Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Nov. 09, 2015 | |
Document and Entity Information: | ||
Entity Registrant Name | Athena Silver Corporation | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2015 | |
Trading Symbol | ahnr | |
Amendment Flag | false | |
Entity Central Index Key | 1,304,409 | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 36,202,320 | |
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 | 2,015 | |
Document Fiscal Period Focus | Q3 | |
Entity Incorporation, State Country Name | Delaware | |
Entity Incorporation, Date of Incorporation | Dec. 23, 2003 |
CONSOLIDATED BALANCE SHEETS (Se
CONSOLIDATED BALANCE SHEETS (September 30, 2015 Unaudited) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 | |||
Current Assets | |||||
Cash and cash equivalents | $ 1,135 | $ 8,122 | |||
Prepaid expenses | 2,820 | ||||
Total current assets | 3,955 | 8,122 | |||
Mineral rights and properties - unproven | 1,975,342 | 1,758,820 | |||
Total assets | 1,979,297 | 1,766,942 | |||
Current liabilities: | |||||
Accounts payable | 61,089 | 68,726 | |||
Accrued liabilities | 30,167 | 23,750 | |||
Accrued interest | 1,557 | ||||
Accrued interest - related parties | 158,181 | 107,926 | |||
Advances payable - related parties | 750 | ||||
Deed amendment liability - short-term portion | 10,000 | ||||
Derivative warrant liability | 9,050 | 7,320 | |||
Convertible note payable | 51,270 | ||||
Convertible notes payable - related parties | 1,439,000 | 1,246,000 | |||
Total current liabilities | 1,761,064 | 1,453,722 | |||
Deed amendment liability | 130,000 | ||||
Total Liabilities | $ 1,891,064 | $ 1,453,722 | |||
Commitments and contingencies | |||||
Shareholders' equity: | |||||
Preferred stock | [1] | ||||
Common stock | $ 3,620 | [2] | $ 3,600 | [3] | |
Additional paid-in capital | 6,602,028 | 6,580,048 | |||
Accumulated deficit | (6,517,415) | (6,270,428) | |||
Total shareholders' equity | 88,233 | 313,220 | |||
Total liabilities and shareholders' equity | $ 1,979,297 | $ 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 - P
CONSOLIDATED BALANCE SHEETS - PARENTHETICAL (September 30, 2015 Unaudited) - $ / shares | Sep. 30, 2015 | Dec. 31, 2014 |
CONSOLIDATED BALANCE SHEETS | ||
Preferred Stock, Par Value | $ 0.0001 | $ 0.0001 |
Preferred Stock, Shares Authorized | 5,000,000 | 5,000,000 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Common Stock, Par Value | $ 0.0001 | $ 0.0001 |
Common Stock, Shares Authorized | 100,000,000 | 100,000,000 |
Common Stock, Shares Issued | 36,202,320 | 36,002,320 |
Common Stock, Shares Outstanding | 36,202,320 | 36,002,320 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Operating expenses: | ||||
Exploration costs | $ 22,288 | $ 4,178 | $ 86,545 | $ 4,641 |
General and administrative expenses | 28,125 | 27,948 | 106,902 | 102,258 |
Total operating expenses | 50,413 | 32,126 | 193,447 | 106,899 |
Operating Income (Loss) | (50,413) | (32,126) | (193,447) | (106,899) |
Other income (expense): | ||||
Interest expense | (18,548) | (12,682) | (83,520) | (41,716) |
Change in fair value of derivative warrant liability | 28,900 | 13,620 | 29,980 | (1,350) |
Total other income (expense) | 10,352 | 938 | (53,540) | (43,006) |
Net Income (Loss) | $ (40,061) | $ (31,188) | $ (246,987) | $ (149,965) |
Basic and diluted net income (loss) per common share | $ 0 | $ 0 | $ (0.01) | $ 0 |
Basic and diluted weighted-average common shares outstanding | 36,202,320 | 36,002,320 | 36,181,807 | 36,002,320 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | |
Cash flows from operating activities: | |||
Net Income (Loss) | $ (40,061) | $ (246,987) | $ (149,965) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Amortization of debt discount | 31,710 | ||
Change in fair value of derivative warrant liability | (29,980) | 1,350 | |
Changes in operating assets and liabilities: | |||
Change in Prepaid expenses | (2,820) | ||
Change in Accounts payable | 35,633 | (11,458) | |
Change in Accrued interest - related parties | 50,255 | 41,717 | |
Change in Accrued liabilities and other liabilities | 10,057 | ||
Net cash used in operating activities | (152,132) | (118,356) | |
Cash flows from investing activities: | |||
Acquisition of mineral rights | (48,605) | (116,603) | |
Net cash used in investing activities | (48,605) | (116,603) | |
Cash flows from financing activities: | |||
Net change in advances payable - related parties | 750 | ||
Borrowings from notes payable - related parties | 193,000 | 221,000 | |
Net cash provided by financing activities | 193,750 | 221,000 | |
Net increase (decrease) in cash | (6,987) | (13,959) | |
Cash at beginning of period | 8,122 | 16,934 | |
Cash at end of period | 1,135 | 1,135 | 2,975 |
Supplemental disclosure of non-cash investing and financing activities: | |||
Increase (Decrease) in accrued liabilities applicable to mineral rights | 5,917 | $ (17,083) | |
Conversion of accounts payable to convertible note payable | 51,270 | ||
Common stock issued for mineral rights | 22,000 | ||
Deed amendment liabilities | $ 140,000 | $ 140,000 |
Note 1 - Organization, Basis of
Note 1 - Organization, Basis of Presentation, and Going Concern | 9 Months Ended |
Sep. 30, 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, 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 and nine month periods ended September 30, 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 September 30, 2015, we had not yet achieved profitable operations and we have accumulated losses of $6,517,415 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 $61,000 available under the credit line at September 30, 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 Pro
Note 2 - Mineral Rights and Properties | 9 Months Ended |
Sep. 30, 2015 | |
Notes | |
Note 2 - Mineral Rights and Properties: | Note 2 Mineral Rights and Properties Our mineral rights and mineral properties consist of: September 30, 2015 December 31, 2014 Mineral properties $ 156,707 $ 156,707 Mineral rights Langtry Project 1,818,635 1,602,113 Mineral rights and properties $ 1,975,342 $ 1,758,820 Mineral Properties In 2014, we purchased of 160 acres of land (Castle Rock), 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: · · · · · · · · · · · · · · · 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. In August 2015 the Company acquired by deed conveyance 15 unpatented mining claims in the Calico Mining District in San Bernardino, California from a third party. The claims are contiguous to our existing unpatented and patented claims known as the Langtry Property. In consideration of the conveyance, the Company agreed to pay $10,000, payable in equal monthly installments of $1,000 beginning on September 1, 2015. As of September 30, 2015, $2,000 of this obligation has been paid. The remaining $8,000 due under the agreement is included in accounts payable in the accompanying balance sheet at September 30, 2015. During the nine months ended September 30, 2015 we capitalized a total of $216,522 of lease rental obligations and payments related to Amendment No. 3 of the Lease, the deed amendment with Mobil, and the acquisition of other unpatented mining claims, all as discussed above. The total amount capitalized 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 nine months ended September 30, 2015 we realized a $5,917 increase 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 nine months ended September 30, 2014 we realized a $17,083 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 Financia
Note 3 - Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 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 managements 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 September 30, 2015 Fair Value Measurement at September 30, 2015 Level 1 Level 2 Level 3 Derivative liability - Warrants $ 1,070 $ $ $ 1,070 Derivative liability Convertible note payable $ 7,980 $ $ $ 7,980 Carrying Value at December 31, 2014 Fair Value Measurement at December 31, 2014 Level 1 Level 2 Level 3 Derivative liability - Warrants $ 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 Liabilities
Note 4 - Derivative Liabilities and Note Payable | 9 Months Ended |
Sep. 30, 2015 | |
Notes | |
Note 4 - Derivative Liabilities and Note Payable | Note 4 Derivative Liabilities and Note Payable Warrants: 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 (6,250) Balance, September 30, 2015 $ 1,070 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 September 30, 2015: Fair value assumptions derivative warrants: September 30, 2015 Risk free interest rate 0.33% Expected term (years) 1.4 Expected volatility 142% Expected dividends 0% The following table summarizes the assumptions used to value our derivative warrants at December 31, 2014: Fair value assumptions derivative warrants: December 31, 2014 Risk free interest rate 0.67% Expected term (years) 2.1 Expected volatility 112% Expected dividends 0% Convertible Note Payable: Effective April 1, 2015, the Company executed a convertible promissory note (the Note) in the principal amount of $51,270 in favor of Clifford Neuman, the Companys legal counsel, representing accrued and unpaid fees for past legal services. The Note accrues interest at the rate of 6% per annum, compounded quarterly, 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 Companys common stock at a conversion price of $0.0735 per share, which represented the market price of the Companys 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. The Note contains certain anti-dilution provisions that would reduce the conversion price should the Company issue common stock equivalents at a price less than the Note conversion price. Accordingly, the conversion features of the Note are considered a discount to the Note. However, since the Note is payable upon demand by the note holder, the value of the discount is considered interest expense at the time of its inception. The Note is evaluated quarterly, and upon any quarterly valuations in which the value of the discount changes we recognize a gain or loss due to a decrease or increase in the fair value of the derivative liability, respectively. At the inception of the Note, we recognized $31,710 of interest expense representing the amortization of the discount and the establishment of derivative liability. As a result of the quarterly valuations, total gains of $23,730 have been recorded due to decreases in the fair value of the derivative. The change in fair value of our derivative liability convertible note payable is as follows: Balance, December 31,2014 $ - Valuation at inception 31,710 Total gains (realized/unrealized) included in net loss (23,730) Balance, September 30,2015 $ 7,980 We estimate the fair value of this derivative at each balance sheet date until such time the Note is paid or converted. We estimated the fair value of the derivative on the date of issuance and at September 30, 2015 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 Note. 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 Note. The following table summarizes the assumptions used to value the derivative Note discount at inception on April 1, 2015: Fair value assumptions derivative: Inception: April 1, 2015 Risk free interest rate 0.27% Expected term (years) 1.0 Expected volatility 155% Expected dividends 0% The following table summarizes the assumptions used to value the derivative Note discount at September 30, 2015: Fair value assumptions derivative: September 30, 2015 Risk free interest rate 0.33% Expected term (years) 1.0 Expected volatility 138% Expected dividends 0% A total of $1,557 of interest has accrued on the Note and is included in Accrued interest on the accompanying balance sheet at September 30, 2015. |
Note 5 - Convertible Notes Paya
Note 5 - Convertible Notes Payable - Related Parties | 9 Months Ended |
Sep. 30, 2015 | |
Notes | |
Note 5 - Convertible Notes Payable - Related Parties: | N ote 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 $1,439,000 and $1,246,000 at September 30, 2015 and December 31, 2014, respectively. Borrowings under our convertible note payable to Mr. Gibbs were $193,000 and $221,000 for the nine months ended September 30, 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 nine months ended September 30, 2015 or 2014. Total accrued interest on the notes payable to Mr. Gibbs were $158,181 and $107,926 at September 30, 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 $50,255 and $41,716 for the nine months ended September 30, 2015 and 2014, respectively. Total related party interest expense was $17,750 and $12,682 for the three months ended September 30, 2015 and 2014, respectively. |
Note 6 - Commitments and Contin
Note 6 - Commitments and Contingencies | 9 Months Ended |
Sep. 30, 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 - Share-based Compensati
Note 7 - Share-based Compensation | 9 Months Ended |
Sep. 30, 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 nine months ended September 30, 2015 is as follows. Stock Options A summary of our stock option activity for the nine months ended September 30, 2015 and for the year ended December 31, 2014 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 September 30, 2015 750,000 $ 0.29 The weighted average contractual life of all outstanding options was 2.2 years at September 30, 2015. No share based compensation expense was recorded for either the three or nine months ended September 30, 2015 or 2014. |
Note 8 - Related Party Transact
Note 8 - Related Party Transactions | 9 Months Ended |
Sep. 30, 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 5 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 and nine months ended September 30, 2015 and 2014, a total of $7,500 and $22,500 was recorded as management fees and are included in general and administrative expenses in the accompanying Consolidated Statements of Operations. As of September 30, 2015, $2,500 of management fees due Mr. Power had not been paid and are included in accrued liabilities on the accompanying balance sheet at September 30, 2015. Accrued Interest - Related Parties At September 30, 2015 and December 31, 2014, Accrued interest - related parties represented accrued interest payable to Mr. Gibbs in the amounts of $158,181 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. During the nine months ended September 30, 2015 and 2014, Mr. Power advanced the Company a total of $1,805 and $334, respectively. As of September 30, 2015, $750 of the advances had not been repaid and are included as Advances payable related parties on the accompanying balance sheet at September 30, 2015. There were no outstanding advances at 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 September 30, 2015, a total of $686 of charges was due Mr. Power and is included in Accounts payable on the accompanying balance sheet at September 30, 2015. At December 31, 2014 a total of $806 of Company charges was outstanding on his credit cards. |
Note 9 - Subsequent Events
Note 9 - Subsequent Events | 9 Months Ended |
Sep. 30, 2015 | |
Notes | |
Note 9 - Subsequent Events | Note 9 - Subsequent Events Subsequent to September 30, 2015 the Company borrowed an additional $25,000 under the credit agreement from Mr. Gibbs. |
Note 1 - Organization, Basis 15
Note 1 - Organization, Basis of Presentation, and Going Concern: Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 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 and nine month periods ended September 30, 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 16
Note 1 - Organization, Basis of Presentation, and Going Concern: Liquidity and Going Concern (Policies) | 9 Months Ended |
Sep. 30, 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 September 30, 2015, we had not yet achieved profitable operations and we have accumulated losses of $6,517,415 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 $61,000 available under the credit line at September 30, 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 P17
Note 2 - Mineral Rights and Properties: Schedule of Mineral Rights and Properties (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Tables/Schedules | |
Schedule of Mineral Rights and Properties | September 30, 2015 December 31, 2014 Mineral properties $ 156,707 $ 156,707 Mineral rights Langtry Project 1,818,635 1,602,113 Mineral rights and properties $ 1,975,342 $ 1,758,820 |
Note 3 - Fair Value of Financ18
Note 3 - Fair Value of Financial Instruments: Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Tables/Schedules | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | Carrying Value at September 30, 2015 Fair Value Measurement at September 30, 2015 Level 1 Level 2 Level 3 Derivative liability - Warrants $ 1,070 $ $ $ 1,070 Derivative liability Convertible note payable $ 7,980 $ $ $ 7,980 Carrying Value at December 31, 2014 Fair Value Measurement at December 31, 2014 Level 1 Level 2 Level 3 Derivative liability - Warrants $ 7,320 $ $ $ 7,320 |
Note 4 - Derivative Liabiliti19
Note 4 - Derivative Liabilities and Note Payable: Schedule of Change in fair value of derivative warrant liability (Tables) | 9 Months Ended |
Sep. 30, 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 (6,250) Balance, September 30, 2015 $ 1,070 |
Note 4 - Derivative Liabiliti20
Note 4 - Derivative Liabilities and Note Payable: Schedule of Assumptions used to value derivative warrants (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Tables/Schedules | |
Schedule of Assumptions used to value derivative warrants | Fair value assumptions derivative warrants: September 30, 2015 Risk free interest rate 0.33% Expected term (years) 1.4 Expected volatility 142% Expected dividends 0% |
Note 4 - Derivative Liabiliti21
Note 4 - Derivative Liabilities and Note Payable: Schedule of Change in Fair Value of Derivative Liability - Convertible Note Payable (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Tables/Schedules | |
Schedule of Change in Fair Value of Derivative Liability - Convertible Note Payable | Balance, December 31,2014 $ - Valuation at inception 31,710 Total gains (realized/unrealized) included in net loss (23,730) Balance, September 30,2015 $ 7,980 |
Note 4 - Derivative Liabiliti22
Note 4 - Derivative Liabilities and Note Payable: Schedule of assumptions used to value Derivative Note discount (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Tables/Schedules | |
Schedule of assumptions used to value Derivative Note discount | Fair value assumptions derivative: Inception: April 1, 2015 Risk free interest rate 0.27% Expected term (years) 1.0 Expected volatility 155% Expected dividends 0% The following table summarizes the assumptions used to value the derivative Note discount at September 30, 2015: Fair value assumptions derivative: September 30, 2015 Risk free interest rate 0.33% Expected term (years) 1.0 Expected volatility 138% Expected dividends 0% |
Note 7 - Share-based Compensa23
Note 7 - Share-based Compensation: Schedule of Share-based Compensation, Stock Options, Activity (Tables) | 9 Months Ended |
Sep. 30, 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 September 30, 2015 750,000 $ 0.29 |
Note 1 - Organization, Basis 24
Note 1 - Organization, Basis of Presentation, and Going Concern (Details) | 9 Months Ended |
Sep. 30, 2015 | |
Details | |
Entity Incorporation, State Country Name | Delaware |
Entity Incorporation, Date of Incorporation | Dec. 23, 2003 |
Note 1 - Organization, Basis 25
Note 1 - Organization, Basis of Presentation, and Going Concern: Liquidity and Going Concern (Details) | 69 Months Ended |
Sep. 30, 2015USD ($) | |
Details | |
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | $ (6,517,415) |
Note 2 - Mineral Rights and P26
Note 2 - Mineral Rights and Properties: Schedule of Mineral Rights and Properties (Details) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Mineral properties | ||
Property, Plant and Equipment, Gross | $ 156,707 | $ 156,707 |
Mineral rights - Langtry Project | ||
Property, Plant and Equipment, Gross | 1,818,635 | 1,602,113 |
Mineral rights and properties | ||
Property, Plant and Equipment, Gross | $ 1,975,342 | $ 1,758,820 |
Note 2 - Mineral Rights and P27
Note 2 - Mineral Rights and Properties: Mineral Properties (Details) - Mineral properties - Section 13 Property | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Noncash or Part Noncash Acquisition, Description | we purchased 661 acres of land (“Section 13 Property”) in fee simple |
Payments for (Proceeds from) Acquisition | $ 135,684 |
Note 2 - Mineral Rights and P28
Note 2 - Mineral Rights and Properties (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | |
Mineral rights - Langtry Project | ||
Noncash or Part Noncash Acquisition, 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 | $ 216,522 | $ 69,523 |
Note 3 - Fair Value of Financ29
Note 3 - Fair Value of Financial Instruments: Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Details) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Derivative warrant liability | $ 1,070 | $ 7,320 |
Derivative liability - Convertible note payable | 7,980 | |
Fair Value, Inputs, Level 3 | ||
Derivative warrant liability | 1,070 | $ 7,320 |
Derivative liability - Convertible note payable | $ 7,980 |
Note 4 - Derivative Liabiliti30
Note 4 - Derivative Liabilities and Note Payable: Schedule of Change in fair value of derivative warrant liability (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 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) | (6,250) | (10,180) |
Derivative Warrant Liability, Fair Value, Ending Balance | $ (1,070) | $ (7,320) |
Note 4 - Derivative Liabiliti31
Note 4 - Derivative Liabilities and Note Payable: Schedule of Assumptions used to value derivative warrants (Details) - Derivative Warrants | Sep. 30, 2015 | Dec. 31, 2014 |
Fair Value Assumptions, Risk Free Interest Rate | 0.33% | 0.67% |
Fair Value Assumptions, Expected Term | 1 year 4 months 24 days | 2 years 1 month 6 days |
Fair Value Assumptions, Expected Volatility Rate | 142.00% | 112.00% |
Fair Value Assumptions, Expected Dividend Rate | 0.00% | 0.00% |
Note 4 - Derivative Liabiliti32
Note 4 - Derivative Liabilities and Note Payable (Details) - USD ($) | Sep. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 |
Derivative Note discount | |||
Fair Value Assumptions, Risk Free Interest Rate | 0.33% | 0.27% | |
Fair Value Assumptions, Expected Term | 1 year | 1 year | |
Fair Value Assumptions, Expected Volatility Rate | 138.00% | 155.00% | |
Fair Value Assumptions, Expected Dividend Rate | 0.00% | 0.00% | |
Derivative Note, Accrued Interest | $ 1,557 | ||
Derivative Warrants | |||
Fair Value Assumptions, Risk Free Interest Rate | 0.33% | 0.67% | |
Fair Value Assumptions, Expected Term | 1 year 4 months 24 days | 2 years 1 month 6 days | |
Fair Value Assumptions, Expected Volatility Rate | 142.00% | 112.00% | |
Fair Value Assumptions, Expected Dividend Rate | 0.00% | 0.00% |
Note 4 - Derivative Liabiliti33
Note 4 - Derivative Liabilities and Note Payable: Schedule of Change in Fair Value of Derivative Liability - Convertible Note Payable (Details) | 6 Months Ended |
Sep. 30, 2015USD ($) | |
Details | |
Fair Value of Derivative Liability, Convertible Note Payable, Balance at Inception | $ 31,710 |
Derivative Liability, Convertible Note Payable, Total losses (realized/unrealized) included in net loss | (23,730) |
Fair Value of Derivative Liability, Convertible Note Payable, Balance at End of Period | $ 7,980 |
Note 4 - Derivative Liabiliti34
Note 4 - Derivative Liabilities and Note Payable: Schedule of assumptions used to value Derivative Note discount (Details) - Derivative Note discount | Sep. 30, 2015 | Mar. 31, 2015 |
Fair Value Assumptions, Risk Free Interest Rate | 0.33% | 0.27% |
Fair Value Assumptions, Expected Term | 1 year | 1 year |
Fair Value Assumptions, Expected Volatility Rate | 138.00% | 155.00% |
Fair Value Assumptions, Expected Dividend Rate | 0.00% | 0.00% |
Note 5 - Convertible Notes Pa35
Note 5 - Convertible Notes Payable - Related Parties (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
John D. Gibbs, a significant shareholder | |||
Line of Credit Facility, Initiation Date | Jul. 18, 2012 | ||
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 | Jul. 31, 2014 | ||
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, Fair Value of Amount Outstanding | $ 1,439,000 | $ 1,246,000 | |
Deposit Liabilities, Accrued Interest | 158,181 | $ 107,926 | |
Related Parties | |||
Interest Expense | $ 50,255 | $ 41,716 |
Note 7 - Share-based Compensa36
Note 7 - Share-based Compensation: Schedule of Share-based Compensation, Stock Options, Activity (Details) | Sep. 30, 2015$ / sharesshares |
Details | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Beginning Balance | shares | 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, Outstanding, Number, Ending Balance | shares | 750,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price, Ending Balance | $ 0.29 |
Note 7 - Share-based Compensa37
Note 7 - Share-based Compensation (Details) | 9 Months Ended |
Sep. 30, 2015 | |
Details | |
Weighted average contractual life of all outstanding options | 2 years 2 months 12 days |
Note 8 - Related Party Transa38
Note 8 - Related Party Transactions: Management Fees - Related Parties (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Mr. Power | ||
Management Fee Expense | $ 7,500 | $ 22,500 |
Note 8 - Related Party Transa39
Note 8 - Related Party Transactions (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Accrued interest | $ 1,557 | ||
Accounts payable | 61,089 | $ 68,726 | |
Credit Card | |||
Accounts payable | 686 | 806 | |
Mr. Gibbs | |||
Accrued interest | 158,181 | $ 107,926 | |
Mr. Power | |||
Advances from Related Parties | $ 1,805 | $ 334 |
Note 9 - Subsequent Events (Det
Note 9 - Subsequent Events (Details) | 9 Months Ended |
Sep. 30, 2015 | |
Event 1 | |
Subsequent Event, Description | Company borrowed an additional $25,000 under the credit agreement from Mr. Gibbs. |