Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Nov. 08, 2018 | |
Document And Entity Information | ||
Entity Registrant Name | Athena Silver Corporation | |
Entity Central Index Key | 1,304,409 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 36,532,320 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,018 | |
Entity Small Business | true | |
Entity Emerging Growth | true | |
Entity ExTransition Period | false |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Current Assets | ||
Cash and cash equivalents | $ 608 | $ 664 |
Prepaid expenses | 2,500 | 0 |
Total current assets | 3,108 | 664 |
Mineral rights and properties - unproven, net of impairment of $1,885,816 | 248,472 | 227,647 |
Total assets | 251,580 | 228,311 |
Current liabilities: | ||
Accounts payable | 31,827 | 4,004 |
Accrued liabilities - related parties | 65,000 | 64,500 |
Accrued interest | 11,873 | 9,082 |
Accrued interest - related parties | 423,191 | 349,508 |
Advances payable - related party | 30,100 | 25,000 |
Deed amendment liability - short-term portion | 10,000 | 10,000 |
Derivative liabilities | 31,270 | 58,340 |
Convertible note payable | 51,270 | 51,270 |
Note payable - related party | 0 | 17,509 |
Convertible credit facility - related party | 2,032,120 | 1,890,620 |
Total current liabilities | 2,686,651 | 2,479,833 |
Deed amendment liability | 100,000 | 110,000 |
Total liabilities | 2,786,651 | 2,589,833 |
Commitments and contingencies | ||
Stockholders' equity (deficit): | ||
Preferred stock, $.0001 par value, 5,000,000 shares authorized, none outstanding | 0 | 0 |
Common stock - $0.0001 par value; 100,000,000 shares authorized, 36,532,320 and 36,202,320 issued and outstanding | 3,653 | 3,620 |
Additional paid-in capital | 6,618,495 | 6,602,028 |
Accumulated deficit | (9,157,219) | (8,967,170) |
Total stockholders' deficit | (2,535,071) | (2,361,522) |
Total liabilities and stockholders' deficit | $ 251,580 | $ 228,311 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Impairment of mineral rights and properties | $ 1,885,816 | $ 1,885,816 |
Preferred stock, par value | $ .0001 | $ .0001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ .0001 | $ .0001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares outstanding | 36,532,320 | 36,202,320 |
Common stock, shares issued | 36,532,320 | 36,202,320 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Operating expenses: | ||||
Exploration costs | $ 0 | $ 0 | $ 20,825 | $ 761 |
General and administrative expenses | 39,257 | 36,835 | 119,381 | 110,161 |
Total operating expenses | 39,257 | 36,835 | 140,206 | 110,922 |
Operating loss | (39,257) | (36,835) | (140,206) | (110,922) |
Other income (expense): | ||||
Interest expense | (26,420) | (24,736) | (76,913) | (71,764) |
Change in fair value of derivative liabilities | 7,630 | 65,970 | 27,070 | 37,410 |
Total other income (expense) | (18,790) | 41,234 | (49,843) | (34,354) |
Net income (loss) | $ (58,047) | $ 4,399 | $ (190,049) | $ (145,276) |
Basic and diluted net loss per common share | $ 0 | $ 0 | $ (0.01) | $ 0 |
Basic and diluted weighted-average common shares outstanding | 36,532,320 | 36,202,320 | 36,369,133 | 36,202,320 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash flows from operating activities: | ||
Net loss | $ (190,049) | $ (145,276) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Change in fair value of derivative liabilities | (27,070) | (37,410) |
Changes in operating assets and liabilities: | ||
Prepaid expenses | (2,500) | (2,500) |
Accounts payable | 27,823 | 2,010 |
Accrued interest - related parties | 73,683 | 67,679 |
Accrued liabilities and other liabilities | 19,791 | 22,628 |
Net cash used in operating activities | (98,322) | (92,869) |
Cash flows from investing activities: | ||
Acquisition of mineral rights | (20,825) | (44,675) |
Net cash used in investing activities | (20,825) | (44,675) |
Cash flows from financing activities: | ||
Proceeds from advances from related parties | 12,350 | 4,700 |
Payments on advances from related parties | (7,250) | (4,700) |
Borrowings from credit facility and notes payable - related parties | 141,500 | 165,000 |
Payment on deed amendment liability | (10,000) | (10,000) |
Payments on Note payable - related party | (17,509) | (16,492) |
Net cash provided by financing activities | 119,091 | 138,508 |
Net (decrease) increase in cash | (56) | 964 |
Cash at beginning of period | 664 | 1,582 |
Cash at end of period | 608 | 2,546 |
Supplemental disclosure of cash flow information | ||
Cash paid for interest | 440 | 1,458 |
Cash paid for income taxes | 0 | 0 |
Supplemental disclosure of non-cash financing activities | ||
Conversion of accrued director fees to common stock | $ 16,500 | $ 0 |
1. Organization, Basis of Prese
1. Organization, Basis of Presentation, Liquidity and Going Concern | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Basis of Presentation, Liquidity and Going Concern | Note 1 – Organization, Basis of Presentation, 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 2 – Mineral Rights and Properties. Basis of Presentation We prepared these interim consolidated financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”). The accompanying unaudited interim consolidated financial statements have been prepared in accordance with GAAP for interim financial information and 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, 2018 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 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, 2017. Recent Accounting Pronouncement On July 13, 2017, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features and II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Non-controlling Interests with a Scope Exception. Part I applies to financial instruments such as warrants, convertible debt or convertible preferred stock that contain down round features. Part II replaces the indefinite deferral for certain mandatorily redeemable non-controlling interests and mandatorily redeemable financial instruments of nonpublic entities contained within Accounting Standards Codification (ASC) Topic 480 Liquidity and Going Concern Our interim 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 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, 2018, we had not yet achieved profitable operations and we have accumulated losses of $9,157,219 since our inception. We expect to incur further losses in the development of our business, all of which raise 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. Effective June 30, 2018, we amended our credit agreement with Mr. John Gibbs, a related party, to increase the borrowing limit under the convertible credit facility to $2,150,000. All other provisions, including the December 31, 2018 maturity date, remained unchanged. 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. |
2. Mineral Rights and Propertie
2. Mineral Rights and Properties, net | 9 Months Ended |
Sep. 30, 2018 | |
Extractive Industries [Abstract] | |
Mineral Rights and Properties, net | Note 2 – Mineral Rights and Properties, net Our mineral rights and mineral properties consist of: September 30, 2018 December 31, 2017 Mineral and other properties $ 185,290 $ 185,290 Mineral rights - Langtry project 63,182 42,357 Mineral rights and properties - unproven, net $ 248,472 $ 227,647 Mineral and Other Properties On August 8, 2016, we purchased 33+/- acres of land (“Section 16 Property”) for $28,582, net of $18 of title fees, located in San Bernardino County, California. The property is located in the Calico Mining District in the SE ¼ of the SE ¼ of Section 16; T 10 North, R 1 East. The State of California patented this land to a private party in 1935 and reserved in favor of the State one-sixteenth of all coal, oil, gas and other mineral deposits contained in the land. In 2014, we purchased 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. In 2012, we purchased 661 acres of land (“Section 13 Property”) in fee simple for $135,685 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. Effective March 10, 2016, we executed and delivered a new Lease/Purchase Option (“Lease/Option”) covering our flagship Langtry Property located in the Calico Mining District, San Bernardino County, California. The Lease/Option also includes two unpatented mining claims in the Calico Mining District known as the Lilly #10 and Quad Deuce XIII (the “Langtry Unpatented Claims”), which we have previously owned and agreed to transfer to the Lessor subject to the Lease/Option. The new Lease/Option supersedes all prior agreements. The following is a summary of the highlights of the new Lease/Option, which is qualified in its entirety by the provisions of the Lease/Option dated March 10, 2016: ☐ The Lease/Option has a term of 20 years, and grants an exclusive right to explore, develop and purchase the Langtry property. Lease payments under the new agreement are a nominal $1 per year, payable in advance. This amount was paid in March 2016. The lease requires us to also maintain the option to purchase in good standing as described below. ☐ Option payments: in order to maintain the option to purchase, we are required to pay option payments (“Option Payments”) as follows: $40,000 year 1; the greater of $40,000 or the spot price of 2,500 ounces of silver in years 2 through 5; the greater of $50,000 or the spot price of 2,500 ounces of silver in years 6 through 10; the greater of $75,000 or the spot price of 3,750 ounces of silver in years 11 through 15; and the greater of $100,000 or the spot price of 5,000 ounces of silver in years 16 through 20. 50% of all Option Payments are credited against the purchase price should the Company exercise the purchase option. ☐ In March 2017 we made the required year 2 payment totaling $44,675. In March 2018, we made the required year 3 payment totaling $41,650. 50% of the payment, or $20,825 was capitalized as mining rights as the amount is applicable to the option purchase price. The remaining $20,825 was expensed as lease option costs and included in exploration costs. In all subsequent years, the option payment shall be due March 15. ☐ Option Purchase Price: We have the option to purchase fee title to the Langtry Property for the full 20-year term of the Lease/Option. The purchase price is: · Years 1 through 3 (3-15-2016 to 3-15-2019): $5,000,000 · Years 4 through 5 (3-15-2019 to 3-15-2021): the greater of $5,000,000 or the spot price of 250,000 troy ounces of silver, plus payment of the deferred rent of $130,000; · Years 6 through 10 (3-15-2021 to 3-15-26): the greater of $7,500,000 or the spot price of 375,000 troy ounces of silver, plus payment of the deferred rent of $130,000; · Years 11 through 20 (3-15-2026 to 3-15-2036): the greater of $10,000,000 or the spot price of 500,000 troy ounces of silver, plus payment of the deferred rent of $130,000. ☐ During the lease term, and provided the purchase option has not been exercised, the lessor is entitled to receive a 2% NSR on silver production and a 3% to 5% royalty on other mineral production and certain other revenue streams; ☐ After exercise of the purchase option, the lessor will not receive royalties on silver or other precious metals production but will receive a 5% royalty on barite production and other revenue streams. ☐ Deferred rent of $130,000 under the prior lease shall be payable upon exercise of the purchase option or upon Athena entering into a joint venture or other arrangement to develop the Langtry prospect. Accrued rent of $20,000 under the prior lease was due and paid September 15, 2016. ☐ If we are in breach of the Lease/Option, 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 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. The agreement dated April 30, 1987 granted a base net smelter royalty of 3% plus 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. ☐ On May 28, 2015 we executed an amendment to the deed underlying the Langtry Lease to cap at 2% the net smelter royalty that would be due to Mobil Exploration and Producing North America Inc. (“Mobil”) from any future sales of concentrates, precipitates or metals produced from ores mined from the royalty acreage. In consideration for the amendment, we agreed to pay an amendment fee of $150,000, with $10,000 due at the time of the agreement and the balance payable $10,000 each June 1 st During the term of the Lease, Athena Minerals has the exclusive right to develop and conduct mining operations on the Langtry Property. Future option payments and/or exploration and development of this property will require new equity and/or debt capital. On September 28, 2015, at the request of the Company and its advisors, the San Bernardino County Land Use Services Department (the “Department”) issued and recorded a Certificate of Land Use Compliance for Vested Land Use in which the Department formally determined that the Langtry property had the legally established right for mineral resource development activity (the “Vested Right”). The Vested Right is subject to certain conditions set forth in the Certificate and runs with the Langtry property in perpetuity. 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 for $10,000. The claims are contiguous to our existing unpatented and patented claims known as the Langtry Property. All commitments and obligations under our prior 2010 Lease and the 2016 Lease/Option to Purchase have been fulfilled to date. Future option payments and/or exploration and development of this property may require new equity and/or debt capital. In addition, as of September 30, 2018 all regulatory obligations due or accrued regarding our mineral rights had been paid, and all our claims remain in good standing. Impairment of Mineral Rights The Company has evaluated its mineral rights and properties. As a result of the evaluation, the Company recognized an impairment loss of $1,885,816 associated with the Langtry project as of December 31, 2017. The impairment analysis and conclusion was a result of the continuing low silver prices that negatively affect the economic viability of the project. As such, the Company impaired at 100% all capitalized lease and maintenance payments made prior to the Lease Option agreement of March 10, 2016, as well as the deed amendment fee of $150,000 that provides for a royalty cap upon any future production activities. At September 30, 2018, the unimpaired portion of the mineral rights totaling $63,182 represents payments on the agreement representing amounts applicable to the lease purchase option totaling $63,162, and the lease payment of $20 representing the amount paid for the 20 year lease at $1 per year. |
3. Fair Value of Financial Inst
3. Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Note 3 - Fair Value of Financial Instruments Financial assets and liabilities recorded at fair value in our 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 Fair Value Measurement at September 30, 2018 September 30, 2018 Level 1 Level 2 Level 3 Derivative liability – Convertible note payable $ 31,270 $ – $ – $ 31,270 Carrying Value at Fair Value Measurement at December 31, 2017 December 31, 2017 Level 1 Level 2 Level 3 Derivative liability – Convertible note payable $ 58,340 $ – $ – $ 58,340 A summary of the changes in the derivative liabilities is as follows: Balance, December 31, 2017 $ 58,340 Total gains, (unrealized, realized) included in net loss (27,070 ) Balance, September 30, 2018 $ 31,270 The carrying values of cash and cash equivalents, accounts payable, accrued liabilities and other short-term debt, approximate their fair value because of the short-term nature of these financial instruments. |
4. Derivative Liabilities and N
4. Derivative Liabilities and Note Payable | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Liabilities and Note Payable | Note 4 – Derivative Liabilities and Note Payable 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 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 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 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. 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 conversion option changes we recognize a gain or loss due to a decrease or increase in the fair value of the derivative liability, respectively. The change in fair value of our derivative liability – convertible note payable is as follows: Balance, December 31, 2017 $ 58,340 Total gains, (unrealized, realized) included in net loss (27,070 ) Balance, September 30, 2018 $ 31,270 We estimate the fair value of this derivative at inception and at each balance sheet date until such time the Note is paid or converted 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 liability at September 30, 2018: Fair value assumptions – derivative: September 30, 2018 Risk free interest rate 2.59% Expected term (years) 1.0 Expected volatility 203% Expected dividends 0% The following table summarizes the assumptions used to value the derivative liability at December 31, 2017: Fair value assumptions – derivative: December 31, 2017 Risk free interest rate 1.76% Expected term (years) 1.0 Expected volatility 183% Expected dividends 0% Accrued interest totaled $11,873 and $9,082 at September 30, 2018 and December 31, 2017, respectively, and is included in Accrued interest on the accompanying consolidated balance sheets. |
5. Credit Agreement and Notes P
5. Credit Agreement and Notes Payable - Related Parties | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Credit Agreement and Notes Payable - Related Parties | Note 5 – Credit Agreement and Notes Payable – Related Parties Convertible Credit Facility – Related Party 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, is convertible, at the option of the lender, into common shares at a conversion price of $0.50 per share. Since its inception we have amended the credit agreement several times to either increase the borrowing limit and/or extend the maturity date. Effective June 30, 2018, we amended the credit agreement to increase the borrowing limit under the convertible credit facility to $2,150,000. All other provisions, including the December 31, 2018 maturity date, remained unchanged. The modification was not considered substantial. 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. Likewise, derivative accounting did not apply to the embedded conversion option. 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 $2,032,120 and $1,890,620 at September 30, 2018 and December 31, 2017, respectively. Borrowings under our convertible note payable to Mr. Gibbs were $141,500 and $165,000 for the nine months ended September 30, 2018 and 2017, respectively, and were generally used to pay certain mining lease obligations as well as other operating expenses. No principal or interest payments have made to Mr. Gibbs since the inception of the convertible credit facility. As of September 30, 2018 there remained $117,880 of credit available for future borrowings. Total accrued interest on the notes payable to Mr. Gibbs was $423,191 and $349,454 at September 30, 2018 and December 31, 2017, respectively, and are included in Accrued interest - related parties on the accompanying consolidated balance sheets. Note Payable – Related Party On September 12, 2016 we executed an unsecured Note Payable (“Note”) with Mr. John Power, the Company’s President and Chief Executive Officer in the amount of $45,000. The Note accrued interest at 6% per year, and matured on September 12, 2018. The Note required monthly principal and interest payments of $1,994 beginning on October 12, 2016. As of September 30, 2018 all required principal and interest payments had been made. During the period ended September 30 2018, the Company made payments of $17,509 on the note payable. At September 30, 2018 and December 31, 2017 the Note balance was $-0- and $17,509, respectively. Interest Expense – Related Parties Total related party interest expense was $74,123 and $69,136 for the nine months ended September 30, 2018 and 2017, respectively. Total related party interest expense was $25,453 and $23,824 for the three months ended September 30, 2018 and 2017, respectively. |
6. Commitments and Contingencie
6. Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 6 - Commitments and Contingencies We are subject to various commitments and contingencies under the Langtry Lease/Option to Purchase as discussed in Note 2 – Mining Rights and Properties. |
7. Share-based Compensation
7. Share-based Compensation | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
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 is as follows: Shares Weighted Average Exercise Price Outstanding at December 31, 2017 600,000 $ 0.26 Options expired (600,000 ) $ 0.26 Outstanding at September 30, 2018 – All options expired in April 2018. No share based compensation expense was recorded for either the nine months ended September 30, 2018 or 2017. All outstanding options at December 31, 2017 represented options issued outside the 2004 Equity Incentive Plan. |
8. Related Party Transactions
8. Related Party Transactions | 9 Months Ended |
Sep. 30, 2018 | |
Related Party Transactions [Abstract] | |
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 and director of both Athena and Magellan. Mr. Gibbs is a significant shareholder and creditor (see Note 5 – Credit Agreement and Notes Payable – Related Parties), 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. There exists no arrangement or understanding with respect to the resolution of future conflicts of interest. 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 and Director Fees – Related Parties The Company is subject to a month-to-month management agreement with Mr. Power requiring a monthly payment of $2,500 as consideration for the day-to-day management of Athena. For each of the three and nine-months ended September 30, 2018 and 2017, a total of $7,500 and $22,500, respectively, was recorded as management fees and are included in general and administrative expenses in the accompanying consolidated statements of operations. As of September 30, 2018 and December 31, 2017, $65,000 and $52,500, respectively, of management fees due to Mr. Power had not been paid and are included in accrued liabilities – related parties on the accompanying consolidated balance sheets. The Company was subject to an agreement with a Director to pay a retainer fee of $1,000 per month for his services. For the three and nine-months ended September 30, 2017, a total of $3,000 and $9,000, respectively, was charged as director fees and is included in general and administrative expenses on the accompanying consolidated statements of operations. On May 15, 2018, the Director resigned, and as a result the Company agreed to convert a total of $16,500 of outstanding fees due the Director into 330,000 shares of the Company’s common stock. For the three and nine-months ended September 30, 2018, a total of $-0- and $4,500, respectively, was charged as director fees and is included in general and administrative expenses on the accompanying consolidated statements of operations. At September 30, 2018 and December 31, 2017, a total of $-0- and $12,000, respectively, had not been paid and is included in accrued liabilities – related parties on the accompanying consolidated balance sheets. Accrued Interest - Related Parties At September 30, 2018 and December 31, 2017, Accrued interest - related parties includes accrued interest payable to Mr. Gibbs in the amounts of $423,191 and $349,454, respectively, representing unpaid interest on the convertible credit facility. In addition, at September 30, 2018 and December 31, 2017, Accrued interest - related parties includes $-0- and $54, respectively, of interest accrued on the installment Note payable due to Mr. Power. 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, 2018, Mr. Power made short-term advances to the Company totaling $12,350, of which $7,250 was repaid during the period. At September 30, 2018, advances totaling $30,100 had not been repaid. During the nine months ended September 30, 2017, Mr. Power made short-term advances to the Company totaling $4,700, all of which was repaid during the period. At December 31, 2017, $25,000 of the advances was outstanding. 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. |
9. Subsequent Events
9. Subsequent Events | 9 Months Ended |
Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 9 - Subsequent Events Subsequent to September 30, 2018 Mr. Gibbs has advanced $7,500 under the credit facility. |
1. Organization, Basis of Pre_2
1. Organization, Basis of Presentation, Liquidity and Going Concern (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
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 2 – Mineral Rights and Properties. |
Basis of Presentation | Basis of Presentation We prepared these interim consolidated financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”). The accompanying unaudited interim consolidated financial statements have been prepared in accordance with GAAP for interim financial information and 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, 2018 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 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, 2017. |
Recent Accounting Pronouncement | Recent Accounting Pronouncement On July 13, 2017, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features and II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Non-controlling Interests with a Scope Exception. Part I applies to financial instruments such as warrants, convertible debt or convertible preferred stock that contain down round features. Part II replaces the indefinite deferral for certain mandatorily redeemable non-controlling interests and mandatorily redeemable financial instruments of nonpublic entities contained within Accounting Standards Codification (ASC) Topic 480 |
Liquidity and Going Concern | Liquidity and Going Concern Our interim 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 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, 2018, we had not yet achieved profitable operations and we have accumulated losses of $9,157,219 since our inception. We expect to incur further losses in the development of our business, all of which raise 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. Effective June 30, 2018, we amended our credit agreement with Mr. John Gibbs, a related party, to increase the borrowing limit under the convertible credit facility to $2,150,000. All other provisions, including the December 31, 2018 maturity date, remained unchanged. 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. |
2. Mineral Rights and Propert_2
2. Mineral Rights and Properties, net (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Extractive Industries [Abstract] | |
Mineral rights and properties | September 30, 2018 December 31, 2017 Mineral and other properties $ 185,290 $ 185,290 Mineral rights - Langtry project 63,182 42,357 Mineral rights and properties - unproven, net $ 248,472 $ 227,647 |
3. Fair Value of Financial In_2
3. Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value assets and liabilities on a recurring basis | Financial assets and liabilities measured at fair value on a recurring basis are summarized below: Carrying Value at Fair Value Measurement at September 30, 2018 September 30, 2018 Level 1 Level 2 Level 3 Derivative liability – Convertible note payable $ 31,270 $ – $ – $ 31,270 Carrying Value at Fair Value Measurement at December 31, 2017 December 31, 2017 Level 1 Level 2 Level 3 Derivative liability – Convertible note payable $ 58,340 $ – $ – $ 58,340 |
Derivative liabilities rollforward | A summary of the changes in the derivative liabilities is as follows: Balance, December 31, 2017 $ 58,340 Total gains, (unrealized, realized) included in net loss (27,070 ) Balance, September 30, 2018 $ 31,270 |
4. Derivative Liabilities and_2
4. Derivative Liabilities and Note Payable (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Change in fair value of derivative liability | A summary of the changes in the derivative liabilities is as follows: Balance, December 31, 2017 $ 58,340 Total gains, (unrealized, realized) included in net loss (27,070 ) Balance, September 30, 2018 $ 31,270 |
Assumptions used to derive derivative liability | The following table summarizes the assumptions used to value the derivative liability at September 30, 2018: Fair value assumptions – derivative: September 30, 2018 Risk free interest rate 2.59% Expected term (years) 1.0 Expected volatility 203% Expected dividends 0% The following table summarizes the assumptions used to value the derivative liability at December 31, 2017: Fair value assumptions – derivative: December 31, 2017 Risk free interest rate 1.76% Expected term (years) 1.0 Expected volatility 183% Expected dividends 0% |
7. Share-based Compensation (Ta
7. Share-based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of option activity | Shares Weighted Average Exercise Price Outstanding at December 31, 2017 600,000 $ 0.26 Options expired (600,000 ) $ 0.26 Outstanding at September 30, 2018 – |
1. Organization, Basis of Pre_3
1. Organization, Basis of Presentation, Liquidity and Going Concern (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accumulated deficit | $ (9,157,219) | $ (8,967,170) |
Line of credit maximum borrowing capacity | $ 2,150,000 | |
Credit line expiration date | Dec. 31, 2018 |
2. Mineral Rights and Propert_3
2. Mineral Rights and Properties, net (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Extractive Industries [Abstract] | ||
Mineral and other properties | $ 185,290 | $ 185,290 |
Mineral rights - Langtry project | 63,182 | 42,357 |
Mineral rights and properties - unproven, net | $ 248,472 | $ 227,647 |
2. Mineral Rights and Propert_4
2. Mineral Rights and Properties, net (Details Narrative) | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2018USD ($) | Dec. 31, 2017USD ($) | Aug. 08, 2016USD ($)a | Jun. 30, 2014USD ($)a | Jun. 30, 2012USD ($)a | Jun. 30, 2010aInteger | |
Mineral and other properties | $ 185,290 | $ 185,290 | ||||
Mineral rights | 63,182 | 42,357 | ||||
Langtry Lease [Member] | ||||||
Acres owned | a | 413 | |||||
Patented mining claims | Integer | 20 | |||||
Lease term | 20 years | |||||
Impairment of mineral property | 1,885,816 | |||||
Langtry Lease [Member] | Lease Payment [Member] | ||||||
Lease payment | 41,650 | $ 44,675 | ||||
Langtry Lease [Member] | Lease Payment [Member] | Exploration Costs [Member] | ||||||
Lease payment | 20,825 | |||||
Langtry Lease [Member] | Lease Payment [Member] | Mineral Rights and Properties [Member] | ||||||
Lease payment | $ 20,825 | |||||
Section 16 Property [Member] | ||||||
Mineral and other properties | $ 28,582 | |||||
Acres owned | a | 33 | |||||
Castle Rock [Member] | ||||||
Mineral and other properties | $ 21,023 | |||||
Acres owned | a | 160 | |||||
Section 13 Property [Member] | ||||||
Mineral and other properties | $ 135,685 | |||||
Acres owned | a | 661 |
3. Fair Value of Financial In_3
3. Fair Value of Financial Instruments (Details - Fair Value) - Fair Value Measurements Recurring [Member] - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Derivative liabilty - Convertible note payable | $ 31,270 | $ 58,340 |
Fair Value Inputs Level 3 [Member] | ||
Derivative liabilty - Convertible note payable | 31,270 | 58,340 |
Fair Value Inputs Level 1 [Member] | ||
Derivative liabilty - Convertible note payable | 0 | 0 |
Fair Value Inputs Level 2 [Member] | ||
Derivative liabilty - Convertible note payable | $ 0 | $ 0 |
3. Fair Value of Financial In_4
3. Fair Value of Financial Instruments (Details - Change in fair value) | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Fair Value Disclosures [Abstract] | |
Derivative liability, beginning balance | $ 58,340 |
Total gains, (unrealized, realized) included in net loss | (27,070) |
Derivative liability, ending balance | $ 31,270 |
4. Derivative Liabilities and_3
4. Derivative Liabilities and Note Payable (Details - Assumptions) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Measurement Input Risk Free Interest Rate [Member] | ||
Fair value assumptions | 2.59% | 1.76% |
Measurement Input Expected Term [Member] | ||
Fair value assumptions | 1.0 years | 1.0 years |
Measurement Input Price Volatility [Member] | ||
Fair value assumptions | 203% | 183% |
Measurement Input Expected Dividend Rate [Member] | ||
Fair value assumptions | 0% | 0% |
4. Derivative Liabilities and_4
4. Derivative Liabilities and Note Payable (Details Narrative) - Neuman Note [Member] - USD ($) | Sep. 30, 2018 | Apr. 01, 2015 |
Debt face amount | $ 45,000 | |
Debt stated interest rate | 6.00% | |
Convertible note conversion rate | $ .0735 | |
Accrued interest | $ 11,873 |
5. Credit Agreement and Notes_2
5. Credit Agreement and Notes Payable - Related Parties (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Sep. 12, 2016 | |
Line of credit maximum borrowing capacity | $ 2,150,000 | $ 2,150,000 | ||||
Line of credit expiration date | Dec. 31, 2018 | |||||
Accrued interest - related parties | 423,191 | $ 423,191 | $ 349,508 | |||
Note payable - related party | 0 | 0 | 17,509 | |||
Payments on note payable | 7,250 | $ 4,700 | ||||
Interest expense - related parties | 25,453 | $ 23,824 | $ 74,123 | 69,136 | ||
Power Note Payable [Member] | ||||||
Debt issuance date | Sep. 12, 2016 | |||||
Debt face amount | $ 45,000 | |||||
Debt stated interest rate | 6.00% | |||||
Debt maturity date | Sep. 12, 2018 | |||||
Note payable - related party | 0 | $ 0 | 17,509 | |||
Payments on note payable | $ 17,509 | |||||
Gibbs Credit Agreement [Member] | ||||||
Line of credit issuance date | Jul. 18, 2012 | |||||
Line of credit maximum borrowing capacity | 2,150,000 | $ 2,150,000 | ||||
Line of credit expiration date | Dec. 31, 2018 | |||||
Line of credit amount outstanding | 2,032,120 | $ 2,032,120 | 1,890,620 | |||
Proceeds from line of credit | 141,500 | $ 165,000 | ||||
Line of credit remaining amount available | 117,880 | 117,880 | ||||
Accrued interest - related parties | $ 423,191 | $ 423,191 | $ 349,454 |
7. Share-based Compensation (De
7. Share-based Compensation (Details) | 9 Months Ended |
Sep. 30, 2018$ / sharesshares | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Options outstanding, beginning balance | shares | 600,000 |
Options expired | shares | (600,000) |
Options outstanding, ending balance | shares | 0 |
Weighted average exercise price, beginning balance | $ / shares | $ 0.26 |
Weighted average exercise price, expirations | $ / shares | 0.26 |
Weighted average exercise price, ending balance | $ / shares | $ 0 |
7. Share-based Compensation (_2
7. Share-based Compensation (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Share based compensation | $ 0 | $ 0 |
8. Related Party Transactions (
8. Related Party Transactions (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Accrued liabilities - related parties | $ 65,000 | $ 65,000 | $ 64,500 | ||
Advances payable - related party | 30,100 | 30,100 | 25,000 | ||
Proceeds from related party | 12,350 | $ 4,700 | |||
Repayment to related party | 7,250 | 4,700 | |||
Accrued interest - related parties | 423,191 | 423,191 | 349,508 | ||
Power [Member] | |||||
Management fees | 7,500 | $ 7,500 | 22,500 | 22,500 | |
Accrued liabilities - related parties | 65,000 | 65,000 | 52,500 | ||
Advances payable - related party | 30,100 | 30,100 | 25,000 | ||
Proceeds from related party | 12,350 | 4,700 | |||
Repayment to related party | 7,250 | 4,700 | |||
Accrued interest - related parties | 0 | 0 | 54 | ||
Director [Member] | |||||
Accrued liabilities - related parties | 0 | 0 | 12,000 | ||
Directors fees | 0 | $ 3,000 | 4,500 | $ 9,000 | |
Stock issued for accounts payable, value | $ 16,500 | ||||
Stock issued for accounts payable, stock issued | 330,000 | ||||
Advances payable - related party | 0 | $ 0 | 12,000 | ||
Gibbs [Member] | |||||
Accrued interest - related parties | $ 423,191 | $ 423,191 | $ 349,454 |