our convertible note payable to Mr. Gibbs were $75,000 and $120,000 for the three months ended March 31, 2015 and 2014, respectively, and were generally used to pay certain mining lease obligations as discussed in Note 2 – Mineral Rights and Properties, as well as operating expenses. No principal or interest payments were made to Mr. Gibbs during either the three months ended March 31, 2015 or 2014. | |
Total accrued interest on the notes payable to Mr. Gibbs were $123,607 and $107,926 at March 31, 2015 and December 31, 2014, respectively, and are included in Accrued interest - related parties on the accompanying balance sheets. | |
Interest Expense – Related Parties | |
Total related party interest expense was $15,679 and $12,491 for the three months ended March 31, 2015 and 2014, respectively. |
Note_6_Commitments_and_Conting
Note 6 - Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2015 | |
Notes | |
Note 6 - Commitments and Contingencies: | Note 6 - Commitments and Contingencies |
We are subject to various commitments and contingencies under the Langtry Lease as discussed in Note 2 – Mining Rights and Properties. All commitments and obligations under the Lease have been fulfilled to date. |
Note_7_Sharebased_Compensation
Note 7 - Share-based Compensation | 3 Months Ended | |||||
Mar. 31, 2015 | ||||||
Notes | ||||||
Note 7 - Share-based Compensation | Note 7 - Share-based Compensation | |||||
2004 Equity Incentive Plan | ||||||
A summary of our stock option activity for options issued under the 2004 Equity Incentive Plan as well as options outstanding that were issued outside the Plan for the year ended December 31, 2014 and the three months ended March 31, 2015 is as follows. | ||||||
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, 2013 | 750,000 | $0.29 | ||||
Options granted or expired | - | |||||
Outstanding at December 31, 2014 | 750,000 | $0.29 | ||||
Options granted or expired | - | |||||
Outstanding at March 31, 2015 | 750,000 | $0.29 | ||||
The weighted average contractual life of all outstanding options was 2.7 years at March 31, 2015. No share based compensation expense was recorded for either the three months ended March 31, 2015 or 2014. |
Note_8_Related_Party_Transacti
Note 8 - Related Party Transactions | 3 Months Ended |
Mar. 31, 2015 | |
Notes | |
Note 8 - Related Party Transactions: | Note 8 – 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. | |
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 three months ended March 31, 2015 and 2014, a total of $7,500 was recorded as management fees and are included in general and administrative expenses in the accompanying Consolidated Statements of Operations. As of March 31, 2015 all management fees due Mr. Power had been paid. | |
Accrued Interest - Related Parties | |
At March 31, 2015 and December 31, 2014, Accrued interest - related parties represented accrued interest payable to Mr. Gibbs in the amounts of $123,607 and $107,926, 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. | |
Mr. Power made no advances to the Company during the three months ended March 31, 2015. During the three months ended March 31, 2014, Mr. Power advanced the Company a total of $275, all of which was repaid during the quarter. There were no outstanding advances at either March 31, 2015 or December 31, 2014. | |
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 March 31, 2015 a total of $262 of Company charges was outstanding on his credit cards and is included in the accounts payable balance. 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. |
Note_9_Subsequent_Events
Note 9 - Subsequent Events | 3 Months Ended |
Mar. 31, 2015 | |
Notes | |
Note 9 - Subsequent Events | Note 9 - Subsequent Events |
Subsequent to March 31, 2015 the Company borrowed an additional $15,000 under the credit agreement from Mr. Gibbs. | |
Effective April 1, 2015, the Company executed a convertible promissory note (the “Note”) in the principal amount of $51,270.41 in favor of Clifford Neuman, the Company’s legal counsel, representing accrued and unpaid fees for past legal services. The Note accrues interest at the rate of 6% per annum, compounded monthly, and is due on demand. The principal and accrued interest due under the Note may be converted, at the option of the holder, into shares of the Company’s common stock at a conversion price of $0.0735 per share, which represented the market price of the Company’s common stock on the date the Note was made. The conversion price is subject to adjustment in the event the Company sells shares of common stock or common stock equivalent at a price below the conversion price. |
Note_1_Organization_Basis_of_P1
Note 1 - Organization, Basis of Presentation, and Going Concern: Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
Policies | |
Basis of Presentation | Basis of Presentation |
We prepared these condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”). The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with GAAP for interim financial information in accordance with Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In our opinion, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three month period ended March 31, 2015 are not necessarily indicative of the results for the full year. While we believe that the disclosures presented herein are adequate and not misleading, these interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the footnotes thereto contained in our Annual Report on Form 10-K for the year ended December 31, 2014. |
Note_1_Organization_Basis_of_P2
Note 1 - Organization, Basis of Presentation, and Going Concern: Liquidity and Going Concern (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
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 March 31, 2015, we had not yet achieved profitable operations and we have accumulated losses of $6,365,048 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 $179,000 available under the credit line at March 31, 2015. 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_Mineral_Rights_and_Prop1
Note 2 - Mineral Rights and Properties: Schedule of Mineral Rights and Properties (Tables) | 3 Months Ended | |||||
Mar. 31, 2015 | ||||||
Tables/Schedules | ||||||
Schedule of Mineral Rights and Properties | ||||||
31-Mar-15 | 31-Dec-14 | |||||
Mineral properties | $ | $ 156,707 | $ | $ 156,707 | ||
Mineral rights – Langtry Project | 1,632,030 | 1,602,113 | ||||
Mineral rights and properties | $ | $ 1,788,737 | $ | $ 1,758,820 |
Note_3_Fair_Value_of_Financial1
Note 3 - Fair Value of Financial Instruments: Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Tables) | 3 Months Ended | ||||||||||||||
Mar. 31, 2015 | |||||||||||||||
Tables/Schedules | |||||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | |||||||||||||||
Fair Value at | Fair Value Measurement at March 31, 2015 | ||||||||||||||
31-Mar-15 | Level 1 | Level 2 | Level 3 | ||||||||||||
Derivative warrant liability | $ | 6,320 | $ | — | $ | — | $ | 6,320 | |||||||
Fair Value at | Fair Value Measurement at December 31, 2014 | ||||||||||||||
31-Dec-14 | Level 1 | Level 2 | Level 3 | ||||||||||||
Derivative warrant liability | $ | 7,320 | $ | — | $ | — | $ | 7,320 |
Note_4_Derivative_Warrant_Liab1
Note 4 - Derivative Warrant Liability: Schedule of Change in fair value of derivative warrant liability (Tables) | 3 Months Ended | |
Mar. 31, 2015 | ||
Tables/Schedules | ||
Schedule of Change in fair value of derivative warrant liability | ||
Balance, December 31, 2013 | $ 17,500 | |
Total gains (unrealized/realized) included in net loss | (10,180) | |
Balance, December 31, 2014 | 7,320 | |
Total gains (unrealized/realized) included in net loss | (1,000) | |
Balance, March 31, 2015 | $ 6,320 |
Note_4_Derivative_Warrant_Liab2
Note 4 - Derivative Warrant Liability: Schedule of Assumptions used to value derivative warrants (Tables) | 3 Months Ended | |||
Mar. 31, 2015 | ||||
Tables/Schedules | ||||
Schedule of Assumptions used to value derivative warrants | ||||
Fair value assumptions – derivative warrants: | 31-Mar-15 | |||
Risk free interest rate | 0.56% | |||
Expected term (years) | 1.9 | |||
Expected volatility | 143% | |||
Expected dividends | 0% | |||
The following table summarizes the assumptions used to value our derivative warrants at December 31, 2014: | ||||
Fair value assumptions – derivative warrants: | 31-Dec-14 | |||
Risk free interest rate | 0.67% | |||
Expected term (years) | 2.1 | |||
Expected volatility | 112% | |||
Expected dividends | 0% |
Note_7_Sharebased_Compensation1
Note 7 - Share-based Compensation: Schedule of Share-based Compensation, Stock Options, Activity (Tables) | 3 Months Ended | |||||
Mar. 31, 2015 | ||||||
Tables/Schedules | ||||||
Schedule of Share-based Compensation, Stock Options, Activity | ||||||
Shares | Weighted Average Exercise Price | |||||
Outstanding at December 31, 2013 | 750,000 | $0.29 | ||||
Options granted or expired | - | |||||
Outstanding at December 31, 2014 | 750,000 | $0.29 | ||||
Options granted or expired | - | |||||
Outstanding at March 31, 2015 | 750,000 | $0.29 |
Note_1_Organization_Basis_of_P3
Note 1 - Organization, Basis of Presentation, and Going Concern (Details) | 3 Months Ended |
Mar. 31, 2015 | |
Details | |
Entity Incorporation, State Country Name | Delaware |
Entity Incorporation, Date of Incorporation | 23-Dec-03 |
Note_1_Organization_Basis_of_P4
Note 1 - Organization, Basis of Presentation, and Going Concern: Liquidity and Going Concern (Details) (USD $) | 63 Months Ended |
Mar. 31, 2015 | |
Details | |
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | ($6,365,048) |
Note_2_Mineral_Rights_and_Prop2
Note 2 - Mineral Rights and Properties: Schedule of Mineral Rights and Properties (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Mineral properties | ||
Property, Plant and Equipment, Gross | $156,707 | $156,707 |
Mineral rights - Langtry Project | ||
Property, Plant and Equipment, Gross | 1,632,030 | 1,602,113 |
Mineral rights and properties | ||
Property, Plant and Equipment, Gross | $1,788,737 | $1,758,820 |
Note_2_Mineral_Rights_and_Prop3
Note 2 - Mineral Rights and Properties: Mineral Properties (Details) (Mineral properties - Section 13 Property, USD $) | 3 Months Ended |
Mar. 31, 2015 | |
Mineral properties - Section 13 Property | |
Significant Acquisitions and Disposals, Description | we purchased 661 acres of land (“Section 13 Property”) in fee simple |
Significant Acquisitions and Disposals, Acquisition Costs or Sale Proceeds | $135,684 |
Note_2_Mineral_Rights_and_Prop4
Note 2 - Mineral Rights and Properties (Details) (USD $) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2014 | |
Mineral rights - Langtry Project | ||
Significant Acquisitions and Disposals, Description | 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 | |
Mineral rights and properties | ||
Operating Leases, Rent Expense | $29,917 | $69,523 |
Note_3_Fair_Value_of_Financial2
Note 3 - Fair Value of Financial Instruments: Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Derivative warrant liability | $6,320 | $7,320 |
Fair Value, Inputs, Level 3 | ||
Derivative warrant liability | $6,320 | $7,320 |
Note_4_Derivative_Warrant_Liab3
Note 4 - Derivative Warrant Liability: Schedule of Change in fair value of derivative warrant liability (Details) (USD $) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2014 | |
Details | ||
Derivative Warrant Liability, Fair Value, Starting Balance | ($7,320) | ($17,500) |
Derivative Warrant Liability, Fair Value, Total (gains) or losses (realized/unrealized) included in net income (loss) | -1,000 | -10,180 |
Derivative Warrant Liability, Fair Value, Ending Balance | ($6,320) | ($7,320) |
Note_4_Derivative_Warrant_Liab4
Note 4 - Derivative Warrant Liability: Schedule of Assumptions used to value derivative warrants (Details) (Derivative Warrants) | 0 Months Ended | |
Mar. 31, 2015 | Dec. 31, 2014 | |
Derivative Warrants | ||
Fair Value Assumptions, Risk Free Interest Rate | 0.56% | 0.67% |
Fair Value Assumptions, Expected Term | 1 year 10 months 24 days | 2 years 1 month 6 days |
Fair Value Assumptions, Expected Volatility Rate | 143.00% | 112.00% |
Fair Value Assumptions, Expected Dividend Rate | 0.00% | 0.00% |
Note_5_Convertible_Notes_Payab1
Note 5 - Convertible Notes Payable - Related Parties (Details) (USD $) | 3 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
John D. Gibbs, a significant shareholder | |||
Line of Credit Facility, Initiation Date | 18-Jul-12 | ||
Line of Credit Facility, Affiliated Borrower | Mr. Gibbs, a significant shareholder | ||
Line of Credit Facility, Maximum Borrowing Capacity | $1,000,000 | ||
Line of Credit Facility, Interest Rate Description | 5% | ||
Line of Credit Facility, Expiration Date | 31-Jul-14 | ||
Line of Credit Facility, Covenant Compliance | 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) | ||
Line of Credit Facility, Amount Outstanding | 1,321,000 | 1,246,000 | |
Deposit Liabilities, Accrued Interest | 123,607 | 107,926 | |
Related Parties | |||
Interest Expense | $15,679 | $12,491 |
Note_7_Sharebased_Compensation2
Note 7 - Share-based Compensation: Schedule of Share-based Compensation, Stock Options, Activity (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Details | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Beginning Balance | 750,000 | 750,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price, Beginning Balance | $0.29 | $0.29 |
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_7_Sharebased_Compensation3
Note 7 - Share-based Compensation (Details) | 3 Months Ended |
Mar. 31, 2015 | |
Details | |
Weighted average contractual life of all outstanding options | 2 years 8 months 12 days |
Note_8_Related_Party_Transacti1
Note 8 - Related Party Transactions: Management Fees - Related Parties (Details) (Mr. Power, USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Mr. Power | ||
Management Fee, Amount Paid | $7,500 | $7,500 |
Note_8_Related_Party_Transacti2
Note 8 - Related Party Transactions (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Dec. 31, 2014 | |
Accounts payable | $102,775 | $68,726 |
Credit Card | ||
Accounts payable | 262 | 806 |
Mr. Gibbs | ||
Interest Payable, Current | 123,607 | 107,926 |
Mr. Power | ||
Advances from Related Parties | $275 |
Note_9_Subsequent_Events_Detai
Note 9 - Subsequent Events (Details) | 3 Months Ended |
Mar. 31, 2015 | |
Event 1 | |
Subsequent Event, Date | 31-Mar-15 |
Subsequent Event, Description | Company borrowed an additional $15,000 under the credit agreement from Mr. Gibbs |
Event 2 | |
Subsequent Event, Date | 1-Apr-15 |
Subsequent Event, Description | the Company executed a convertible promissory note (the “Note”) in the principal amount of $51,270.41 in favor of Clifford Neuman, the Company’s legal counsel, representing accrued and unpaid fees for past legal services |