Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended |
Sep. 30, 2013 | |
Document And Entity Information | ' |
Entity Registrant Name | 'Pershing Gold Corp. |
Entity Central Index Key | '0001432196 |
Document Type | 'S-1 |
Post-Effective Amendment Number | '1 |
Document Period End Date | 30-Sep-13 |
Amendment Flag | 'true |
Amendment Description | 'This Post-Effective Amendment No. 1 to Form S-1 (this “Post-Effective Amendmentâ€) is being filed pursuant to Section 10 (a)(3) of the Securities Act to update our registration statement on Form S-1 (the “Registration Statementâ€), which was initiallydeclared effective by the Securities and Exchange Commission on February 12, 2013, (i) to include the information contained incertain periodic filings filed with the SEC, and (ii) make certain other updating revisions to the information contained herein so that such information is current as of the date of filing. |
Current Fiscal Year End Date | '--12-31 |
Entity Filer Category | 'Smaller Reporting Company |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
CURRENT ASSETS: | ' | ' |
Cash and cash equivalents | $9,035,743 | $3,218,191 |
Other receivables | ' | 77,364 |
Prepaid expenses - current portion | 359,491 | 502,837 |
Total Current Assets | 9,395,234 | 3,798,392 |
NON - CURRENT ASSETS: | ' | ' |
Property and equipment, net - (see Note 6) | 6,680,903 | 7,386,776 |
Mineral rights - (see Note 5) | 16,786,912 | 16,786,912 |
Reclamation bond deposit - (see Note 5) | 4,645,533 | 4,645,533 |
Deposits | 3,884 | 3,884 |
Total Non - Current Assets | 28,117,232 | 28,823,105 |
Total Assets | 37,512,466 | 32,621,497 |
CURRENT LIABILITIES: | ' | ' |
Accounts payable and accrued expenses | 446,765 | 778,314 |
Note payable - current portion (see Note 7) | 23,036 | 23,036 |
Note payable - related party - (see Note 8) | ' | 486,250 |
Total Current Liabilities | 469,801 | 1,287,600 |
LONG-TERM LIABILITIES: | ' | ' |
Note payable - long term portion (see Note 7) | 42,233 | 59,510 |
Total Liabilities | 512,034 | 1,347,110 |
Commitments and Contingencies | ' | ' |
STOCKHOLDERS' EQUITY : | ' | ' |
Preferred stock, $0.0001 par value; 50,000,000 authorized - (see Note 9) | ' | ' |
Common stock ($.0001 Par Value; 500,000,000 Shares Authorized; 273,292,023 and 266,592,023 shares issued and outstanding as of September 30, 2013 and December 31, 2012, respectively) - (see Note 9) | 27,329 | 26,659 |
Additional paid-in capital | 131,845,027 | 113,052,194 |
Accumulated deficit | -14,901,794 | -14,901,794 |
Accumulated deficit since inception of exploration stage (September 1, 2011) | -79,970,131 | -66,902,672 |
Total Stockholders' Equity | 37,000,432 | 31,274,387 |
Total Liabilities and Stockholders' Equity | 37,512,466 | 32,621,497 |
Convertible Series E Preferred stock | ' | ' |
STOCKHOLDERS' EQUITY : | ' | ' |
Preferred stock, $0.0001 par value; 50,000,000 authorized - (see Note 9) | $1 | ' |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Preferred stock, Par Value (in dollars per share) | $0.00 | $0.00 |
Preferred stock, Authorized (in shares) | 50,000,000 | 50,000,000 |
Common stock, Par Value (in dollars per share) | $0.00 | $0.00 |
Common stock, Authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, issued (in shares) | 273,292,023 | 266,592,023 |
Common stock, Outstanding (in shares) | 273,292,023 | 266,592,023 |
Convertible Series A Preferred Stock | ' | ' |
Preferred stock, Par Value (in dollars per share) | $0.00 | $0.00 |
Preferred stock, Authorized (in shares) | 2,250,000 | 2,250,000 |
Preferred stock, Issued (in shares) | ' | ' |
Preferred stock, Outstanding (in shares) | ' | ' |
Convertible Series B Preferred Stock | ' | ' |
Preferred stock, Par Value (in dollars per share) | $0.00 | $0.00 |
Preferred stock, Authorized (in shares) | 8,000,000 | 8,000,000 |
Preferred stock, Issued (in shares) | ' | ' |
Preferred stock, Outstanding (in shares) | ' | ' |
Convertible Series C Preferred Stock | ' | ' |
Preferred stock, Par Value (in dollars per share) | $0.00 | $0.00 |
Preferred stock, Authorized (in shares) | 3,284,396 | 3,284,396 |
Preferred stock, Issued (in shares) | ' | ' |
Preferred stock, Outstanding (in shares) | ' | ' |
Convertible Series D Preferred Stock | ' | ' |
Preferred stock, Par Value (in dollars per share) | $0.00 | $0.00 |
Preferred stock, Authorized (in shares) | 7,500,000 | 7,500,000 |
Preferred stock, Issued (in shares) | ' | ' |
Preferred stock, Outstanding (in shares) | ' | ' |
Convertible Series E Preferred stock | ' | ' |
Preferred stock, Par Value (in dollars per share) | $0.00 | $0.00 |
Preferred stock, Authorized (in shares) | 15,151 | 15,151 |
Preferred stock, Issued (in shares) | 11,185 | ' |
Preferred stock, Outstanding (in shares) | 11,185 | ' |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | 9 Months Ended | 11 Months Ended | 12 Months Ended | 16 Months Ended | 25 Months Ended | ||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | Sep. 30, 2013 | |
Operating expenses: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Compensation and related taxes | $1,615,926 | $2,433,209 | $4,689,581 | ' | $17,244,155 | ' | $19,726,749 | $1,425,451 | $20,808,828 | $25,498,409 |
Exploration cost | 1,078,139 | 1,782,820 | 1,793,214 | ' | 4,842,781 | ' | 5,221,001 | 2,298,090 | 7,021,023 | 8,814,237 |
Consulting fees | 477,311 | 416,956 | 1,259,924 | ' | 2,021,529 | ' | 2,334,297 | 6,475,520 | 7,905,476 | 9,165,400 |
General and administrative expenses | 745,235 | 800,361 | 2,811,265 | ' | 3,107,036 | ' | 4,172,283 | 2,037,692 | 5,604,753 | 8,416,018 |
Total operating expenses | 3,916,611 | 5,433,346 | 10,553,984 | ' | 27,215,501 | ' | 31,454,330 | 12,236,753 | 41,340,080 | 51,894,064 |
Operating loss from continuing operations | -3,916,611 | -5,433,346 | -10,553,984 | ' | -27,215,501 | ' | -31,454,330 | -12,236,753 | -41,340,080 | -51,894,064 |
OTHER INCOME (EXPENSES): | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Other income | ' | ' | ' | ' | 80,000 | ' | 80,000 | ' | 80,000 | 80,000 |
Gain from sale of uranium assets pursuant to an option agreement | ' | ' | ' | ' | 930,000 | ' | 930,000 | ' | 930,000 | 930,000 |
Gain from sale of subsidiaries | ' | ' | ' | ' | 2,500,000 | ' | 2,500,000 | ' | 2,500,000 | 2,500,000 |
Loss from extinguishment of debts | ' | ' | ' | ' | -4,769,776 | ' | -4,769,776 | ' | -4,769,776 | -4,769,776 |
Change in fair value of derivative liability | ' | ' | ' | ' | -1,454,889 | ' | -1,454,889 | 6,902,806 | 5,447,917 | 5,447,917 |
Gain (loss) from disposal of assets | ' | 3,199 | ' | ' | -18,729 | ' | -18,729 | -174,030 | -192,759 | -192,759 |
Warrant settlement expense | ' | ' | -45,484 | ' | -4,883,196 | ' | 4,883,196 | -4,799,000 | 9,682,196 | -9,727,680 |
Realized gain - trading securities | ' | ' | ' | ' | 19,702 | ' | 19,702 | ' | 19,702 | 19,702 |
Realized gain - available for sale securities - (see Note 4) | ' | 415,000 | 1,656,333 | ' | 755,600 | 1,490,600 | 1,490,600 | ' | 1,490,600 | 3,146,933 |
Share of loss of equity method investee | ' | ' | ' | ' | -83,333 | ' | -83,333 | ' | -83,333 | -83,333 |
Interest expense and other finance costs, net of interest income | -4,963 | -63,762 | -22,665 | ' | -11,402,536 | ' | 11,408,798 | 5,964,380 | 15,924,274 | -15,946,939 |
Total other income (expenses) - net | -4,963 | 354,437 | 1,588,184 | ' | -18,327,157 | ' | -17,598,419 | -9,232,810 | -20,184,119 | -18,595,935 |
Loss from continuing operations before provision for income taxes | -3,921,574 | -5,078,909 | -8,965,800 | ' | -45,542,658 | ' | -49,052,749 | -21,469,563 | -61,524,199 | -70,489,999 |
Loss from continuing operations | -3,921,574 | -5,078,909 | -8,965,800 | ' | -45,542,658 | ' | -49,052,749 | -21,469,563 | -61,524,199 | -70,489,999 |
Discontinued operations: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
(Loss) gain from discontinued operations, net of tax | ' | ' | ' | ' | -50,298 | ' | -50,298 | -3,088,373 | 802,367 | 802,367 |
Net loss | -3,921,574 | -5,078,909 | -8,965,800 | ' | -45,592,956 | ' | -49,103,047 | -24,557,936 | -60,721,832 | -69,687,632 |
Less: Net loss attributable to non-controlling interest | ' | ' | ' | ' | -1,164 | ' | -1,164 | 1,164 | -172,517 | -172,517 |
Net loss attributable to Pershing Gold Corporation | -3,921,574 | -5,078,909 | -8,965,800 | ' | -45,594,120 | ' | -49,104,211 | -24,556,772 | -60,894,349 | -69,860,149 |
Preferred deemed dividend | -4,101,659 | ' | -4,101,659 | ' | -2,702,777 | ' | -2,702,777 | -3,284,396 | -5,987,173 | -10,088,832 |
Preferred stock dividend | ' | ' | ' | 79,278 | -21,150 | ' | -21,150 | ' | -21,150 | -21,150 |
Net loss available to common stockholders | ($8,023,233) | ($5,078,909) | ($13,067,459) | ' | ($48,318,047) | ' | ($51,828,138) | ($27,841,168) | ($66,902,672) | ($79,970,131) |
Loss per common share, basic and diluted: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Loss from continuing operations (in dollars per share) | ($0.03) | ($0.02) | ($0.05) | ' | ($0.23) | ' | ($0.22) | ($0.31) | ($0.25) | ($0.36) |
Loss from discontinued operations (in dollars per share) | $0 | $0 | $0 | ' | $0 | ' | $0 | ($0.04) | $0 | $0 |
Earnings per share basic and diluted (in dollars per share) | ($0.03) | ($0.02) | ($0.05) | ' | ($0.23) | ' | ($0.22) | ($0.35) | ($0.25) | ($0.36) |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - Basic and Diluted (in shares) | 273,292,023 | 256,619,449 | 272,236,712 | ' | 206,120,460 | ' | 219,530,283 | 70,372,421 | 242,840,594 | 224,003,492 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 9 Months Ended | 25 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ' | ' | ' |
Net loss attributable to Pershing Gold Corporation | ($8,965,800) | ($45,594,120) | ($69,860,149) |
Adjustments to reconcile net loss to net cash used in operating activities: | ' | ' | ' |
Depreciation | 729,771 | 756,482 | 2,048,347 |
Bad debts | ' | 13,333 | 513,333 |
Bad debts in connection with discontinued operations | ' | 61,050 | 65,300 |
Amortization of debt discounts and deferred financing cost | ' | 8,100,450 | 12,049,972 |
Amortization of prepaid expense in connection with the issuance of common stock issued for prepaid services | ' | ' | 116,669 |
Loss from extinguishment of debts | ' | 4,769,776 | 4,769,776 |
Change in fair value of derivative liability | ' | 1,454,889 | -5,447,917 |
Interest expense in connection with the note modification | ' | 3,022,186 | 3,022,186 |
Interest expense in connection with the conversion of notes payable | ' | ' | 230,192 |
Interest expense in connection with the cancellation of debt and assignment of shares agreement | ' | 61,500 | 61,500 |
Gain from disposal of discontinued operations | ' | ' | -1,134,448 |
Loss from disposal of assets | ' | 18,729 | 192,759 |
Non-controlling interest | ' | 1,164 | 172,348 |
Realized gain - available for sale securities | -1,656,333 | -755,600 | -3,146,933 |
Realized gain - trading securities | ' | -19,702 | -19,702 |
Gain from sale of subsidiary | ' | -500,000 | -500,000 |
Share of loss of equity method investee | ' | 83,333 | 83,333 |
Common stock issued and included in settlement expense | ' | 4,883,196 | 9,644,696 |
Stock-based compensation | 3,834,352 | 16,716,283 | 25,980,788 |
Gain from sale of uranium assets pursuant to an option agreement | ' | -930,000 | -930,000 |
Changes in operating assets and liabilities: | ' | ' | ' |
Restricted cash - current portion | ' | ' | 1,320,817 |
Other receivables | 77,364 | 99,908 | 86,575 |
Prepaid expenses - current portion and other current assets | 143,346 | 90,871 | 1,902,077 |
Assets of discontinued operations - current portion | ' | ' | 141,378 |
Prepaid expenses - long-term portion | ' | 37,759 | 41,912 |
Restricted cash - long-term portion | ' | ' | 500,000 |
Deposits | ' | -95,788 | -95,788 |
Assets of discontinued operations - long term portion | ' | ' | 40,556 |
Accounts payable and accrued expenses | -172,319 | 353,581 | 206,308 |
Liabilities of discontinued operation | ' | -21,622 | 28,730 |
NET CASH USED IN OPERATING ACTIVITIES | -6,009,619 | -7,392,342 | -17,915,385 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ' | ' | ' |
Acquisition of mining rights | ' | -2,576,400 | -2,576,400 |
Payments received on notes receivable | ' | 930,000 | 1,430,000 |
Increase in reclamation bond deposits | ' | ' | -1,715,629 |
Net proceeds received from the sale of marketable securities | 1,656,333 | 875,302 | 3,266,635 |
Proceeds from disposal of assets | ' | 74,074 | 207,505 |
Purchase of property and equipment | -23,898 | -300,098 | -426,631 |
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES | 1,632,435 | -997,122 | 185,480 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ' | ' | ' |
Proceeds from sale of common stock, net of issuance costs | ' | 6,307,500 | 12,609,866 |
Proceeds from sale of preferred stock, net of issuance costs | 10,227,079 | 1,000,000 | 14,511,475 |
Proceeds from note payable | ' | 500,000 | 500,000 |
Proceeds from convertible promissory notes | ' | ' | 1,715,604 |
Payments on notes payable | -17,277 | -1,541,691 | -3,433,369 |
Advances to former parent company | ' | ' | 48,745 |
Distribution to former parent company | -15,066 | -88,390 | -108,706 |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 10,194,736 | 6,177,419 | 25,843,615 |
EFFECT OF EXCHANGE RATE ON CASH | ' | ' | 1,649 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 5,817,552 | -2,212,045 | 8,115,359 |
CASH AND CASH EQUIVALENTS- beginning of period | 3,218,191 | 3,670,567 | 920,384 |
CASH AND CASH EQUIVALENTS- end of period | 9,035,743 | 1,458,522 | 9,035,743 |
Cash paid for: | ' | ' | ' |
Interest | 4,050 | 196,408 | 534,174 |
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ' | ' | ' |
Issuance of common stock for payment of notes payable and accrued interest | ' | 8,315,258 | 9,323,005 |
Issuance of common stock in connection with the conversion of a promissory note into a current private placement | ' | ' | 611,750 |
Issuance of preferred stock in connection with the conversion of a promissory note and accrued interest into a current private placement | 645,480 | ' | 645,480 |
Issuance of additional notes payable upon assignment of debt | ' | 294,285 | 294,285 |
Beneficial conversion feature and debt discount in connection with the issuance of convertible promissory notes | ' | 168,163 | 1,883,767 |
Preferred stock deemed dividend | ' | 1,616,777 | 4,901,173 |
Issuance of common stock for payment of Continental's accrued legal fees | ' | 170,614 | 170,614 |
Issuance of common stock for payment of accrued dividend | ' | 3,601 | 3,601 |
Reclassification of derivative liability to equity | ' | 7,750,289 | 7,750,289 |
Issuance of a note receivable upon sale of subsidiary | ' | 500,000 | 500,000 |
Issuance of a note receivable in connection with sale of uranium assets pursuant to an option agreement | ' | 930,000 | 930,000 |
Common stock and warrants issued for acquisition of mining rights | ' | 5,709,441 | 5,709,441 |
Distribution to former parent company | ' | 606,339 | 517,949 |
Cancellation of debt in connection with the assignment of shares | ' | 42,000 | 42,000 |
Issuance of a note payable for purchase of mining equipment | ' | 92,145 | 92,145 |
Cancellation of debt in connection with an assignment agreement | ' | ' | $33,500 |
ORGANIZATION_AND_DESCRIPTION_O
ORGANIZATION AND DESCRIPTION OF BUSINESS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2013 | Dec. 31, 2012 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ' |
ORGANIZATION AND DESCRIPTION OF BUSINESS | ' | ' |
NOTE 1 — ORGANIZATION AND DESCRIPTION OF BUSINESS | NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS | |
Organization | Organization | |
Pershing Gold Corporation (the “Company”), formerly named Sagebrush Gold Ltd., formerly named The Empire Sports & Entertainment Holdings Co. (“Empire”), formerly named Excel Global, Inc., was incorporated under the laws of the State of Nevada on August 2, 2007. On February 27, 2012, the Company changed its name to Pershing Gold Corporation. The Company is a gold and precious metals exploration company pursuing exploration and development opportunities primarily in Nevada. The Company is currently focused on exploration of its Relief Canyon properties in Pershing County in northwestern Nevada. None of the Company’s properties contain proven and probable reserves, and all of the Company’s activities on all of its properties are exploratory in nature. | Pershing Gold Corporation (the “Company”), formerly Sagebrush Gold Ltd., formerly The Empire Sports & Entertainment Holdings Co. (“Empire”), formerly Excel Global, Inc., was incorporated under the laws of the State of Nevada on August 2, 2007. On February 27, 2012, the Company changed its name to Pershing Gold Corporation. The Company is a gold and precious metals exploration company pursuing exploration and development opportunities primarily in Nevada. The Company is currently focused on exploration of its Relief Canyon properties in Pershing County in northwestern Nevada. None of the Company’s properties contain proven and probable reserves, and all of its activities on all of the Company’s properties are exploratory in nature. | |
On September 1, 2011, the Company exited the sports and entertainment business and disposed of its Empire subsidiary pursuant to a Stock Purchase Agreement by and between the Company, Empire and Concert International Inc. (“CII”). Pursuant to the stock purchase agreement, the Company agreed to sell to CII its Empire subsidiary, including the 66.67% equity ownership interest in Capital Hoedown Inc. (“Capital Hoedown”), for $500,000. As a result, on September 1, 2011, Empire and Capital Hoedown were no longer subsidiaries of the Company. | A wholly-owned subsidiary, EXCX Funding Corp., a Nevada corporation was formed in January 2011. | |
A wholly-owned subsidiary, EXCX Funding Corp., a Nevada corporation was formed in January 2011 and held the note payable - related party (see Note 8), which was exchanged for the Company’s Series E Convertible Preferred Stock and warrants in August 2013 and was cancelled (see Note 9). | On September 1, 2011, the Company exited the sports and entertainment business and disposed of its Empire subsidiary pursuant to a Stock Purchase Agreement by and between the Company, Empire and Concert International Inc. (“CII”) (see Note 14). Pursuant to the stock purchase agreement, the Company agreed to sell to CII its Empire subsidiary, including the 66.67% equity ownership interest in Capital Hoedown Inc. (“Capital Hoedown”), for $500,000 which was payable on March 31, 2012 pursuant to a Senior Promissory Note issued by CII to the Company. As a result, on September 1, 2011, Empire and Capital Hoedown are no longer considered subsidiaries of the Company. | |
On August 30, 2011, the Company, through its wholly-owned subsidiary, Gold Acquisition Corp. (“Gold Acquisition”) acquired the Relief Canyon Mine property (“Relief Canyon”) located in Pershing County, near Lovelock, Nevada, for an aggregate purchase price consisting of: (i) $12,000,000 cash and (ii) $8,000,000 in senior secured convertible promissory notes. | On May 24, 2011, the Company entered into four limited liability company membership interests purchase agreements with the owners of Arttor Gold LLC (“Arttor Gold”). Each of the owners of Arttor Gold, sold their interests in Arttor Gold in privately negotiated sales resulting in the Company acquiring 100% of Arttor Gold. Pursuant to the Agreements, the Company issued 8,000,000 shares of Series B Convertible Preferred Stock and 13,000,000 shares of Common Stock in exchange for 100% membership interests in Arttor Gold. | |
A wholly-owned subsidiary, Pershing Royalty Company, a Delaware corporation, was formed on May 17, 2012 to hold royalty interests in two gold exploration properties (see Note 3). | As a result of this transaction, on May 24, 2011, Arttor Gold became a wholly-owned subsidiary of the Company. Arttor Gold (an exploration stage company), a Nevada limited liability company, was formed and organized on April 28, 2011. Arttor Gold operates as a U.S. based junior gold exploration and mining company. | |
Going concern | A wholly-owned subsidiary, Noble Effort Gold, LLC, a Nevada limited liability company (“Noble Effort”), was formed in June 2011. A wholly-owned subsidiary, Continental Resources Acquisition Sub, Inc., a Florida corporation, was formed in July 2011. A wholly-owned subsidiary, Gold Acquisition Corp., a Nevada corporation, was formed in August 2011. | |
The Company is in the exploration stage and does not generate revenues to meet its operating expenses. | On July 22, 2011, the Company, Continental Resources Acquisition Sub, Inc. (“Acquisition Sub”), and Continental Resources Group, Inc. (“Continental”), entered into an asset purchase agreement and, through the Acquisition Sub, closed on the purchase of substantially all of the assets of Continental in consideration for (i) shares of the Company’s common stock which was equal to eight shares for every 10 shares of Continental’s common stock outstanding; (ii) the assumption of the outstanding warrants to purchase shares of Continental’s common stock and (iii) the assumption of Continental’s 2010 Equity Incentive Plan and all options granted and issued thereunder (see Note 3). After giving effect to the foregoing, the Company issued 76,095,215 shares of its common stock, 41,566,999 warrants, and 2,248,000 stock options following the transaction. | |
These unaudited condensed consolidated financial statements of the Company have been prepared assuming that the Company will continue as a going concern, which contemplates, among other things, the realization of assets and the satisfaction of liabilities in the normal course of business over a reasonable period of time. The Company has incurred a net loss of approximately $9.0 million for the nine months ended September 30, 2013, $6.0 million of net cash used in operations for the nine months ended September 30, 2013 and total accumulated deficit of approximately $95.0 million since its inception and requires capital for its contemplated operational and exploration activities to take place. The Company plans to raise additional capital to carry out its business plan. The Company’s ability to raise additional capital through future equity and debt securities issuances is unknown. Obtaining additional financing, the successful development of the Company’s contemplated plan of operations, and its transition, ultimately, to profitable operations are necessary for the Company to continue operations. The ability to successfully resolve these factors raises substantial doubt about the Company’s ability to continue as a going concern. The unaudited condensed consolidated financial statements of the Company do not include any adjustments that may result from the outcome of the uncertainties. | Consequently, the issuance of 76,095,215 shares of the Company’s common stock to Continental accounted for approximately 67% of the total issued and outstanding stock of the Company as of July 22, 2011 and the Company became a majority owned subsidiary of Continental. | |
In August 2013, the Company completed a private placement to several accredited investors for the purchase of 10,533 shares of its Series E Convertible Preferred Stock (“Series E”) and 12,639,600 warrants to purchase shares of common stock for aggregate net proceeds of approximately $10.2 million (see Note 9). | Effective February 2012, the Company is considered to be an equity method investee as a result of the decrease in Continental’s ownership interest of less than 50% which is accounted for under equity method of accounting. As of December 31, 2012, Continental holds a 28.54% interest in the Company. | |
In addition, in August 2013, the Company issued 652 shares of its Series E stock and 782,400 warrants to purchase shares of common stock in exchange for the cancellation of a note payable — related party and accrued interest totaling approximately $646,000 (see Note 8). | On August 30, 2011, the Company, through its wholly-owned subsidiary, Gold Acquisition Corp. (“Gold Acquisition”) acquired the Relief Canyon Mine (“Relief Canyon”) located in Pershing County, near Lovelock, Nevada, for an aggregate purchase price consisting of: (i) $12,000,000 cash and (ii) $8,000,000 of senior secured convertible promissory notes issued to Platinum Long Term Growth LLC (“Platinum”) and Lakewood Group LLC (“Lakewood”). | |
A newly-formed wholly-owned subsidiary of the Company, Red Battle Corp. (“Red Battle”), a Delaware corporation, was formed on April 30, 2012 and on May 23, 2012, purchased all of the outstanding membership interests of Arttor Gold and Noble Effort. | ||
The Company entered into an Agreement and Plan of Merger on May 24, 2012 with Valor Gold Corp. and Valor Gold Acquisition Corp., a wholly-owned subsidiary of Valor Gold Corp., (see Note 3) for the purpose of divesting its Red Rocks and North Battle gold properties. As a result of this transaction, Red Battle, together with Arttor Gold and Noble Effort, became wholly-owned subsidiaries of Valor Gold. | ||
A newly-formed wholly-owned subsidiary, Pershing Royalty Company., a Delaware corporation, was formed on May 17, 2012 for the purpose of entering into a Net Smelter Return Production Royalty Agreement (“NSR Agreement”) with Arthur Leger (see Note 3). | ||
On June 11, 2012, the Company and American Strategic Minerals Corporation (“Amicor”) effected the exercise of an Option Agreement, through the assignment of Continental Resources Acquisition Sub, Inc. (“Acquisition Sub”), (see Note 3). As a result of the assignment of Acquisition Sub, the Company divested all of its uranium assets to Amicor. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended | 12 Months Ended | ||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | |||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ' | ||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ' | ||||||||||||||
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||||||||||
Basis of presentation and principles of consolidation | Basis of Presentation and Principle of Consolidation | |||||||||||||||
The unaudited condensed consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”) and present the unaudited condensed consolidated financial statements of the Company as of September 30, 2013. All intercompany transactions and balances have been eliminated and net earnings are reduced by the portion of the net earnings of subsidiaries applicable to non-controlling interests. Prior periods have been restated in the Company’s consolidated financial statements and related footnotes to conform to this presentation and all transactions relating to the sports and entertainment business are included in discontinued operations. All adjustments (consisting of normal recurring items) necessary to present fairly the Company’s financial position as of September 30, 2013, and the results of operations and cash flows for the nine months ended September 30, 2013 have been included. The results of operations for the nine months ended September 30, 2013 are not necessarily indicative of the results to be expected for the full year. The accounting policies and procedures employed in the preparation of these unaudited condensed consolidated financial statements have been derived from the audited financial statements of the Company for the period ended December 31, 2012, which are contained in the Company’s Form 10-K as filed with the Securities and Exchange Commission (“SEC”) on April 1, 2013. The consolidated balance sheet as of December 31, 2012 was derived from those financial statements. | The consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America ("US GAAP") and present the consolidated financial statements of the Company and its majority-owned subsidiaries as of December 31, 2012. In the preparation of the consolidated financial statements of the Company, intercompany transactions and balances are eliminated and net earnings are reduced by the portion of the net earnings of subsidiaries applicable to non-controlling interests. | |||||||||||||||
Exploration stage company | Exploration Stage Company | |||||||||||||||
On September 1, 2011, the Company exited the sports and entertainment business and sold its Empire subsidiary. The Company is engaged in gold and precious metals exploration. The Company has been in the exploration stage since September 1, 2011 and has not yet realized any revenues from its planned operations. The Company is an exploration stage company as defined in Financial Accounting Standards Board (“FASB”) issued Accounting Standards Codification (“ASC”) Topic 915 “Development Stage Entities”. | On September 1, 2011, the Company exited the sports and entertainment business and disposed of its Empire subsidiary pursuant to a Stock Purchase Agreement. The Company is no longer engaged in or pursuing agreements with artists or athletes for sports and entertainment promotion and events, and will focus its activities exclusively on its new business segment, gold and precious metals exploration company. The Company has been in the exploration stage since September 1, 2011 and has not yet realized any revenues from its planned operations. The Company is an exploration stage company as defined in Financial Accounting Standards Board (“FASB”) issued Accounting Standards Codification (“ASC”) ASC 915 “Development Stage Entities”. | |||||||||||||||
Use of estimates | Use of Estimates and Assumptions | |||||||||||||||
In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the consolidated balance sheet, and revenues and expenses for the period then ended. Actual results may differ significantly from those estimates. Significant estimates made by management include, but are not limited to, allowance for bad debts, the useful life of property and equipment, the assumptions used to calculate fair value of options and warrants granted and derivative liability, beneficial conversion on convertible notes payable, capitalized mineral rights, asset valuations, common stock issued for services, common stock issued for conversion of notes and common stock issued in connection with an acquisition. | In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the consolidated balance sheet, and revenues and expenses for the period then ended. Actual results may differ significantly from those estimates. Significant estimates made by management include, but are not limited to, allowance for bad debts, the useful life of property and equipment, the assumptions used to calculate fair value of options granted and derivative liability, beneficial conversion on convertible notes payable, capitalized mineral rights, asset valuations, common stock issued for services, common stock issued for conversion of notes and common stock issued in connection with an acquisition. | |||||||||||||||
Non-controlling interests in consolidated financial statements | Non-controlling interests in consolidated financial statements | |||||||||||||||
In December 2007, ASC 810-10-65, “Non-controlling Interests in Consolidated Financial Statements” clarified that a non-controlling (minority) interest in a subsidiary is an ownership interest in the entity that should be reported as equity in the consolidated financial statements. It also requires consolidated net income to include the amounts attributable to both the parent and non-controlling interest, with disclosure on the face of the consolidated income statement of the amounts attributed to the parent and to the non-controlling interest. In accordance with ASC 810-10-45-21, those losses attributable to the parent and the non-controlling interest in subsidiary may exceed their interests in the subsidiary’s equity. The excess and any further losses attributable to the parent and the non-controlling interest shall be attributed to those interests even if that attribution results in a deficit non-controlling interest balance. | In December 2007, ASC 810-10-65, “Non-controlling Interests in Consolidated Financial Statements” clarifies that a non-controlling (minority) interest in a subsidiary is an ownership interest in the entity that should be reported as equity in the consolidated financial statements. It also requires consolidated net income to include the amounts attributable to both the parent and non-controlling interest, with disclosure on the face of the consolidated income statement of the amounts attributed to the parent and to the non-controlling interest. In accordance with ASC 810-10-45-21, those losses attributable to the parent and the non-controlling interest in subsidiary may exceed their interests in the subsidiary’s equity. The excess and any further losses attributable to the parent and the non-controlling interest shall be attributed to those interests even if that attribution results in a deficit non-controlling interest balance. As of December 31, 2012 and 2011, the Company reported a deficit non-controlling interest balance of $0 and $1,164, respectively, in connection with a majority-owned subsidiary of Acquisition Sub (see Note 3), as reflected in the accompanying consolidated balance sheets. | |||||||||||||||
Cash and cash equivalents | Cash and Cash Equivalents | |||||||||||||||
The Company considers all highly liquid investments with a maturity of three months or less when acquired to be cash equivalents. The Company places its cash with a high credit quality financial institution. The Company’s accounts at this institution are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. At September 30, 2013, the Company had bank balances exceeding the FDIC insurance limit on interest bearing accounts. To reduce its risk associated with the failure of such financial institution, the Company evaluates at least annually the rating of the financial institution in which it holds deposits. | The Company considers all highly liquid investments with a maturity of three months or less when acquired to be cash equivalents. The Company places its cash with high credit quality financial institutions. The Company’s accounts at these institutions are insured by the Federal Deposit Insurance Corporation ("FDIC") up to $250,000 per account. In addition to the basic insurance deposit coverage, the FDIC was providing temporary unlimited coverage for non-interest bearing transaction accounts through December 31, 2012. At December 31, 2012, the Company has not reached bank balances exceeding the FDIC insurance limit on interest bearing accounts. To reduce its risk associated with the failure of such financial institutions, the Company evaluates at least annually the rating of the financial institutions in which it holds deposits. | |||||||||||||||
Marketable securities | Comprehensive Income (Loss) | |||||||||||||||
Marketable securities consist of the Company’s investment in publicly traded equity securities and are generally restricted for sale under Federal securities laws. The Company’s policy is to liquidate securities received when market conditions are favorable for sale. Since these securities are often restricted, the Company is unable to liquidate them until the restriction is removed. Marketable securities that are bought and held principally for the purpose of selling them in the near term are to be classified as trading securities and reported at fair value, with unrealized gains and losses included in earnings. Pursuant to ASC Topic 320, “Investments — Debt and Equity Securities,” the Company’s marketable securities have a readily determinable and active quoted price, such as from NASDAQ, NYSE Euronext, the Over the Counter Bulletin Board, and the OTC Markets Group. | The Company adopted ASC 220-10, “Reporting Comprehensive Income,” (formerly SFAS No. 130). ASC 220-10 requires the reporting of comprehensive income in addition to net income from operations. Comprehensive income is a more inclusive financial reporting methodology that includes disclosure of information that historically has not been recognized in the calculation of net income. | |||||||||||||||
Trading securities are carried at fair value, with changes in unrealized holding gains and losses included in income and classified within interest and other income, net, in the accompanying consolidated statements of operations. | Marketable securities | |||||||||||||||
Available for sale securities are carried at fair value, with changes in unrealized gains or losses are recognized as an element of comprehensive income based on changes in the fair value of the security. Once liquidated, realized gains or losses on the sale of marketable securities available for sale are reflected in the net income (loss) for the period in which the security was liquidated. | Marketable securities consist of the Company’s investment in publicly traded equity securities and are generally restricted for sale under Federal securities laws. The Company’s policy is to liquidate securities received when market conditions are favorable for sale. Since these securities are often restricted, the Company is unable to liquidate them until the restriction is removed. Marketable securities that are bought and held principally for the purpose of selling them in the near term are to be classified as trading securities and reported at fair value, with unrealized gains and losses included in earnings. Pursuant to ASC Topic 320, “Investments – Debt and Equity Securities” the Company’s marketable securities have a readily determinable and active quoted price, such as from NASDAQ, NYSE Euronext, the Over the Counter Bulletin Board, and the OTC Markets Group. | |||||||||||||||
Fair value of financial instruments | Trading securities are carried at fair value, with changes in unrealized holding gains and losses included in income and classified within interest and other income, net, in the accompanying consolidated statements of operations. | |||||||||||||||
The Company adopted ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”), for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements, establishes a framework for measuring fair value and expands disclosure about such fair value measurements. The adoption of ASC 820 did not have an impact on the Company’s financial position or operating results, but did expand certain disclosures. | Available for sale securities are carried at fair value, with changes in unrealized gains or losses are recognized as an element of comprehensive income based on changes in the fair value of the security. Once liquidated, realized gains or losses on the sale of marketable securities available for sale are reflected in the net income (loss) for the period in which the security was liquidated. | |||||||||||||||
ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below: | Fair value of financial instruments | |||||||||||||||
Level 1: | Observable inputs such as quoted market prices in active markets for identical assets or Liabilities | The Company adopted ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”), for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements, establishes a framework for measuring fair value and expands disclosure about such fair value measurements. The adoption of ASC 820 did not have an impact on the Company’s financial position or operating results, but did expand certain disclosures. | ||||||||||||||
Level 2: | Observable market-based inputs or unobservable inputs that are corroborated by market data | |||||||||||||||
Level 3: | Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions. | ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below: | ||||||||||||||
The Company analyzes all financial instruments with features of both liabilities and equity under the FASB’s accounting standard for such instruments. Under this standard, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. | Level 1: | Observable inputs such as quoted market prices in active markets for identical assets or | ||||||||||||||
liabilities | ||||||||||||||||
Depending on the product and the terms of the transaction, the fair value of notes payable and derivative liabilities were modeled using a series of techniques, including closed-form analytic formula, such as the Black-Scholes option-pricing model. | Level 2: | Observable market-based inputs or unobservable inputs that are corroborated by market data | ||||||||||||||
Level 3: | Unobservable inputs for which there is little or no market data, which require the use of the | |||||||||||||||
The Company classified the investments in marketable securities available for sale as Level 3, adjusted for the effect of restriction. The securities were restricted and cannot be readily resold by the Company absent a registration of the sale of those securities under the Securities Act of 1933 as amended (the “Securities Act”) or the availability of an exemption from the registration. Unrealized gains or losses on marketable securities available for sale were recognized as an element of comprehensive income based on changes in the fair value of the security. Once liquidated, realized gains or losses on the sale of marketable securities available for sale were reflected in net income for the period in which the security was liquidated. At the end of each period, the Company evaluated the carrying value of the marketable securities for a decrease in value. The Company evaluated the entity underlying these marketable securities to determine whether a decline in fair value below the amortized cost basis is other than temporary. If the decline in fair value is judged to be “other- than- temporary”, the cost basis of the individual security is written down to fair value as a new cost basis and the amount of the write-down is charged to earnings. | reporting entity’s own assumptions. | |||||||||||||||
The Company analyzes all financial instruments with features of both liabilities and equity under the FASB’s accounting standard for such instruments. Under this standard, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Depending on the product and the terms of the transaction, the fair value of notes payable and derivative liabilities were modeled using a series of techniques, including closed-form analytic formula, such as the Black-Scholes option-pricing model. | ||||||||||||||||
The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, prepaid expenses, accounts payable and accrued expenses approximate their estimated fair market value based on the short-term maturity of these instruments. The carrying amount of the notes payable at September 30, 2013 approximate their respective fair value based on the Company’s incremental borrowing rate. | ||||||||||||||||
The following table presents a reconciliation of the derivative liability measured at fair value on a recurring basis using significant unobservable input (Level 3) from January 1, 2012 to December 31, 2012: | ||||||||||||||||
Prepaid expenses | Conversion feature derivative liability | |||||||||||||||
Balance at January 1, 2012 | $ | 6,295,400 | ||||||||||||||
Prepaid expenses — current portion of $359,491 and $502,837 at September 30, 2013 and December 31, 2012, respectively, consist primarily of costs paid for future services which will occur within a year. Prepaid expenses principally include prepayments for consulting and business advisory services, insurance premiums and mineral lease fees which are being amortized over the terms of their respective agreements. | Change in fair value included in earnings | 1,454,889 | ||||||||||||||
Reclassification of derivative liability to equity | (7,750,289 | ) | ||||||||||||||
Mineral property acquisition and exploration costs | Balance at December 31, 2012 | $ | — | |||||||||||||
Costs of lease, exploration, carrying and retaining unproven mineral lease properties are expensed as incurred. The Company expenses all mineral exploration costs as incurred as it is still in the exploration stage. If the Company identifies proven and probable reserves in its investigation of its properties and upon development of a plan for operating a mine, it would enter the development stage and capitalize future costs until production is established. When a property reaches the production stage, the related capitalized costs are amortized using the units-of-production method over the estimated life of the proven and probable reserves. If in the future the Company has capitalized mineral properties, these properties will be periodically assessed for impairment. To date, the Company has not established the commercial feasibility of any exploration prospects; therefore, all costs are being expensed. During the nine months ended September 30, 2013 and 2012, the Company incurred exploration costs of $1,793,214 and $4,842,781, respectively. | Investment measured at fair value on a recurring basis: | |||||||||||||||
Fair Value Measurements Using: | ||||||||||||||||
ASC 930-805, “Extractive Activities-Mining: Business Combinations”, states that mineral rights consist of the legal right to explore, extract, and retain at least a portion of the benefits from mineral deposits. Mining assets include mineral rights. Acquired mineral rights are considered tangible assets under ASC 805. ASC 805 requires that mineral rights be recognized at fair value as of the acquisition date. As a result, the direct costs to acquire mineral rights are initially capitalized as tangible assets. Mineral rights include costs associated with acquiring patented and unpatented mining claims. | Quoted Prices | Significant | Significant | |||||||||||||
in Active | Other | Unobservable | ||||||||||||||
ASC 930-805-30-1 and 30-2 provides that in fair valuing mineral assets, an acquirer should take into account both: | Markets | Observable | Inputs | |||||||||||||
(Level 1) | Inputs | (Level 3) | ||||||||||||||
· The value beyond proven and probable reserves (“VBPP”) to the extent that a market participant would include VBPP in determining the fair value of the assets. | (Level 2) | |||||||||||||||
· The effects of anticipated fluctuations in the future market price of minerals in a manner that is consistent with the expectations of market participants. | ||||||||||||||||
Marketable securities – available for sale, net of discount for effect of restriction | $ | — | $ | — | $ | — | ||||||||||
Property and equipment | ||||||||||||||||
The Company classifies the investments in marketable securities available for sale as Level 3, adjusted for the effect of restriction. The securities are restricted and cannot be readily resold by the Company absent a registration of those securities under the Securities Act of 1933 as amended (the “Securities Act”) or the availabilities of an exemption from the registration requirements under the Securities Act. As these securities are often restricted, the Company is unable to liquidate them until the restriction is removed. Unrealized gains or losses on marketable securities available for sale are recognized as an element of comprehensive income based on changes in the fair value of the security. Once liquidated, realized gains or losses on the sale of marketable securities available for sale are reflected in our net income for the period in which the security was liquidated. | ||||||||||||||||
Property and equipment are carried at cost. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition. Depreciation is calculated on a straight-line basis over the estimated useful life of the assets, generally one to twenty five years. | ||||||||||||||||
At the end of each period, the Company evaluates the carrying value of the marketable securities for a decrease in value. The Company evaluates the company underlying these marketable securities to determine whether a decline in fair value below the amortized cost basis is other than temporary. If the decline in fair value is judged to be “other- than- temporary”, the cost basis of the individual security shall be written down to fair value as a new cost basis and the amount of the write-down is charged to earnings. | ||||||||||||||||
Impairment of long-lived assets | ||||||||||||||||
The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, other receivables, prepaid expenses, accounts payable and accrued expenses approximate their estimated fair market value based on the short-term maturity of these instruments. The carrying amount of the notes payable at December 31, 2012, approximate their respective fair value based on the Company’s incremental borrowing rate. The Company did not identify any other assets or liabilities that are required to be presented on the consolidated balance sheets at fair value in accordance with applicable accounting guidance. | ||||||||||||||||
The Company accounts for the impairment or disposal of long-lived assets according to the ASC 360 “Property, Plant and Equipment”. The Company continually monitors events and changes in circumstances that could indicate that the carrying amounts of long-lived assets, including mineral rights, may not be recoverable. Long-lived assets in the exploration stage are monitored for impairment based on factors such as the Company’s continued right to explore the area, exploration reports, assays, technical reports, drill results and the Company’s continued plans to fund exploration programs on the property, and whether sufficient work has been performed to indicate that the carrying amount of the mineral property cost carried forward as an asset will not be fully recovered. The tests for long-lived assets in the exploration stage would be monitored for impairment based on factors such as current market value of the long-lived assets and results of exploration, future asset utilization, business climate, mineral prices and future undiscounted cash flows expected to result from the use of the related assets. | ||||||||||||||||
Prepaid expenses | ||||||||||||||||
Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated future net undiscounted cash flows expected to be generated by the asset. When necessary, impaired assets are written down to estimated fair value based on the best information available. Estimated fair value is generally based on either appraised value or measured by discounting estimated future cash flows. Considerable management judgment is necessary to estimate discounted future cash flows. Accordingly, actual results could vary significantly from such estimates. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The Company did not record any impairment charges of its long-lived assets at September 30, 2013 and December 31, 2012, respectively. | ||||||||||||||||
Prepaid expenses – current portion of $502,837 and $463,737 at December 31, 2012 and 2011, respectively, consist primarily of costs paid for future services which will occur within a year. Prepaid expenses include prepayments (in cash and common stock) of public relation services, consulting and business advisory services, and prepaid insurance and mineral lease payments which are being amortized over the terms of their respective agreements. Prepaid expenses – long term portion of $0 and $37,759 at December 31, 2012 and 2011, respectively, consist primarily of costs paid for future mineral lease payments after one year. | ||||||||||||||||
Goodwill and other intangible assets | ||||||||||||||||
Mineral property acquisition and exploration costs | ||||||||||||||||
In accordance with ASC 350-30-65, “Intangibles - Goodwill and Others”, the Company assesses the impairment of identifiable intangibles whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors the Company considers to be important which could trigger an impairment review include the following: | ||||||||||||||||
Costs of lease, exploration, carrying and retaining unproven mineral lease properties are expensed as incurred. The Company has chosen to expense all mineral exploration costs as incurred given that it is still in the exploration stage. If the Company identifies proven and probable reserves in its investigation of its properties and upon development of a plan for operating a mine, it would enter the development stage and capitalize future costs until production is established. When a property reaches the production stage, the related capitalized costs will be amortized, using the units-of-production method over the estimated life of the proven and probable reserves. If in the future the Company has capitalized mineral properties, these properties will be periodically assessed for impairment. To date, the Company has not established the commercial feasibility of any exploration prospects; therefore, all costs are being expensed. During the years ended December 31, 2012 and 2011, the Company incurred exploration cost of $5,221,001 and $2,298,090, respectively. | ||||||||||||||||
1. Significant underperformance relative to expected historical or projected future operating results; | ||||||||||||||||
2. Significant changes in the manner of use of the acquired assets or the strategy for the overall business; and | ASC 930-805, “Extractive Activities-Mining: Business Combinations”, states that mineral rights consist of the legal right to explore, extract, and retain at least a portion of the benefits from mineral deposits. Mining assets include mineral rights. Acquired mineral rights are considered tangible assets under ASC 805. ASC 805 requires that mineral rights be recognized at fair value as of the acquisition date. As a result, the direct costs to acquire mineral rights are initially capitalized as tangible assets. Mineral rights include costs associated with acquiring patented and unpatented mining claims. | |||||||||||||||
3. Significant negative industry or economic trends. | ||||||||||||||||
ASC 930-805-30-1 and 30-2 provides that in fair valuing mineral assets, an acquirer should take into account both: | ||||||||||||||||
When the Company determines that the carrying value of intangibles may not be recoverable based upon the existence of one or more of the above indicators of impairment and the carrying value of the asset cannot be recovered from projected undiscounted cash flows, the Company records an impairment charge. The Company measures any impairment based on a projected discounted cash flow method using a discount rate determined by management to be commensurate with the risk inherent in the current business model. Significant management judgment is required in determining whether an indicator of impairment exists and in projecting cash flows. The Company did not have any intangible assets as of September 30, 2013 and December 31, 2012. | ||||||||||||||||
• | The value beyond proven and probable reserves (“VBPP”) to the extent that a market participant would include VBPP in determining the fair value of the assets. | |||||||||||||||
Income Taxes | • | The effects of anticipated fluctuations in the future market price of minerals in a manner that is consistent with the expectations of market participants. | ||||||||||||||
The Company accounts for income taxes pursuant to the provision of ASC 740-10, “Accounting for Income Taxes” which requires, among other things, an asset and liability approach to calculating deferred income taxes. The asset and liability approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred asset will not be realized. | Property and equipment | |||||||||||||||
The Company follows the provision of the ASC 740-10 related to Accounting for Uncertain Income Tax Position. When tax returns are filed, there may be uncertainty about the merits of positions taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is most likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. | Property and equipment are carried at cost. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition. Depreciation is calculated on a straight-line basis over the estimated useful life of the assets, generally one to twenty five years. | |||||||||||||||
Tax positions that meet the more likely than not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for uncertain tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company believes its tax positions are all highly certain of being upheld upon examination. As such, the Company has not recorded a liability for uncertain tax benefits. | Impairment of long-lived assets | |||||||||||||||
The Company has adopted ASC 740-10-25, “Definition of Settlement”, which provides guidance on how an entity should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits and provides that a tax position can be effectively settled upon the completion and examination by a taxing authority without being legally extinguished. For tax positions considered effectively settled, an entity would recognize the full amount of tax benefit, even if the tax position is not considered more likely than not to be sustained based solely on the basis of its technical merits and the statute of limitations remains open. The federal and state income tax returns of the Company are subject to examination by the IRS and state taxing authorities, generally for three years after they were filed. | The Company accounts for the impairment or disposal of long-lived assets according to the ASC 360 “Property, Plant and Equipment”. The Company continually monitors events and changes in circumstances that could indicate that the carrying amounts of long-lived assets, including mineral rights, may not be recoverable. Long-lived assets in the exploration stage are monitored for impairment based on factors such as the Company's continued right to explore the area, exploration reports, assays, technical reports, drill results and the Company's continued plans to fund exploration programs on the property, whether sufficient work has been performed to indicate that the carrying amount of the mineral property cost carried forward as an asset will not be fully recovered, even though a viable mine has been discovered. The tests for long-lived assets in the exploration stage would be monitored for impairment based on factors such as current market value of the long-lived assets and results of exploration, future asset utilization, business climate, mineral prices and future undiscounted cash flows expected to result from the use of the related assets. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated future net undiscounted cash flows expected to be generated by the asset. When necessary, impaired assets are written down to estimated fair value based on the best information available. Estimated fair value is generally based on either appraised value or measured by discounting estimated future cash flows. Considerable management judgment is necessary to estimate discounted future cash flows. Accordingly, actual results could vary significantly from such estimates. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The Company did not consider it necessary to record any impairment charges of its long-lived assets at December 31, 2012 and 2011, respectively. | |||||||||||||||
Stock-based compensation | Goodwill and other intangible assets | |||||||||||||||
Stock-based compensation is accounted for based on the requirements of the Share-Based Payment Topic of ASC 718, “Compensation — Stock Compensation”, which requires recognition in the consolidated financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). The ASC also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award. | In accordance with ASC 350-30-65, “Intangibles - Goodwill and Others”, the Company assesses the impairment of identifiable intangibles whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors the Company considers to be important which could trigger an impairment review include the following: | |||||||||||||||
Pursuant to ASC Topic 505-50, “Equity Based Payments to Non-employees”, for share-based payments to consultants and other third-parties, compensation expense is determined at the “measurement date.” The expense is recognized over the vesting period of the award. Until the measurement date is reached, the total amount of compensation expense remains uncertain. The Company initially records compensation expense based on the fair value of the award at the reporting date. | 1 | Significant underperformance relative to expected historical or projected future operating results; | ||||||||||||||
2 | Significant changes in the manner of use of the acquired assets or the strategy for the overall business; and | |||||||||||||||
Recent accounting pronouncements | 3 | Significant negative industry or economic trends. | ||||||||||||||
In July 2013, the FASB issued ASU 2013-11, “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists.” ASU 2013-11 provides guidance on the presentation of unrecognized tax benefits related to any disallowed portion of net operating loss carryforwards, similar tax losses, or tax credit carryforwards, if they exist. ASU 2013-11 is effective for fiscal years beginning after December 15, 2013. The adoption of ASU 2013-11 is not expected to have a material impact on the Company’s consolidated financial statements. | When the Company determines that the carrying value of intangibles may not be recoverable based upon the existence of one or more of the above indicators of impairment and the carrying value of the asset cannot be recovered from projected undiscounted cash flows, the Company records an impairment charge. The Company measures any impairment based on a projected discounted cash flow method using a discount rate determined by management to be commensurate with the risk inherent in the current business model. Significant management judgment is required in determining whether an indicator of impairment exists and in projecting cash flows. The Company did not have any intangible assets as of December 31, 2012 and 2011. | |||||||||||||||
Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures. | Income Taxes | |||||||||||||||
The Company accounts for income taxes pursuant to the provision of ASC 740-10, “Accounting for Income Taxes” which requires, among other things, an asset and liability approach to calculating deferred income taxes. The asset and liability approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred asset will not be realized. | ||||||||||||||||
The Company follows the provision of the ASC 740-10 related to Accounting for Uncertain Income Tax Position. When tax returns are filed, there may be uncertainty about the merits of positions taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is most likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. | ||||||||||||||||
Tax positions that meet the more likely than not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for uncertain tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company believes its tax positions are all highly certain of being upheld upon examination. As such, the Company has not recorded a liability for uncertain tax benefits. | ||||||||||||||||
The Company has adopted ASC 740-10-25, “Definition of Settlement”, which provides guidance on how an entity should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits and provides that a tax position can be effectively settled upon the completion and examination by a taxing authority without being legally extinguished. For tax positions considered effectively settled, an entity would recognize the full amount of tax benefit, even if the tax position is not considered more likely that not to be sustained based solely on the basis of its technical merits and the statute of limitations remains open. The federal and state income tax returns of the Company are subject to examination by the IRS and state taxing authorities, generally for three years after they were filed. | ||||||||||||||||
Advertising | ||||||||||||||||
Advertising costs are expensed as incurred. For the years ended December 31, 2012 and 2011, advertising expense totaled $0 and $441,064, respectively. Such expense is included in loss from discontinued operations on the accompanying consolidated statement of operations. | ||||||||||||||||
Stock-based compensation | ||||||||||||||||
Stock-based compensation is accounted for based on the requirements of the Share-Based Payment Topic of ASC 718, “Compensation – Stock Compensation”, which requires recognition in the consolidated financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). The ASC also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award. | ||||||||||||||||
Pursuant to ASC Topic 505-50, “Equity Based Payments to Non-employees”, for share-based payments to consultants and other third-parties, compensation expense is determined at the “measurement date.” The expense is recognized over the vesting period of the award. Until the measurement date is reached, the total amount of compensation expense remains uncertain. The Company initially records compensation expense based on the fair value of the award at the reporting date. | ||||||||||||||||
Recent accounting pronouncements | ||||||||||||||||
In July 2012, the FASB issued Accounting Standards Update (“ASU”) 2012-02, “Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment”, on testing for indefinite-lived intangible assets for impairment. The new guidance provides an entity to simplify the testing for a drop in value of intangible assets such as trademarks, patents, and distribution rights. The amended standard reduces the cost of accounting for indefinite-lived intangible assets, especially in cases where the likelihood of impairment is low. The changes permit businesses and other organizations to first use subjective criteria to determine if an intangible asset has lost value. The amendments to U.S. GAAP will be effective for fiscal years starting after September 15, 2012. The Company’s adoption of this accounting guidance does not have a material impact on the consolidated financial statements and related disclosures. | ||||||||||||||||
There were other updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to have a material impact on the Company’s financial position, results of operations or cash flows. |
ACQUISITION_DISPOSITION_AND_DE
ACQUISITION, DISPOSITION AND DECONSOLIDATION | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2013 | Dec. 31, 2012 | |||||
ACQUISITION, DISPOSITION AND DECONSOLIDATION | ' | ' | ||||
ACQUISITION, DISPOSITION AND DECONSOLIDATION | ' | ' | ||||
NOTE 3 — ACQUISITION, DISPOSITION AND DECONSOLIDATION | NOTE 3 – ACQUISITION, DISPOSITION AND DECONSOLIDATION | |||||
Continental Resources Group, Inc. | Continental Resources Group, Inc. | |||||
On July 22, 2011, the Company, Continental Resources Acquisition Sub Inc. (“Acquisition Sub”) and Continental Resources Group Inc. (“Continental”) entered into a Purchase Agreement and, through Acquisition Sub, completed the purchase of substantially all of the assets of Continental. | On July 22, 2011, the Company, Acquisition Sub and Continental entered into a Purchase Agreement and, through Acquisition Sub, closed on the purchase of substantially all of the assets of Continental in consideration for (i) shares of the Company’s common stock equal to eight shares of the Company’s Common stock for every 10 shares of Continental’s common stock outstanding; (ii) the assumption of the outstanding warrants to purchase shares of Continental’s common stock equal to one warrant to purchase eight shares of the Company’s common stock for every warrant to purchase ten shares Continental’s common stock outstanding at an exercise price equal to such amount as is required pursuant to the terms of the outstanding warrants, and (iii) the assumption of Continental’s 2010 Equity Incentive Plan and all options granted and issued equal to one option to purchase eight shares of the Company’s common stock for every option to purchase 10 shares of Continental’s common stock outstanding with a strike price equal to such amount as is required pursuant to the terms of the outstanding option. Upon the closing of the asset sale, Acquisition Sub assumed the Assumed Liabilities (as defined in the Purchase Agreement) of Continental. Under the terms of the Purchase Agreement, the Company purchased from Continental substantially all of its assets, including, but not limited to, 100% of the outstanding shares of common stock of Continental’s wholly-owned subsidiaries (Green Energy Fields, Inc., and ND Energy, Inc.). | |||||
On February 12, 2013 the SEC declared the Company’s registration statement on Form S-1 effective. The registration statement satisfied a condition of the liquidation of Continental. As a result of the effectiveness of the Form S-1 registration statement, Continental completed its plan of liquidation, including the distribution of 76,095,215 of the Company’s shares on a pro rata basis to Continental shareholders of record as of March 1, 2013. | The Company issued 76,095,215 shares of its common stock, warrants to purchase 41,566,999 shares of common stock, and options to purchase 2,248,000 shares of common stock following the transaction to acquire substantially all of the assets of Continental. Consequently, the issuance of 76,095,215 shares of the Company’s common stock to Continental accounted for approximately 67% of the total issued and outstanding stock of the Company as of July 22, 2011 and the Company had become a majority-owned subsidiary of Continental. Effective February 2012, the Company was considered to be an equity method investee as a result of the decrease in Continental’s ownership interest to less than 50% which is accounted for under the equity method of accounting. | |||||
Sale of Uranium Exploration Properties | ||||||
As of December 31, 2012, Continental held a 28.54% interest in the Company. See Note 17- Subsequent Events regarding the dissolution of Continental and distribution of the Company’s shares held by Continental to its shareholders of record on March 1, 2013. | ||||||
On January 26, 2012, the Company and American Strategic Minerals Corp. (“Amicor”) entered into an Option Agreement whereby Amicor acquired the option to purchase all uranium properties and claims (the “Option”) from the Company for a purchase price of $10.00 in consideration for the issuance of (i) 10,000,000 shares of Amicor’s common stock and (ii) a six month promissory note in the principal amount of $1,000,000. Pursuant to the Option, the consideration received by the Company for the option was non-refundable. | ||||||
The issuance of 76,095,215 shares of common stock and the issuance of warrants to purchase 41,566,999 shares of common stock and options to purchase 2,248,000 shares of common stock were valued at $14,857,676 which primarily represents the fair value of the net asset acquired from Continental of cash of $11,164,514, a note receivable of $2,000,000, prepaid expenses and other current assets of $1,904,997 and assumed liabilities of $293,659. The Company valued the transaction under ASC 805-50-30-2, “Business Combinations” whereby if the consideration is not in the form of cash, the measurement is based on either the cost which shall be measured based on the fair value of the consideration given or the fair value of the assets (or net assets) acquired, whichever is more clearly evident and thus more reliably measurable. The Company deemed that the fair value of the net assets of Continental amounting to $14,857,676 is more clearly evident and more reliable measurement basis. | ||||||
In 2012, $930,000 of the principal amount of note was paid. Under the terms of the note, Amicor was required to pay the balance of the note upon completion of a private placement totaling $1,000,000 or more on or before July 26, 2012. The $1,000,000 private placement was not completed by that date and thus Amicor was not required to pay the final $70,000 due under the note. Accordingly, no amounts under the note receivable from Amicor are currently outstanding. | ||||||
Prior to the asset purchase agreement, Barry Honig, the Company’s director and then Chairman, held 2,685,000 shares of Continental directly and certain entities under Mr. Honig’s control and family members held 3,075,838 shares of Continental. Additionally, one of the shareholders of the Company held 4,569,252 shares of Continental prior to such agreement. Although there was common ownership between the Company and Continental, through the Company's Board Member and a stockholder, such collective interests in the Company only accounted for a total of 15% upon the consummation of the asset purchase agreement. | ||||||
Between February 2012 and January 2013, the Company sold all 10,000,000 shares of Amicor common stock it owned in private transactions and generated net proceeds of $1,641,933. In October 2012, Amicor changed its name to Marathon Patent Group, Inc. | ||||||
Accordingly, pursuant to ASC 805, the Company applied push–down accounting and adjusted to fair value all of the assets and liabilities directly on the financial statements of the subsidiary, Acquisition Sub. The net purchase price paid by the Company was allocated to assets acquired and liabilities assumed on the records of the Company as follows: | ||||||
Sale of Gold Exploration Properties | ||||||
Current assets (including cash of $11,164,514) | $ | 13,069,511 | ||||
A wholly-owned subsidiary of the Company, Red Battle Corp. (“Red Battle”), a Delaware corporation, was formed on April 30, 2012 to hold all of the outstanding membership interests of Arttor Gold and Noble Effort, then subsidiaries of the Company which owned the Red Battle and North Battle Mountain gold exploration properties. The Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) on May 24, 2012 with Valor Gold Corp. and Valor Gold Acquisition Corp., a wholly-owned subsidiary of Valor Gold Corp., for the purpose of divesting its Red Rocks and North Battle Mountain gold properties. As a result of this transaction, Red Battle, together with Arttor Gold and Noble Effort were sold to Valor Gold. | Note receivable | 2,000,000 | ||||
Prepaid expenses – long term portion | 41,912 | |||||
The Merger effectively resulted in the sale of the Company’s two Lander County, Nevada exploration properties, Red Rock Mineral Prospect (including the Centerra Prospect), and North Battle Mountain Mineral Prospect, to Valor Gold for (i) $2,000,000 in cash (the “Cash Consideration”), (ii) a 5% promissory note in the principal amount of $500,000 due 18 months following the issuance date and (iii) 25,000,000 shares of Valor Gold’s common stock. | Property and equipment | 39,912 | ||||
In November 2012, the Company collected the full balance of the note receivable $500,000 plus accrued interest from Valor Gold. | Liabilities assumed (including a 12% note payable of $50,000) | (293,659 | ) | |||
Prior to the Merger, certain entities under the control of Barry Honig, a director of the Company, and Mr. Honig’s family members held 5,600,003 shares of Valor Gold. Additionally, another shareholder of the Company held 750,000 shares of Valor Gold prior to the Merger. Contemporaneously with the closing of the Merger, this shareholder purchased 1,250,000 shares of Valor Gold’s common stock in a private placement by Valor Gold. Additionally, entities under Mr. Honig’s control purchased 5,000,000 shares of Valor Gold’s Series A Preferred Stock in the Valor Gold private placement. | Net purchase price | $ | 14,857,676 | |||
The issuance of 25,000,000 shares of Valor Gold’s common stock to the Company accounted for approximately 38.6% of the total issued and outstanding common stock of Valor Gold as of May 24, 2012. Between February 2013 and May 2013, the Company sold all 25,000,000 shares it owned of Valor Gold common stock in private transactions which generated net proceeds of $1,505,000. As of September 30, 2013, the Company no longer owns any shares in Valor Gold. | On July 18, 2011, the Company borrowed $2,000,000 from Continental, and issued it an unsecured 6% promissory note. On July 22, 2011, in connection with the asset purchase agreement, the Company acquired the note receivable which was payable to Continental and included the acquisition of the $2,000,000 note receivable as part of the purchase price allocation. Accordingly, the acquired note receivable was eliminated against the note payable on the Company’s financial statements. | |||||
The Purchase Agreement constitutes a plan of reorganization within the meaning of Treasury Regulations Section 1.368-2(g) and constitutes a plan of liquidation of Continental. The Company agreed to file a registration statement under the Securities Act of 1933, as amended (“Securities Act”) in connection with liquidation of Continental no later than 30 days following (i) the closing date of the asset sale or (ii) the date that Continental delivered or filed its audited financial statements for the fiscal year ended March 31, 2011, and to distribute the registered shares to its shareholders as part of its liquidation. The Company agreed to use its best efforts to cause such registration to be declared effective within 12 months following the closing date of the asset sale. | ||||||
The Company had agreed to pay liquidated damages of 1% per month, up to a maximum of 5%, in the event that the Company failed to file or was unable to cause the registration statement to be declared effective. Continental was expected to liquidate on or prior to July 1, 2012. | ||||||
In August 2012, the Company entered into an Amendment Agreement with Continental and Acquisition Sub whereby the parties agreed to amend the Asset Purchase Agreement to remove the liquidated damages provision associated with the registration rights obligations of the Company. Such registration statement was declared effective in February 2013, and as a result, Continental has started the process of distribution of the Company’s shares as of March 22, 2013 and expects to complete the distribution as soon as practicable (see Note 17). | ||||||
Continental Resources Acquisition Sub, Inc. | ||||||
On January 26, 2012, the Company and Amicor entered into an Option Agreement whereby Amicor acquired the option to purchase all uranium properties and claims (the “Option”) from the Company for a purchase price of $10.00 in consideration for the issuance of (i) 10,000,000 shares of Amicor’s common stock and (ii) a six month promissory note in the principal amount of $1,000,000. Pursuant to the Option, the consideration received by the Company was non-refundable. The Company and Amicor amended the Option on April 24, 2012 and May 3, 2012 in order to extend the termination date of the Option. On June 11, 2012, Amicor notified the Company of its decision to exercise the Option. The Company and Amicor effected the exercise of the Option, through the assignment of the Company’s wholly-owned subsidiary, Acquisition Sub, which was the owner of 100% of the issued and outstanding common stock of each of Green Energy Fields, Inc., a Nevada corporation (“Green Energy”) (which was the owner of 100% of the issued and outstanding common stock of CPX Uranium, Inc.) and ND Energy, Inc., a Delaware corporation (“ND Energy”). Additionally, ND Energy and Green Energy held a majority of the outstanding membership interests of Secure Energy LLC. As a result of the assignment, Acquisition Sub is no longer a subsidiary of the Company. | ||||||
In 2012, $930,000 of the principal amount of note was paid. Under the terms of the note, Amicor was required to pay the balance of the note upon completion of a private placement totaling $1,000,000 or more on or before July 26, 2012. The $1,000,000 private placement was not completed by that date thus Amicor was not required to pay the final $70,000 due under the note. No amounts under the note receivable from Amicor were outstanding at December 31, 2012. | ||||||
The Company accounted for such transaction pursuant to ASC 845-10, “Nonmonetary Transactions” and related subtopics for an exchange of a nonmonetary asset for a non controlling ownership interest in a second entity. Since the Company received cash in the exchange of its nonmonetary assets and the cash received was greater than 25% of the fair value of the assets exchanged, the transaction was considered a monetary exchange and full or partial gain recognition is required. The fair value of the uranium mining claims exchanged approximates the Company’s carrying value which amounted to $0. In accordance with ASC 845-10, the Company recognized a gain from the sale of uranium assets of $930,000 which represents the cash collected on the note as of December 31, 2012. The Company has no actual or implied commitment, financial or otherwise, to support the operations of the new entity in any manner and the Company planned to liquidate its investment in Amicor. Consequently, the Company treated its investment in Amicor as marketable securities - available for sale with an initial basis of $0. Between February 2012 and December 2012, the Company sold 8,486,667 shares of Amicor’s common stock under private transactions and generated net proceeds of $1,490,600 and recorded a realized gain – available for sale securities of $1,490,600 during the year ended December 31, 2012. Additionally, in January 2013, the Company sold an aggregate of 1,513,333 shares of Amicor’s common stock in a private transaction and generated net proceeds of $151,333 (see Note 17). In October 2012, Amicor changed its name to Marathon Patent Group, Inc. | ||||||
David Rector, a former member of the Company's Board of Directors, was a former director of Amicor. Joshua Bleak, Continental's Chief Executive Officer and director, was a former director of Amicor. On March 8, 2013, Mr. Rector and Mr. Bleak tendered their resignations as members of the Board of Amicor. | ||||||
Red Battle Corp. | ||||||
On May 24, 2012, the Company and Red Battle entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Valor Gold Corp., a Delaware corporation ("Valor Gold"), and Valor Gold Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of Valor Gold (the "Buyer"). The Merger Agreement provides for, upon the terms and subject to the conditions in the Merger Agreement, the merger of the Buyer with and into Red Battle with Red Battle continuing as the surviving entity and the corporate existence of the Buyer ceasing (the "Merger"). The Merger effectively resulted in the sale of the Company’s two Lander County, Nevada exploration properties, Red Rock Mineral Prospect (including Centerra Prospect), and North Battle Mountain Mineral Prospect, to Valor Gold for (i) $2,000,000 in cash (the “Cash Consideration”), (ii) a 5% promissory note in the principal amount of $500,000 due 18 months following the issuance date and (iii) 25,000,000 shares of Valor Gold’s common stock. As further consideration for the Merger, (i) Arthur Leger, the Company’s former Chief Geologist, agreed to surrender to the Company for cancellation of 1,750,000 shares of the Company’s common stock; (ii) Arthur Leger agreed to grant, as lessor, a 1% net smelter returns production royalty on all minerals produced from certain claims under the Red Rock Mineral Prospect and North Battle Mountain Mineral Prospect leases to the Company; and (iii) Mr. Leger agreed to defer certain royalty payments under the terms of the Lease Agreements with Arttor Gold related to the Red Rocks and North Battle Mineral Prospect Properties. Under the terms of the note, all outstanding principal, together with all accrued but unpaid interest, is payable upon the earlier of: (i) the closing of one or more private placements of the Valor Gold’s securities in which Valor Gold receives gross proceeds of at least $7,500,000 or (ii) 18 months following the issuance of the note. | ||||||
In November 2012, the Company collected the full balance of the note receivable $500,000 plus accrued interest from Valor Gold. As of December 31, 2012, the note and interest receivables were $0. | ||||||
Prior to the Merger, certain entities under the control of Barry Honig, a director of the Company, and Mr. Honig’s family members held 5,600,003 shares of Valor Gold. Additionally, one of the shareholders of the Company held 750,000 shares of Valor Gold prior to the Merger. Contemporaneously with the closing of the Merger, such shareholder purchased 1,250,000 shares of Valor Gold’s common stock in a private placement by Valor Gold. Additionally, entities under Mr. Honig’s control purchased 5,000,000 shares of Valor Gold’s Series A Preferred Stock in the Valor Gold private placement. | ||||||
Assuming the conversion into common stock of Valor Gold’s Series A Preferred Stock both the interest of the aforementioned shareholder and entities controlled by Mr. Honig in Valor Gold would account for 18% of Valor Gold’s issued and outstanding common stock at the closing of the Merger. In addition to being large shareholders of the Company and Valor Gold, both the shareholder and Mr. Honig, as well as, entities controlled by Mr. Honig, directly and indirectly, may influence the Company’s decisions with respect to voting of the 25,000,000 shares of Valor Gold owned by the Company, through their investments in both the Company and Valor Gold. Mr. Honig has served as co-Chairman of the Company and currently is a director of the Company. Accordingly, the Company and Mr. Honig are considered to be founders and “promoters” of Valor Gold as defined under the Securities Act. As a result of such shareholder and Mr. Honig, as well as entities controlled by Mr. Honig, being among the largest shareholders of the Company and Valor Gold, there may exist certain conflicts of interest with respect to the business and affairs of each of these companies. The Company believes that the shareholder and Mr. Honig, as well as entities controlled by Mr. Honig, are independent private investors who have no agreements, arrangements or understandings with respect to the ownership or control over any of these companies. | ||||||
The Company also considered the guidance in ASC 805 “Business Combination” (formerly EITF 02-5 “Common Control”), that the Merger Agreement was not treated as a common control transaction as there was no group of shareholders that held more than 50% of the voting ownership interest of each entity with contemporaneous written evidence of an agreement to vote a majority of the entities’ shares in concert. | ||||||
The Company accounted for the 25,000,000 shares of Valor Gold’s common stock under ASC 845-10-S99, “Transfer of Nonmonetary Assets by Promoters or Shareholders” whereby the transfer of nonmonetary assets to a company by its promoters or shareholders in exchange for stock prior to or at the time of the company's initial public offering normally should be recorded at the transferors' historical cost basis determined under US GAAP. The Company recorded the 25,000,000 shares of Valor Gold at the historical cost basis of the nonmonetary assets transferred which amounted to $83,333. As a result of this transaction, during the year ended December 31, 2012, the Company recognized a gain from the sale of its subsidiaries of $2,500,000 as described above which represents the cash and note consideration to the Company pursuant to the Merger Agreement. | ||||||
Consequently, the issuance of 25,000,000 shares of Valor Gold’s common stock to the Company accounted for approximately 38.6% of the total issued and outstanding common stock of Valor Gold as of May 24, 2012. As a result of the Company’s ownership interest of more than 20% of Valor Gold, the Company is considered to be an equity method investor which is accounted for under equity method of accounting. As of December 31, 2012 the Company holds a 32.4% interest in Valor Gold. The Company recorded its share of Valor Gold’s net loss which amounted to $83,333 using the equity method of accounting and such investment has been reduced to $0. Under ASC 323-10-35 “Investments – Equity Method”, the equity method investor shall discontinue applying the equity method when the investment has been reduced to zero and shall not provide for additional losses, unless the equity method investor provides or commits to provide additional funds to the investee, has guaranteed obligations of the investee, or is otherwise committed to provide further financial support to the investee. The Company is not obligated or committed to provide additional funds or further financial support to Valor Gold and as such the Company shall not record additional share of losses of Valor Gold upon reducing such investment to $0. | ||||||
In February 2013 the Company sold an aggregate of 3,000,000 shares of Valor Gold’s common stock in a private transaction and generated net proceeds of $300,000 (see Note 17). | ||||||
MARKETABLE_SECURITIES
MARKETABLE SECURITIES | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
MARKETABLE SECURITIES. | ' | ||||||||||||||||
MARKETABLE SECURITIES | ' | ||||||||||||||||
NOTE 4 — MARKETABLE SECURITIES | |||||||||||||||||
Marketable securities activity for the three months ended September 30, 2013 consisted of the following: | |||||||||||||||||
Cost | Gross | Gross | Realized Gain | Fair Value | |||||||||||||
Unrealized | Unrealized | from Sale of | |||||||||||||||
Gains | Losses | Securities | |||||||||||||||
Marketable securities — available for sale | $ | — | $ | — | $ | — | $ | 1,656,333 | $ | — | |||||||
In January 2013, the Company sold the remaining 1,513,333 shares of Amicor common stock it owned in a private transaction and generated net proceeds of $151,333. Between February 2013 and May 2013, the Company sold all 25,000,000 shares of Valor Gold common stock it owned in private transactions and generated net proceeds of $1,505,000. Consequently, the Company recorded a realized gain — available for sale securities of $1,656,333 during the nine months ended September 30, 2013. | |||||||||||||||||
MINERAL_PROPERTIES
MINERAL PROPERTIES | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
MINERAL PROPERTIES. | ' | |||||||
MINERAL PROPERTIES | ' | |||||||
NOTE 5 — MINERAL PROPERTIES | ||||||||
Relief Canyon Properties | ||||||||
The Relief Canyon properties are located in Pershing County about 100 miles northeast of Reno, Nevada and at the southern end of the Humboldt Range. The Relief Canyon properties do not currently have any mineral reserves and all activities undertaken and currently proposed are exploratory in nature. | ||||||||
Relief Canyon Mine | ||||||||
Through the Company’s wholly-owned subsidiary, Gold Acquisition, the Company owns 164 unpatented lode mining claims and 120 unpatented millsites at the Relief Canyon Mine property. The property includes the Relief Canyon Mine and gold processing facilities, currently in a care and maintenance status. The Relief Canyon Mine includes three open pit mines, heap leach pads comprised of six cells, two solution ponds and a cement block constructed adsorption desorption-recovery (ADR) solution processing circuit. The ADR type process plant consists of four carbon columns, acid wash system, stripping vessel, electrolytic cells, a furnace and a retort for the production of gold doré. The process facility was completed in 2008 by Firstgold Corp and produced gold until 2009 and is currently in a care and maintenance status. The facilities are generally in good condition. Most of the Relief Canyon Mine property is burdened by a production royalty equal to 2% of net smelter returns payable to Battle Mountain Gold Exploration LLC (now owned by Royal Gold). | ||||||||
Pershing Pass Property | ||||||||
The Pershing Pass property consists of over 700 unpatented mining claims covering approximately 12,000 acres and a mining lease covering approximately 600 acres. The Pershing Pass property includes approximately 490 unpatented lode mining claims covering approximately 9,700 acres that we acquired from Silver Scott Mines in March 2012 and approximately 283 unpatented lode mining claims covering about 5,660 acres owned directly by a Victoria Gold Corp. subsidiary prior to our purchase. Victoria Gold has reserved a 2% net smelter return production royalty on the 221 claims that are located outside the area of interest related to the Newmont Leased property, discussed above. The Pershing Pass property also includes 17 unpatented mining claims acquired from a third party in April 2012 subject to a 2% net smelter return royalty, 17 unpatented mining claims that the Company located in mid 2012, and approximately 635 acres of private lands that the Company leased in January 2013. The primary term of the lease is ten years, which may be extended as long as mineral development work continues on the property. Production from the lease is subject to a 2% net smelter return royalty on all metals produced other than gold, and to a royalty on gold indexed to the gold price, ranging from 2% at gold prices of less than $500 per ounce to 3.5% at gold prices over $1,500 per ounce. Prior to one year after commercial production, the Company can repurchase up to 3% of the royalty on gold production at the rate of $600,000 for each 1%. | ||||||||
In September 2013, the Company entered into a lease agreement and purchase option with Wolf Pack Gold (Nevada) Corp for 19 unpatented mining claims (approximately 400 acres) in the Pershing Pass Property. The lease grants the Company exclusive rights to conduct mineral exploration, development and mining and an exclusive option to purchase the claims. The primary term of the lease is ten years, which may be extended as long as mineral exportation, development, or mining work continues on the property. Production from the lease is subject to a 1% net smelter return royalty on precious metals and a one-half percent net smelter royalty on all other metals produced from the lease. Prior to production, and starting in September 2016, the Company is required to pay a $10,000 per year advance minimum royalty payment to Wolf Pack Gold. The advance minimum royalty remains at $10,000 per year until September 2023 when the advance royalty payment increases to $12,500 per year. The advance royalty payment increases to $15,000 per year in September 2028 and then $20,000 per year in September 2033. The advance minimum royalty payments are due on or before the anniversary dates of the lease agreement. If the Company decides to exercise the purchase option, which is exercisable at any time, it can acquire the 19 unpatented mining claims from Wolf Pack Gold for $250,000. | ||||||||
Newmont Leased Properties | ||||||||
On April 5, 2012, the Company purchased from Victoria Gold Corp. and Victoria Resources (US) Inc. (“VRI”) their interest in approximately 13,300 acres of mining claims and private lands adjacent to the Company’s landholdings at the Relief Canyon Mine in Pershing County, Nevada. Approximately 8,900 acres of these properties are held under leases and subleases with Newmont USA Ltd., which the Company refers to as the Newmont Leased properties. Victoria Gold has reserved a 2% net smelter return royalty from the production on 221 of the 283 unpatented mining claims that it owned directly. | ||||||||
Approximately 8,900 acres of the lands that the Company acquired from Victoria Gold Corporation are a leasehold interest comprised of unpatented mining claims and private lands subject to a 2006 Mineral Lease and Sublease with Newmont USA Ltd., which the Company refers to as the Newmont Leased property. The Newmont Leased property consists of 155 unpatented lode mining claims owned by Newmont comprising approximately 2,800 acres, approximately 4,900 acres of privately-owned fee minerals leased by Newmont from the owners, and 62 unpatented mining claims that were owned by Victoria within the Newmont Leased property and area of interest. | ||||||||
In order to maintain the 2006 Minerals Lease and Sublease with Newmont, the Company was required to spend approximately $1.0 million in exploration expenses in 2013. The Company has satisfied the 2013 direct drilling work commitment. Starting in 2014, the Company is required to spend $0.5 million on exploration expenditures or pay Newmont rental payments of $10 per acre per year. The rental payments will escalate by 5% per year. The Company has also satisfied the 2014 direct drilling work commitment and the majority of the 2015 commitment. Under the current terms of the 2006 Minerals Lease and Sublease and commencing in 2014, the annual rent, if the Company elects not to or fails to incur at least $0.5 million in exploration expenditures, would be approximately $0.1 million. Because the Company has satisfied the direct drilling work commitment for 2014 and 2015, it will not incur annual rental payments in 2014 or 2015. The Company will be required to expend $0.5 million in additional direct drilling expenditures in 2016 in order to avoid the annual rental payment requirement. | ||||||||
Pursuant to the 2006 Minerals Lease and Sublease, the Company is subject to a 3% to 5% net smelter royalty tied to the gold price in the event Newmont elects not to pursue the Venture Option and quitclaims the claims and leased lands to the Company. The 5% net smelter royalty would apply if the monthly average gold price is equal to or greater than $400 per ounce. In addition, the Company is subject to a 2.5% net smelter returns royalty payable to the lessor on approximately 800 acres of the Newmont Leased properties under the 1994 Mining Lease and a 3.5% net smelter returns royalty payable to the lessor on approximately 495 acres of the Newmont Leased properties under the 1999 Mining Lease; these royalties would offset the Newmont royalty down to 2%. | ||||||||
The Company has posted bonds with the United States Department of the Interior Bureau of Land Management (“BLM”) as required by the State of Nevada in an amount equal to the maximum cost to reclaim land disturbed in its mining process. The Company posted a reclamation bond deposit of approximately $4.6 million to provide surface reclamation coverage for the Relief Canyon Mine, as required by the BLM to secure remediation costs if the project is abandoned or closed. Due to its investment in the bond and the close monitoring of the BLM Nevada State Office, the Company believes that it has adequately mitigated any liability that could be incurred by the Company to reclaim lands disturbed in its mining process. | ||||||||
As of September 30, 2013, based on management’s review of the carrying value of mineral rights, management determined that there is no evidence that the cost of these acquired mineral rights will not be fully recovered and accordingly, the Company has determined that no adjustment to the carrying value of mineral rights was required. | ||||||||
As of the date of these consolidated financial statements, the Company has not established any proven or probable reserves on its mineral properties and has incurred only acquisition and exploration costs. | ||||||||
Mineral properties consisted of the following: | ||||||||
September 30, | December 31, | |||||||
2013 | 2012 | |||||||
Relief Canyon Mine — Gold Acquisition | $ | 8,501,071 | $ | 8,501,071 | ||||
Relief Canyon Mine — Newmont Leased Properties | 7,709,441 | 7,709,441 | ||||||
Pershing Pass Property | 576,400 | 576,400 | ||||||
$ | 16,786,912 | $ | 16,786,912 | |||||
PROPERTY_AND_EQUIPMENT
PROPERTY AND EQUIPMENT | 9 Months Ended | 12 Months Ended | |||||||||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | ||||||||||||||||||||||
PROPERTY AND EQUIPMENT | ' | ' | |||||||||||||||||||||
PROPERTY AND EQUIPMENT | ' | ' | |||||||||||||||||||||
NOTE 6 — PROPERTY AND EQUIPMENT | NOTE 6 – PROPERTY AND EQUIPMENT | ||||||||||||||||||||||
Property and equipment consisted of the following: | Property and equipment consisted of the following: | ||||||||||||||||||||||
Estimated Life | September 30, | December 31, | Estimated Life | 31-Dec-12 | 31-Dec-11 | ||||||||||||||||||
2013 | 2012 | Furniture and fixtures | 5 years | $ | 56,995 | $ | 20,000 | ||||||||||||||||
Furniture and fixtures | 5 years | $ | 56,995 | $ | 56,995 | Office and computer equipment | 1 - 5 years | 220,060 | 26,606 | ||||||||||||||
Office and computer equipment | 1 - 5 years | 227,344 | 220,060 | Land | — | 266,977 | 266,977 | ||||||||||||||||
Land | — | 266,977 | 266,977 | Building and improvements | 5 - 25 years | 727,965 | 727,965 | ||||||||||||||||
Building and improvements | 5 - 25 years | 727,965 | 727,965 | Site costs | 10 years | 1,272,732 | 1,272,732 | ||||||||||||||||
Site costs | 10 years | 1,272,732 | 1,272,732 | Crushing system | 20 years | 2,256,943 | 2,256,943 | ||||||||||||||||
Crushing system | 20 years | 2,256,943 | 2,256,943 | Process plant and equipment | 10 years | 3,166,280 | 3,115,266 | ||||||||||||||||
Process plant and equipment | 10 years | 3,169,442 | 3,166,280 | Vehicles and mining equipment | 5 - 10 years | 682,373 | 659,622 | ||||||||||||||||
Vehicles and mining equipment | 5 - 10 years | 695,825 | 682,373 | 8,650,325 | 8,346,111 | ||||||||||||||||||
8,674,223 | 8,650,325 | Less: accumulated depreciation | (1,263,549 | ) | (315,008 | ) | |||||||||||||||||
Less: accumulated depreciation | (1,993,320 | ) | (1,263,549 | ) | |||||||||||||||||||
$ | 7,386,776 | $ | 8,031,103 | ||||||||||||||||||||
$ | 6,680,903 | $ | 7,386,776 | ||||||||||||||||||||
For the year ended December 31, 2012 and 2011, depreciation expense amounted to $992,648 and $325,928 respectively. | |||||||||||||||||||||||
For the nine months ended September 30, 2013 and 2012, depreciation expense amounted to $729,771 and $756,482, respectively. | |||||||||||||||||||||||
Between November 2011 and December 31, 2011, the Company sold mining and drilling equipment with a net book value of $407,369 to third parties for a sales price of $233,339, realizing a loss on sale of assets of $174,030. As of December 31, 2011, $99,908 of the sales proceeds were included in other receivables as reflected in the accompanying consolidated balance sheet and were collected in January 2012. | |||||||||||||||||||||||
Depreciation expense related to the sold mining and drilling equipment amounted to $10,920 which is included in the $325,928 above. During fiscal 2012, the Company sold mining and drilling equipment with a net book value of $80,309 to third parties for a sales price of $74,074 realizing a loss on sale of assets of $6,235. Depreciation expense related to the sold mining and drilling equipment amounted to $10,318 which is included in the $992,648 above. Additionally, the Company retired certain fully depreciated fixed assets in the amount of $33,789 which was included in the depreciation expense during fiscal 2012. |
NOTES_PAYABLE
NOTES PAYABLE | 9 Months Ended | 12 Months Ended | |||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | ||||||||||||||||
NOTES PAYABLE | ' | ' | |||||||||||||||
NOTES PAYABLE | ' | ' | |||||||||||||||
NOTE 7 — NOTES PAYABLE | NOTE 9 – NOTES PAYABLE | ||||||||||||||||
In August 2012, the Company issued a note payable in the amount of $92,145 in connection with the acquisition of mining equipment. The note payable bears interest at approximately 7% per annum and is secured by a lien on the mining equipment. The note is payable in 48 equal monthly payments of $2,226 beginning in September 2012. | As of December 31, 2012 and 2011, note payable – related party consisted of the following: | ||||||||||||||||
Notes payable — short and long term portion consisted of the following: | 31-Dec-12 | 31-Dec-11 | |||||||||||||||
Note payable - related party | $ | 486,250 | $ | 561,750 | |||||||||||||
September 30, 2013 | December 31, 2012 | Less: debt discount - related party | — | (50,918 | ) | ||||||||||||
Total notes payable | $ | 65,269 | $ | 82,546 | |||||||||||||
Less: current portion | (23,036 | ) | (23,036 | ) | Note payable - related party, net | $ | 486,250 | $ | 510,832 | ||||||||
Long term portion | $ | 42,233 | $ | 59,510 | |||||||||||||
In February 2011, the Company, Empire and its wholly-owned subsidiary, EXCX Funding Corp. (collectively the “Borrowers”), entered into a credit facility agreement (the “Credit Facility Agreement”) with two lenders including Barry Honig, a member of the Company’s Board of Directors. The Credit Facility Agreement consisted of a loan pursuant to which $4.5 million was borrowed on a senior secured basis. The indebtedness under the Credit Facility Agreement was evidenced by a promissory note payable to the order of the lenders. The loan was used exclusively to fund the costs and expenses of certain music and sporting events (the “Events”) as agreed to by the parties. | |||||||||||||||||
The notes bear interest at 6% per annum and matured on January 31, 2012, subject to acceleration in the event the Borrowers undertake third party financing. | |||||||||||||||||
In addition to the 6% interest, the Borrower is required to pay all interest, fees, costs and expenses incurred by lenders in connection with the issuance of this loan facility. Pursuant to the Credit Facility Agreement, the Borrowers entered into a Master Security Agreement, Collateral Assignment and Equity Pledge with the lenders whereby the Borrowers collaterally assigned and pledged to lenders, and granted to lenders a present, absolute, unconditional and continuing security interest in, all of the property, assets and equity interests of the Company as defined in such agreement. Furthermore, in connection with the Credit Facility Agreement, the Lenders entered into a Contribution and Security Agreement (the “Contribution Agreement”) with the Company’s former Chief Executive Officer, Sheldon Finkel (See Note 11). As consideration for the extension of credit pursuant to the Credit Facility Agreement, the Borrowers were obligated to pay a fee equal to 15% of the initial loan commitment of $4.5 million (the “Preferred Return Fee”) of which Sheldon Finkel, shall receive a pro-rata portion (1/3). The Preferred Return Fee was payable if at all, only out of the net profits from the Events. Accordingly, the Company shall record the Preferred Return Fee upon attaining net profits from the Events. The Company issued to the lenders and Sheldon Finkel an aggregate of 2,250,000 shares of the Company’s newly designated Series A Preferred Stock, convertible into one share each of the Company’s common stock. | |||||||||||||||||
The Company valued the 2,250,000 Series A Preferred Stock at the fair market value of the underlying common stock on the date of grant at $1.20 per share or $2,700,000 and recorded a debt discount of $1,800,000 and deferred financing cost of $900,000 which are being amortized over the term of these notes. Such deferred financing cost represents the 750,000 Series A Preferred Stock issued to Sheldon Finkel for guaranteeing one-third of the net losses and assignment of that certain irrevocable letter of credit, as described above. Between May 2011 and December 2011, 2,250,000 of these preferred shares were converted into common stock. During August 2011, the revenues from the Events did not exceed its costs and accordingly the Company is indebted to the lenders, including the Board Member of the Company. As a result, the obligations under the Contribution Agreements became obligations of the parties thereto to each other. Between August 2011 and December 2011, the Company paid a total of $3,326,500 to the lenders and such amount reduced the principal balance of these notes. On November 29, 2011, the holder of this note payable, converted $611,750 principal balance of this note into an aggregate of 1,529,375 of units of the Company offered in a private placement. Each unit was sold for a purchase price of $0.40 per unit and consisted of: (i) one share of common stock and (ii) a two-year warrant to purchase fifty (50%) percent of the number of shares of common stock purchased at an exercise price of $0.60 per share, subject to adjustment upon the occurrence of certain events. | |||||||||||||||||
In March 2012, Mr. Honig, as the sole remaining holder of the note, agreed to extend the maturity date of the remaining balance of the note to February 1, 2013. | |||||||||||||||||
In July 2012, Mr. Honig (the “Assignor”) entered into an Assignment Agreement with a related party (the “Assignee”) whereby the Assignor assigned $42,000 of his outstanding principal note (the “Assigned Note”) in connection with the Credit Facility Agreement. The Assignee purchased the Assigned Note for $42,000. On August 10, 2012, the Company entered into a Cancellation of Debt and Assignment of Shares Agreement with the Assignee and Sheldon Finkel, the Company’s former Chief Executive Officer. Pursuant to the Separation Agreement and Release dated in September 2011, Sheldon Finkel retained 600,000 shares of the Company’s common stock (the “Executive Retained Securities”) which were pledged as collateral security for the repayment of certain amounts owed to the Company by a third party (the “Third Party Receivable”). The Third Party receivable was not collected by the Company and accordingly, the Company was entitled to receive 300,000 shares of the Executive Retained Securities. On August 10, 2012, the Company and Sheldon Finkel agreed that Mr. Finkel would surrender 300,000 shares of the Executive Retained Securities to the Company in consideration for the cancellation of the Third Party Receivable. | |||||||||||||||||
Pursuant to the Cancellation of Debt and Assignment of Shares Agreement, the Company, Sheldon Finkel and the Assignee agreed that in consideration for the cancellation and satisfaction of the Assigned Note, Mr. Finkel would transfer and assign the 300,000 shares of Executive Retained Securities due to the Company to the Assignee. As a result of the transfer and assignment of the 300,000 shares of the Company’s common stock to the Assignee, the Third Party Receivable and the Assigned Note were extinguished. The Company valued the 300,000 common shares at the fair market value on the date of grant or assignment at approximately $0.345 per share or $103,500. In connection with the assignment of the 300,000 shares of common stock, the Company reduced the outstanding principal note by $42,000 and recognized an interest expense of $61,500. | |||||||||||||||||
In October 2012, the Company entered into an Assignment of Rights and Assumption of Obligation Agreement with Barry Honig whereby the Company assigned and transferred the rights arising under the Separation Agreement and General Release executed on March 28, 2011 and Agreement for Payment of Future Proceeds executed in April 2011 (collectively the “Agreement”). The Agreement is in connection with debts and obligations owed by Gregory Cohen, the former President of the Company. In consideration for the assumption by Mr. Honig of all obligations owned by the Company under the Agreement, Mr. Honig reduced the outstanding principal note due to him by $33,500. As of December 31, 2012, the remaining outstanding principal note due to Mr. Honig amounted to $486,250. | |||||||||||||||||
In January 2013, Mr. Honig, as the sole remaining holder of the note, agreed to extend the maturity date of the remaining balance of the note to February 1, 2014. | |||||||||||||||||
As of December 31, 2012 and 2011, accrued interest and fees on this note payable – related party amounted to $142,164 and $109,493, respectively. For the years ended December 31, 2012 and 2011, amortization of debt discount and deferred financing cost amounted to $101,836 and $2,598,163, respectively, and was included in interest expense. | |||||||||||||||||
In March 2012, the Company received $500,000 in connection with a 5% secured promissory note (the “Bridge Note”), which was secured by certain assets of the Company’s wholly-owned subsidiaries, Arttor Gold and Noble Effort. The Company administratively issued such Bridge Note on April 10, 2012. The full amount of principal and accrued interest under the Bridge Note was due and payable on a date that shall be the earlier to occur of: (x) the sale of Noble Effort and Arttor Gold, (or the sale of all or substantially all of the assets of Arttor Gold and Noble Effort) to a third party purchaser or (y) October 10, 2012. The Bridge Note was fully paid on May 29, 2012. As of December 31, 2012, accrued interest on this note amounted to $0. | |||||||||||||||||
In August 2012, the Company issued a note payable amounting to $92,145 in connection with the acquisition of mining equipment. The note payable bears interest at approximately 7% per annum and is secured by a lien of the mining equipment. The note is payable in 48 equal monthly payments of $2,226 beginning in September 2012. As of December 31, 2012, the current and long term portion of this note amounted to $23,036 and $59,510, respectively. | |||||||||||||||||
Notes payable – short and long term portion consisted of the following: | |||||||||||||||||
31-Dec-12 | 31-Dec-11 | ||||||||||||||||
Total notes payable | $ | 82,546 | $ | — | |||||||||||||
Less: current portion | (23,036 | ) | — | ||||||||||||||
Long term portion | $ | 59,510 | $ | — | |||||||||||||
RELATED_PARTY_TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2013 | Dec. 31, 2012 | |
RELATED PARTY TRANSACTIONS | ' | ' |
RELATED PARTY TRANSACTIONS | ' | ' |
NOTE 8 — RELATED PARTY TRANSACTIONS | NOTE 11 – RELATED PARTY TRANSACTIONS | |
Parties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. The Company discloses all related party transactions. | Parties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. The Company discloses all related party transactions. | |
Note payable - related party | Note payable - related party | |
In February 2011, Mr. Honig, a Director of the Company advanced $2,250,000 to the Company under a Credit Facility Agreement. Between August 2011 and December 2011, the Company paid a total of $1,688,250 to Mr. Honig. Additionally, between July 2012 and October 2012, a total of $75,500 was extinguished on a non-cash basis reducing the principal balance of the note to $486,250. | In connection with the Credit Facility Agreement (see Note 9), certain lenders, including Mr. Honig, the Company’s Board Member, funded $2,250,000 to the Company under this Credit Facility Agreement. Furthermore, in connection with the Credit Facility Agreement, the lenders entered into a Contribution Agreement with the Company’s former Chief Executive Officer, Sheldon Finkel, pursuant to which Sheldon Finkel agreed to pay or reimburse the lenders the pro rata portion (1/3) of any net losses from Events and irrevocably pledged to lenders a certain irrevocable letter of credit dated in June 2010 in favor of Sheldon Finkel. The Company also issued to Sheldon Finkel and the Company’s Board Member 750,000 shares each of the Company’s newly designated Series A Preferred Stock, convertible into one share each of the Company’s common stock. As consideration for the extension of credit pursuant to the Credit Facility Agreement, the borrowers are obligated to pay a fee equal to 15% of the initial loan commitment of $4.5 million of which Sheldon Finkel, shall receive a pro-rata portion (1/3). The Preferred Return Fee shall be payable if at all, only out of the net profits from the Events. The Company did not generate net profits from the Events. On May 4, 2011, Sheldon Finkel and the Company’s Board Member converted their shares into 1,500,000 shares of Common Stock. Between August 2011 and December 2011, the Company paid a total of $1,688,250 to the Company’s Board Member and such amount reduced the principal balance of his note. | |
Subsequently, in August 2013, Mr. Honig exchanged the note including accrued interest of $159,230 for Company’s Series E Convertible Preferred Stock and warrants and the Credit Facility was terminated (see Note 9). | At December 31, 2012 and 2011 principal amount of the note payable – related party amounted to $486,250 and $561,750, respectively. | |
As of September 30, 2013 and December 31, 2012 principal balance of the note amounted to $0 and $486,250, respectively. As of September 30, 2013 and December 31, 2012, accrued interest on this note payable — related party amounted to $0 and $142,164, respectively. | Convertible promissory note - related party | |
Continental Resources Group, Inc. | On February 1, 2011, the Company raised $750,000 in consideration for the issuance of convertible promissory notes from various investors, including $100,000 from the Company’s Member of the Board of Directors. The convertible promissory notes bore interest at 5% per annum and were convertible into shares of the Company’s common stock at a fixed rate of $1.00 per share. On October 31, 2011, the Company entered into amendment agreements (the “Amendments”) with holders of the Company’s outstanding 5% convertible promissory notes dated as of February 1, 2011 in the aggregate principal amount of $750,000. Pursuant to the Amendments, the fixed conversion price was adjusted from $1.00 to $0.65. The note holders, including Company’s Member of the Board of Directors, Barry Honig, converted their outstanding notes to the Company’s common stock at a conversion price of $0.65 per share. | |
In January 2013, the Company paid $15,066 of Continental’s expenses. The Company recorded such advances to additional paid in capital which represents distributions to the Company’s former parent company for a total of $15,066 and $611,589 at September 30, 2013 and December 31, 2012, respectively. | Member of the board of directors | |
As of December 31, 2012, a member of the Company's Board of Directors, Barry Honig, held 9,474,759 shares of Continental, directly or indirectly. In addition, family members, including trusts for the benefit of Mr. Honig's minor children, currently own 3,685,000 shares of Continental of which Mr. Honig disclaims beneficial ownership. Accordingly, as one of the largest shareholder of Continental, Mr. Honig may be deemed to be in control of Continental and accordingly there may exist certain conflicts of interest as a result. See Note 17- Subsequent Events regarding the dissolution of Continental and distribution of the Company’s shares held by Continental to its shareholders of record on March 1, 2013. | ||
Continental Resources Group, Inc. | ||
As of December 31, 2012, Continental holds a 28.54% interest in the Company. The Company is considered to be an equity method investee as a result of Continental’s ownership interest of less than 50% which is accounted for under equity method of accounting. In March 2012, the Company issued 250,000 shares of its common stock to a third party for the payment of Continental’s accrued legal fees of $170,614 (see Note 12) and was considered an advance to Continental. Additionally, between April 2012 and December 2012, the Company paid an aggregate of $93,640 for the payment of Continental’s accounting, legal and other public company fees. During the year ended December 31, 2012, the Company recorded such advances to additional paid in capital which represents distributions to the Company’s former parent company for a total of $611,589. At December 31, 2012 and 2011, the Company had a receivable from Continental amounting to $0 and $347,335 respectively. These advances were short-term in nature and non-interest bearing and were recorded as due from equity method investor. See Note 17- Subsequent Events regarding the dissolution of Continental and distribution of the Company’s shares held by Continental to its shareholders of record on March 1, 2013. | ||
STOCKHOLDERS_EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended | 12 Months Ended | ||||||||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | |||||||||||||||||||||
STOCKHOLDERS' EQUITY | ' | ' | ||||||||||||||||||||
STOCKHOLDERS' EQUITY | ' | ' | ||||||||||||||||||||
NOTE 9 — STOCKHOLDERS’ EQUITY | ||||||||||||||||||||||
NOTE 12 – STOCKHOLDERS’ EQUITY | ||||||||||||||||||||||
Preferred Stock | ||||||||||||||||||||||
Preferred Stock | ||||||||||||||||||||||
The Company is authorized within the limitations and restrictions stated in the Amended and Restated Articles of Incorporation to provide by resolution or resolutions for the issuance of 50,000,000 shares of Preferred Stock, par value $0.0001 per share in such series and with such designations, preferences and relative, participating, optional or other special rights and qualifications, limitations or restrictions as the Company’s Board of Directors establish. | ||||||||||||||||||||||
The Company is authorized within the limitations and restrictions stated in the Amended and Restated Articles of Incorporation of the Company, to provide by resolution or resolutions for the issuance of 50,000,000 shares of Preferred Stock, par value $0.0001 per share in such series and with such designations, preferences and relative, participating, optional or other special rights and qualifications, limitations or restrictions as the Company’s Board of Directors shall fix by resolution or resolutions providing for the issuance thereof duly adopted by the Board of Directors. | ||||||||||||||||||||||
Convertible Series A Preferred Stock | ||||||||||||||||||||||
Series A Convertible Preferred Stock | ||||||||||||||||||||||
As of September 30, 2013, 2,250,000 shares of Series A Preferred Stock, $0.0001 par value were authorized with none issued and outstanding. | ||||||||||||||||||||||
In connection with the Credit Facility Agreement, the Company agreed to issue to the lenders and Sheldon Finkel an aggregate of 2,250,000 shares of the Company’s newly designated Series A Preferred Stock, convertible into one share each of the Company’s common stock (see Note 9). The holders of the Company’s Series A Preferred Stock were entitled to the same number of votes per share of common stock that the holder of these Series A Preferred Stock may convert into at the time of the vote. In the event of a liquidation, dissolution or winding up of the business of the Company, the holder of the Series A Preferred Stock would have preferential payment and distribution rights over any other class or series of capital stock that provide for Series A Preferred Stock’s preferential payment and over the Company’s Common Stock. The Company valued the 2,250,000 Series A Preferred Stock at the fair market value of the underlying common stock on the date of grant at $1.20 per share or $2,700,000 and recorded a debt discount of $1,800,000 and deferred financing cost of $900,000 which were amortized over the term of these notes. Between May 2011 and December 2011, 2,250,000 Series A Preferred Stock were converted into 2,250,000 shares of common stock. As of December 31, 2012, 2,250,000 shares of Series A Preferred Stock, $0.0001 par value were authorized with none issued and outstanding. | ||||||||||||||||||||||
Convertible Series B Preferred Stock | ||||||||||||||||||||||
Series B Convertible Preferred Stock | ||||||||||||||||||||||
As of September 30, 2013, 8,000,000 shares of Series B Preferred Stock, $0.0001 par value were authorized with none issued and outstanding. | ||||||||||||||||||||||
Each share of Series B Convertible Preferred Stock is convertible into one share each of the Company’s common stock. The holders of the Company’s Series B Preferred Stock are entitled to the same number of votes per share of common stock that the holder of the Series B Preferred Stock may convert into at the time of the vote. In the event of a liquidation, dissolution or winding up of the business of the Company, the holder of the Series B Preferred Stock would have preferential payment and distribution rights over any other class or series of capital stock that provides for Series B Preferred Stock’s preferential payment and over the Company’s Common Stock. | ||||||||||||||||||||||
Convertible Series C Preferred Stock | ||||||||||||||||||||||
On May 24, 2011, the Company entered into four limited liability company membership interests purchase agreements with the former owners of Arttor Gold. Each of the owners of Arttor Gold, sold their interests in Arttor Gold in privately negotiated sales resulting in the Company acquiring 100% of Arttor Gold. Pursuant to the Agreements, the Company issued 8,000,000 shares of preferred stock, designated Series B Convertible Preferred Stock, and 13,000,000 shares of Common Stock in exchange for 100% membership interests in Arttor Gold. | ||||||||||||||||||||||
As of September 30, 2013, 3,284,396 shares of Series C Preferred Stock, $0.0001 par value were authorized with none issued and outstanding. | ||||||||||||||||||||||
Between October 2011 and December 2011, 7,500,000 shares of Series B Preferred Stock were converted into 7,500,000 shares of common stock. On February 3, 2012, 500,000 shares of Series B Preferred Stock were converted into 500,000 shares of common stock. The Company valued these common shares at par value. The Series B Preferred stock does not include any mandatory redeemable provisions. As of December 31, 2012, 8,000,000 shares of Series B Preferred Stock, $0.0001 par value were authorized with none issued and outstanding. | ||||||||||||||||||||||
Convertible Series D Preferred Stock | ||||||||||||||||||||||
As of September 30, 2013, there were 7,500,000 shares of Series D Preferred Stock authorized and none issued and outstanding. | Series C Convertible Preferred Stock | |||||||||||||||||||||
Convertible Series E Preferred Stock | On September 29, 2011, the Company sold 3,284,396 shares of Series C Convertible Preferred Stock and two-year warrants (the “Series C Preferred Warrants”) to purchase 9,853,188 shares of Common Stock at an exercise price of $0.60 per share for an aggregate purchase price of $3,284,396. | |||||||||||||||||||||
On August 5, 2013, the Company designated 15,151 shares of Series E Convertible Preferred Stock. Each share of Series E is convertible into shares of the Company’s common stock at a conversion rate of 3,000 shares of common stock for each share of Series E which is equivalent to a conversion price of $0.33 per share of common stock, subject to certain adjustments in the event of stock dividends, stock splits and subsequent equity sales. | In accordance with ASC 505, “Equity - Dividends and Stock Splits”, the Series C Convertible Preferred Stock was considered to have an embedded beneficial conversion feature (ECF) because the conversion price was less than the fair value of the Company’s common stock. This Series C Convertible Preferred Stock was fully convertible at the issuance date, therefore a portion of proceeds allocated to the Series C Convertible Preferred Stock of $3,284,396 was determined to be the value of the beneficial conversion feature and was recorded as a deemed dividend. | |||||||||||||||||||||
The holders of the Series E Preferred Stock will vote on an as-converted basis on all matters on which the holders of the common stock have a right to vote. The Company may, at any time after February 8, 2014, redeem all then outstanding Series E Preferred Stock for cash in an amount equal to 110% of the purchase price for the Series E Preferred Stock, provided that the optional redemption provisions are met as defined in the certificate of designation. Upon liquidation, dissolution or winding up of the Company, each holder of Series E Preferred Stock is entitled to receive the greater of: (i) 110% of the purchase price of the Series E Preferred Stock, and (ii) the amount each holder would be entitled to receive if such holder’s shares of Series E Preferred Stock were converted into common stock. Upon a change of control, all outstanding shares of Series E Preferred Stock will automatically convert into shares of common stock and the holders will also be entitled to receive a cash payment equal to 10% of the purchase price paid for the Series E Preferred Stock. The Company believes that the occurrence of the optional redemption is considered conditional events and as a result the instrument does not meet the definition of mandatorily redeemable financial instrument based from ASC 480-10-25, “Distinguishing Liabilities from Equity”. | In connection with the initial sales of the Series C Preferred Stock, the initial estimated fair values allocated to the ECF were $1,172,999 and the fair value allocated to the warrants of $ 2,111,397 was recorded as a deemed dividend on September 29, 2011. | |||||||||||||||||||||
In August 2013, the Company completed private placements to several accredited investors for the purchase of 10,533 shares of its Series E Convertible Preferred Stock and warrants to acquire 12,639,600 shares of the Company’s common stock for aggregate net proceeds of approximately $10.2 million. Each purchaser of Series E received a 3-year warrant to acquire a number of shares of the Company’s common stock equal to 40% of the number of shares of common stock issuable upon conversion of the Series E shares. The warrants are exercisable immediately at an exercise price of $0.40 per share of the Company’s common stock, subject to adjustments in the event of stock dividends, recapitalizations or certain other transactions and expire three years from the date of issuance. The purchase price of one share of Series E Preferred Stock and the associated warrant was $990. | The assumptions used valuing the Preferred Warrants include: | |||||||||||||||||||||
In accordance with ASC 505, “Equity - Dividends and Stock Splits”, the Series E Preferred Stock was considered to have an embedded beneficial conversion feature (ECF) because the conversion price was less than the fair value of the Company’s common stock. The Series E Preferred Stock was fully convertible at the issuance date, therefore a portion of proceeds allocated to the Series E Preferred Stock was determined to be the value of the beneficial conversion feature and was recorded as a preferred deemed dividend. In connection with the initial sales of the Series E Preferred Stock, the initial estimated fair value allocated to the ECF was $2,188,792 and the fair value allocated to the warrants of $1,912,867 was recorded as a preferred deemed dividend in August 2013. | Risk free interest rate (annual) | 0.27% | ||||||||||||||||||||
Expected volatility | 112% | |||||||||||||||||||||
The assumptions used valuing the warrants include: | Expected life | 2 Years | ||||||||||||||||||||
Assumed dividends | none | |||||||||||||||||||||
Risk free interest rate (annual) | 0.61% to 0.82% | |||||||||||||||||||||
Expected volatility | 86% | Each share of Series C Preferred Stock is convertible into shares of common stock at a conversion price of $0.50 per share, subject to adjustment in the event the Company issues common stock or securities convertible into or exercisable for shares of common stock at a price lower than the conversion price then in effect, but not less than $0.30 per share. The Series C Preferred Stock has a stated value of $1.50 per share. In the event of the liquidation, dissolution or winding up of the business of the Company, each share of Series C Preferred Stock shall be entitled to receive, a preferential amount in cash equal to the stated value. The Series C Preferred Warrants may be exercised until the second anniversary of issuance at a cash exercise price of $0.60 per share, subject to adjustment. The Series C Preferred Warrants may be exercised on a cashless basis at any time after the original date of issuance. On September 29, 2011, the Company issued 4,429,415 shares of common stock in connection with the exercise of the 9,853,188 Series C Preferred Warrants on a cashless basis. In June 2012, the conversion price of the Series C Preferred Stock was adjusted to $0.32 per share as a result of certain anti-dilution provisions contained therein due to the sale of the Company’s common stock at $0.32 per share. In June 2012, 3,284,396 shares of Series C Preferred Stock were converted into 10,263,738 shares of the Company’s common stock. The Series C Preferred Stock does not include any mandatory redeemable provisions. As of December 31, 2012, 3,284,396 shares of Series C Preferred Stock, $0.0001 par value were authorized with none issued and outstanding. | ||||||||||||||||||||
Expected life | 3 Years | |||||||||||||||||||||
Assumed dividends | none | Series D Convertible Preferred Stock | ||||||||||||||||||||
In connection with these private placements, the Company paid legal fees of approximately $124,000 and commissions of approximately $76,000 in cash and the issuance of warrants to purchase 13,590 shares of the Company’s Common Stock. | On February 21, 2012, the Company designated 1,000,000 shares of 9.0% Series D Cumulative Convertible Preferred Stock. Each share of Series D Preferred Stock is convertible (together with accrued and unpaid dividends thereon) into shares of the Company’s common stock at a conversion price of $0.40 per share, subject to equitable adjustments after such events as stock dividends, stock splits or fundamental corporate transactions, and subject to anti-dilution provisions. The holders of the Company’s Series D Convertible Preferred Stock do not have voting rights. Upon liquidation, dissolution or winding up of the Company’s business, each holder of Series D Preferred Stock shall be entitled to receive, for each share thereof a preferential amount in cash equal to $1.00. | |||||||||||||||||||||
Additionally, Mr. Honig exchanged the outstanding principal and accrued interest of $645,480 owed by the Company under a Credit Facility Agreement (see Note 8) for 652 shares of Series E Convertible Preferred Stock and warrants to acquire 782,400 shares of the Company’s common stock on equivalent terms to those of investors purchasing in the private placement. | ||||||||||||||||||||||
All preferential amounts to be paid to the holders of Series D Preferred Stock in connection with such liquidation, dissolution or winding up shall be paid before the payment or distribution of any assets to the holders of (i) any other class or series of capital stock and (ii) of the Company’s common stock. The Company is required to redeem in cash all or portion of the Series D Preferred Stock upon the occurrence of a major transactions such as a consolidation, merger or other business combination, sale and transfer of more than 50% of any of the Company’s assets, or the closing of a purchase with more than 50% of the outstanding shares of stock tendered and the inability of the Company to convert any portion of the Series D Preferred stock due to insufficient authorized number of shares of common stock as defined in the certificate of designation. The redemption price is equivalent to the sum of (i) the greater of (A) 110% of the aggregate stated value of the outstanding shares of the Series D Preferred Stock plus all accrued dividends and (B) the aggregate stated value of the outstanding shares of the Series D Preferred Stock plus all accrued dividends divided by the conversion price on the date of the major transaction redemption price is demanded or the date the major transaction redemption price is paid in full whichever is less multiplied by the volume weighted average price on (x) the date of the major transaction redemption price is demanded and (y) the date the major transaction redemption price is paid in full, whichever is greater and (ii) all other amounts, costs, expenses and liquidated damages. The Company believes that the occurrence of the major transactions as defined in the certificate of designations are considered conditional events and as a result the instrument does not meet the definition of mandatorily redeemable financial instrument based from ASC 480-10-25, “Distinguishing Liabilities from Equity”. | ||||||||||||||||||||||
As of September 30, 2013, there were 15,151 shares of Series E Preferred Stock authorized and 11,185 shares issued and outstanding. | ||||||||||||||||||||||
This financial instrument was assessed at each reporting period to determine whether circumstances have changed such that the instrument met the definition of a mandatorily redeemable instrument (that is, the event is no longer conditional). If the event has occurred, the condition is resolved, or the event has become certain to occur, the financial instrument will be reclassified as a liability. On April 11, 2012, the Company filed an amendment to the Certificate of Designation for the Series D Preferred Stock with the Secretary of State of the State of Nevada to increase the number of authorized shares of Series D Preferred Stock that could be issued by the Company to 7,500,000. In June 2012, the conversion price of the Company’s Series D Convertible Preferred Stock was adjusted to $0.32 per share as a result of certain anti-dilution provisions contained therein due to the sale of the Company’s common stock at $0.32 per share. | ||||||||||||||||||||||
Common Stock | ||||||||||||||||||||||
On February 23, 2012, the Company entered into a Stock Purchase Agreement with two subscribers and sold 1,000,000 shares of the Series D Preferred Stock and an aggregate of 8,750,000 warrants to acquire shares of Common Stock for an aggregate purchase price of $1,000,000 (the “Series D Preferred Stock Purchase Price”). | ||||||||||||||||||||||
On February 9, 2012, the Company issued 12,000,000 shares of restricted common stock to Stephen Alfers, the Company’s Chief Executive Officer, pursuant to his employment agreement. On February 8, 2013, the Company and Mr. Alfers amended his employment agreement, at the Company’s request, to extend the vesting of 6,000,000 shares of restricted stock until March 14, 2014. These shares originally would have vested on February 9, 2013. | ||||||||||||||||||||||
All of the proceeds from the Series D Preferred Stock Purchase Price were used to prepay (i) $800,000 of that certain senior secured convertible promissory note to Platinum and (ii) $200,000 of that certain senior secured convertible promissory note to Lakewood (see Note 7). | ||||||||||||||||||||||
On June 18, 2012, the Company granted 3,000,000 shares of restricted common stock to a director of the Company that were valued at fair market value on the date of grant at approximately $0.34 per share. These restricted shares vest one third at the end of each of the first three years following the date of issuance. | ||||||||||||||||||||||
In accordance with ASC 505, “Equity - Dividends and Stock Splits”, the Series D Preferred Stock was considered to have an embedded beneficial conversion feature (ECF) because the conversion price was less than the fair value of the Company’s common stock. This Series D Preferred Stock was fully convertible at the issuance date, therefore a portion of proceeds allocated to the Series D Preferred Stock of $1,000,000 was determined to be the value of the beneficial conversion feature and was recorded as a preferred deemed dividend. In connection with the initial sales of the Series D Preferred Stock, the initial estimated fair values allocated to the ECF were $226,629 and the fair value allocated to the warrants of $773,371 was recorded as a preferred deemed dividend on February 23, 2012. | ||||||||||||||||||||||
On June 18, 2012, the Company issued 5,000,000 shares of restricted common stock to Mr. Alfers. On February 8, 2013, the Company and Mr. Alfers amended, at the Company’s request, the related restricted stock agreement to extend the vesting schedule of the first one third of the shares until March 14, 2014. These shares originally would have vested on June 18, 2014. | ||||||||||||||||||||||
On November 21, 2012, the Company issued 200,000 shares of restricted common stock to Eric Alexander, the Company’s Vice President of Finance and Controller. On February 8, 2013, the Company and Mr. Alexander amended, at the Company’s request, his restricted stock agreement to extend vesting of the first third of his grant until March 14, 2014. These shares originally would have vested on November 30, 2013. | The assumptions used valuing the warrants include: | |||||||||||||||||||||
On February 12, 2013, the Company granted an aggregate of 6,700,000 shares of restricted common stock to a director of the Company and certain employees and consultants of the Company, which were valued at fair market value on the date of grant at approximately $3,417,000 or $0.51 per share. These restricted shares vest one third at the end of each of the first three years from the date of issuance. | Risk free interest rate (annual) | 0.88 | % | |||||||||||||||||||
Expected volatility | 110 | % | ||||||||||||||||||||
During the nine months ended September 30, 2013, the Company recorded stock-based compensation expense in connection with restricted stock awards of $3,475,523. At September 30, 2013, there was a total of $3,904,349 unrecognized compensation expense in connection with restricted stock awards. | Expected life | 5 Years | ||||||||||||||||||||
Assumed dividends | none | |||||||||||||||||||||
Common Stock Options | ||||||||||||||||||||||
In connection with the March Note Assignment and Assumption Agreement, $1,100,000 of the notes were amended to allow for their conversion into the Company’s Series D Preferred Stock equivalent to the stated value of the Series D Preferred Stock. As such, the Company issued a total of 1,100,000 shares of Series D Preferred Stock and an additional 227,586 shares of Series D Preferred Stock in consideration for the conversion of this convertible promissory note into shares of Series D Preferred Stock (see Note 7). | ||||||||||||||||||||||
A summary of the Company’s outstanding stock options as of September 30, 2013 and changes during the period then ended are presented below: | ||||||||||||||||||||||
On March 30, 2012, the Company also amended the $2.4 million note assigned to FGIT to allow for the conversion of this note into the Company’s Series D Preferred Stock at $1.00 per share. FGIT agreed to fully convert this note (together with accrued and unpaid interest thereon) into 2,421,600 shares of Series D Preferred Stock and an additional 501,021 shares of Series D Preferred Stock in consideration for the conversion of this note into shares of Series D Preferred Stock (see Note 7). | ||||||||||||||||||||||
Number of | Weighted | Weighted | ||||||||||||||||||||
Options | Average | Average | On March 30, 2012, the Company amended a convertible promissory note to allow for the conversion of such note into the Company’s Series D Preferred Stock at $1.00 per share. The holder of this note agreed to fully convert this note (together with accrued and unpaid interest thereon) into 1,024,744 shares of Series D Preferred Stock and an additional 212,017 shares of Series D Preferred Stock in consideration for the conversion of this Note into shares of Series D Preferred Stock (see Note 8). | |||||||||||||||||||
Exercise | Remaining | |||||||||||||||||||||
Price | Contractual | The Company recorded loss from extinguishment of debts for a total of $2,436,888 in connection with the note conversions and preferred deemed dividend of $537,499 for the year ended December 31, 2012 in connection with the issuance of the additional shares of Series D Preferred Stock discussed above. | ||||||||||||||||||||
Life | ||||||||||||||||||||||
(Years) | On March 30, 2012, the holder of the 400,000 shares of the Company’s Series D Preferred Stock converted his shares of Series D Preferred Stock into 1,153,143 shares of the Company’s Common Stock (which included accrued and unpaid dividends thereon). The Company recorded preferred deemed dividend of $79,278 in connection with the conversion of the Series D Preferred Stock into the Company’s common stock at an adjusted conversion price of $0.35 per share. | |||||||||||||||||||||
Balance at December 31, 2012 | 35,298,000 | $ | 0.46 | 9.11 | ||||||||||||||||||
Granted | 350,000 | 0.42 | 3.83 | In June 2012, 6,086,968 shares of Series D Preferred Stock were converted into 19,021,775 shares of the Company’s common stock in June 2012. Additionally, as consideration for agreeing to convert its Series C Preferred Stock and Series D Preferred Stock, the Company issued an additional 3,000,000 shares of common stock to the preferred shareholder and such shares were valued at the fair market value on the date of grant at $0.36 per share or $1,086,000 and have been included in preferred stock deemed dividend. | ||||||||||||||||||
Exercised | — | — | — | |||||||||||||||||||
Forfeited | (2,248,000 | ) | 1.3 | 7 | The Company recognized preferred stock dividends of $21,150 related to the Series D Preferred Stock during the year ended December 31, 2012. Accrued dividends amounted to $17,550 as of December 31, 2012. As of December 31, 2012, there were 7,500,000 shares of Series D Preferred Stock authorized and none issued and outstanding. | |||||||||||||||||
Cancelled | — | — | — | |||||||||||||||||||
Balance at September 30, 2013 | 33,400,000 | 0.4 | 8.43 | |||||||||||||||||||
Options exercisable at end of period | 31,600,000 | $ | 0.4 | Common Stock | ||||||||||||||||||
Options expected to vest through December 31, 2014 | 1,800,000 | |||||||||||||||||||||
Weighted average fair value of options granted during the period | $ | 0.25 | In February 2011, the Company issued 200,000 shares of the Company’s common stock in connection with a one year public relations and consulting agreement. The Company valued these common shares at the fair market value on the date of grant at $1.40 per share or $280,000. In November 2011, the Company and the consultant agreed to terminate such agreement in consideration for (i) a cash payment of $50,000 and (iii) the issuance of 50,000 shares of the Corporation’s common stock. The Company valued the 50,000 common shares at the fair market value on the date of grant at $0.68 per share or $34,000. Accordingly, the Company recognized stock based consulting expense of $314,000 during the year ended December 31, 2011. | |||||||||||||||||||
Stock options outstanding at September 30, 2013 as disclosed in the above table have approximately $731,700 of intrinsic value at the end of the period. | In March 2011, the Company entered into a Separation Agreement and General Release (the “Settlement Agreement”) with the former president of the Company. Pursuant to the Settlement Agreement, the former President, Mr. Cohen returned 900,000 shares of the Company’s common stock for cancellation and sold 1,200,000 shares of the Company’s common stock he owned to one or more purchasers who are accredited investors on the closing date (the “Closing”). At the Closing, the proceeds from the private sale of the 1,200,000 shares were distributed for payment and reimbursement of various fees and obligations outstanding to the Company, a certain vendor, the Member of the Company’s Board of Directors and $115,000 to Mr. Cohen. The Closing occurred in April 2011. The Company received a total of $77,250 for reimbursement of certain costs and expenses on the closing date pursuant to this agreement and such amount has been applied against live events expenses in the accompanying consolidated statements of operations. In addition, Mr. Cohen’s employment agreement was terminated and the parties exchanged releases. In addition, at the Closing, the Company and Mr. Cohen agreed to: (i) assignments of certain boxing promotional rights agreements (subject to any required consents or approvals), and (ii) various profit sharing agreements with respect to certain of the boxing promotional rights agreements under which Mr. Cohen may elect to continue as the promoter of the boxers named therein. In connection with the return of the 900,000 shares of common stock, the Company valued the cancelled shares at $59,612 which represents the carrying amount of the assigned promotional advances and was allocated to retained earnings as a result of the Separation agreement entered into between the Company and the former president of the Company on March 28, 2011 in accordance with ASC 505-30 “Treasury Stock”. | |||||||||||||||||||||
On September 29, 2010, the Company’s Board of Directors and stockholders adopted the 2010 Stock Incentive Plan (the “2010 Plan”). Under the 2010 Plan, options may be granted which are intended to qualify as Incentive Stock Options under Section 422 of the Internal Revenue Code of 1986 (the “Code”) or which are not intended to qualify as Incentive Stock Options thereunder. In addition, direct grants of stock or restricted stock may be awarded. The 2010 Plan has reserved 2,800,000 shares of common stock for issuance, and there are currently outstanding stock-based awards to purchase 2,150,000 shares of the Company’s common stock under the 2010 Plan. | In April 2011, the Company sold an aggregate of 410,000 shares of common stock at a purchase price of $0.60 per share which generated gross proceeds of $246,000. | |||||||||||||||||||||
On February 9, 2012, the holders of approximately 53% of the outstanding shares of the Company’s common stock voted in favor of the adoption of the Company’s 2012 Equity Incentive Plan (the “ 2012 Plan”). The Board approved the 2012 Plan on February 9, 2012, which reserves 40,000,000 shares of common stock for issuance thereunder in the form of qualified incentive stock options, non-qualified stock options and restricted stock grants, issuable to the Company’s officers, directors, employees and consultants. As of September 30, 2013, there are no remaining available stock-based awards for future issuances under the 2012 Plan. | On July 22, 2011, the Company issued 76,095,215 shares of its common stock pursuant to an asset purchase agreement entered into between the Company, the Company’s wholly-owned subsidiary, Acquisition Sub, and Continental. The purchase considerations included 76,095,215 shares of the Company’s stock and the issuance of 41,566,999 stock warrants and 2,248,000 stock options and were valued at $14,857,676 (see Note 3). The Company accounted the value under ASC 805-50-30-2 “Business Combinations” whereby if the consideration is not in the form of cash, the measurement is based on either the cost which shall be measured based on the fair value of the consideration given or the fair value of the assets (or net assets) acquired, whichever is more clearly evident and thus more reliably measurable. The Company deemed that the fair value of the net asset of Continental amounting to $14,857,676 is more clearly evident and more reliable measurement basis. | |||||||||||||||||||||
On February 12, 2013, the Board approved the adoption of a 2013 Equity Incentive Plan (the “2013 Plan”). The 2013 Plan provides for the grant of incentive stock options, nonqualified stock options, restricted stock, restricted stock units, stock appreciation rights and other types of stock-based awards to the Company’s employees, officers, directors and consultants. Pursuant to the terms of the 2013 Plan, either the Board or a board committee is authorized to administer the plan, including by determining which eligible participants will receive awards, the number of shares of common stock subject to the awards and the terms and conditions of such awards. Up to 40 million shares of common stock are issuable pursuant to awards under the 2013 Plan. As of September 30, 2013, there were 33,300,000 remaining available stock-based awards for future issuances under the 2013 Plan. | On September 2, 2011, the Company, Empire, EXCX, Capital Hoedown, Inc. and Sheldon Finkel, the Company’s former Chief Executive Officer and former Co-Chairman of the Board of Directors (“Executive”), entered into a Separation Agreement (the “Agreement”) under which Executive resigned from all positions with the Company and each of its subsidiaries and affiliates. Pursuant to the Agreement, Executive agreed to the following: | |||||||||||||||||||||
In March 2013, the Company granted 150,000 3-year options to purchase shares of common stock exercisable at $0.44 per share to consultants of the Company pursuant to a consulting agreement for business advisory services. The stock options fully vested by May 31, 2013. The 150,000 options were valued on the grant date at approximately $0.25 per option or a total of $38,058 using a Black-Scholes option pricing model with the following assumptions: stock price of $0.44 per share, volatility of 92%, expected term of 3 years, no dividend yield and a risk free interest rate of 0.35%. | ||||||||||||||||||||||
i. | Cancellation of 750,000 shares of common stock, par value $0.001 per share, of the Company’s Common Stock owned by Executive; and | |||||||||||||||||||||
In March 2013, the Company extended the exercise period of stock options to purchase 500,000 shares of common stock previously granted to the Company’s former Vice President of Finance and Administration and director on June 18, 2012. The exercise period was extended to December 31, 2013 from March 31, 2013. The Company valued the extension of the option period utilizing the Black-Scholes option pricing model using the following assumptions: estimated volatility of 92%, risk-free interest rate of 0.14%, no dividend yield, and an expected life of 0.75 years, and recorded $35,079 as stock based compensation during the nine months ended September 30, 2013. | ii. | All unvested shares and options of the Company shall be cancelled and returned to the Company, other than outstanding options awarded to Executive to purchase 400,000 shares of Common Stock and additionally, Executive shall be entitled to retain 600,000 shares of Common Stock presently owned (the options to purchase 400,000 shares of Common Stock and 600,000 shares of Common Stock, the “Executive Retained Securities”). The Executive Retained Securities shall secure for collection of certain outstanding receivables of approximately $112,500, and thereafter be pledged to Lenders as collateral security for the payment by the Executive of $150,000 of indebtedness to Lenders in accordance with a payment schedule set forth in the Agreement; and | ||||||||||||||||||||
iii. | 1,950,000 shares of Executive’s Common Stock shall be sold to Michael Brauser, one of the Lenders; and | |||||||||||||||||||||
In August 2013, the Company granted 200,000 5-year options to purchase shares of common stock exercisable at $0.40 per share to consultants of the Company pursuant to a consulting agreement for investor relations services. The stock options vest immediately and were valued on the grant date at approximately $0.23 per option or a total of $45,080 using a Black-Scholes option pricing model with the following assumptions: stock price of $0.35 per share, volatility of 86%, expected term of 5 years, no dividend yield and a risk free interest rate of 1.57%. | iv. | That certain Letter of Credit issued by Signature Bank, NA, (the “Letter of Credit”) pledged to Lenders as collateral security for the Loan Agreement, shall be assigned by Executive to the Lenders to repay the obligations under the Credit facility agreement. | ||||||||||||||||||||
During the nine months ended September 30, 2013, the Company recorded stock based compensation expense related to options of $323,750. At September 30, 2013, there was a total of $156,651 of unrecognized compensation expense related to non-vested options. | Additionally, the employment agreement of Executive was terminated upon execution of the Separation Agreement. The Executive and the Companies agreed to release each other from any and all claims and further obligations. Pursuant to the Agreement, Sheldon Finkel agreed to return 750,000 shares of common stock. The Company valued and recorded the cancelled shares at par value or $75 against additional paid in capital. | |||||||||||||||||||||
Common Stock Warrants | Between September 2011 and October 2011, the Company sold $1,718,000 of units pursuant to subscription agreements (the “Subscription Agreements”) for an aggregate sale of 3,436,000 units, at a purchase price of $0.50 per unit. Each unit consists of: (i) one share of common stock and (ii) a two year warrant to purchase 50% percent of the number of shares of common stock (1,718,000 warrants) at an exercise price of $0.60 per share. The warrants may be exercised until the second anniversary of their issuance at a cash exercise price of $0.60 per share, subject to adjustment. The warrants may be exercised on a cashless basis if at any time at 100% of the closing price for the common stock on the business day immediately prior to the exercise. In September 2011, the Company issued 866,065 shares of common stock in connection with the exercise of these 1,678,000 warrants on a cashless basis. | |||||||||||||||||||||
A summary of the Company’s outstanding stock warrants as of September 30, 2013 and changes during the period then ended are presented below: | Between October 2011 and December 2011, the Company sold $1,830,000 of units pursuant to subscription agreements for an aggregate sale of 4,575,000 units. Additionally, on November 29, 2011, the holder of the Company’s 6% note payable converted $611,750 principal balance of the note into an aggregate of 1,529,375 of units (see Note 9). Each unit was sold for a purchase price of $0.40 per unit and consists of: (i) one share of common stock and (ii) a two-year warrant to purchase fifty percent of the number of shares of common stock (3,052,188 warrants) purchased at an exercise price of $0.60 per share, subject to adjustment upon the occurrence of certain events. The warrants may be exercised at any time on a cashless basis at 100% of the closing price for the common stock on the business day immediately prior to the date of exercise. During the year ended December 31, 2011, the Company paid placement agent fees of $370,583 in cash to broker-dealers in connection with the sale of the units above. | |||||||||||||||||||||
Number of | Weighted | Weighted | In October 2011, the Company issued 500,000 shares of the Company’s common stock in connection with a public and investor relations agreement. The Company valued these common shares at the fair market value on the date of grant at $0.971 per share or $485,500. Accordingly, the Company recognized stock based consulting expense of $485,500 during the year ended December 31, 2011. | |||||||||||||||||||
Warrants | Average | Average | ||||||||||||||||||||
Exercise | Remaining | |||||||||||||||||||||
Price | Contractual | In December 2011, the Company issued 600,000 shares of the Company’s common stock in connection with an advisory and consulting agreement. The consultant previously acted as a placement agent of the Parent Company whereby the consultant received warrants to purchase Continental’s common stock. Such warrants were assumed by the Company pursuant to the asset purchase agreement entered into with Continental. Additionally, the consultant agreed to cancel 1,056,046 assumed warrants and waive any right to receive the Company’s warrants. The Company valued these common shares at the fair market value on the date of grant at $0.53 per share or $318,000. Accordingly, the Company recognized stock based consulting expense of $318,000 during the year ended December 31, 2011. | ||||||||||||||||||||
Life | ||||||||||||||||||||||
(Years) | Following the consummation of the asset purchase agreement with Continental, certain holders of Continental’s warrants that were received in connection with the private placement of Continental securities (the “Continental Offering”) asserted certain rights against the Company under Section 5(f) of the Continental Warrants (the “Put Right”), which the Company disputed. On October 3, 2011, the Company, Continental and each of the holders of the Continental Warrants that exercised their Put Right, entered into an Agreement and Release (the “Release”) in which the Company agreed to issue to such holder 2 shares of the Company’s common stock (the “Additional Stock”) for every $1.00 invested in the Continental Offering in exchange for cancellation of the Continental Warrants and waiver of ratchet anti-dilution protection from future offerings. A total of 5,350,000 shares were issued and a total of 4,280,000 stock warrants to purchase shares of the Company’s common stock (equivalent to 5,350,000 Continental warrants) were cancelled in connection with the settlement of the Put Rights. The Company valued these common shares at the fair market value on the date of grant at $0.89 per share or $4,761,500. Accordingly, the Company recognized settlement expense of $4,761,500 during the year ended December 31, 2011. | |||||||||||||||||||||
Balance at December 31, 2012 | 16,255,779 | $ | 0.54 | 2.42 | ||||||||||||||||||
Granted | 13,435,590 | 0.4 | 3 | On November 18, 2011, the Company received an acknowledgment letter pursuant to which the beneficial owner of 500,000 shares of the common stock and a stock option agreement to purchase 600,000 shares of the Company’s common stock agreed, regardless of vesting, to cancel 450,000 shares of common stock and the termination of the 600,000 options. The Company valued and recorded the cancelled shares at par value or $45 against additional paid in capital. | ||||||||||||||||||
Cancelled | (3,446,748 | ) | 0.65 | 0.14 | ||||||||||||||||||
Forfeited | — | — | — | Between January 2012 and February 2012, the Company sold an aggregate of 2,237,500 units with net proceeds to the Company of $847,500. Each unit was sold for a purchase price of $0.40 per unit and consisted of: (i) one share of common stock and (ii) a two-year warrant to purchase 50% (1,118,750 warrants) of the number of shares of common stock purchased at an exercise price of $0.60 per share, subject to adjustment upon the occurrence of certain events. The warrants may be exercised at any time on a cashless basis at 100% of the closing price for the common stock on the business day immediately prior to the date of exercise. The Company has agreed to file a “resale” registration statement with the SEC covering all shares of common stock and shares of common stock underlying the warrants (including as issued to placement agents) within 60 days of the final closing date of the sale of any units and to maintain the effectiveness of the registration statement until all securities have been sold or are otherwise able to be sold pursuant to Rule 144. The Company has agreed to use its reasonable best efforts to have the registration statement declared effective within 120 days of the final closing on the sale of units. | ||||||||||||||||||
Exercised | — | — | — | |||||||||||||||||||
Balance at September 30, 2013 | 26,244,621 | $ | 0.45 | 2.47 | The Company is obligated to pay to investors a fee of one (1%) per month in cash for every thirty day period up to a maximum of six (6%) percent, (i) that the registration statement has not been filed after the filing date, and (ii) following the effectiveness date that the registration statement has not been declared effective; provided, however, that the Company shall not be obligated to pay any such liquidated damages if the Company is unable to fulfill its registration obligations as a result of rules, regulations, positions or releases issued or actions taken by the SEC pursuant to its authority with respect to “Rule 415”, provided the Company registers at such time the maximum number of shares of common stock permissible upon consultation with the staff of the SEC. | |||||||||||||||||
Warrants exercisable at September 30, 2013 | 26,244,621 | $ | 0.45 | 2.47 | ||||||||||||||||||
In August 2012, the Company entered into waiver agreements with majority of the investors who purchased units pursuant to subscription agreements dated between September 2011 and February 2012 whereby the Company agreed to register the shares of common stock underlying the units with the SEC. The waiver agreement irrevocably and unconditionally waives the liquidated damages in cash or kind related to any failure by the Company to cause the registration statement to be filed on or before a designated filing date or declared effective by the SEC on or before the effectiveness date. Furthermore, the shares of common stock that would be covered by the above discussed registration statement are no longer considered “Registrable Securities” as such term is defined in the governing Registration Rights Agreement and therefore the Company believes it no longer has any obligation under such Registration Rights Agreement to register such shares. | ||||||||||||||||||||||
Weighted average fair value of warrants granted during the period | $ | 0.17 | ||||||||||||||||||||
In April 2012, the Company sold an aggregate 4,385,716 shares of common stock to certain investors for an aggregate purchase price of $1,535,000 or a purchase price of $0.35 per share. | ||||||||||||||||||||||
In May 2013, the Company paid a total of $45,484 in connection with the cancellation of 3,446,748 warrants to acquire the Company’s common stock. This was reflected as warrant settlement expense in the Company’s Statement of Operations during the nine months ended September 30, 2013. | ||||||||||||||||||||||
On June 19, 2012, the Company issued 12,500,000 shares of its common stock to certain investors in a private placement for an aggregate purchase price of $4,000,000 or a purchase price of $0.32 per share. In connection with the private placement, the Company paid fees of $75,000 and issued 234,375 shares of its common stock to a placement agent as consideration for certain placement agent services. In connection with the private placement, the Company and the purchasers entered into a registration rights agreement dated June 19, 2012 which provides the purchasers certain rights relating to the registration of the common stock under the Securities Act. Pursuant to the registration rights agreement, at any time after December 19, 2012, the purchasers have the right to require the Company to file a registration statement under the Securities Act to register the common stock. In addition, if the Company registers any of its equity securities under the Securities Act, the Company is required to give the purchasers prompt notice of its intention to do so, and the purchasers may request the common stock to be included in the registration statement. | ||||||||||||||||||||||
In August 2013, as part of the Series E Preferred Stock private placement, the Company issued a total of 13,435,590 3-year warrant to purchase shares of the Company’s common stock at an exercise price of $0.40 per share. | ||||||||||||||||||||||
On February 9, 2012, the Board of Directors of the Company appointed Stephen Alfers as Chairman and Chief Executive Officer of the Company. Simultaneously with Mr. Alfers’ appointment, Barry Honig resigned from his position as Chairman of the Company but remains a member of the Board of Directors. On February 9, 2012, the Company entered into an employment agreement with Mr. Alfers, pursuant to which Mr. Alfers shall serve as the Chief Executive Officer of the Company until December 31, 2015, subject to renewal. Pursuant to the terms of his employment agreement, Mr. Alfers will be entitled to a base salary of $250,000 per year and was issued (i) 12,000,000 shares of the Company’s restricted common stock and (ii) an option to purchase 10,000,000 shares of the Company’s common stock with a term of ten years and an exercise price equal to the closing price of the Company’s common stock on the trading day immediately prior to the date of issuance of such grant or $0.49 which shall be vested in full on the effective date. | ||||||||||||||||||||||
Vesting of restricted stock grant is as follows: | ||||||||||||||||||||||
i. | 6,000,000 shares of restricted common stock (less any shares sooner vested upon registration of 3,000,000 shares of the restricted common stock with the Securities Exchange Commission) shall vest on the earlier of (a) such date that the Company consummates a secondary public offering of its securities in which the Company receives gross proceeds of at least $7,000,000 or (b) one (1) year from the effective date of the employment agreement; | |||||||||||||||||||||
ii. | 3,000,000 shares of restricted common stock shall vest two (2) years from the effective date of the employment agreement; and | |||||||||||||||||||||
iii. | 3,000,000 shares of restricted common stock shall vest three (3) years from the effective date of the employment agreement. | |||||||||||||||||||||
Additionally, during the year ended December 31, 2012, the Company recorded stock-based compensation expense of $3,817,917 in connection with the vested restricted stock grants. At December 31, 2012, there was a total of $2,062,083 of unrecognized compensation expense related to these non-vested restricted stock grants arrangement. | ||||||||||||||||||||||
On February 23, 2012, the Company issued 2 million common shares to the original holders of the senior secured promissory note in connection with the Note Modification Agreement (see Note 7). Accordingly, the Company valued the 2 million common shares at the fair market value on the date of grant at $0.489 per share or $978,000 and was recognized as interest expense during the year ended December 31 2012 in connection with the Note Modification Agreement. | ||||||||||||||||||||||
On March 30, 2012, in connection with the March Note Assignment and Assumption Agreement (see Note 7), the various assignees agreed to convert an aggregate principal amount of $1,892,014 into 5,405,754 shares of the Company’s Common Stock at a conversion price of $0.35 per share. Such various assignees received an additional 1,118,432 shares of the Company’s Common Stock as consideration for the note conversion and were valued at the fair market value on the date of grant at $0.55 per share or $615,138 and have been included in loss from extinguishment of debts for the year ended December 31, 2012. | ||||||||||||||||||||||
On March 30, 2012, the original holders of the senior secured notes agreed to convert $262,500 of the notes in exchange for an aggregate of 750,000 shares of the Company’s common stock (see Note 7). The Company accounted the reduction of the conversion price from $0.40 to $0.35 per share and such conversion under ASC 470-20-40 “Debt with Conversion and Other Options” and accordingly, for the year ended December 31, 2012, recorded loss from extinguishment of debts of $51,563 which is equal to the fair value of shares issued in excess of the fair value issuable pursuant to the original conversion terms. | ||||||||||||||||||||||
On March 30, 2012, the holder of the assigned $1.6 million note (together with accrued and unpaid interest of $14,400) agreed to convert such note into 4,612,571 shares of common stock at a conversion price of $0.35 per share and an additional 954,325 shares of the Company’s common stock as consideration for the note conversion. The Company accounted for the reduction of the conversion price from $0.40 to $0.35 per share and such conversion under ASC 470-20-40 “Debt with Conversion and Other Options” and accordingly recorded loss from extinguishment of debts of $317,114 which is equal to the fair value of shares issued in excess of the fair value issuable pursuant to the original conversion terms. The additional 954,325 shares of common stock were valued at the fair market value on the date of grant at $0.55 per share or $524,878 and have been included in loss from extinguishment of debts for the year ended December 31, 2012. | ||||||||||||||||||||||
On March 20, 2012, the Company issued 250,000 shares of common stock to a third party in consideration for payment of legal services rendered of $129,028 and Continental’s accrued legal fees of $170,614 for a total amount of $299,642. The Company valued these common shares for $299,642 (see Note 11). | ||||||||||||||||||||||
In March 2012, the Company issued 200,000 shares of common stock to a consultant in consideration for payment of public relations services rendered. The Company recorded stock based consulting expense and valued these common shares at the fair market value on the date of grants at approximately $0.55 per share or $110,000 for the year ended December 31, 2012. | ||||||||||||||||||||||
In March 2012, the Company issued an aggregate of 6,229,718 shares of common stock in connection with the exercise of the 11,399,150 stock warrants on a cashless basis. The Company valued these common shares at par value. | ||||||||||||||||||||||
On February 23, 2012, a majority of the Company’s outstanding voting capital stock authorized by written consent, in lieu of a special meeting of the Company’s stockholders, the Company to effectuate a reverse stock split at a ratio not less than two-for-one and not greater than fifteen-for-one, with the exact ratio to be set and the amendment to the Company’s Articles of Incorporation to be filed at the discretion of the Company’s Board of Directors. Currently, the Company’s Board has not set an exact ratio for the reverse stock split. | ||||||||||||||||||||||
On April 27, 2012, the Company issued 50,000 shares of common stock to a consultant in consideration for certain consulting services rendered. The Company had accrued such consulting expense prior to issuance amounting to $45,000. The Company valued these common shares at the fair market value on the date of grants at approximately $0.90 per share or $45,000. | ||||||||||||||||||||||
On April 5, 2012, the Company issued to Victoria Gold. and Victoria Resources (US) Inc. 10 million shares of the Company’s common stock, and a 2 year warrant to purchase 5 million shares of Common Stock at a purchase price of $0.60 per share in connection with the acquisition of rights to approximately 13,300 acres of mining claims and private lands adjacent to the Company’s landholdings at the Relief Canyon Mine in Pershing County, Nevada (see Note 5). The Company valued the 10 million common shares at the fair market value on the date of grants at approximately $0.46 per share or $4,600,000. For the year ended December 31, 2012, the Company recorded the value of such shares and warrants into mineral rights as reflected in the accompanying consolidated balance sheets. | ||||||||||||||||||||||
As previously disclosed, on July 22, 2011, the Company purchased substantially all of the assets of Continental in consideration for (i) 8 shares of the Company’s common stock for every 10 shares of Common Stock of Continental outstanding; (ii) the assumption by the Company of the outstanding warrants to purchase shares of Continental’s common stock at a ratio of one warrant (the “Company Warrants”) to purchase 8 shares of the Company’s Common Stock for every Continental Warrant to purchase 10 shares of Continental’s common stock; and (iii) the assumption of Continental’s 2010 Equity Incentive Plan and all options granted and issued thereunder at a ratio of one option to purchase 8 shares of the Company Common Stock for every option to purchase 10 shares of Continental’s common stock outstanding. Between April 2012 and June 2012, the Company issued an aggregate of 9,729,285 shares of its common stock to holders of Company Warrants in consideration for the cancellation of such Company Warrants. Additionally, such holders agreed to the elimination of certain most favored nations provisions or price protection associated with the shares of Continental’s common stock issued in connection with the Continental Warrants (the “Warrant Cancellation Transaction”). The Company issued 9,729,285 shares of the Company’s common stock at a ratio of 300 shares for every 1,000 Company Warrants held. An aggregate of 32,430,954 Company Warrants were cancelled as a result of the Warrant Cancellation Transaction. Accordingly, the Company valued the 9,729,285 common shares at the fair market value on the date of grants ranging between $0.29 to $0.505 per share or $4,883,196. This was reflected as a settlement expense in the Company’s Statement of Operations during the year ended December 31, 2012. | ||||||||||||||||||||||
In connection with the Merger Agreement between the Company, Red Battle, and Valor Gold, the Company cancelled 1,750,000 shares of the Company’s common stock (see Note 3). The Company valued these cancelled common shares at par value. | ||||||||||||||||||||||
On June 18, 2012, the Company granted an aggregate of 8,000,000 shares of restricted common stock to the Company’s CEO and a director of the Company and which were valued at fair market value on the date of grant at approximately $0.34 per share. Such restricted shares shall vests one third at the end of each three years from the date of issuance. Additionally, during the year ended December 31, 2012, the Company recorded stock-based compensation expense of $886,519 in connection with the vested restricted stock grants. At December 31, 2012, there was a total of $1,833,481 of unrecognized compensation expense related to these non-vested restricted stock grants arrangement. | ||||||||||||||||||||||
Additionally, on June 18, 2012, the Company issued 1,000,000 shares of restricted common stock to the Company’s former Vice President of Finance and Administration and director, which were valued at fair market value on the date of grant at approximately $0.34 per share and vest either (i) in three equal annual installments beginning one year from the date of issuance, or, if earlier, (ii) upon the termination of his employment by, and services as a director of the Company without cause, or for reasons other than death, disability, normal or early retirement or good reason, in which case the restricted common stock shall vest as of the later of the dates of his termination of employment by the Company and his termination of services as a director of the Company. The former Vice President of Finance and Administration and director resigned from his position as a director of the Company on November 20, 2012 and as an employee of the Company on December 31, 2012, causing his restricted common stock to vest. During the year ended December 31, 2012, the Company recorded stock-based compensation expense of $340,000 in connection with the vested restricted stock grants. | ||||||||||||||||||||||
On November 21, 2012, the Company granted 200,000 shares of restricted common stock to the Company’s Vice President of Finance and Controller and which were valued at fair market value on the date of grant at approximately $0.35 per share. Such restricted shares shall vest as follows: 33.33% on November 30, 2013, 33.33% on November 30, 2014, and 33.34% on November 30, 2015. During the year ended December 31, 2012, the Company recorded stock-based compensation expense of $3,612 in connection with the vested restricted stock grants. At December 31, 2012, there was a total of $67,308 of unrecognized compensation expense related to these non-vested restricted stock grants arrangement. | ||||||||||||||||||||||
On December 3, 2012, the Company completed a private placement to several accredited investors (the “Purchasers”) for 9,469,548 shares of its common stock and 3,787,819 warrants for aggregate gross proceeds of $3,124,950. The purchase price for one share of common stock and a warrant to acquire 0.40 of a share of common stock was $0.33. The warrants are exercisable immediately at an exercise price of $0.50 per share and will expire on December 7, 2015. The warrant contains customary adjustment provisions in the event of dividends or recapitalizations. In addition, the Company paid aggregate consideration of 303,030 shares of the Company’s common stock and 121,212 warrants, in lieu of $100,000 as consideration for certain placement agent services in connection with the private placement. In connection with the issuance of the 303,030 shares to the placement agent, the Company valued these common shares at par value. | ||||||||||||||||||||||
Common Stock Options | ||||||||||||||||||||||
A summary of the stock options as of December 31, 2012 and 2011 and changes during the period are presented below: | ||||||||||||||||||||||
Number of Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (Years) | ||||||||||||||||||||
Balance at December 31, 2010 | 2,850,000 | $ | 0.6 | 9.45 | ||||||||||||||||||
Granted | 2,648,000 | 1.36 | 8.96 | |||||||||||||||||||
Exercised | - | - | - | |||||||||||||||||||
Forfeited | (1,950,000 | ) | 0.41 | 8.84 | ||||||||||||||||||
Cancelled | - | - | - | |||||||||||||||||||
Balance at December 31, 2011 | 3,548,000 | 1.11 | 8.45 | |||||||||||||||||||
Granted | 32,250,000 | 0.39 | 10 | |||||||||||||||||||
Exercised | - | - | - | |||||||||||||||||||
Forfeited | (500,000 | ) | 0.81 | 8.59 | ||||||||||||||||||
Cancelled | - | - | - | |||||||||||||||||||
Balance outstanding at December 31, 2012 | 35,298,000 | $ | 0.46 | 9.11 | ||||||||||||||||||
Options exercisable at end of year | 33,055,067 | $ | 0.46 | |||||||||||||||||||
Options expected to vest | 2,242,933 | |||||||||||||||||||||
Weighted average fair value of options granted during the period | $ | 0.36 | ||||||||||||||||||||
Stock options outstanding at December 31, 2012 as disclosed in the above table have approximately $943,000 intrinsic value at the end of the year. | ||||||||||||||||||||||
On September 29, 2010, the Company’s Board of Directors and stockholders adopted the 2010 Stock Incentive Plan (the “2010 Plan”). Under the 2010 Plan, options may be granted which are intended to qualify as Incentive Stock Options under Section 422 of the Internal Revenue Code of 1986 (the "Code") or which are not intended to qualify as Incentive Stock Options thereunder. In addition, direct grants of stock or restricted stock may be awarded. The 2010 Plan has reserved 2,800,000 shares of common stock for issuance. Upon the closing of the Exchange, the Company had outstanding options to purchase 2,800,000 shares of the Company’s common stock under the 2010 Plan which represents an exchange of 2,800,000 options previously granted prior to the reverse merger and recapitalization with similar terms as discussed below. | ||||||||||||||||||||||
In connection with the Company’s 2010 Stock Incentive Plan (the “2010 Plan”), for the years ended December 31, 2012 and 2011, the Company recorded stock-based compensation expense of $93,080 and $584,903 respectively. At December 31, 2012, there was a total of $39,878 of unrecognized compensation expense related to these non-vested option-based compensation arrangements under the 2010 Plan. | ||||||||||||||||||||||
On May 31, 2011, pursuant to a termination acknowledgement letter, the Company agreed to grant a former employee 50,000 10-year options to purchase shares of common stock at $1.01 per share. The 50,000 options were valued on the grant date at $1.19 per option or a total of $59,500 using a Black-Scholes option pricing model with the following assumptions: stock price of $1.19 per share, volatility of 205%, expected term of 6.5 years, and a risk free interest rate of 3.05%. For the year ended December 31, 2011, the Company recorded stock-based compensation expense of $59,500. | ||||||||||||||||||||||
On July 22, 2011, the Company granted 2,248,000 stock options and warrants to purchase 41,566,999 shares of common stock pursuant to an asset purchase agreement entered into between the Company, Acquisition Sub and Continental (see Note 3). The 2,248,000 9-year options to purchase shares of common stock at $1.423 per share are subject to a vesting schedule based on the stock option holder's continued employment and services. For the years ended December 31, 2012 and 2011, the Company recognized stock based compensation of $1,260,423 and $706,281, respectively, which represent the portion of the vested replacement option awards attributable to post-combination services due to the assumption of the stock options of Continental which was accounted for under ASC 805-30-30-9 (“Acquirer Share-Based Payment Awards Exchanged for Awards Held by the Acquiree’s Employees). These options were valued on the grant date at $1.11 per option using a Black-Scholes option pricing model with the following assumptions: stock price of $1.10 per share, volatility of 196%, expected term of 10 years, and a risk free interest rate of 2.99%. At December 31, 2012, there was a total of $27,860 of unrecognized compensation expense related to these non-vested replacement option awards. | ||||||||||||||||||||||
During the year ended December 31, 2012 and 2011, 500,000 and 1,950,000 options, respectively, were forfeited in accordance with the termination of employee and consultant relationships. | ||||||||||||||||||||||
Common Stock Warrants | ||||||||||||||||||||||
A summary of the status of the Company's outstanding stock warrants as of December 31, 2012 and 2011 and changes during the period then ended is as follows: | ||||||||||||||||||||||
Number of Warrants | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (Years) | ||||||||||||||||||||
Balance at December 31, 2010 | - | $ | - | - | ||||||||||||||||||
Granted | 56,190,375 | 2.25 | 3.25 | |||||||||||||||||||
Cancelled | -5,336,045 | 2.84 | 4.4 | |||||||||||||||||||
Forfeited | -3,720,000 | 2.84 | - | |||||||||||||||||||
Exercised | -11,531,188 | 0.6 | 2 | |||||||||||||||||||
Balance at December 31, 2011 | 35,603,142 | $ | 2.64 | 3.94 | ||||||||||||||||||
Granted | 24,482,741 | 0.56 | 4.59 | |||||||||||||||||||
Cancelled | (32,430,954 | ) | 2.83 | 3.86 | ||||||||||||||||||
Forfeited | - | - | - | |||||||||||||||||||
Exercised | (11,399,150 | ) | 0.42 | 4.64 | ||||||||||||||||||
Balance at December 31, 2012 | 16,255,779 | $ | 0.54 | 2.42 | ||||||||||||||||||
Warrants exercisable at December 31, 2012 | 16,255,779 | $ | 0.54 | 2.42 | ||||||||||||||||||
Weighted average fair value of options granted during the year ended December 31, 2012 | $ | 0.46 | ||||||||||||||||||||
On July 22, 2011, the Company granted 2,248,000 stock options and warrants to purchase 41,566,999 shares of common stock pursuant to an asset purchase agreement entered into between the Company, Acquisition Sub, and Continental (see Note 3). The assumption of stock warrants was replaced with the Company’s 3,200,000 4.5-year warrants to purchase shares of common stock at $2.835 per share granted to an affiliated company and its assignees which are subject to a vesting schedule based on the warrant holder's continued services and the Company’s 38,366,999 (ranging from 5 months to 4.60 years) warrants to purchase shares of common stock at an exercise price of $2.835 which were related to private placement sale of the Company’s common stock. For the years ended December 31, 2012 and 2011, the Company recognized stock based compensation of $165,730 and $1,528,158, respectively, which represents the portion of the vested replacement warrants awards attributable to post-combination services due to the assumption of the stock warrants of Continental which was accounted for under ASC 805-30-30-9 (“Acquirer Share-Based Payment Awards Exchanged for Awards Held by the Acquiree’s Employees). These warrants were valued on the grant date at $1.11 per option using a Black-Scholes option pricing model with the following assumptions: stock price of $1.10 per share, volatility of 193%, expected term of 10 years, and a risk free interest rate of 1.56%. | ||||||||||||||||||||||
Between September 2011 and October 2011, the Company sold $1,718,000 of units pursuant to subscription agreements for an aggregate sale of 3,436,000 units at a purchase price of $0.50 per unit. Each unit consists of: (i) one share of common stock and (ii) a two year warrant to purchase 50% percent (1,718,000 warrants) of the number of shares of common stock at an exercise price of $0.60 per share. The warrants may be exercised until the second anniversary of their issuance at a cash exercise price of $0.60 per share, subject to adjustment. In September 2011, the Company issued 866,065 shares of common stock in connection with the exercise of these 1,678,000 stock warrants on a cashless basis. | ||||||||||||||||||||||
Between October 2011 and December 2011, the Company sold $1,830,000 of units pursuant to subscription agreements for an aggregate sale of 4,575,000 units. Additionally, on November 29, 2011, the holder of the Company’s 6% note payable converted $611,750 principal balance of the note into an aggregate of 1,529,375 of units (see Note 9). Each Unit was sold for a purchase price of $0.40 per unit and consists of: (i) one share of common stock and (ii) a two-year warrant to purchase fifty percent of the number of shares of common stock (3,052,188 warrants) purchased at an exercise price of $0.60 per share, subject to adjustment upon the occurrence of certain events. | ||||||||||||||||||||||
The warrants sold in the units above may be exercised at any time on a cashless basis at 100% of the closing price of the common stock on the business day immediately prior to the date of exercise. | ||||||||||||||||||||||
Following the consummation of the asset purchase agreement with Continental, certain holders of Continental’s warrants that were received in connection with the private placement of Continental securities (the “Continental Offering”) asserted certain rights against the Company under Section 5(f) of the Continental Warrants (the “Put Right”), which the Company disputed. On October 3, 2011, the Company, Continental and each of the holders of the Continental Warrants that exercised their Put Right, entered into an Agreement and Release (the “Release”) in which the Company agreed to issue to such holder 2 shares of the Company’s common stock (the “Additional Stock”) for every $1.00 invested in the Continental Offering in exchange for cancellation of the Continental Warrants and waiver of ratchet anti-dilution protection from future offerings. A total of 5,350,000 shares were issued and a total of 4,280,000 stock warrants to purchase shares of the Company’s common stock (equivalent to 5,350,000 Continental warrants) were cancelled in connection with the settlement of the Put Rights. | ||||||||||||||||||||||
In connection with an advisory and consulting agreement, in December 2011, the Company issued 600,000 shares of common stock to a consultant who previously acted as a placement agent of the Parent Company whereby the consultant received warrants to purchase Continental’s common stock. Such warrants were assumed by the Company pursuant to the asset purchase agreement entered into with Continental. Additionally, the consultant agreed to cancel 1,056,045 assumed warrants and waive any right to receive the Company’s warrants. | ||||||||||||||||||||||
Between January and February 2012, the Company sold an aggregate of 2,237,500 units with net proceeds to the Company of $847,500. Each unit was sold for a purchase price of $0.40 per unit and consisted of: (i) one share of common stock and (ii) a two-year warrant to purchase 50% (1,118,750 warrants) of the number of shares of common stock purchased at an exercise price of $0.60 per share, subject to adjustment upon the occurrence of certain events. The warrants may be exercised at any time on a cashless basis at 100% of the closing price for the common stock on the business day immediately prior to the date of exercise. In March 2012, the Company issued 336,974 shares of common stock in connection with the exercise of these 968,750 stock warrants on a cashless basis. | ||||||||||||||||||||||
On February 23, 2012, the Company entered into a Stock Purchase Agreement with two subscribers and sold 1,000,000 shares of the Series D Preferred Stock and an aggregate of 8,750,000 warrants to acquire shares of Common Stock for an aggregate purchase price of $1,000,000 (see Note 12 – Preferred Stock). On March 29, 2012, the Company issued 2,967,143 shares of common stock in connection with the exercise of 5,250,000 stock warrants on a cashless basis. | ||||||||||||||||||||||
On February 23, 2012, as previously discussed, in connection with a Note Modification Agreement, the Company issued warrants to purchase an aggregate of 4,144,320 shares of common stock to Platinum and warrants to purchase an aggregate of 1,036,080 shares of common stock to Lakewood (see Note 7). The warrants may be exercised at any time, in whole or in part, at an exercise price of $0.40 per share until the fifth anniversary of their issuance. The warrants may be exercised on a cashless basis at any time. In February 2012, the Company issued 2,925,601 shares of common stock in connection with the exercise of these 5,180,400 stock warrants on a cashless basis. | ||||||||||||||||||||||
On March 6, 2012, the Company issued a warrant to purchase 400,000 shares of the Company’s common stock at an exercise price equal to the market price of the Company’s common stock on the date of issuance or at $0.45 per share to a consultant in consideration for services rendered. The 400,000 warrants were valued on the grant date at approximately $0.41 per option or a total of $163,155 using a Black-Scholes option pricing model with the following assumptions: stock price of $0.45 per share, volatility of 110%, expected term of 10 years, and a risk free interest rate of 1.98%. For the year ended December 31, 2012, the Company recognized stock based consulting of $163,155. | ||||||||||||||||||||||
On April 5, 2012, the Company issued to Victoria Gold and Victoria Resources (US) Inc. 10 million shares of the Company’s common stock, and a 2 year warrant to purchase 5 million shares of common stock at a purchase price of $0.60 per share in connection with the acquisition of rights to approximately 13,300 acres of mining claims and private lands adjacent to the Company’s landholdings at the Relief Canyon Mine in Pershing County, Nevada (see Note 5). The 5 million warrants were valued on the grant date at approximately $0.22 per warrant or a total of $1,109,441 using a Black-Scholes option pricing model with the following assumptions: stock price of $0.46 per share, volatility of 105%, expected term of 2 years, and a risk free interest rate of 0.35%. For the year ended December 31, 2012, the Company recorded the value of such shares and warrants into mineral rights as reflected in the accompanying consolidated balance sheets. The warrant may be exercised in whole, or in part, at any time by means of a “cashless” exercise. In the event of an “Organic Change”, as defined in the warrant, the Company may elect to: (i) require the holder to exercise the warrant prior to the consummation of such Organic Change or (ii) secure from the person or entity purchasing such assets or the successor resulting from such Organic Change, a written agreement to deliver to the holder, in exchange for the warrant, a warrant of such acquiring or successor entity. | ||||||||||||||||||||||
On December 3, 2012, the Company completed a private placement to several accredited investors for 9,469,548 shares of its common stock and 3,787,819 warrants for aggregate gross proceeds of $3,124,950. The warrants are exercisable immediately at an exercise price of $0.50 per share and will expire on December 7, 2015. The warrant contains customary adjustment provisions in the event of dividends or recapitalizations. In addition, the Company paid aggregate consideration of 303,030 shares of the Company’s common stock and 121,212 warrants, in lieu of $100,000 as consideration for certain placement agent services in connection with the private placement. | ||||||||||||||||||||||
NET_LOSS_PER_COMMON_SHARE
NET LOSS PER COMMON SHARE | 9 Months Ended | 12 Months Ended | ||||||||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | |||||||||||||||||||||
NET LOSS PER COMMON SHARE | ' | ' | ||||||||||||||||||||
NET LOSS PER COMMON SHARE | ' | ' | ||||||||||||||||||||
NOTE 10 — NET LOSS PER COMMON SHARE | ||||||||||||||||||||||
NOTE 13 — NET LOSS PER COMMON SHARE | ||||||||||||||||||||||
Net loss per common share is calculated in accordance with ASC Topic 260, “Earnings Per Share”. Basic loss per share is computed by dividing net loss available to common stockholder, adjusted for preferred dividends, by the weighted average number of shares of common stock outstanding during the period. The computation of diluted net loss per share does not include anti-dilutive common stock equivalents in the weighted average shares outstanding. The following table sets forth the computation of basic and diluted loss per share: | ||||||||||||||||||||||
Net loss per common share is calculated in accordance with ASC Topic 260, “Earnings Per Share”. Basic loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. The computation of diluted net loss per share does not include dilutive common stock equivalents in the weighted average shares outstanding as they would be anti-dilutive. | ||||||||||||||||||||||
For the Three | For the Three | For the Nine | For the Nine | |||||||||||||||||||
Months ended | Months ended | Months ended | Months ended | For the | For the | |||||||||||||||||
September 30, | September 30, | September 30, | September 30, | year ended | year ended | |||||||||||||||||
2013 | 2012 | 2013 | 2012 | December 31, 2012 | December 31, 2011 | |||||||||||||||||
Numerator: | Numerator: | |||||||||||||||||||||
Loss from continuing operations available to common stockholders | $ | (8,023,233 | ) | $ | (5,078,909 | ) | $ | (13,067,459 | ) | $ | (48,266,585 | ) | Loss from continuing operations | $ | (49,052,749 | ) | $ | (21,469,563 | ) | |||
Loss from discontinued operations | $ | — | $ | — | $ | — | $ | (50,298 | ) | Loss from discontinued operations | $ | (50,298 | ) | $ | (3,088,373 | ) | ||||||
Denominator: | Denominator: | |||||||||||||||||||||
Denominator for basic and diluted loss per share | 273,292,023 | 256,619,449 | 272,236,712 | 206,120,456 | Denominator for basic and diluted loss per share (weighted-average shares) | 219,530,283 | 70,372,421 | |||||||||||||||
(weighted-average shares) | ||||||||||||||||||||||
Loss per common share, basic and diluted: | ||||||||||||||||||||||
Loss per common share, basic and diluted: | Loss from continuing operations | $ | (0.22 | ) | $ | (0.31 | ) | |||||||||||||||
Loss from continuing operations | $ | (0.03 | ) | $ | (0.02 | ) | $ | (0.05 | ) | $ | (0.23 | ) | Loss from discontinued operations | $ | (0.00 | ) | $ | (0.04 | ) | |||
Loss from discontinued operations | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | ||||||||||
The following were excluded from the computation of diluted shares outstanding as they would have had an anti-dilutive impact on the Company’s loss from continuing operations and loss from discontinued operations. In periods where the Company has a net loss, all dilutive securities are excluded. | ||||||||||||||||||||||
The following were excluded from the computation of diluted shares outstanding as they would have had an anti-dilutive impact on the Company’s loss from continuing operations and loss from discontinued operations. In periods where the Company has a net loss, all dilutive securities are excluded. | ||||||||||||||||||||||
December 31, | December 31, | |||||||||||||||||||||
September 30, | September 30, | 2012 | 2011 | |||||||||||||||||||
2013 | 2012 | Common stock equivalents: | ||||||||||||||||||||
Common stock equivalents: | Stock options | 35,298,000 | 3,548,000 | |||||||||||||||||||
Stock options | 33,400,000 | 35,298,000 | Stock warrants | 16,255,779 | 35,603,142 | |||||||||||||||||
Stock warrants | 26,244,621 | 12,222,188 | Convertible preferred stock | — | 8,710,990 | |||||||||||||||||
Convertible preferred stock | 33,555,000 | — | Convertible promissory notes embedded conversion feature | — | 22,030,656 | |||||||||||||||||
93,199,621 | 47,520,188 | 51,553,779 | 69,892,788 | |||||||||||||||||||
DISCONTINUED_OPERATIONS
DISCONTINUED OPERATIONS | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
DISCONTINUED OPERATIONS. | ' | |||||||
DISCONTINUED OPERATIONS | ' | |||||||
NOTE 11 — DISCONTINUED OPERATIONS | ||||||||
In September 2011, the Company decided to discontinue its sports and entertainment business and prior periods have been restated in the Company’s consolidated financial statements and related footnotes to conform to this presentation. On September 1, 2011, the Company disposed of its Empire subsidiary pursuant to a stock purchase agreement by and between the Company, Empire and CII. Prior to the purchase, CII was the owner of a 33 1/3% minority interest with Empire in Capital Hoedown, Inc., an Ontario corporation, formed to undertake an event held during August 2011. Pursuant to the stock purchase agreement, the Company agreed to sell Empire to CII, including the 66.67% equity ownership interest in Capital Hoedown, for $500,000 which was payable on March 31, 2012 pursuant to a Senior Promissory Note issued by CII to the Company which bears interest at 8% per annum. During 2012 the outstanding note balance was fully written off as a bad debt. | ||||||||
The following table sets forth indicated selected financial data of the Company’s discontinued operations of its sports and entertainment business during the nine months ended September 30, 2013 and 2012. | ||||||||
September | September | |||||||
30, 2013 | 30, 2012 | |||||||
Revenues | $ | — | $ | — | ||||
Cost of sales | — | — | ||||||
Gross profit (loss) | — | — | ||||||
Operating and other non-operating expenses | — | (50,298 | ) | |||||
Loss from discontinued operations | — | (50,298 | ) | |||||
Gain from sale of sports and entertainment business | — | — | ||||||
Loss from discontinued operations | $ | — | $ | (50,298 | ) | |||
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended | 12 Months Ended | ||||||||
Sep. 30, 2013 | Dec. 31, 2012 | |||||||||
COMMITMENTS AND CONTINGENCIES | ' | ' | ||||||||
COMMITMENTS AND CONTINGENCIES | ' | ' | ||||||||
NOTE 12 — COMMITMENTS AND CONTINGENCIES | NOTE 15 – COMMITMENTS AND CONTINGENCIES | |||||||||
Operating Lease | Operating Lease | |||||||||
In February 2012, the Company signed a three year lease agreement for office space located in Lakewood, Colorado containing approximately 2,390 net rentable square feet with a term commencing in March 2012 and expiring in April 2015. The lease requires the Company to pay an annual base rent of $18.50 per rentable square foot or $44,215 plus a pro rata share of operating expenses. The base rent is subject to annual increases beginning on May 1, 2013 as defined in the lease agreement. Future minimum rental payments required under the lease are as follows: | In February 2012, the Company signed a three year lease agreement for office space located in Lakewood, Colorado containing approximately 2,390 net rentable square feet with a term commencing in March 2012 and expiring in April 2015. The lease requires the Company to pay an annual base rent of $18.50 per rentable square feet or $44,215 plus a pro rata share of operating expenses. The base rent is subject to annual increases beginning on May 1, 2013 as defined in the lease agreement. Future minimum rental payments required under these operating leases are as follows: | |||||||||
2013 | $ | 11,353 | 2013 | $ | 45,011 | |||||
2014 | 46,207 | 2014 | 46,207 | |||||||
2015 and thereafter | 15,535 | 2015 and thereafter | 15,535 | |||||||
$ | 106,753 | |||||||||
$ | 73,095 | |||||||||
Rent expense was $28,050 and $56,583 for the years ended December 31, 2012 and 2011, respectively. | ||||||||||
Rent expense was $33,759 for the nine months ended September 30, 2013. | ||||||||||
Litigation | ||||||||||
Relief Gold | ||||||||||
Relief Gold Group, Inc., v Sagebrush Gold Ltd, Gold Acquisition Corp., Barry C. Honig, and David S. Rector (12 civ 0952) | ||||||||||
On February 7, 2012, the Company obtained a copy of a complaint filed in the United States District Court for the Southern District of New York (the “Complaint”) entitled Relief Gold Group, Inc., v Sagebrush Gold Ltd, Gold Acquisition Corp., Barry C. Honig, and David S. Rector (12 civ 0952). Relief Gold alleges various causes of action including breach of contract, intentional interference with contract, intentional interference with prospective business relationship/economic relations, misappropriation of trade secrets and unjust enrichment, related to the Company’s acquisition on August 30, 2011 of the assets of the Relief Canyon Mine pursuant to Chapter 11 of the Bankruptcy Code. Relief Gold seeks money damages and to enjoin Sagebrush, Honig, Rector and GAC from exercising its rights and privileges gained or acquired as a result of any alleged unlawful conduct, including any management rights over GAC or the assets acquired by GAC as a result of the alleged wrongful conduct of the other defendants. Relief Gold further seeks to disgorge the profits, benefits and any other advantages gained by reason of the alleged unlawful conduct. The Company served and filed its answer to the Complaint on May 24, 2012, in which it denied the material allegations and asserted a number of affirmative defenses. On September 18, 2012, a stipulation and order to transfer the case to the Northern District of Nevada was filed and the case was transferred to said court. The parties currently are engaged in discovery. | ||||||||||
The Company disputes the allegations in the Complaint and believes the Complaint to be wholly without merit and intends vigorously to defend the claims. On or about February 29, 2012, Gold Acquisition Corp. commenced an adversary proceeding in the United States Bankruptcy Court for the District of Nevada against FirstGold, Terence Lynch and Relief Gold Group, and moved, by order to show cause, for a preliminary injunction and temporary restraining order staying the prosecution of the above-referenced action pending in the Southern District. The motion for a preliminary injunction was denied on or about March 15, 2012. Relief Gold and Lynch have filed a motion to dismiss which is set for hearing in May 2013. | ||||||||||
Gold Acquisition Corp., v FirstGold Corp. et al (Case No. 12-05013-GWZ) | ||||||||||
On or about February 29, 2012, Gold Acquisition Corp. ("GAC") commenced an adversary proceeding in the United States Bankruptcy Court for the District of Nevada against FirstGold, Terence Lynch and Relief Gold Group, and moved, by order to show cause, for a preliminary injunction and temporary restraining order staying the prosecution of the above-referenced action pending in the Southern District. The motion for a preliminary injunction was denied on or about March 15, 2012. Firstgold filed a motion to dismiss the complaint on April 23, 2012. On June 27, 2012, the Court ordered a "stand still" of this litigation, effectively staying any further action, until December 12, 2012, extended until the hearing on the Adversary Complaint Defendants’ Motion to Dismiss in May 2013. | ||||||||||
GAC also filed a Motion for Order to Show Cause in Firstgold’s main bankruptcy action Case No. 10-50215-GWZ requesting that the court require Firstgold to complete documentation for conveyance of property. That motion was granted on or about February 28, 2012. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended | 12 Months Ended | ||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | |||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ' | ||||||||||||||
Basis of presentation and principles of consolidation | ' | ' | ||||||||||||||
Basis of presentation and principles of consolidation | Basis of Presentation and Principle of Consolidation | |||||||||||||||
The unaudited condensed consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”) and present the unaudited condensed consolidated financial statements of the Company as of September 30, 2013. All intercompany transactions and balances have been eliminated and net earnings are reduced by the portion of the net earnings of subsidiaries applicable to non-controlling interests. Prior periods have been restated in the Company’s consolidated financial statements and related footnotes to conform to this presentation and all transactions relating to the sports and entertainment business are included in discontinued operations. All adjustments (consisting of normal recurring items) necessary to present fairly the Company’s financial position as of September 30, 2013, and the results of operations and cash flows for the nine months ended September 30, 2013 have been included. The results of operations for the nine months ended September 30, 2013 are not necessarily indicative of the results to be expected for the full year. The accounting policies and procedures employed in the preparation of these unaudited condensed consolidated financial statements have been derived from the audited financial statements of the Company for the period ended December 31, 2012, which are contained in the Company’s Form 10-K as filed with the Securities and Exchange Commission (“SEC”) on April 1, 2013. The consolidated balance sheet as of December 31, 2012 was derived from those financial statements. | The consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America ("US GAAP") and present the consolidated financial statements of the Company and its majority-owned subsidiaries as of December 31, 2012. In the preparation of the consolidated financial statements of the Company, intercompany transactions and balances are eliminated and net earnings are reduced by the portion of the net earnings of subsidiaries applicable to non-controlling interests. | |||||||||||||||
Exploration stage company | ' | ' | ||||||||||||||
Exploration stage company | Exploration Stage Company | |||||||||||||||
On September 1, 2011, the Company exited the sports and entertainment business and sold its Empire subsidiary. The Company is engaged in gold and precious metals exploration. The Company has been in the exploration stage since September 1, 2011 and has not yet realized any revenues from its planned operations. The Company is an exploration stage company as defined in Financial Accounting Standards Board (“FASB”) issued Accounting Standards Codification (“ASC”) Topic 915 “Development Stage Entities”. | On September 1, 2011, the Company exited the sports and entertainment business and disposed of its Empire subsidiary pursuant to a Stock Purchase Agreement. The Company is no longer engaged in or pursuing agreements with artists or athletes for sports and entertainment promotion and events, and will focus its activities exclusively on its new business segment, gold and precious metals exploration company. The Company has been in the exploration stage since September 1, 2011 and has not yet realized any revenues from its planned operations. The Company is an exploration stage company as defined in Financial Accounting Standards Board (“FASB”) issued Accounting Standards Codification (“ASC”) ASC 915 “Development Stage Entities”. | |||||||||||||||
Use of estimates | ' | ' | ||||||||||||||
Use of estimates | Use of Estimates and Assumptions | |||||||||||||||
In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the consolidated balance sheet, and revenues and expenses for the period then ended. Actual results may differ significantly from those estimates. Significant estimates made by management include, but are not limited to, allowance for bad debts, the useful life of property and equipment, the assumptions used to calculate fair value of options and warrants granted and derivative liability, beneficial conversion on convertible notes payable, capitalized mineral rights, asset valuations, common stock issued for services, common stock issued for conversion of notes and common stock issued in connection with an acquisition. | In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the consolidated balance sheet, and revenues and expenses for the period then ended. Actual results may differ significantly from those estimates. Significant estimates made by management include, but are not limited to, allowance for bad debts, the useful life of property and equipment, the assumptions used to calculate fair value of options granted and derivative liability, beneficial conversion on convertible notes payable, capitalized mineral rights, asset valuations, common stock issued for services, common stock issued for conversion of notes and common stock issued in connection with an acquisition. | |||||||||||||||
Non-controlling interests in consolidated financial statements | ' | ' | ||||||||||||||
Non-controlling interests in consolidated financial statements | Non-controlling interests in consolidated financial statements | |||||||||||||||
In December 2007, ASC 810-10-65, “Non-controlling Interests in Consolidated Financial Statements” clarified that a non-controlling (minority) interest in a subsidiary is an ownership interest in the entity that should be reported as equity in the consolidated financial statements. It also requires consolidated net income to include the amounts attributable to both the parent and non-controlling interest, with disclosure on the face of the consolidated income statement of the amounts attributed to the parent and to the non-controlling interest. In accordance with ASC 810-10-45-21, those losses attributable to the parent and the non-controlling interest in subsidiary may exceed their interests in the subsidiary’s equity. The excess and any further losses attributable to the parent and the non-controlling interest shall be attributed to those interests even if that attribution results in a deficit non-controlling interest balance. | In December 2007, ASC 810-10-65, “Non-controlling Interests in Consolidated Financial Statements” clarifies that a non-controlling (minority) interest in a subsidiary is an ownership interest in the entity that should be reported as equity in the consolidated financial statements. It also requires consolidated net income to include the amounts attributable to both the parent and non-controlling interest, with disclosure on the face of the consolidated income statement of the amounts attributed to the parent and to the non-controlling interest. In accordance with ASC 810-10-45-21, those losses attributable to the parent and the non-controlling interest in subsidiary may exceed their interests in the subsidiary’s equity. The excess and any further losses attributable to the parent and the non-controlling interest shall be attributed to those interests even if that attribution results in a deficit non-controlling interest balance. As of December 31, 2012 and 2011, the Company reported a deficit non-controlling interest balance of $0 and $1,164, respectively, in connection with a majority-owned subsidiary of Acquisition Sub (see Note 3), as reflected in the accompanying consolidated balance sheets. | |||||||||||||||
Cash and cash equivalents | ' | ' | ||||||||||||||
Cash and cash equivalents | Cash and Cash Equivalents | |||||||||||||||
The Company considers all highly liquid investments with a maturity of three months or less when acquired to be cash equivalents. The Company places its cash with a high credit quality financial institution. The Company’s accounts at this institution are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. At September 30, 2013, the Company had bank balances exceeding the FDIC insurance limit on interest bearing accounts. To reduce its risk associated with the failure of such financial institution, the Company evaluates at least annually the rating of the financial institution in which it holds deposits. | The Company considers all highly liquid investments with a maturity of three months or less when acquired to be cash equivalents. The Company places its cash with high credit quality financial institutions. The Company’s accounts at these institutions are insured by the Federal Deposit Insurance Corporation ("FDIC") up to $250,000 per account. In addition to the basic insurance deposit coverage, the FDIC was providing temporary unlimited coverage for non-interest bearing transaction accounts through December 31, 2012. At December 31, 2012, the Company has not reached bank balances exceeding the FDIC insurance limit on interest bearing accounts. To reduce its risk associated with the failure of such financial institutions, the Company evaluates at least annually the rating of the financial institutions in which it holds deposits. | |||||||||||||||
Marketable securities | ' | ' | ||||||||||||||
Marketable securities | Marketable securities | |||||||||||||||
Marketable securities consist of the Company’s investment in publicly traded equity securities and are generally restricted for sale under Federal securities laws. The Company’s policy is to liquidate securities received when market conditions are favorable for sale. Since these securities are often restricted, the Company is unable to liquidate them until the restriction is removed. Marketable securities that are bought and held principally for the purpose of selling them in the near term are to be classified as trading securities and reported at fair value, with unrealized gains and losses included in earnings. Pursuant to ASC Topic 320, “Investments — Debt and Equity Securities,” the Company’s marketable securities have a readily determinable and active quoted price, such as from NASDAQ, NYSE Euronext, the Over the Counter Bulletin Board, and the OTC Markets Group. | Marketable securities consist of the Company’s investment in publicly traded equity securities and are generally restricted for sale under Federal securities laws. The Company’s policy is to liquidate securities received when market conditions are favorable for sale. Since these securities are often restricted, the Company is unable to liquidate them until the restriction is removed. Marketable securities that are bought and held principally for the purpose of selling them in the near term are to be classified as trading securities and reported at fair value, with unrealized gains and losses included in earnings. Pursuant to ASC Topic 320, “Investments – Debt and Equity Securities” the Company’s marketable securities have a readily determinable and active quoted price, such as from NASDAQ, NYSE Euronext, the Over the Counter Bulletin Board, and the OTC Markets Group. | |||||||||||||||
Trading securities are carried at fair value, with changes in unrealized holding gains and losses included in income and classified within interest and other income, net, in the accompanying consolidated statements of operations. | Trading securities are carried at fair value, with changes in unrealized holding gains and losses included in income and classified within interest and other income, net, in the accompanying consolidated statements of operations. | |||||||||||||||
Available for sale securities are carried at fair value, with changes in unrealized gains or losses are recognized as an element of comprehensive income based on changes in the fair value of the security. Once liquidated, realized gains or losses on the sale of marketable securities available for sale are reflected in the net income (loss) for the period in which the security was liquidated. | Available for sale securities are carried at fair value, with changes in unrealized gains or losses are recognized as an element of comprehensive income based on changes in the fair value of the security. Once liquidated, realized gains or losses on the sale of marketable securities available for sale are reflected in the net income (loss) for the period in which the security was liquidated. | |||||||||||||||
Fair value of financial instruments | ' | ' | ||||||||||||||
Fair value of financial instruments | ||||||||||||||||
Fair value of financial instruments | ||||||||||||||||
The Company adopted ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”), for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements, establishes a framework for measuring fair value and expands disclosure about such fair value measurements. The adoption of ASC 820 did not have an impact on the Company’s financial position or operating results, but did expand certain disclosures. | ||||||||||||||||
The Company adopted ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”), for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements, establishes a framework for measuring fair value and expands disclosure about such fair value measurements. The adoption of ASC 820 did not have an impact on the Company’s financial position or operating results, but did expand certain disclosures. | ||||||||||||||||
ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below: | ||||||||||||||||
ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below: | ||||||||||||||||
Level 1: | Observable inputs such as quoted market prices in active markets for identical assets or Liabilities | |||||||||||||||
Level 2: | Observable market-based inputs or unobservable inputs that are corroborated by market data | Level 1: | Observable inputs such as quoted market prices in active markets for identical assets or | |||||||||||||
Level 3: | Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions. | liabilities | ||||||||||||||
Level 2: | Observable market-based inputs or unobservable inputs that are corroborated by market data | |||||||||||||||
The Company analyzes all financial instruments with features of both liabilities and equity under the FASB’s accounting standard for such instruments. Under this standard, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. | Level 3: | Unobservable inputs for which there is little or no market data, which require the use of the | ||||||||||||||
reporting entity’s own assumptions. | ||||||||||||||||
Depending on the product and the terms of the transaction, the fair value of notes payable and derivative liabilities were modeled using a series of techniques, including closed-form analytic formula, such as the Black-Scholes option-pricing model. | The Company analyzes all financial instruments with features of both liabilities and equity under the FASB’s accounting standard for such instruments. Under this standard, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Depending on the product and the terms of the transaction, the fair value of notes payable and derivative liabilities were modeled using a series of techniques, including closed-form analytic formula, such as the Black-Scholes option-pricing model. | |||||||||||||||
The Company classified the investments in marketable securities available for sale as Level 3, adjusted for the effect of restriction. The securities were restricted and cannot be readily resold by the Company absent a registration of the sale of those securities under the Securities Act of 1933 as amended (the “Securities Act”) or the availability of an exemption from the registration. Unrealized gains or losses on marketable securities available for sale were recognized as an element of comprehensive income based on changes in the fair value of the security. Once liquidated, realized gains or losses on the sale of marketable securities available for sale were reflected in net income for the period in which the security was liquidated. At the end of each period, the Company evaluated the carrying value of the marketable securities for a decrease in value. The Company evaluated the entity underlying these marketable securities to determine whether a decline in fair value below the amortized cost basis is other than temporary. If the decline in fair value is judged to be “other- than- temporary”, the cost basis of the individual security is written down to fair value as a new cost basis and the amount of the write-down is charged to earnings. | The following table presents a reconciliation of the derivative liability measured at fair value on a recurring basis using significant unobservable input (Level 3) from January 1, 2012 to December 31, 2012: | |||||||||||||||
Conversion feature derivative liability | ||||||||||||||||
The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, prepaid expenses, accounts payable and accrued expenses approximate their estimated fair market value based on the short-term maturity of these instruments. The carrying amount of the notes payable at September 30, 2013 approximate their respective fair value based on the Company’s incremental borrowing rate. | Balance at January 1, 2012 | $ | 6,295,400 | |||||||||||||
Change in fair value included in earnings | 1,454,889 | |||||||||||||||
Reclassification of derivative liability to equity | (7,750,289 | ) | ||||||||||||||
Balance at December 31, 2012 | $ | — | ||||||||||||||
Investment measured at fair value on a recurring basis: | ||||||||||||||||
Fair Value Measurements Using: | ||||||||||||||||
Quoted Prices | Significant | Significant | ||||||||||||||
in Active | Other | Unobservable | ||||||||||||||
Markets | Observable | Inputs | ||||||||||||||
(Level 1) | Inputs | (Level 3) | ||||||||||||||
(Level 2) | ||||||||||||||||
Marketable securities – available for sale, net of discount for effect of restriction | $ | — | $ | — | $ | — | ||||||||||
The Company classifies the investments in marketable securities available for sale as Level 3, adjusted for the effect of restriction. The securities are restricted and cannot be readily resold by the Company absent a registration of those securities under the Securities Act of 1933 as amended (the “Securities Act”) or the availabilities of an exemption from the registration requirements under the Securities Act. As these securities are often restricted, the Company is unable to liquidate them until the restriction is removed. Unrealized gains or losses on marketable securities available for sale are recognized as an element of comprehensive income based on changes in the fair value of the security. Once liquidated, realized gains or losses on the sale of marketable securities available for sale are reflected in our net income for the period in which the security was liquidated. | ||||||||||||||||
At the end of each period, the Company evaluates the carrying value of the marketable securities for a decrease in value. The Company evaluates the company underlying these marketable securities to determine whether a decline in fair value below the amortized cost basis is other than temporary. If the decline in fair value is judged to be “other- than- temporary”, the cost basis of the individual security shall be written down to fair value as a new cost basis and the amount of the write-down is charged to earnings. | ||||||||||||||||
The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, other receivables, prepaid expenses, accounts payable and accrued expenses approximate their estimated fair market value based on the short-term maturity of these instruments. The carrying amount of the notes payable at December 31, 2012, approximate their respective fair value based on the Company’s incremental borrowing rate. The Company did not identify any other assets or liabilities that are required to be presented on the consolidated balance sheets at fair value in accordance with applicable accounting guidance. | ||||||||||||||||
Prepaid expenses | ' | ' | ||||||||||||||
Prepaid expenses | Prepaid expenses | |||||||||||||||
Prepaid expenses — current portion of $359,491 and $502,837 at September 30, 2013 and December 31, 2012, respectively, consist primarily of costs paid for future services which will occur within a year. Prepaid expenses principally include prepayments for consulting and business advisory services, insurance premiums and mineral lease fees which are being amortized over the terms of their respective agreements. | Prepaid expenses – current portion of $502,837 and $463,737 at December 31, 2012 and 2011, respectively, consist primarily of costs paid for future services which will occur within a year. Prepaid expenses include prepayments (in cash and common stock) of public relation services, consulting and business advisory services, and prepaid insurance and mineral lease payments which are being amortized over the terms of their respective agreements. Prepaid expenses – long term portion of $0 and $37,759 at December 31, 2012 and 2011, respectively, consist primarily of costs paid for future mineral lease payments after one year. | |||||||||||||||
Mineral property acquisition and exploration costs | ' | ' | ||||||||||||||
Mineral property acquisition and exploration costs | Mineral property acquisition and exploration costs | |||||||||||||||
Costs of lease, exploration, carrying and retaining unproven mineral lease properties are expensed as incurred. The Company expenses all mineral exploration costs as incurred as it is still in the exploration stage. If the Company identifies proven and probable reserves in its investigation of its properties and upon development of a plan for operating a mine, it would enter the development stage and capitalize future costs until production is established. When a property reaches the production stage, the related capitalized costs are amortized using the units-of-production method over the estimated life of the proven and probable reserves. If in the future the Company has capitalized mineral properties, these properties will be periodically assessed for impairment. To date, the Company has not established the commercial feasibility of any exploration prospects; therefore, all costs are being expensed. During the nine months ended September 30, 2013 and 2012, the Company incurred exploration costs of $1,793,214 and $4,842,781, respectively. | Costs of lease, exploration, carrying and retaining unproven mineral lease properties are expensed as incurred. The Company has chosen to expense all mineral exploration costs as incurred given that it is still in the exploration stage. If the Company identifies proven and probable reserves in its investigation of its properties and upon development of a plan for operating a mine, it would enter the development stage and capitalize future costs until production is established. When a property reaches the production stage, the related capitalized costs will be amortized, using the units-of-production method over the estimated life of the proven and probable reserves. If in the future the Company has capitalized mineral properties, these properties will be periodically assessed for impairment. To date, the Company has not established the commercial feasibility of any exploration prospects; therefore, all costs are being expensed. During the years ended December 31, 2012 and 2011, the Company incurred exploration cost of $5,221,001 and $2,298,090, respectively. | |||||||||||||||
ASC 930-805, “Extractive Activities-Mining: Business Combinations”, states that mineral rights consist of the legal right to explore, extract, and retain at least a portion of the benefits from mineral deposits. Mining assets include mineral rights. Acquired mineral rights are considered tangible assets under ASC 805. ASC 805 requires that mineral rights be recognized at fair value as of the acquisition date. As a result, the direct costs to acquire mineral rights are initially capitalized as tangible assets. Mineral rights include costs associated with acquiring patented and unpatented mining claims. | ASC 930-805, “Extractive Activities-Mining: Business Combinations”, states that mineral rights consist of the legal right to explore, extract, and retain at least a portion of the benefits from mineral deposits. Mining assets include mineral rights. Acquired mineral rights are considered tangible assets under ASC 805. ASC 805 requires that mineral rights be recognized at fair value as of the acquisition date. As a result, the direct costs to acquire mineral rights are initially capitalized as tangible assets. Mineral rights include costs associated with acquiring patented and unpatented mining claims. | |||||||||||||||
ASC 930-805-30-1 and 30-2 provides that in fair valuing mineral assets, an acquirer should take into account both: | ASC 930-805-30-1 and 30-2 provides that in fair valuing mineral assets, an acquirer should take into account both: | |||||||||||||||
· The value beyond proven and probable reserves (“VBPP”) to the extent that a market participant would include VBPP in determining the fair value of the assets. | • | The value beyond proven and probable reserves (“VBPP”) to the extent that a market participant would include VBPP in determining the fair value of the assets. | ||||||||||||||
· The effects of anticipated fluctuations in the future market price of minerals in a manner that is consistent with the expectations of market participants. | • | The effects of anticipated fluctuations in the future market price of minerals in a manner that is consistent with the expectations of market participants. | ||||||||||||||
Property and equipment | ' | ' | ||||||||||||||
Property and equipment | Property and equipment | |||||||||||||||
Property and equipment are carried at cost. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition. Depreciation is calculated on a straight-line basis over the estimated useful life of the assets, generally one to twenty five years. | Property and equipment are carried at cost. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition. Depreciation is calculated on a straight-line basis over the estimated useful life of the assets, generally one to twenty five years. | |||||||||||||||
Impairment of long-lived assets | ' | ' | ||||||||||||||
Impairment of long-lived assets | Impairment of long-lived assets | |||||||||||||||
The Company accounts for the impairment or disposal of long-lived assets according to the ASC 360 “Property, Plant and Equipment”. The Company continually monitors events and changes in circumstances that could indicate that the carrying amounts of long-lived assets, including mineral rights, may not be recoverable. Long-lived assets in the exploration stage are monitored for impairment based on factors such as the Company’s continued right to explore the area, exploration reports, assays, technical reports, drill results and the Company’s continued plans to fund exploration programs on the property, and whether sufficient work has been performed to indicate that the carrying amount of the mineral property cost carried forward as an asset will not be fully recovered. The tests for long-lived assets in the exploration stage would be monitored for impairment based on factors such as current market value of the long-lived assets and results of exploration, future asset utilization, business climate, mineral prices and future undiscounted cash flows expected to result from the use of the related assets. | The Company accounts for the impairment or disposal of long-lived assets according to the ASC 360 “Property, Plant and Equipment”. The Company continually monitors events and changes in circumstances that could indicate that the carrying amounts of long-lived assets, including mineral rights, may not be recoverable. Long-lived assets in the exploration stage are monitored for impairment based on factors such as the Company's continued right to explore the area, exploration reports, assays, technical reports, drill results and the Company's continued plans to fund exploration programs on the property, whether sufficient work has been performed to indicate that the carrying amount of the mineral property cost carried forward as an asset will not be fully recovered, even though a viable mine has been discovered. The tests for long-lived assets in the exploration stage would be monitored for impairment based on factors such as current market value of the long-lived assets and results of exploration, future asset utilization, business climate, mineral prices and future undiscounted cash flows expected to result from the use of the related assets. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated future net undiscounted cash flows expected to be generated by the asset. When necessary, impaired assets are written down to estimated fair value based on the best information available. Estimated fair value is generally based on either appraised value or measured by discounting estimated future cash flows. Considerable management judgment is necessary to estimate discounted future cash flows. Accordingly, actual results could vary significantly from such estimates. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The Company did not consider it necessary to record any impairment charges of its long-lived assets at December 31, 2012 and 2011, respectively. | |||||||||||||||
Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated future net undiscounted cash flows expected to be generated by the asset. When necessary, impaired assets are written down to estimated fair value based on the best information available. Estimated fair value is generally based on either appraised value or measured by discounting estimated future cash flows. Considerable management judgment is necessary to estimate discounted future cash flows. Accordingly, actual results could vary significantly from such estimates. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The Company did not record any impairment charges of its long-lived assets at September 30, 2013 and December 31, 2012, respectively. | ||||||||||||||||
Goodwill and other intangible assets | ' | ' | ||||||||||||||
Goodwill and other intangible assets | Goodwill and other intangible assets | |||||||||||||||
In accordance with ASC 350-30-65, “Intangibles - Goodwill and Others”, the Company assesses the impairment of identifiable intangibles whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors the Company considers to be important which could trigger an impairment review include the following: | In accordance with ASC 350-30-65, “Intangibles - Goodwill and Others”, the Company assesses the impairment of identifiable intangibles whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors the Company considers to be important which could trigger an impairment review include the following: | |||||||||||||||
1. Significant underperformance relative to expected historical or projected future operating results; | 1 | Significant underperformance relative to expected historical or projected future operating results; | ||||||||||||||
2. Significant changes in the manner of use of the acquired assets or the strategy for the overall business; and | 2 | Significant changes in the manner of use of the acquired assets or the strategy for the overall business; and | ||||||||||||||
3. Significant negative industry or economic trends. | 3 | Significant negative industry or economic trends. | ||||||||||||||
When the Company determines that the carrying value of intangibles may not be recoverable based upon the existence of one or more of the above indicators of impairment and the carrying value of the asset cannot be recovered from projected undiscounted cash flows, the Company records an impairment charge. The Company measures any impairment based on a projected discounted cash flow method using a discount rate determined by management to be commensurate with the risk inherent in the current business model. Significant management judgment is required in determining whether an indicator of impairment exists and in projecting cash flows. The Company did not have any intangible assets as of September 30, 2013 and December 31, 2012. | When the Company determines that the carrying value of intangibles may not be recoverable based upon the existence of one or more of the above indicators of impairment and the carrying value of the asset cannot be recovered from projected undiscounted cash flows, the Company records an impairment charge. The Company measures any impairment based on a projected discounted cash flow method using a discount rate determined by management to be commensurate with the risk inherent in the current business model. Significant management judgment is required in determining whether an indicator of impairment exists and in projecting cash flows. The Company did not have any intangible assets as of December 31, 2012 and 2011. | |||||||||||||||
Income Taxes | ' | ' | ||||||||||||||
Income Taxes | Income Taxes | |||||||||||||||
The Company accounts for income taxes pursuant to the provision of ASC 740-10, “Accounting for Income Taxes” which requires, among other things, an asset and liability approach to calculating deferred income taxes. The asset and liability approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred asset will not be realized. | The Company accounts for income taxes pursuant to the provision of ASC 740-10, “Accounting for Income Taxes” which requires, among other things, an asset and liability approach to calculating deferred income taxes. The asset and liability approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred asset will not be realized. | |||||||||||||||
The Company follows the provision of the ASC 740-10 related to Accounting for Uncertain Income Tax Position. When tax returns are filed, there may be uncertainty about the merits of positions taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is most likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. | The Company follows the provision of the ASC 740-10 related to Accounting for Uncertain Income Tax Position. When tax returns are filed, there may be uncertainty about the merits of positions taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is most likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. | |||||||||||||||
Tax positions that meet the more likely than not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for uncertain tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company believes its tax positions are all highly certain of being upheld upon examination. As such, the Company has not recorded a liability for uncertain tax benefits. | Tax positions that meet the more likely than not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for uncertain tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company believes its tax positions are all highly certain of being upheld upon examination. As such, the Company has not recorded a liability for uncertain tax benefits. | |||||||||||||||
The Company has adopted ASC 740-10-25, “Definition of Settlement”, which provides guidance on how an entity should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits and provides that a tax position can be effectively settled upon the completion and examination by a taxing authority without being legally extinguished. For tax positions considered effectively settled, an entity would recognize the full amount of tax benefit, even if the tax position is not considered more likely than not to be sustained based solely on the basis of its technical merits and the statute of limitations remains open. The federal and state income tax returns of the Company are subject to examination by the IRS and state taxing authorities, generally for three years after they were filed. | The Company has adopted ASC 740-10-25, “Definition of Settlement”, which provides guidance on how an entity should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits and provides that a tax position can be effectively settled upon the completion and examination by a taxing authority without being legally extinguished. For tax positions considered effectively settled, an entity would recognize the full amount of tax benefit, even if the tax position is not considered more likely that not to be sustained based solely on the basis of its technical merits and the statute of limitations remains open. The federal and state income tax returns of the Company are subject to examination by the IRS and state taxing authorities, generally for three years after they were filed. | |||||||||||||||
Stock-based compensation | ' | ' | ||||||||||||||
Stock-based compensation | ||||||||||||||||
Stock-based compensation | ||||||||||||||||
Stock-based compensation is accounted for based on the requirements of the Share-Based Payment Topic of ASC 718, “Compensation — Stock Compensation”, which requires recognition in the consolidated financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). The ASC also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award. | ||||||||||||||||
Stock-based compensation is accounted for based on the requirements of the Share-Based Payment Topic of ASC 718, “Compensation – Stock Compensation”, which requires recognition in the consolidated financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). The ASC also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award. | ||||||||||||||||
Pursuant to ASC Topic 505-50, “Equity Based Payments to Non-employees”, for share-based payments to consultants and other third-parties, compensation expense is determined at the “measurement date.” The expense is recognized over the vesting period of the award. Until the measurement date is reached, the total amount of compensation expense remains uncertain. The Company initially records compensation expense based on the fair value of the award at the reporting date. | ||||||||||||||||
Pursuant to ASC Topic 505-50, “Equity Based Payments to Non-employees”, for share-based payments to consultants and other third-parties, compensation expense is determined at the “measurement date.” The expense is recognized over the vesting period of the award. Until the measurement date is reached, the total amount of compensation expense remains uncertain. The Company initially records compensation expense based on the fair value of the award at the reporting date. | ||||||||||||||||
Recent accounting pronouncements | ' | ' | ||||||||||||||
Recent accounting pronouncements | Recent accounting pronouncements | |||||||||||||||
In July 2013, the FASB issued ASU 2013-11, “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists.” ASU 2013-11 provides guidance on the presentation of unrecognized tax benefits related to any disallowed portion of net operating loss carryforwards, similar tax losses, or tax credit carryforwards, if they exist. ASU 2013-11 is effective for fiscal years beginning after December 15, 2013. The adoption of ASU 2013-11 is not expected to have a material impact on the Company’s consolidated financial statements. | In July 2012, the FASB issued Accounting Standards Update (“ASU”) 2012-02, “Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment”, on testing for indefinite-lived intangible assets for impairment. The new guidance provides an entity to simplify the testing for a drop in value of intangible assets such as trademarks, patents, and distribution rights. The amended standard reduces the cost of accounting for indefinite-lived intangible assets, especially in cases where the likelihood of impairment is low. The changes permit businesses and other organizations to first use subjective criteria to determine if an intangible asset has lost value. The amendments to U.S. GAAP will be effective for fiscal years starting after September 15, 2012. The Company’s adoption of this accounting guidance does not have a material impact on the consolidated financial statements and related disclosures. | |||||||||||||||
Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures. | There were other updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to have a material impact on the Company’s financial position, results of operations or cash flows. | |||||||||||||||
MARKETABLE_SECURITIES_Tables
MARKETABLE SECURITIES (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
MARKETABLE SECURITIES. | ' | ||||||||||||||||
Schedule of Marketable Securities activity | ' | ||||||||||||||||
Marketable securities activity for the three months ended September 30, 2013 consisted of the following: | |||||||||||||||||
Cost | Gross | Gross | Realized Gain | Fair Value | |||||||||||||
Unrealized | Unrealized | from Sale of | |||||||||||||||
Gains | Losses | Securities | |||||||||||||||
Marketable securities — available for sale | $ | — | $ | — | $ | — | $ | 1,656,333 | $ | — |
MINERAL_PROPERTIES_Tables
MINERAL PROPERTIES (Tables) | 9 Months Ended | 12 Months Ended | |||||||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | ||||||||||||||||||||
MINERAL PROPERTIES. | ' | ' | |||||||||||||||||||
Schedule of Mineral Properties | ' | ' | |||||||||||||||||||
31-Dec-12 | 31-Dec-11 | ||||||||||||||||||||
September 30, | December 31, | Relief Canyon Mine – Gold Acquisition | $ | 8,501,071 | $ | 8,501,071 | |||||||||||||||
2013 | 2012 | Relief Canyon Mine – Newmont Leased Properties | 7,709,441 | - | |||||||||||||||||
Relief Canyon Mine — Gold Acquisition | $ | 8,501,071 | $ | 8,501,071 | Pershing Pass Property | 576,400 | - | ||||||||||||||
Relief Canyon Mine — Newmont Leased Properties | 7,709,441 | 7,709,441 | |||||||||||||||||||
Pershing Pass Property | 576,400 | 576,400 | $ | 16,786,912 | $ | 8,501,071 | |||||||||||||||
$ | 16,786,912 | $ | 16,786,912 | ||||||||||||||||||
PROPERTY_AND_EQUIPMENT_Tables
PROPERTY AND EQUIPMENT (Tables) | 9 Months Ended | 12 Months Ended | |||||||||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | ||||||||||||||||||||||
PROPERTY AND EQUIPMENT | ' | ' | |||||||||||||||||||||
Schedule of Property and Equipment | ' | ' | |||||||||||||||||||||
Estimated Life | 31-Dec-12 | 31-Dec-11 | |||||||||||||||||||||
Furniture and fixtures | 5 years | $ | 56,995 | $ | 20,000 | ||||||||||||||||||
Estimated Life | September 30, | December 31, | Office and computer equipment | 1 - 5 years | 220,060 | 26,606 | |||||||||||||||||
2013 | 2012 | Land | — | 266,977 | 266,977 | ||||||||||||||||||
Furniture and fixtures | 5 years | $ | 56,995 | $ | 56,995 | Building and improvements | 5 - 25 years | 727,965 | 727,965 | ||||||||||||||
Office and computer equipment | 1 - 5 years | 227,344 | 220,060 | Site costs | 10 years | 1,272,732 | 1,272,732 | ||||||||||||||||
Land | — | 266,977 | 266,977 | Crushing system | 20 years | 2,256,943 | 2,256,943 | ||||||||||||||||
Building and improvements | 5 - 25 years | 727,965 | 727,965 | Process plant and equipment | 10 years | 3,166,280 | 3,115,266 | ||||||||||||||||
Site costs | 10 years | 1,272,732 | 1,272,732 | Vehicles and mining equipment | 5 - 10 years | 682,373 | 659,622 | ||||||||||||||||
Crushing system | 20 years | 2,256,943 | 2,256,943 | 8,650,325 | 8,346,111 | ||||||||||||||||||
Process plant and equipment | 10 years | 3,169,442 | 3,166,280 | Less: accumulated depreciation | (1,263,549 | ) | (315,008 | ) | |||||||||||||||
Vehicles and mining equipment | 5 - 10 years | 695,825 | 682,373 | ||||||||||||||||||||
8,674,223 | 8,650,325 | $ | 7,386,776 | $ | 8,031,103 | ||||||||||||||||||
Less: accumulated depreciation | (1,993,320 | ) | (1,263,549 | ) | |||||||||||||||||||
$ | 6,680,903 | $ | 7,386,776 | ||||||||||||||||||||
NOTES_PAYABLE_Tables
NOTES PAYABLE (Tables) | 9 Months Ended | 12 Months Ended | |||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | ||||||||||||||||
NOTES PAYABLE | ' | ' | |||||||||||||||
Schedule of Notes Payable | ' | ' | |||||||||||||||
31-Dec-12 | 31-Dec-11 | ||||||||||||||||
September 30, 2013 | December 31, 2012 | Total notes payable | $ | 82,546 | $ | — | |||||||||||
Total notes payable | $ | 65,269 | $ | 82,546 | Less: current portion | (23,036 | ) | — | |||||||||
Less: current portion | (23,036 | ) | (23,036 | ) | Long term portion | $ | 59,510 | $ | — | ||||||||
Long term portion | $ | 42,233 | $ | 59,510 | |||||||||||||
STOCKHOLDERS_EQUITY_Tables
STOCKHOLDERS' EQUITY (Tables) | 9 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2013 | Dec. 31, 2012 | ||||||||||
STOCKHOLDERS' EQUITY | ' | ' | |||||||||
Assumptions used valuing the warrants | ' | ' | |||||||||
Risk free interest rate (annual) | 0.61% to 0.82% | ||||||||||
Expected volatility | 86% | ||||||||||
Expected life | 3 Years | ||||||||||
Assumed dividends | none | ||||||||||
Summary of the outstanding stock options | ' | ' | |||||||||
A summary of the Company’s outstanding stock options as of September 30, 2013 and changes during the period then ended are presented below: | |||||||||||
Number of | Weighted | Weighted | |||||||||
Options | Average | Average | |||||||||
Exercise | Remaining | ||||||||||
Price | Contractual | ||||||||||
Life | |||||||||||
(Years) | |||||||||||
Balance at December 31, 2012 | 35,298,000 | $ | 0.46 | 9.11 | |||||||
Granted | 350,000 | 0.42 | 3.83 | ||||||||
Exercised | — | — | — | ||||||||
Forfeited | (2,248,000 | ) | 1.3 | 7 | |||||||
Cancelled | — | — | — | ||||||||
Balance at September 30, 2013 | 33,400,000 | 0.4 | 8.43 | ||||||||
Options exercisable at end of period | 31,600,000 | $ | 0.4 | ||||||||
Options expected to vest through December 31, 2014 | 1,800,000 | ||||||||||
Weighted average fair value of options granted during the period | $ | 0.25 | |||||||||
Summary of the outstanding stock warrants | ' | ' | |||||||||
A summary of the Company’s outstanding stock warrants as of September 30, 2013 and changes during the period then ended are presented below: | Risk free interest rate (annual) | 0.27% | |||||||||
Expected volatility | 112% | ||||||||||
Number of | Weighted | Weighted | Expected life | 2 Years | |||||||
Warrants | Average | Average | Assumed dividends | none | |||||||
Exercise | Remaining | ||||||||||
Price | Contractual | ||||||||||
Life | |||||||||||
(Years) | |||||||||||
Balance at December 31, 2012 | 16,255,779 | $ | 0.54 | 2.42 | |||||||
Granted | 13,435,590 | 0.4 | 3 | ||||||||
Cancelled | (3,446,748 | ) | 0.65 | 0.14 | |||||||
Forfeited | — | — | — | ||||||||
Exercised | — | — | — | ||||||||
Balance at September 30, 2013 | 26,244,621 | $ | 0.45 | 2.47 | |||||||
Warrants exercisable at September 30, 2013 | 26,244,621 | $ | 0.45 | 2.47 | |||||||
Weighted average fair value of warrants granted during the period | $ | 0.17 |
NET_LOSS_PER_COMMON_SHARE_Tabl
NET LOSS PER COMMON SHARE (Tables) | 9 Months Ended | 12 Months Ended | |||||||||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | ||||||||||||||||||||||
NET LOSS PER COMMON SHARE | ' | ' | |||||||||||||||||||||
Schedule of Computation of Earnings Per Share | ' | ' | |||||||||||||||||||||
NOTE 10 — NET LOSS PER COMMON SHARE | For the | For the | |||||||||||||||||||||
year ended | year ended | ||||||||||||||||||||||
The computation of diluted net loss per share does not include anti-dilutive common stock equivalents in the weighted average shares outstanding. The following table sets forth the computation of basic and diluted loss per share: | 31-Dec-12 | 31-Dec-11 | |||||||||||||||||||||
Numerator: | |||||||||||||||||||||||
For the Three | For the Three | For the Nine | For the Nine | Loss from continuing operations | $ | -49,052,749 | $ | -21,469,563 | |||||||||||||||
Months ended | Months ended | Months ended | Months ended | Loss from discontinued operations | $ | -50,298 | $ | -3,088,373 | |||||||||||||||
September 30, | September 30, | September 30, | September 30, | ||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | Denominator: | |||||||||||||||||||
Numerator: | Denominator for basic and diluted loss per share | ||||||||||||||||||||||
Loss from continuing operations available to common stockholders | $ | (8,023,233 | ) | $ | (5,078,909 | ) | $ | (13,067,459 | ) | $ | (48,266,585 | ) | (weighted-average shares) | 219,530,283 | 70,372,421 | ||||||||
Loss from discontinued operations | $ | — | $ | — | $ | — | $ | (50,298 | ) | ||||||||||||||
Loss per common share, basic and diluted: | |||||||||||||||||||||||
Denominator: | Loss from continuing operations | $ | -0.22 | $ | -0.31 | ||||||||||||||||||
Denominator for basic and diluted loss per share | 273,292,023 | 256,619,449 | 272,236,712 | 206,120,456 | Loss from discontinued operations | $ | 0 | $ | -0.04 | ||||||||||||||
(weighted-average shares) | |||||||||||||||||||||||
Loss per common share, basic and diluted: | |||||||||||||||||||||||
Loss from continuing operations | $ | (0.03 | ) | $ | (0.02 | ) | $ | (0.05 | ) | $ | (0.23 | ) | |||||||||||
Loss from discontinued operations | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | |||||||||||
Schedule of Earnings Per Share Diluted | ' | ' | |||||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||||||
September 30, | September 30, | 2012 | 2011 | ||||||||||||||||||||
2013 | 2012 | Common stock equivalents: | |||||||||||||||||||||
Common stock equivalents: | Stock options | 35,298,000 | 3,548,000 | ||||||||||||||||||||
Stock options | 33,400,000 | 35,298,000 | Stock warrants | 16,255,779 | 35,603,142 | ||||||||||||||||||
Stock warrants | 26,244,621 | 12,222,188 | Convertible preferred stock | - | 8,710,990 | ||||||||||||||||||
Convertible preferred stock | 33,555,000 | — | Convertible promissory notes embedded conversion feature | - | 22,030,656 | ||||||||||||||||||
93,199,621 | 47,520,188 | 51,553,779 | 69,892,788 | ||||||||||||||||||||
DISCONTINUED_OPERATIONS_Tables
DISCONTINUED OPERATIONS (Tables) | 9 Months Ended | 12 Months Ended | |||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | ||||||||||||||||
DISCONTINUED OPERATIONS. | ' | ' | |||||||||||||||
Schedule of discontinued operations of the Company's sports and entertainment business | ' | ' | |||||||||||||||
The following table sets forth indicated selected financial data of the Company’s discontinued operations of its sports and entertainment business during the nine months ended September 30, 2013 and 2012. | 31-Dec-12 | 31-Dec-11 | |||||||||||||||
Assets: | |||||||||||||||||
September | September | Accounts receivable, net | $ | — | $ | 44,300 | |||||||||||
30, 2013 | 30, 2012 | Notes and loan receivable | — | 16,750 | |||||||||||||
Revenues | $ | — | $ | — | Assets of discontinued operations | $ | — | $ | 61,050 | ||||||||
Cost of sales | — | — | |||||||||||||||
Gross profit (loss) | — | — | Liabilities: | ||||||||||||||
Operating and other non-operating expenses | — | (50,298 | ) | Accounts payables and accrued expenses | $ | — | $ | 21,622 | |||||||||
Liabilities of discontinued operations | $ | — | $ | 21,622 | |||||||||||||
Loss from discontinued operations | — | (50,298 | ) | ||||||||||||||
Gain from sale of sports and entertainment business | — | — | |||||||||||||||
Loss from discontinued operations | $ | — | $ | (50,298 | ) | ||||||||||||
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended | 12 Months Ended | ||||||||
Sep. 30, 2013 | Dec. 31, 2012 | |||||||||
COMMITMENTS AND CONTINGENCIES | ' | ' | ||||||||
Schedule of future minimum rental payments required under the lease | ' | ' | ||||||||
2013 | $ | 45,011 | ||||||||
2013 | $ | 11,353 | 2014 | 46,207 | ||||||
2014 | 46,207 | 2015 and thereafter | 15,535 | |||||||
2015 and thereafter | 15,535 | $ | 106,753 | |||||||
$ | 73,095 | |||||||||
ORGANIZATION_AND_DESCRIPTION_O1
ORGANIZATION AND DESCRIPTION OF BUSINESS (Details) (USD $) | 0 Months Ended | 9 Months Ended | 12 Months Ended | |||
Aug. 30, 2011 | Sep. 30, 2013 | Dec. 31, 2008 | 17-May-12 | Sep. 02, 2011 | Sep. 01, 2011 | |
item | item | |||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ' | ' | ' | ' | ' |
Number of Company's properties contain proven and probable reserves | ' | 0 | ' | ' | ' | ' |
Sold equity ownership interest in Capital Hoedown (as a percent) | ' | ' | ' | ' | 66.70% | 66.67% |
Sold equity ownership in Capital Hoedown, value | ' | ' | ' | ' | $500,000 | $500,000 |
Acquisition of Relief Canyon, paid in cash | 12,000,000 | ' | 550,000 | ' | ' | ' |
Acquisition of Relief Canyon, convertible notes issued | $8,000,000 | ' | ' | ' | ' | ' |
Number of gold exploration properties | ' | ' | ' | 2 | ' | ' |
ORGANIZATION_AND_DESCRIPTION_O2
ORGANIZATION AND DESCRIPTION OF BUSINESS (Details 2) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | 16 Months Ended | 25 Months Ended | 1 Months Ended | ||||||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | Sep. 30, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | |
Barry Honig, Board Member | Warrants | Warrants | Convertible Series E Preferred Stock | Convertible Series E Preferred Stock | Convertible Series E Preferred Stock | |||||||||
Common Stock | Barry Honig, Board Member | Barry Honig, Board Member | Warrants | |||||||||||
Common Stock | ||||||||||||||
ORGANIZATION AND DESCRIPTION OF BUSINESS | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net loss | $3,921,574 | $5,078,909 | $8,965,800 | $45,592,956 | $49,103,047 | $24,557,936 | $60,721,832 | $69,687,632 | ' | ' | ' | ' | ' | ' |
Net cash used in operations | ' | ' | 6,009,619 | 7,392,342 | 9,943,307 | 7,500,568 | 11,905,766 | 17,915,385 | ' | ' | ' | ' | ' | ' |
Total accumulated deficit | ' | ' | ' | ' | ' | ' | -82,000,000 | 95,000,000 | ' | ' | ' | ' | ' | ' |
Going concern | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued in private placement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,533 | ' | ' |
Number of shares of common stock to be acquired | ' | ' | ' | ' | ' | ' | ' | ' | ' | 12,639,600 | ' | ' | ' | 12,639,600 |
Net proceeds from private placement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,200,000 |
Number of shares issued in exchange for outstanding principal and accrued interest to related party | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 652 | ' |
Number of warrants issued in exchange for outstanding principal and accrued interest to related party (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 782,400 | ' | ' | ' |
Amount owed by the Company under a Credit Facility Agreement to related party | ' | ' | ' | ' | ' | ' | ' | ' | $645,480 | ' | ' | ' | ' | ' |
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | 16 Months Ended | 25 Months Ended | |||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | Sep. 30, 2013 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ' | ' | ' | ' | ' | ' | ' |
Prepaid expenses - current portion | $359,491 | ' | $359,491 | ' | $502,837 | $463,737 | $502,837 | $359,491 |
Exploration cost | $1,078,139 | $1,782,820 | $1,793,214 | $4,842,781 | $5,221,001 | $2,298,090 | $7,021,023 | $8,814,237 |
Property and equipment | ' | ' | ' | ' | ' | ' | ' | ' |
Estimated useful life | ' | ' | '10 years | ' | '10 years | ' | ' | ' |
Minimum | ' | ' | ' | ' | ' | ' | ' | ' |
Property and equipment | ' | ' | ' | ' | ' | ' | ' | ' |
Estimated useful life | ' | ' | '1 year | ' | ' | ' | ' | ' |
Maximum | ' | ' | ' | ' | ' | ' | ' | ' |
Property and equipment | ' | ' | ' | ' | ' | ' | ' | ' |
Estimated useful life | ' | ' | '25 years | ' | ' | ' | ' | ' |
ACQUISITION_DISPOSITION_AND_DE1
ACQUISITION, DISPOSITION AND DECONSOLIDATION (Details) (USD $) | 0 Months Ended | 9 Months Ended | 12 Months Ended | 16 Months Ended | 25 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 1 Months Ended | 4 Months Ended | |||||||||
Aug. 30, 2011 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2008 | Dec. 31, 2012 | Sep. 30, 2013 | Mar. 31, 2012 | Mar. 01, 2013 | Jan. 26, 2012 | Jan. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Jul. 26, 2012 | 24-May-12 | Nov. 30, 2012 | 31-May-13 | 24-May-12 | 24-May-12 | |
Continental Resources | Amicor | Amicor | Amicor | Amicor | Amicor | Valor Gold | Valor Gold | Valor Gold | Valor Gold | Valor Gold | |||||||||
Barry Honig Family Members | Shareholder | ||||||||||||||||||
Distribution of shares to continental shareholders | ' | ' | ' | ' | ' | ' | ' | ' | 76,095,215 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Purchase price of options to purchase properties and claims sold to Amicor, cash | ' | ' | ' | ' | ' | ' | ' | ' | ' | $10 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Purchase price of options to purchase properties and claims sold to Amicor, shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Purchase price of options to purchase properties and claims sold to Amicor, promissory note | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of a note receivable in connection with sale of uranium assets pursuant to an option agreement | ' | 930,000 | 930,000 | ' | ' | 930,000 | 930,000 | ' | ' | ' | ' | 930,000 | ' | ' | ' | ' | ' | ' | ' |
Final amount due under the note which Amicor is not required to pay | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 70,000 | ' | ' | ' | ' | ' |
Notes receivable, net | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | ' | 500,000 | ' | ' | ' | ' |
Common shares of Amicor purchased during Amicor's private placement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Value of common stock issued | ' | ' | 3,817,917 | ' | ' | ' | ' | ' | ' | ' | 1,641,933 | ' | ' | ' | ' | ' | 1,505,000 | ' | ' |
Cash paid for acquisition | 12,000,000 | ' | ' | ' | 550,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,000,000 | ' | ' | ' | ' |
Notes payable interest rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | 8.00% | ' | ' | ' | ' | ' | ' | 5.00% | ' | ' | ' | ' |
Promissory note term from the issuance date | ' | ' | ' | ' | ' | ' | ' | ' | ' | '6 months | ' | ' | ' | ' | '18 months | ' | ' | ' | ' |
Common Stock Issued for purchase of assets or interest | ' | ' | 10,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25,000,000 | ' | ' | ' | ' |
Amount collected from note receivable | ' | $930,000 | $1,430,000 | ' | ' | $1,430,000 | $1,430,000 | ' | ' | ' | ' | ' | ' | ' | ' | $500,000 | ' | ' | ' |
Common Shares of Valor Gold held by related parties prior to purchase agreement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,600,003 | 750,000 |
Common shares of Valor Gold purchased by related parties during Valor Gold's private placement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,250,000 |
Shares of Valor Gold Series A Preferred Stock purchased by related parties during Valor Gold's private placement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,000,000 | ' |
Percentage of outstanding common stock acquired | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 38.60% | ' | ' | ' | ' |
Common stock issued (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25,000,000 | ' | ' |
MARKETABLE_SECURITIES_Details
MARKETABLE SECURITIES (Details) (USD $) | 3 Months Ended | 9 Months Ended | 11 Months Ended | 12 Months Ended | 16 Months Ended | 25 Months Ended | ||
Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | Sep. 30, 2013 | |
MARKETABLE SECURITIES. | ' | ' | ' | ' | ' | ' | ' | ' |
Realized Gain from Sale of Securities | $415,000 | $1,656,333 | $755,600 | $1,490,600 | $1,490,600 | ' | $1,490,600 | $3,146,933 |
MARKETABLE_SECURITIES_Details_
MARKETABLE SECURITIES (Details 2) (USD $) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 11 Months Ended | 12 Months Ended | 16 Months Ended | 25 Months Ended | 4 Months Ended | |||
Jan. 31, 2013 | Jan. 31, 2012 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | Sep. 30, 2013 | 31-May-13 | |
Valor Gold | |||||||||||
Additional information | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares of Amicor Sold | 1,513,333 | ' | ' | ' | ' | 8,486,667 | ' | ' | ' | ' | ' |
Generated net proceeds | $151,333 | $151,333 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock issued in private transactions (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25,000,000 |
Generated net proceeds from private transactions | ' | ' | ' | ' | ' | ' | 3,817,917 | ' | ' | ' | 1,505,000 |
Realized gain - available for sale securities | ' | ' | $415,000 | $1,656,333 | $755,600 | $1,490,600 | $1,490,600 | ' | $1,490,600 | $3,146,933 | ' |
MINERAL_PROPERTIES_Details
MINERAL PROPERTIES (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
MINERAL PROPERTIES: | ' | ' | ' |
Relief Canyon Mine - Gold Acquisition | $8,501,071 | $8,501,071 | $8,501,071 |
Relief Canyon Mine - Newmont Leased Properties | 7,709,441 | 7,709,441 | ' |
Pershing Pass Property | 576,400 | 576,400 | ' |
Total Mineral Properties | $16,786,912 | $16,786,912 | $8,501,071 |
MINERAL_PROPERTIES_Details_2
MINERAL PROPERTIES (Details 2) (USD $) | 27 Months Ended | 1 Months Ended | 9 Months Ended | 1 Months Ended | 9 Months Ended | |||||||||||||||||||||
Jun. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2012 | Apr. 05, 2012 | Mar. 31, 2012 | Feb. 29, 2012 | Dec. 31, 2011 | Dec. 31, 2008 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Apr. 05, 2012 | Sep. 30, 2013 | |
mi | Wolf Pack Gold (Nevada) Corp | Newmont USA Ltd. | Newmont USA Ltd. | Newmont USA Ltd. | Newmont USA Ltd. | Minimum | Minimum | Minimum | Minimum | Minimum | Minimum | Maximum | Relief Canyon Mine | Pershing Pass Property | Pershing Pass Property | Victoria Gold | Victoria Gold | Silver Scott Mines | ||||||||
acre | 2006 Mineral Lease and Sublease | 1994 Mining Lease | 1999 Mining Lease | Wolf Pack Gold (Nevada) Corp | Wolf Pack Gold (Nevada) Corp | Wolf Pack Gold (Nevada) Corp | Wolf Pack Gold (Nevada) Corp | Wolf Pack Gold (Nevada) Corp | Newmont USA Ltd. | Newmont USA Ltd. | item | acre | Maximum | item | acre | item | ||||||||||
item | item | acre | acre | Till September 2023 | After September 2023 | Sep-28 | Sep-33 | 2006 Mineral Lease and Sublease | 2006 Mineral Lease and Sublease | item | acre | item | acre | |||||||||||||
acre | ||||||||||||||||||||||||||
Distance of Relief Canyon properties from Reno, Nevada | ' | 100 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unpatented Lode Mining Claims Owned | ' | ' | ' | ' | 84 | 283 | ' | 489 | ' | ' | 155 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 164 | ' | ' | 283 | 283 | 490 |
Unpatented Millsites owned | ' | ' | ' | ' | 118 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 120 | ' | ' | ' | ' | ' |
Number of open pit mines | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3 | ' | ' | ' | ' | ' |
Number of cells included in heap leach pads | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6 | ' | ' | ' | ' | ' |
Number of solution ponds | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 | ' | ' | ' | ' | ' |
Number of carbon columns included in ADR | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4 | ' | ' | ' | ' | ' |
Net Smelter Return Royalty Percentage | ' | ' | ' | 2.00% | ' | ' | ' | ' | ' | 2.00% | ' | ' | ' | ' | ' | ' | ' | ' | 3.00% | 5.00% | 2.00% | ' | ' | 2.00% | 2.00% | ' |
Unpatented mining claims owned, acquired from a third party | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 17 | ' | ' | ' | ' |
Net smelter return royalty percentage on unpatented mining claims acquired from a third party | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2.00% | ' | ' | ' | ' |
Unpatented mining claims owned that the Company located during mid 2012 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 17 | ' | ' | ' | ' |
Private lands leased (in acres) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 635 | ' | ' | ' | ' |
Primary term of the lease | ' | ' | ' | ' | ' | ' | ' | ' | '10 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '10 years | ' | ' | ' | ' |
Royalty percentage on all metals produced other than gold | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2.00% | ' | ' | ' | ' |
Royalty percentage on gold if gold prices are less than $500 per ounce | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2.00% | ' | ' | ' | ' |
Gold price (per ounce) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $500 | ' | ' | ' | ' |
Royalty percentage on gold if gold prices are over $1,500 per ounce | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3.50% | ' | ' | ' | ' |
Gold price (per ounce) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,500 | ' | ' | ' | ' |
Royalty percentage on gold production that the entity can repurchase | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3.00% | ' | ' | ' |
Rate at which the entity can repurchase royalty percentage of gold | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 600,000 | ' | ' | ' | ' |
Each royalty percentage that the company can repurchase at specified rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.00% | ' | ' | ' | ' |
Unpatented mining claims owned | ' | ' | ' | ' | ' | ' | ' | ' | 19 | ' | 62 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Royalty percentage on precious metals | ' | ' | ' | ' | ' | ' | ' | ' | 1.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Royalty percentage on all other materials excluding precious metals | ' | ' | ' | ' | ' | ' | ' | ' | 0.50% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Advance royalty required to pay prior to production | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Advance royalty required to pay per year | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,000 | 12,500 | 15,000 | 20,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Number of unpatented mining claims that can be acquired by the Company if purchase option is exercised | ' | ' | ' | ' | ' | ' | ' | ' | 19 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Purchase price for acquisition of unpatented mining claims | ' | ' | ' | ' | ' | ' | ' | ' | 250,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Acres of Property | ' | ' | ' | 13,300 | ' | ' | ' | 9,700 | 400 | ' | 2,800 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 12,000 | ' | 5,660 | 13,300 | 9,700 |
Area of properties held under leases and subleases | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 600 | ' | ' | 8,900 | ' |
Unpatented mining claims owned on which royalty owed to Victoria Gold | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 700 | ' | ' | 221 | ' |
Reclamation bond deposit | ' | 4,645,533 | 4,645,533 | ' | ' | ' | 4,557,629 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Adjustment to the carrying value of mineral rights | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Acres of privately-owned fee minerals leased (in acres) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,900 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount required to be spent in exploration expenses in 2013 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount required to be spent in exploration expenses per year | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Rental payment per acre per year | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Increase in rental payments per year (as a percent) | 5.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount of annual rent payable if the Company elects not to or fails to incur minimum specific amount in exploration expenditures | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Additional direct drilling expenditures required in 2016 in order to avoid the annual rental payment requirement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Minimum monthly average gold price for which 5% net smelter royalty would apply (per ounce) | ' | ' | ' | ' | ' | ' | ' | ' | ' | $400 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net smelter return royalty percentage on specified acres of leased properties (in acres) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2.50% | 3.50% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Acres of leased property on which royalty percentage apply (in acres) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 800 | 495 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
PROPERTY_AND_EQUIPMENT_Details
PROPERTY AND EQUIPMENT (Details) (USD $) | 9 Months Ended | 12 Months Ended | 16 Months Ended | 25 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | Sep. 30, 2013 | |
PROPERTY AND EQUIPMENT | ' | ' | ' | ' | ' | ' |
Furniture and fixtures | $56,995 | ' | $56,995 | $20,000 | $56,995 | $56,995 |
Furniture and fixtures, estimated life | '5 years | ' | '5 years | ' | ' | ' |
Office and computer equipment | 227,344 | ' | 220,060 | 26,606 | 220,060 | 227,344 |
Office and computer equipment, estimated life minimum | '1 year | ' | '1 year | ' | ' | ' |
Office and computer equipment, maximum estimated life | '5 years | ' | '5 years | ' | ' | ' |
Land | 266,977 | ' | 266,977 | 266,977 | 266,977 | 266,977 |
Building and improvements | 727,965 | ' | 727,965 | 727,965 | 727,965 | 727,965 |
Building and improvements, minimum estimated life | '5 years | ' | '5 years | ' | ' | ' |
Building and improvements, maximum estimated life | '25 years | ' | '25 years | ' | ' | ' |
Site costs | 1,272,732 | ' | 1,272,732 | 1,272,732 | ' | ' |
Site costs, estimated life | '10 years | ' | '10 years | ' | ' | ' |
Crushing system | 2,256,943 | ' | 2,256,943 | 2,256,943 | 2,256,943 | 2,256,943 |
Crushing system, estimated life | '20 years | ' | '20 years | ' | ' | ' |
Process plant and equipment | 3,169,442 | ' | 3,166,280 | 3,115,266 | 3,166,280 | 3,169,442 |
Process plant and equipment, estimated life | '10 years | ' | '10 years | ' | ' | ' |
Vehicles and mining equipment | 695,825 | ' | 682,373 | 659,622 | 682,373 | 695,825 |
Vehicles and mining equipment, minimum estimated life | '5 years | ' | '5 years | ' | ' | ' |
Vehicles and mining equipment, maximum estimated life | '10 years | ' | '10 years | ' | ' | ' |
Total property and equipment, net | 8,674,223 | ' | 8,650,325 | 8,346,111 | 8,650,325 | 8,674,223 |
Less: accumulated depreciation | -1,993,320 | ' | -1,263,549 | -315,008 | -1,263,549 | -1,993,320 |
Total property and equipment, gross | 6,680,903 | ' | 7,386,776 | 8,031,103 | 7,386,776 | 6,680,903 |
Depreciation | $729,771 | $756,482 | $992,648 | $325,928 | $1,318,576 | $2,048,347 |
NOTES_PAYABLE_Details
NOTES PAYABLE (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
NOTES PAYABLE | ' | ' | ' |
Total Notes Payable | $65,269 | $82,546 | ' |
Less: current portion | -23,036 | -23,036 | ' |
Long term portion | $42,233 | $59,510 | ' |
NOTES_PAYABLE_Details_2
NOTES PAYABLE (Details 2) (USD $) | 9 Months Ended | ||
Sep. 30, 2013 | Aug. 31, 2012 | Feb. 28, 2011 | |
item | |||
NOTES PAYABLE | ' | ' | ' |
Note payable in connection with acquisition | ' | $92,145 | $92,145 |
Note payable in connection with acquisition, interest (as a percent) | ' | 7.00% | ' |
Number of equal monthly payments of the note payable | 48 | ' | ' |
Monthly payments of the note payable | $2,226 | ' | ' |
RELATED_PARTY_TRANSACTIONS_Det
RELATED PARTY TRANSACTIONS (Details) (USD $) | 1 Months Ended | 9 Months Ended | 12 Months Ended | 4 Months Ended | 5 Months Ended | 1 Months Ended | ||||||||
Mar. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Feb. 28, 2011 | Oct. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2013 | Aug. 31, 2013 | Dec. 31, 2012 | Feb. 28, 2011 | Jan. 31, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | |
Barry Honig, Board Member | Barry Honig, Board Member | Barry Honig, Board Member | Barry Honig, Board Member | Barry Honig, Board Member | Barry Honig, Board Member | Continental Resources | Continental Resources | Continental Resources | ||||||
Debt | ' | ' | ' | $7,999,778 | ' | ' | ' | ' | ' | ' | $2,250,000 | ' | ' | ' |
Payments on notes | ' | ' | ' | ' | ' | ' | 1,688,250 | ' | ' | ' | ' | ' | ' | ' |
Principle amount of note payable | ' | ' | ' | ' | 486,250 | 486,250 | ' | 0 | ' | 486,250 | ' | ' | ' | ' |
Accrued interest and fees | ' | ' | ' | ' | ' | ' | ' | 0 | 159,230 | 142,164 | ' | ' | ' | ' |
Payments for Continental's expenses | ' | 93,640 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 15,066 | ' | ' |
Distribution to former parent company | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 15,066 | 611,589 |
Extinguished debt | $294,285 | $2,436,888 | $357,635 | ' | ' | $75,500 | ' | ' | ' | ' | ' | ' | ' | ' |
STOCKHOLDERS_EQUITY_Details
STOCKHOLDERS' EQUITY (Details) (USD $) | 1 Months Ended | 12 Months Ended | 1 Months Ended | 9 Months Ended | |||||
Aug. 31, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2012 | Aug. 31, 2013 | Mar. 31, 2013 | Sep. 30, 2013 | |
Number of Options | Number of Options | Number of Options | |||||||
Number of Options: | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Beginning Balance at December 31, 2012 (in shares) | ' | ' | 3,548,000 | 2,850,000 | ' | ' | ' | ' | 35,298,000 |
Granted (in shares) | ' | ' | ' | 32,250,000 | 2,648,000 | ' | ' | ' | 350,000 |
Exercised (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Forfeited (in shares) | ' | ' | ' | 500,000 | 1,950,000 | ' | ' | ' | -2,248,000 |
Cancelled (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Balance outstanding at September 30, 2013 (in shares) | ' | ' | 35,298,000 | 3,548,000 | 2,850,000 | ' | ' | ' | 33,400,000 |
Options exercisable at end of period (in shares) | ' | ' | 33,055,067 | ' | ' | ' | ' | ' | 31,600,000 |
Options expected to vest through December 31, 2014 (in shares) | ' | ' | 2,242,933 | ' | ' | ' | ' | ' | 1,800,000 |
Weighted Average Exercise Price: | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Beginning Balance at December 31, 2012 (in dollars per share) | ' | ' | $1.11 | $0.60 | ' | ' | ' | ' | $0.46 |
Granted (in dollars per share) | ' | ' | ' | $0.39 | $1.36 | ' | ' | ' | $0.42 |
Exercised (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Forfeited (in dollars per share) | ' | ' | ' | $0.81 | $0.41 | ' | ' | ' | $1.30 |
Cancelled (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Balance outstanding at September 30, 2013 (in dollars per share) | ' | ' | $0.46 | $1.11 | $0.60 | ' | ' | ' | $0.40 |
Options exercisable at end of period (in dollars per share) | ' | ' | $0.46 | ' | ' | ' | ' | ' | $0.40 |
Weighted average fair value of options granted during the period (in dollars per share) | $0.23 | $0.25 | $0.36 | ' | ' | ' | $0.23 | $0.25 | $0.25 |
Weighted Average Remaining Contractual Life: | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Beginning Balance | ' | ' | '8 years 5 months | '9 years 5 months | ' | '9 years 2 months | ' | ' | '9 years 1 month 10 days |
Granted | ' | ' | ' | '10 years | '8 years 11 months | ' | ' | ' | '3 years 9 months 29 days |
Forfeited | ' | ' | ' | '8 years 7 months | '8 years 9 months | ' | ' | ' | '7 years |
Balance outstanding at September 30, 2013 | ' | ' | ' | ' | ' | ' | ' | ' | '8 years 5 months 5 days |
STOCKHOLDERS_EQUITY_Details_2
STOCKHOLDERS' EQUITY (Details 2) (USD $) | 12 Months Ended | 9 Months Ended | |
Dec. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2013 | |
Stock Warrants | |||
Number of Warrants: | ' | ' | ' |
Beginning balance at December 31, 2012 (in shares) | 35,603,142 | ' | 16,255,779 |
Granted (in shares) | 24,482,741 | 56,190,375 | 13,435,590 |
Cancelled (in shares) | 32,430,954 | 5,336,045 | -3,446,748 |
Forfeited (in shares) | ' | -3,720,000 | ' |
Exercised (in shares) | -11,399,150 | -11,531,188 | ' |
Ending Balance at September 30, 2013 (in shares) | 16,255,779 | 35,603,142 | 26,244,621 |
Warrants exercisable at September 30, 2013 (in shares) | 16,255,779 | ' | 26,244,621 |
Weighted Average Exercise Price: | ' | ' | ' |
Beginning Balance at December 31, 2012 (in dollars per share) | ' | ' | $0.54 |
Granted (in dollars per share) | ' | ' | $0.40 |
Cancelled (in dollars per share) | ' | ' | $0.65 |
Forfeited (in dollars per share) | ' | ' | ' |
Exercised (in dollars per share) | ' | ' | ' |
Ending Balance at September 30, 2013 (in dollars per share) | ' | ' | $0.45 |
Warrants exercisable at September 30, 2013 (in dollars per share) | $0.54 | ' | $0.45 |
Weighted average fair value of warrants granted during the period (in dollars per share) | ' | ' | $0.17 |
Weighted Average Remaining Contractual Life: | ' | ' | ' |
Beginning Balance at December 31, 2012 | ' | ' | '2 years 5 months 1 day |
Granted | ' | ' | '3 years |
Cancelled | ' | ' | '1 month 20 days |
Ending Balance at September 30, 2013 | '2 years 5 months | '3 years 11 months | '2 years 5 months 19 days |
Warrants exercisable at September 30, 2013 | '2 years 5 months | ' | '2 years 5 months 19 days |
STOCKHOLDERS_EQUITY_Details_3
STOCKHOLDERS' EQUITY (Details 3) (USD $) | 0 Months Ended | 1 Months Ended | 9 Months Ended | 12 Months Ended | 16 Months Ended | 25 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | 9 Months Ended | 0 Months Ended | 1 Months Ended | 1 Months Ended | 9 Months Ended | ||||||||||||||||||||||||||||||
Feb. 12, 2013 | Feb. 08, 2013 | Jun. 18, 2012 | Aug. 31, 2013 | Mar. 31, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | Sep. 30, 2013 | Nov. 21, 2012 | Mar. 30, 2012 | Feb. 23, 2012 | Feb. 09, 2012 | Feb. 28, 2011 | Sep. 29, 2010 | Aug. 31, 2013 | Aug. 31, 2013 | 31-May-13 | Dec. 31, 2012 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Aug. 05, 2013 | Aug. 31, 2013 | Sep. 30, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | |
Barry Honig, Board Member | Warrants | Warrants | Warrants | Warrants | Warrants | Warrants | Warrants | Private placement | Private placement | Private placement | Vested restricted stock grants | Preferred Stock | Convertible Series A Preferred Stock | Convertible Series B Preferred Stock | Convertible Series C Preferred Stock | Convertible Series D Preferred Stock | Convertible Series E Preferred Stock | Convertible Series E Preferred Stock | Convertible Series E Preferred Stock | Convertible Series E Preferred Stock | Convertible Series E Preferred Stock | Convertible Series E Preferred Stock | Convertible Series E Preferred Stock | Convertible Series E Preferred Stock | Non-vested option-based compensation | Non-vested option-based compensation | ||||||||||||||||||
Minimum | Maximum | Common Stock | Common Stock | Warrants | Warrants | Barry Honig, Board Member | Warrants | Private placement | Private placement | Private placement | ||||||||||||||||||||||||||||||||||
Barry Honig, Board Member | Common Stock | Warrants | Warrants | |||||||||||||||||||||||||||||||||||||||||
item | ||||||||||||||||||||||||||||||||||||||||||||
Stock authorized, shares | ' | ' | ' | ' | ' | 50,000,000 | ' | 50,000,000 | 50,000,000 | 50,000,000 | 50,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50,000,000 | 2,250,000 | 8,000,000 | 3,284,396 | 7,500,000 | 15,151 | ' | 15,151 | ' | ' | ' | ' | ' | ' | ' |
Par value of preferred stock authorized (in dollars per share) | ' | ' | ' | ' | ' | $0.00 | ' | $0.00 | $0.00 | $0.00 | $0.00 | ' | ' | ' | ' | $1.20 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.00 | $0.00 | $0.00 | $0.00 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of common shares issued upon conversion | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Conversion price per share of common stock (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.33 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Preferred stock redemption amount as percentage of purchase price | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 110.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount that preferred stockholder is entitled to receive as percentage of purchase price upon liquidation, dissolution or winding up of the entity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 110.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash payment that preferred stockholders are entitled to receive as percentage of purchase price upon a change of control | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of shares of common stock to be acquired | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 12,639,600 | ' | ' | ' | 13,590 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 12,639,600 | ' | ' | ' | ' | ' |
Net proceeds from private placement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $10,200,000 | ' | $10,200,000 | ' | ' | ' |
Term of warrants | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '3 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '3 years | ' | ' | ' |
Percentage of number of shares of common stock issuable upon conversion of the Series E shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 40.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Exercise price (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.40 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.40 | ' | ' |
Expiration period of warrants | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '3 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of shares of Series E Preferred Stock with associated warrant used to determine cumulative purchase price | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1 | ' | ' | ' |
Purchase price of each share of Series E Preferred Stock with associated warrant (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $990 | ' | ' | ' |
Initial estimated fair value allocated to the ECF | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,188,792 | ' | ' | ' | ' | ' | ' | ' | ' |
initial estimated fair value allocated to the warrants | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,912,867 | ' | ' | ' | ' | ' | ' | ' | ' |
Assumptions used valuing the warrants | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Risk free interest rate (annual) (as a percent) | ' | ' | ' | ' | ' | ' | ' | 0.27% | 0.25% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.27% | 0.61% | 0.82% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Expected volatility (as a percent) | ' | ' | ' | ' | ' | ' | ' | 103.00% | 106.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | 86.00% | ' | 112.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Expected life | ' | ' | ' | ' | ' | ' | ' | '2 years | '2 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | '3 years | ' | '2 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Assumed dividends (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Legal fees paid in cash | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 124,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Commissions paid in cash | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 76,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount owed by the Company under a Credit Facility Agreement to related party | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 645,480 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of shares issued in exchange for outstanding principal and accrued interest to related party | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 652 | ' | ' | ' | ' | ' | ' |
Number of warrants issued in exchange for outstanding principal and accrued interest to related party (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 782,400 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Preferred stock, Issued (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,250,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 0 | 0 | 0 | ' | ' | 11,185 | ' | ' | ' | ' | ' | ' | ' |
Preferred stock, Outstanding (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 0 | 0 | 0 | ' | ' | 11,185 | ' | ' | ' | ' | ' | ' | ' |
Shares issued in private placement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,533 | ' | ' | ' | 10,533 | ' | ' | ' | ' |
Shares of common stock issued to CEO | ' | ' | 5,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 12,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of restricted shares previously issued to CEO for which vesting period has been extended | ' | 6,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock-based compensation expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,475,523 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 323,750 | ' |
Unrecognized compensation expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,904,349 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 156,651 |
Shares of restricted common stock issued to director | 6,700,000 | ' | 3,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Value of restricted common stock issued to director | 3,417,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Market value of restricted common stock issued to director (in dollars per share) | $0.51 | ' | $0.34 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of vesting of restricted common stock | 33.33% | ' | 33.33% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Vesting period | '3 years | ' | '3 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Restricted stock issued to Vice President (in shares) | ' | ' | ' | ' | 500,000 | ' | ' | ' | ' | ' | ' | 200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Intrinsic value of stock options outstanding | ' | ' | ' | ' | ' | 731,700 | ' | ' | ' | ' | 731,700 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Reserved for issuance (in shares) | 40,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 40,000,000 | ' | 2,800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding awards under 2010 plan (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,150,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Holders of common stock in favor of 2012 Equity Incentive Plan (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 53.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Remaining available stock-based awards for future issuances under 2012 Plan (in shares) | ' | ' | ' | ' | ' | 0 | ' | ' | ' | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Remaining available stock-based awards for future issuances under 2013 Plan (in shares) | ' | ' | ' | ' | ' | 33,300,000 | ' | ' | ' | ' | 33,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Three year options granted to consultants, shares | ' | ' | ' | ' | 150,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Value of three year options granted to consultants (in dollars per share) | ' | ' | ' | ' | $0.44 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted average fair value of options granted (in dollars per share) | ' | ' | ' | $0.23 | $0.25 | ' | ' | $0.36 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Three year options granted to consultants, value | ' | ' | ' | ' | 38,058 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Assumptions of Black-Scholes option pricing model | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share price (in dollars per share) | ' | ' | ' | $0.35 | $0.44 | ' | ' | ' | ' | ' | ' | ' | $0.56 | $1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Volatility (as a percent) | ' | ' | ' | 86.00% | 92.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Expected term | ' | ' | ' | '5 years | '3 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Dividend yield (as a percent) | ' | ' | ' | 0.00% | 0.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Risk free interest rate (as a percent) | ' | ' | ' | 1.57% | 0.35% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Volatility granted to Vice President (as a percent) | ' | ' | ' | ' | 92.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Risk free interest rate to Vice President (as a percent) | ' | ' | ' | ' | 0.14% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Dividend yield to Vice President (as a percent) | ' | ' | ' | ' | 0.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Expected term to Vice President | ' | ' | ' | ' | '9 months | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Five year options granted to consultants, shares | ' | ' | ' | 200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Value of five year options granted to consultants (in dollars per share) | ' | ' | ' | $0.40 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Five year options granted to consultants, value | ' | ' | ' | 45,080 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Warrant settlement expense | ' | ' | ' | ' | ' | 45,484 | 4,883,196 | -4,883,196 | 4,799,000 | -9,682,196 | 9,727,680 | ' | ' | ' | ' | ' | ' | ' | ' | 45,484 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cancelled (in shares) | ' | ' | ' | ' | ' | ' | ' | 32,430,954 | 5,336,045 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -3,446,748 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Warrants issued to purchase shares of the Company's common stock (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 13,435,590 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Additional stock-based compensation expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $35,079 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
NET_LOSS_PER_COMMON_SHARE_Deta
NET LOSS PER COMMON SHARE (Details) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | 16 Months Ended | 25 Months Ended | |||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | Sep. 30, 2013 | |
Numerator: | ' | ' | ' | ' | ' | ' | ' | ' |
Loss from continuing operations available to common stockholders | ($3,921,574) | ($5,078,909) | ($8,965,800) | ($45,542,658) | ($49,052,749) | ($21,469,563) | ($61,524,199) | ($70,489,999) |
Loss from discontinued operations | ' | ' | ' | ($50,298) | ($50,298) | ($3,088,373) | $802,367 | $802,367 |
Denominator: | ' | ' | ' | ' | ' | ' | ' | ' |
Denominator for basic and diluted loss per share (in shares) | 273,292,023 | 256,619,449 | 272,236,712 | 206,120,460 | 219,530,283 | 70,372,421 | 242,840,594 | 224,003,492 |
Loss per common share, basic and diluted: | ' | ' | ' | ' | ' | ' | ' | ' |
Loss from continuing operations (in dollars per share) | ($0.03) | ($0.02) | ($0.05) | ($0.23) | ($0.22) | ($0.31) | ($0.25) | ($0.36) |
Loss from discontinued operations (in dollars per share) | $0 | $0 | $0 | $0 | $0 | ($0.04) | $0 | $0 |
NET_LOSS_PER_COMMON_SHARE_Deta1
NET LOSS PER COMMON SHARE (Details 2) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | |
Common stock equivalents: | ' | ' | ' | ' |
Stock options (in shares) | 33,400,000 | 35,298,000 | 35,298,000 | 3,548,000 |
Stock warrants (in shares) | 26,244,621 | 12,222,188 | 16,255,779 | 35,603,142 |
Convertible preferred stock (in shares) | 33,555,000 | ' | ' | 8,710,990 |
Total (in shares) | 93,199,621 | 47,520,188 | 51,553,779 | 69,892,788 |
DISCONTINUED_OPERATIONS_Detail
DISCONTINUED OPERATIONS (Details) (USD $) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | |
DISCONTINUED OPERATIONS. | ' | ' | ' | ' |
Revenues | ' | ' | ' | $3,041,329 |
Cost of sales | ' | ' | ' | ' |
Gross profit (loss) | ' | ' | ' | ' |
Operating and other non-operating expenses | ' | -50,298 | ' | ' |
Loss from discontinued operations | ' | -50,298 | ' | ' |
Gain from sale of sports and entertainment business | ' | ' | ' | ' |
Loss from discontinued operations | ' | ($50,298) | ' | ' |
DISCONTINUED_OPERATIONS_Detail1
DISCONTINUED OPERATIONS (Details 2) (USD $) | Mar. 31, 2012 | Sep. 01, 2011 |
DISCONTINUED OPERATIONS. | ' | ' |
Minority interest in Capital Hoedown, Inc. owned by CII with Empire (as a percent) | ' | 33.33% |
Equity ownership interest in Capital Hoedown sold to CII (as a percent) | ' | 66.67% |
Value of Empire sale to CII | $500,000 | ' |
Senior Promissory Note, issued by CII, interest rate (as a percent) | 8.00% | ' |
COMMITMENTS_AND_CONTINGENCIES_1
COMMITMENTS AND CONTINGENCIES (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Apr. 05, 2012 |
COMMITMENTS AND CONTINGENCIES | ' | ' | ' |
2013 | $11,353 | $45,011 | ' |
2014 | 46,207 | 46,207 | ' |
2015 and thereafter | 15,535 | 15,535 | ' |
Total | $73,095 | $106,753 | $10 |
COMMITMENTS_AND_CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details 2) (USD $) | 1 Months Ended | 9 Months Ended | 12 Months Ended | |
Feb. 29, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
sqft | ||||
COMMITMENTS AND CONTINGENCIES | ' | ' | ' | ' |
Lease agreement term | '3 years | ' | ' | ' |
Net rentable square feet area for which rent is payable | 2,390 | ' | ' | ' |
Annual base rent per rentable square foot (in dollars per square foot) | ' | 18.5 | ' | ' |
Annual base rent | $44,215 | $44,215 | ' | ' |
Rent Expense | ' | $33,759 | $28,050 | $56,583 |
Recovered_Sheet1
Consolidated Balance Sheets (USD $) | Dec. 31, 2012 | Dec. 31, 2011 |
Assets, Current [Abstract] | ' | ' |
Cash and Cash Equivalents, at Carrying Value | $3,218,191 | $3,670,567 |
Marketable securities - trading securities | ' | 100,000 |
Accounts and Other Receivables, Net, Current | 77,364 | 113,241 |
Prepaid Expense, Current | 502,837 | 463,737 |
Deferred financing cost | ' | 50,919 |
Due from equity method investor (former Parent Company) | ' | 347,335 |
Assets of discontinued operations - current portion | ' | 61,050 |
Total Current Assets | 3,798,392 | 4,806,849 |
Assets, Noncurrent [Abstract] | ' | ' |
Prepaid expenses - long-term portion | ' | 37,759 |
Property, Plant and Equipment, Net | 7,386,776 | 8,031,103 |
Other Finite-Lived Intangible Assets, Gross | 16,786,912 | 8,501,071 |
Reclamation Bond Noncurrent | 4,645,533 | 4,557,629 |
Deposits Assets, Noncurrent | 3,884 | 51,000 |
Total Non - Current Assets | 28,823,105 | 21,178,562 |
Total Assets | 32,621,497 | 25,985,411 |
Liabilities, Current [Abstract] | ' | ' |
Accounts Payable and Accrued Liabilities, Current | 778,314 | 821,111 |
Senior convertible promissory notes, net of debt discount | ' | 1,066,445 |
Convertible promissory note, net of debt discount | ' | 118,487 |
Notes Payable, Current | 23,036 | ' |
Note Payable Related Party Net of Debt Discount | 486,250 | 510,832 |
Derivative liability. | ' | 6,295,400 |
Liabilities of discontinued operation | ' | 21,622 |
Total Current Liabilities | 1,287,600 | 8,833,897 |
Long Term Liabilities [Abstract] | ' | ' |
Other Notes Payable, Noncurrent | 59,510 | ' |
Total Liabilities | 1,347,110 | 8,833,897 |
Stockholders' Equity Attributable to Parent [Abstract] | ' | ' |
Preferred Stock, Value, Issued | ' | ' |
Common Stock, Value, Issued | 26,659 | 14,277 |
Additional Paid in Capital | 113,052,194 | 47,114,351 |
Retained Earnings (Accumulated Deficit) | -14,901,794 | -14,901,794 |
Accumulated deficit since inception of exploration stage (September 1, 2011) | -66,902,672 | -15,074,534 |
Stockholders' Equity Attributable to Parent | 31,274,387 | 17,152,678 |
Stockholders' Equity Attributable to Noncontrolling Interest | ' | -1,164 |
Total Stockholders' Equity | 31,274,387 | 17,151,514 |
Total Liabilities and Stockholders' Equity | 32,621,497 | 25,985,411 |
Series A Preferred Stock | ' | ' |
Stockholders' Equity Attributable to Parent [Abstract] | ' | ' |
Preferred Stock, Value, Issued | ' | ' |
Series B Preferred Stock | ' | ' |
Stockholders' Equity Attributable to Parent [Abstract] | ' | ' |
Preferred Stock, Value, Issued | ' | 50 |
Series C Preferred Stock | ' | ' |
Stockholders' Equity Attributable to Parent [Abstract] | ' | ' |
Preferred Stock, Value, Issued | ' | 328 |
Series D Preferred Stock | ' | ' |
Stockholders' Equity Attributable to Parent [Abstract] | ' | ' |
Preferred Stock, Value, Issued | ' | ' |
Recovered_Sheet2
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2012 | Dec. 31, 2011 |
Preferred Stock, Par or Stated Value Per Share | $0.00 | $0.00 |
Preferred Stock, Shares Authorized | 50,000,000 | 50,000,000 |
Common Stock, Par or Stated Value Per Share | $0.00 | $0.00 |
Common Stock, Shares Authorized | 500,000,000 | 500,000,000 |
Common Stock, Shares, Issued | 266,592,023 | 142,773,113 |
Common Stock, Shares, Outstanding | 266,592,023 | 142,773,113 |
Series A Preferred Stock | ' | ' |
Preferred Stock, Par or Stated Value Per Share | $0.00 | $0.00 |
Preferred Stock, Shares Authorized | 2,250,000 | 2,250,000 |
Preferred Stock, Shares Issued | ' | ' |
Preferred Stock, Shares Outstanding | ' | ' |
Series B Preferred Stock | ' | ' |
Preferred Stock, Par or Stated Value Per Share | $0.00 | $0.00 |
Preferred Stock, Shares Authorized | 8,000,000 | 8,000,000 |
Preferred Stock, Shares Issued | ' | 500,000 |
Preferred Stock, Shares Outstanding | ' | 500,000 |
Series C Preferred Stock | ' | ' |
Preferred Stock, Par or Stated Value Per Share | $0.00 | $0.00 |
Preferred Stock, Shares Authorized | 3,284,396 | 3,284,396 |
Preferred Stock, Shares Issued | ' | 3,284,396 |
Preferred Stock, Shares Outstanding | ' | 3,284,396 |
Series D Preferred Stock | ' | ' |
Preferred Stock, Par or Stated Value Per Share | $0.00 | $0.00 |
Preferred Stock, Shares Authorized | 7,500,000 | 7,500,000 |
Preferred Stock, Shares Issued | ' | ' |
Preferred Stock, Shares Outstanding | ' | ' |
Recovered_Sheet3
Consolidated Statements of Operations (USD $) | 12 Months Ended | 16 Months Ended | |
Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | |
CONSOLIDATED STATEMENTS OF OPERATIONS | ' | ' | ' |
Revenue, Net | ' | ' | ' |
Costs and Expenses [Abstract] | ' | ' | ' |
Labor and Related Expense | 19,726,749 | 1,425,451 | 20,808,828 |
Exploration Expense, Mining | 5,221,001 | 2,298,090 | 7,021,023 |
Professional Fees | 2,334,297 | 6,475,520 | 7,905,476 |
General and Administrative Expense | 4,172,283 | 2,037,692 | 5,604,753 |
Total operating expenses | 31,454,330 | 12,236,753 | 41,340,080 |
Operating loss from continuing operations | -31,454,330 | -12,236,753 | -41,340,080 |
Nonoperating Income (Expense) [Abstract] | ' | ' | ' |
Derivative expense | ' | -5,198,206 | ' |
Other Income | 80,000 | ' | 80,000 |
Gain (Loss) on Disposition of Assets for Financial Service Operations | 930,000 | ' | 930,000 |
Gain (Loss) on Disposition of Stock in Subsidiary | 2,500,000 | ' | 2,500,000 |
Gains (Losses) on Extinguishment of Debt | -4,769,776 | ' | -4,769,776 |
Derivative, Gain (Loss) on Derivative, Net | -1,454,889 | 6,902,806 | 5,447,917 |
Loss from disposal of assets | -18,729 | -174,030 | -192,759 |
Litigation Settlement, Expense | -4,883,196 | 4,799,000 | -9,682,196 |
Trading Securities, Realized Gain | 19,702 | ' | 19,702 |
Available-for-sale Securities, Gross Realized Gain (Loss) | 1,490,600 | ' | 1,490,600 |
Income (Loss) from Equity Method Investments | -83,333 | ' | -83,333 |
Interest Expense, Other | -11,408,798 | -5,964,380 | -15,924,274 |
Nonoperating Income (Expense) | -17,598,419 | -9,232,810 | -20,184,119 |
Loss from continuing operations before provision for income taxes | -49,052,749 | -21,469,563 | -61,524,199 |
Provision for income taxes | ' | ' | ' |
Loss from continuing operations | -49,052,749 | -21,469,563 | -61,524,199 |
Income (Loss) from Discontinued Operations, Net of Tax, Including Portion Attributable to Noncontrolling Interest [Abstract] | ' | ' | ' |
Income (Loss) from Discontinued Operations, Net of Tax, Including Portion Attributable to Noncontrolling Interest | -50,298 | -3,088,373 | 802,367 |
Net loss | -49,103,047 | -24,557,936 | -60,721,832 |
Less: Net loss (income) attributable to non-controlling interest | -1,164 | 1,164 | -172,517 |
Net loss attributable to Pershing Gold Corporation | -49,104,211 | -24,556,772 | -60,894,349 |
Preferred deemed dividend | -2,702,777 | -3,284,396 | -5,987,173 |
Preferred stock dividends | -21,150 | ' | -21,150 |
Net loss available to common stockholders | ($51,828,138) | ($27,841,168) | ($66,902,672) |
Income (Loss) from Operations before Extraordinary Items, Per Basic and Diluted Share [Abstract] | ' | ' | ' |
Income (Loss) from Continuing Operations, Per Basic and Diluted Share | ($0.22) | ($0.31) | ($0.25) |
Income (Loss) from Discontinued Operations and Disposal of Discontinued Operations, Net of Tax, Per Basic and Diluted Share | $0 | ($0.04) | $0 |
Earnings Per Share, Basic and Diluted | ($0.22) | ($0.35) | ($0.25) |
Weighted Average Number of Shares Outstanding, Basic and Diluted | 219,530,283 | 70,372,421 | 242,840,594 |
Recovered_Sheet4
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | 16 Months Ended | |
Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | |
Net Cash Provided by (Used in) Operating Activities [Abstract] | ' | ' | ' |
Net loss attributable to Pershing Gold Corporation | ($49,104,211) | ($24,556,772) | ($60,894,349) |
Adjustments to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities [Abstract] | ' | ' | ' |
Depreciation | 992,648 | 325,928 | 1,318,576 |
Provision for Doubtful Accounts | 13,333 | 500,000 | 513,333 |
Discontinued Operation Provision for Doubtful Accounts | 27,550 | 98,544 | 65,300 |
Amortization of Financing Costs and Discounts | 8,100,450 | 5,233,317 | 12,049,972 |
Amortization of Other Deferred Charges | ' | 280,000 | 116,669 |
Loss from extinguishment of debts | 4,769,776 | ' | 4,769,776 |
Derivative expense | ' | 5,198,206 | ' |
Change in fair value of derivative liability | 1,454,889 | -6,902,806 | -5,447,917 |
Interest Expenses in Connection with Note Modification | 3,022,186 | ' | 3,022,186 |
Paid-in-Kind Interest | ' | 230,192 | 230,192 |
Interest Expense Debt Cancellation | 61,500 | ' | 61,500 |
Gain from disposal of discontinued operations | ' | -1,133,448 | -1,134,448 |
Loss from disposal of assets | 18,729 | 174,030 | 192,759 |
Non-controlling interest | 1,164 | -1,164 | 172,348 |
Realized gain - available for sale securities | -1,490,600 | ' | -1,490,600 |
Realized gain - trading securities | -19,702 | ' | -19,702 |
Gain or Loss on Sale Subsidiary | -500,000 | ' | -500,000 |
Share of loss of equity method investee | 83,333 | ' | 83,333 |
Common stock issued for services | 1,514,158 | 837,500 | 2,351,658 |
Common stock issued in connection with an employment agreement | 3,817,917 | ' | 3,817,917 |
Paid in Kind Settlement Expense | 4,883,196 | 4,761,500 | 9,644,696 |
Stock Based Compensation | 13,492,394 | 2,884,841 | 15,976,861 |
Gain from sale of uranium assets pursuant to an option agreement | -930,000 | ' | -930,000 |
Increase (Decrease) in Operating Capital [Abstract] | ' | ' | ' |
Increase (Decrease) in Restricted Cash for Operating Activities | ' | 560,000 | 1,320,817 |
Other receivables | 22,544 | -13,333 | 9,211 |
Increase (Decrease) in Prepaid Expense | -110,591 | 1,441,141 | 1,758,731 |
Assets of discontinued operations - current portion | ' | 200,883 | 141,378 |
Prepaid expenses - long-term portion | 37,759 | 4,153 | 41,912 |
Increase (Decrease) in Restricted Cash | ' | 500,000 | 500,000 |
Deposits | -95,788 | -1,000 | -95,788 |
Increase (Decrease) in Assets of Disposal Group Including Discontinued Operation Noncurrent | ' | 93,809 | 40,556 |
Accounts payable and accrued expenses | 15,681 | 526,778 | 378,627 |
Liabilities of discontinued operation | -21,622 | 1,257,133 | 28,730 |
Net Cash Provided by (Used in) Operating Activities | -9,943,307 | -7,500,568 | -11,905,766 |
Net Cash Provided by (Used in) Investing Activities [Abstract] | ' | ' | ' |
Investment in marketable securities available for sale | ' | -100,000 | ' |
Acquisition of mining rights | -2,576,400 | ' | -2,576,400 |
Proceeds from Collection of Notes Receivable | 1,430,000 | ' | 1,430,000 |
Increase in Reclamation Bond | ' | -1,715,629 | -1,715,629 |
Cash used in acquisition of Gold Acquisition | ' | -12,000,000 | ' |
Cash acquired from acquisition of business | ' | 2,000,100 | ' |
Cash acquired in connection with the asset purchase agreement entered into with former parent company | ' | 11,164,514 | ' |
Proceeds from Sale of Available-for-sale Securities | 1,610,302 | ' | 1,610,302 |
Proceeds from Sale of Productive Assets | 74,074 | 133,431 | 207,505 |
Purchase of property and equipment | -336,485 | -70,220 | -402,733 |
Net Cash Provided by (Used in) Investing Activities | 201,491 | -587,804 | -1,446,955 |
Net Cash Provided by (Used in) Financing Activities [Abstract] | ' | ' | ' |
Proceeds from Issuance of Common Stock | 9,432,450 | 3,423,416 | 12,609,866 |
Proceeds from Issuance of Preferred Stock and Preference Stock | 1,000,000 | 3,284,396 | 4,284,396 |
Proceeds from note payable - related party | ' | 2,250,000 | ' |
Proceeds from Notes Payable | 500,000 | 2,250,000 | 500,000 |
Advances received from former parent company in connection with the asset purchase agreement | ' | 2,000,000 | ' |
Proceeds from convertible promissory note - related party | ' | 100,000 | ' |
Proceeds from Convertible Promissory Notes | ' | 2,365,604 | 1,715,604 |
Collection on subscription receivable | ' | 30 | ' |
Proceeds from (Repayments of) Notes Payable | -1,549,370 | -4,076,722 | -3,416,092 |
Origination of Notes Receivable from Related Parties | ' | -347,335 | 48,745 |
Repayment of Notes Receivable from Related Parties | -93,640 | ' | -93,640 |
Net Cash Provided by (Used in) Financing Activities | 9,289,440 | 11,249,389 | 15,648,879 |
Effect of Exchange Rate on Cash and Cash Equivalents | ' | ' | 1,649 |
Cash and Cash Equivalents, Period Increase (Decrease) | -452,376 | 3,161,017 | 2,297,807 |
CASH AND CASH EQUIVALENTS- beginning of period | 3,670,567 | 509,550 | 920,384 |
CASH AND CASH EQUIVALENTS- end of period | 3,218,191 | 3,670,567 | 3,218,191 |
Cash Paid for [Abstract] | ' | ' | ' |
Interest Paid | 197,633 | 332,491 | 530,124 |
Income Taxes Paid | ' | ' | ' |
Noncash Investing and Financing Items [Abstract] | ' | ' | ' |
Stock Issued for Payment of Notes Payable and Accrued Interest | 8,315,258 | 1,007,747 | 9,323,005 |
Stock Issued in Connection with Conversion of Promissory Note into Current Private Placement | ' | 611,750 | 611,750 |
Issuance of a note payable in connection with the acquisition of business | ' | 8,000,000 | ' |
Common stock issued for prepaid services | ' | 280,000 | ' |
Notes Issued | 294,285 | ' | 294,285 |
Debt Instrument, Convertible, Beneficial Conversion Feature | 168,163 | 2,465,604 | 1,883,767 |
Debt discount in connection with the issuance of the credit facility agreement and notes payable | ' | 1,800,000 | ' |
Deferred financing cost in connection with the issuance of the credit facility agreement and notes payable | ' | 900,000 | ' |
Preferred Stock Deemed Dividend | 1,616,777 | 3,284,396 | 4,901,173 |
Assumption of liabilities of Arttor Gold upon acquisition | ' | 21,750 | ' |
Purchase of other receivable of Arttor Gold upon acquisition | ' | 30 | ' |
Purchase of reclamation bond deposit of Gold Acquisition upon acquisition | ' | 2,842,000 | ' |
Purchase of property and equipment of Gold Acquisition upon acquisition | ' | 8,656,929 | ' |
Purchase of mineral rights of Gold Acquisition upon acquisition | ' | 2,000 | ' |
Value of Goodwill upon acquisition of Gold Acquisition | ' | 8,499,071 | ' |
Common stock, warrants and options issued in connection with the asset purchase agreement entered into with former parent company | ' | 14,857,675 | ' |
Purchase of prepaid expenses and deposits of former parent company | ' | 1,946,909 | ' |
Purchase of note receivable of former parent company in connection with the asset purchase agreement | ' | 2,000,000 | ' |
Purchase of property and equipment of former parent company | ' | 39,912 | ' |
Assumption of liabilities of former parent company | ' | 293,659 | ' |
Issuance of Common Stock for Expenses Adjustment | 170,614 | ' | 170,614 |
Issuance of Common Stock for Accrued Dividend Adjustment | 3,601 | ' | 3,601 |
Reclassification of Derivative Liability to Equity | 7,750,289 | ' | 7,750,289 |
Issuance of a note receivable upon sale of subsidiary | 500,000 | ' | 500,000 |
Issuance Note Receivable Sale Assets Option Agreement | 930,000 | ' | 930,000 |
Common Stock Warrants Issued Acquisition Mining Rights | 5,709,441 | ' | 5,709,441 |
Distribution to former parent company | 517,949 | ' | 517,949 |
Notes Reduction | 42,000 | ' | 42,000 |
Noncash or Part Noncash Acquisition, Fixed Assets Acquired | 92,145 | ' | 92,145 |
Notes Reduction 1 | $33,500 | ' | $33,500 |
Consolidated_Statements_of_Cha
Consolidated Statements of Changes in Stockholders' Equity (USD $) | Preferred Stock Series A | Preferred Stock Series B | Preferred Stock Series C | Preferred Stock Series D | Common Stock [Member] | Additional Paid-In Capital | Accumulated Deficit | Non-Controlling Interest. | Total |
Beginning balance, value at Dec. 31, 2010 | ' | ' | ' | ' | $2,213 | $4,749,678 | ($2,075,548) | ' | $2,676,343 |
Beginning balance, shares at Dec. 31, 2010 | ' | ' | ' | ' | 22,135,805 | ' | ' | ' | ' |
Issuance of common stock for cash, value | ' | ' | ' | ' | 842 | 3,422,574 | ' | ' | 3,423,416 |
Stock Issued During Period, Shares, New Issues | ' | ' | ' | ' | 8,421,000 | ' | ' | ' | ' |
Issuance of common stock in connection with the conversion of a promissory note into a current private placement, value | ' | ' | ' | ' | 153 | 611,597 | ' | ' | 611,750 |
Issuance of common stock in connection with the conversion of a promissory note into a current private placement, shares | ' | ' | ' | ' | 1,529,375 | ' | ' | ' | ' |
Issuance of common stock for services, value | ' | ' | ' | ' | 135 | 1,117,365 | ' | ' | 1,117,500 |
Issuance of common stock for services, shares | ' | ' | ' | ' | 1,350,000 | ' | ' | ' | ' |
Issuance of common stock in connection with the conversion of promissory notes, value | ' | ' | ' | ' | 120 | 1,007,627 | ' | ' | 1,007,747 |
Issuance of common stock in connection with the conversion of promissory notes, shares | ' | ' | ' | ' | 1,196,238 | ' | ' | ' | ' |
Issuance of common stock and preferred stock in connection with the acquisition of Arttor Gold LLC, value | ' | 800 | ' | ' | 1,300 | 1,976,280 | ' | ' | 1,978,380 |
Issuance of common stock and preferred stock in connection with the acquisition of Arttor Gold LLC, shares | ' | 8,000,000 | ' | ' | 13,000,000 | ' | ' | ' | ' |
Issuance of preferred stock in connection with the credit facility agreement and notes payable, value | 225 | ' | ' | ' | ' | 2,699,775 | ' | ' | 2,700,000 |
Issuance of preferred stock in connection with the credit facility agreement and notes payable, shares | 2,250,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of common stock in connection with the conversion of preferred stock, value | -225 | -750 | ' | ' | 975 | ' | ' | ' | ' |
Issuance of common stock in connection with the conversion of preferred stock, shares | -2,250,000 | -7,500,000 | ' | ' | 9,750,000 | ' | ' | ' | ' |
Issuance of preferred stock with warrants for cash, value | ' | ' | 328 | ' | ' | 3,284,068 | ' | ' | 3,284,396 |
Issuance of preferred stock with warrants for cash, shares | ' | ' | 3,284,396 | ' | ' | ' | ' | ' | ' |
Issuance of common stock in connection with the exercise of warrants, value | ' | ' | ' | ' | 530 | -530 | ' | ' | ' |
Issuance of common stock in connection with the exercise of warrants, shares | ' | ' | ' | ' | 5,295,480 | ' | ' | ' | ' |
Issuance of common stock as incentive shares in connection with convertible promissory notes, value | ' | ' | ' | ' | 75 | 749,925 | ' | ' | 750,000 |
Issuance of common stock as incentive shares in connection with convertible promissory notes, shares | ' | ' | ' | ' | 750,000 | ' | ' | ' | ' |
Beneficial conversion feature in connection with a convertible promissory note | ' | ' | ' | ' | ' | 1,715,604 | ' | ' | 1,715,604 |
Preferred stock deemed dividend | ' | ' | ' | ' | ' | 3,284,396 | -3,284,396 | ' | ' |
Issuance of common stock in connection with a put right and release settlement agreement, value | ' | ' | ' | ' | 535 | 4,760,965 | ' | ' | 4,761,500 |
Issuance of common stock in connection with a put right and release settlement agreement, shares | ' | ' | ' | ' | 5,350,000 | ' | ' | ' | ' |
Issuance of common stock, warrants, and options in connection with an asset purchase agreement entered into with Continental Resources Group, Inc., value | ' | ' | ' | ' | 7,609 | 14,850,066 | ' | ' | 14,857,675 |
Issuance of common stock, warrants, and options in connection with an asset purchase agreement entered into with Continental Resources Group, Inc., shares | ' | ' | ' | ' | 76,095,215 | ' | ' | ' | ' |
Stock-based compensation in connection with options granted | ' | ' | ' | ' | ' | 649,402 | ' | ' | 649,402 |
Stock-based compensation in connection with the assumed options and warrants attributable to post-combination services | ' | ' | ' | ' | ' | 2,235,439 | ' | ' | 2,235,439 |
Cancellation of common stock in connection with the separation agreement, value | ' | ' | ' | ' | -165 | 75 | -59,612 | ' | -59,702 |
Cancellation of common stock in connection with the separation agreement, shares | ' | ' | ' | ' | -1,650,000 | ' | ' | ' | ' |
Cancellation of common stock issued to a founder, value | ' | ' | ' | ' | -45 | 45 | ' | ' | ' |
Cancellation of common stock issued to a founder, shares | ' | ' | ' | ' | -450,000 | ' | ' | ' | ' |
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | ' | ' | ' | ' | ' | ' | -24,556,772 | -1,164 | -24,557,936 |
Ending balance, value at Dec. 31, 2011 | ' | 50 | 328 | ' | 14,277 | 47,114,351 | -29,976,328 | -1,164 | 17,151,514 |
Ending balance, shares at Dec. 31, 2011 | ' | 500,000 | 3,284,396 | ' | 142,773,113 | ' | ' | ' | ' |
Issuance of preferred stock for cash, value | ' | ' | ' | 100 | ' | 999,900 | ' | ' | 1,000,000 |
Issuance of preferred stock for cash, shares | ' | ' | ' | 1,000,000 | ' | ' | ' | ' | ' |
Issuance of common stock for cash, value | ' | ' | ' | ' | 2,883 | 9,429,567 | ' | ' | 9,432,450 |
Stock Issued During Period, Shares, New Issues | ' | ' | ' | ' | 28,827,139 | ' | ' | ' | ' |
Issuance of common stock to placement agent in connection with sale of common stock, value | ' | ' | ' | ' | 30 | -30 | ' | ' | ' |
Issuance of common stock to placement agent in connection with sale of common stock, shares | ' | ' | ' | ' | 303,030 | ' | ' | ' | ' |
Stock Issued During Period, Value, Other | ' | ' | ' | ' | 1,200 | 3,816,717 | ' | ' | 3,817,917 |
Stock Issued During Period, Shares, Other | ' | ' | ' | ' | 12,000,000 | ' | ' | ' | ' |
Issuance of common stock in connection with the note modification agreement, value | ' | ' | ' | ' | 200 | 977,800 | ' | ' | 978,000 |
Issuance of common stock in connection with the note modification agreement, shares | ' | ' | ' | ' | 2,000,000 | ' | ' | ' | ' |
Issuance of warrants in connection with the note modification agreement | ' | ' | ' | ' | ' | 2,044,186 | ' | ' | 2,044,186 |
Issuance of common and preferred stock for conversion of notes payable, value | ' | ' | ' | 549 | 1,284 | 13,494,579 | -537,499 | ' | 12,958,913 |
Issuance of common and preferred stock for conversion of notes payable, shares | ' | ' | ' | 5,486,968 | 12,841,082 | ' | ' | ' | ' |
Issuance of common stock for services, value | ' | ' | ' | ' | 50 | 454,592 | ' | ' | 454,642 |
Issuance of common stock for services, shares | ' | ' | ' | ' | 500,000 | ' | ' | ' | ' |
Issuance of common stock in connection with the conversion of preferred stock, value | ' | -50 | -328 | -649 | 3,093 | 80,813 | -79,278 | ' | 3,601 |
Issuance of common stock in connection with the conversion of preferred stock, shares | ' | -500,000 | -3,284,396 | -6,486,968 | 30,938,656 | ' | ' | ' | ' |
Issuance of common stock as consideration for the conversion of preferred stock, value | ' | ' | ' | ' | 300 | 1,085,700 | -1,086,000 | ' | ' |
Issuance of common stock as consideration for the conversion of preferred stock, shares | ' | ' | ' | ' | 3,000,000 | ' | ' | ' | ' |
Issuance of common stock in connection with the exercise of warrants, value | ' | ' | ' | ' | 624 | -624 | ' | ' | ' |
Issuance of common stock in connection with the exercise of warrants, shares | ' | ' | ' | ' | 6,229,718 | ' | ' | ' | ' |
Issuance of common stock in connection with the acquisition of mineral rights, value | ' | ' | ' | ' | 1,000 | 4,599,000 | ' | ' | 4,600,000 |
Issuance of common stock in connection with the acquisition of mineral rights, shares | ' | ' | ' | ' | 10,000,000 | ' | ' | ' | ' |
Issuance of warrants in connection with the acquisition of mineral rights, value | ' | ' | ' | ' | ' | 1,109,441 | ' | ' | 1,109,441 |
Issuance of restricted common stock to various officers, value | ' | ' | ' | ' | 920 | 1,229,210 | ' | ' | 1,230,130 |
Issuance of restricted common stock to various officers, shares | ' | ' | ' | ' | 9,200,000 | ' | ' | ' | ' |
Issuance of common stock in connection with the cancellation of warrants, value | ' | ' | ' | ' | 973 | 4,882,223 | ' | ' | 4,883,196 |
Issuance of common stock in connection with the cancellation of warrants, shares | ' | ' | ' | ' | 9,729,285 | ' | ' | ' | ' |
Preferred stock deemed dividend | ' | ' | ' | ' | ' | 1,000,000 | -1,000,000 | ' | ' |
Cancellation of common stock in connection with the Agreement and Plan of Merger with Valor Gold, value | ' | ' | ' | ' | -175 | 175 | ' | ' | ' |
Cancellation of common stock in connection with the Agreement and Plan of Merger with Valor Gold, shares | ' | ' | ' | ' | -1,750,000 | ' | ' | ' | ' |
Stock-based compensation in connection with options granted to employees and consultants | ' | ' | ' | ' | ' | 11,903,087 | ' | ' | 11,903,087 |
Stock-based compensation in connection with the assumed options and warrants attributable to post-combination services | ' | ' | ' | ' | ' | 1,426,152 | ' | ' | 1,426,152 |
Stock-based compensation in connection with warrants granted to consultants | ' | ' | ' | ' | ' | 163,155 | ' | ' | 163,155 |
Reclassification of derivatives to equity | ' | ' | ' | ' | ' | 7,750,289 | ' | ' | 7,750,289 |
Assignment of common stock in connection with cancellation of debt and assignment of shares agreement | ' | ' | ' | ' | ' | 103,500 | ' | ' | 103,500 |
Distribution Former Parent Company | ' | ' | ' | ' | ' | -611,589 | ' | ' | -611,589 |
Preferred Stock dividends | ' | ' | ' | ' | ' | ' | -21,150 | ' | -21,150 |
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | ' | ' | ' | ' | ' | ' | -49,104,211 | 1,164 | -49,103,047 |
Ending balance, value at Dec. 31, 2012 | ' | ' | ' | ' | $26,659 | $113,052,194 | ($81,804,466) | ' | $31,274,387 |
Ending balance, shares at Dec. 31, 2012 | ' | ' | ' | ' | 266,592,023 | ' | ' | ' | ' |
ORGANIZATION_AND_DESCRIPTION_O3
ORGANIZATION AND DESCRIPTION OF BUSINESS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2013 | Dec. 31, 2012 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ' |
Business Description and Basis of Presentation [Text Block] | ' | ' |
NOTE 1 — ORGANIZATION AND DESCRIPTION OF BUSINESS | NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS | |
Organization | Organization | |
Pershing Gold Corporation (the “Company”), formerly named Sagebrush Gold Ltd., formerly named The Empire Sports & Entertainment Holdings Co. (“Empire”), formerly named Excel Global, Inc., was incorporated under the laws of the State of Nevada on August 2, 2007. On February 27, 2012, the Company changed its name to Pershing Gold Corporation. The Company is a gold and precious metals exploration company pursuing exploration and development opportunities primarily in Nevada. The Company is currently focused on exploration of its Relief Canyon properties in Pershing County in northwestern Nevada. None of the Company’s properties contain proven and probable reserves, and all of the Company’s activities on all of its properties are exploratory in nature. | Pershing Gold Corporation (the “Company”), formerly Sagebrush Gold Ltd., formerly The Empire Sports & Entertainment Holdings Co. (“Empire”), formerly Excel Global, Inc., was incorporated under the laws of the State of Nevada on August 2, 2007. On February 27, 2012, the Company changed its name to Pershing Gold Corporation. The Company is a gold and precious metals exploration company pursuing exploration and development opportunities primarily in Nevada. The Company is currently focused on exploration of its Relief Canyon properties in Pershing County in northwestern Nevada. None of the Company’s properties contain proven and probable reserves, and all of its activities on all of the Company’s properties are exploratory in nature. | |
On September 1, 2011, the Company exited the sports and entertainment business and disposed of its Empire subsidiary pursuant to a Stock Purchase Agreement by and between the Company, Empire and Concert International Inc. (“CII”). Pursuant to the stock purchase agreement, the Company agreed to sell to CII its Empire subsidiary, including the 66.67% equity ownership interest in Capital Hoedown Inc. (“Capital Hoedown”), for $500,000. As a result, on September 1, 2011, Empire and Capital Hoedown were no longer subsidiaries of the Company. | A wholly-owned subsidiary, EXCX Funding Corp., a Nevada corporation was formed in January 2011. | |
A wholly-owned subsidiary, EXCX Funding Corp., a Nevada corporation was formed in January 2011 and held the note payable - related party (see Note 8), which was exchanged for the Company’s Series E Convertible Preferred Stock and warrants in August 2013 and was cancelled (see Note 9). | On September 1, 2011, the Company exited the sports and entertainment business and disposed of its Empire subsidiary pursuant to a Stock Purchase Agreement by and between the Company, Empire and Concert International Inc. (“CII”) (see Note 14). Pursuant to the stock purchase agreement, the Company agreed to sell to CII its Empire subsidiary, including the 66.67% equity ownership interest in Capital Hoedown Inc. (“Capital Hoedown”), for $500,000 which was payable on March 31, 2012 pursuant to a Senior Promissory Note issued by CII to the Company. As a result, on September 1, 2011, Empire and Capital Hoedown are no longer considered subsidiaries of the Company. | |
On August 30, 2011, the Company, through its wholly-owned subsidiary, Gold Acquisition Corp. (“Gold Acquisition”) acquired the Relief Canyon Mine property (“Relief Canyon”) located in Pershing County, near Lovelock, Nevada, for an aggregate purchase price consisting of: (i) $12,000,000 cash and (ii) $8,000,000 in senior secured convertible promissory notes. | On May 24, 2011, the Company entered into four limited liability company membership interests purchase agreements with the owners of Arttor Gold LLC (“Arttor Gold”). Each of the owners of Arttor Gold, sold their interests in Arttor Gold in privately negotiated sales resulting in the Company acquiring 100% of Arttor Gold. Pursuant to the Agreements, the Company issued 8,000,000 shares of Series B Convertible Preferred Stock and 13,000,000 shares of Common Stock in exchange for 100% membership interests in Arttor Gold. | |
A wholly-owned subsidiary, Pershing Royalty Company, a Delaware corporation, was formed on May 17, 2012 to hold royalty interests in two gold exploration properties (see Note 3). | As a result of this transaction, on May 24, 2011, Arttor Gold became a wholly-owned subsidiary of the Company. Arttor Gold (an exploration stage company), a Nevada limited liability company, was formed and organized on April 28, 2011. Arttor Gold operates as a U.S. based junior gold exploration and mining company. | |
Going concern | A wholly-owned subsidiary, Noble Effort Gold, LLC, a Nevada limited liability company (“Noble Effort”), was formed in June 2011. A wholly-owned subsidiary, Continental Resources Acquisition Sub, Inc., a Florida corporation, was formed in July 2011. A wholly-owned subsidiary, Gold Acquisition Corp., a Nevada corporation, was formed in August 2011. | |
The Company is in the exploration stage and does not generate revenues to meet its operating expenses. | On July 22, 2011, the Company, Continental Resources Acquisition Sub, Inc. (“Acquisition Sub”), and Continental Resources Group, Inc. (“Continental”), entered into an asset purchase agreement and, through the Acquisition Sub, closed on the purchase of substantially all of the assets of Continental in consideration for (i) shares of the Company’s common stock which was equal to eight shares for every 10 shares of Continental’s common stock outstanding; (ii) the assumption of the outstanding warrants to purchase shares of Continental’s common stock and (iii) the assumption of Continental’s 2010 Equity Incentive Plan and all options granted and issued thereunder (see Note 3). After giving effect to the foregoing, the Company issued 76,095,215 shares of its common stock, 41,566,999 warrants, and 2,248,000 stock options following the transaction. | |
These unaudited condensed consolidated financial statements of the Company have been prepared assuming that the Company will continue as a going concern, which contemplates, among other things, the realization of assets and the satisfaction of liabilities in the normal course of business over a reasonable period of time. The Company has incurred a net loss of approximately $9.0 million for the nine months ended September 30, 2013, $6.0 million of net cash used in operations for the nine months ended September 30, 2013 and total accumulated deficit of approximately $95.0 million since its inception and requires capital for its contemplated operational and exploration activities to take place. The Company plans to raise additional capital to carry out its business plan. The Company’s ability to raise additional capital through future equity and debt securities issuances is unknown. Obtaining additional financing, the successful development of the Company’s contemplated plan of operations, and its transition, ultimately, to profitable operations are necessary for the Company to continue operations. The ability to successfully resolve these factors raises substantial doubt about the Company’s ability to continue as a going concern. The unaudited condensed consolidated financial statements of the Company do not include any adjustments that may result from the outcome of the uncertainties. | Consequently, the issuance of 76,095,215 shares of the Company’s common stock to Continental accounted for approximately 67% of the total issued and outstanding stock of the Company as of July 22, 2011 and the Company became a majority owned subsidiary of Continental. | |
In August 2013, the Company completed a private placement to several accredited investors for the purchase of 10,533 shares of its Series E Convertible Preferred Stock (“Series E”) and 12,639,600 warrants to purchase shares of common stock for aggregate net proceeds of approximately $10.2 million (see Note 9). | Effective February 2012, the Company is considered to be an equity method investee as a result of the decrease in Continental’s ownership interest of less than 50% which is accounted for under equity method of accounting. As of December 31, 2012, Continental holds a 28.54% interest in the Company. | |
In addition, in August 2013, the Company issued 652 shares of its Series E stock and 782,400 warrants to purchase shares of common stock in exchange for the cancellation of a note payable — related party and accrued interest totaling approximately $646,000 (see Note 8). | On August 30, 2011, the Company, through its wholly-owned subsidiary, Gold Acquisition Corp. (“Gold Acquisition”) acquired the Relief Canyon Mine (“Relief Canyon”) located in Pershing County, near Lovelock, Nevada, for an aggregate purchase price consisting of: (i) $12,000,000 cash and (ii) $8,000,000 of senior secured convertible promissory notes issued to Platinum Long Term Growth LLC (“Platinum”) and Lakewood Group LLC (“Lakewood”). | |
A newly-formed wholly-owned subsidiary of the Company, Red Battle Corp. (“Red Battle”), a Delaware corporation, was formed on April 30, 2012 and on May 23, 2012, purchased all of the outstanding membership interests of Arttor Gold and Noble Effort. | ||
The Company entered into an Agreement and Plan of Merger on May 24, 2012 with Valor Gold Corp. and Valor Gold Acquisition Corp., a wholly-owned subsidiary of Valor Gold Corp., (see Note 3) for the purpose of divesting its Red Rocks and North Battle gold properties. As a result of this transaction, Red Battle, together with Arttor Gold and Noble Effort, became wholly-owned subsidiaries of Valor Gold. | ||
A newly-formed wholly-owned subsidiary, Pershing Royalty Company., a Delaware corporation, was formed on May 17, 2012 for the purpose of entering into a Net Smelter Return Production Royalty Agreement (“NSR Agreement”) with Arthur Leger (see Note 3). | ||
On June 11, 2012, the Company and American Strategic Minerals Corporation (“Amicor”) effected the exercise of an Option Agreement, through the assignment of Continental Resources Acquisition Sub, Inc. (“Acquisition Sub”), (see Note 3). As a result of the assignment of Acquisition Sub, the Company divested all of its uranium assets to Amicor. |
Going_Concern
Going Concern | 12 Months Ended |
Dec. 31, 2012 | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | ' |
Going Concern | ' |
Going Concern | |
Future issuances of the Company's equity or debt securities will be required in order for the Company to continue to finance its operations and continue as a going concern. The Company has not generated revenues to meet its operating expenses. | |
These consolidated financial statements of the Company have been prepared assuming that the Company will continue as a going concern, which contemplates, among other things, the realization of assets and the satisfaction of liabilities in the normal course of business over a reasonable period of time. The Company has incurred a net loss of approximately $49.1 million for the year ended December 31, 2012, $9.9 million of net cash used in operations for the year ended December 31, 2012 and cumulative net losses of approximately $82.0 million since its inception and requires capital for its contemplated operational and exploration activities to take place. The Company plans to raise additional capital to carry out its business plan. The Company's ability to raise additional capital through future equity and debt securities issuances is unknown. The obtainment of additional financing, the successful development of the Company's contemplated plan of operations, and its transition, ultimately, to profitable operations are necessary for the Company to continue operations. The ability to successfully resolve these factors raise substantial doubt about the Company's ability to continue as a going concern. The consolidated financial statements of the Company do not include any adjustments that may result from the outcome of these aforementioned uncertainties. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended | 12 Months Ended | ||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | |||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ' | ||||||||||||||
Significant Accounting Policies [Text Block] | ' | ' | ||||||||||||||
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||||||||||
Basis of presentation and principles of consolidation | Basis of Presentation and Principle of Consolidation | |||||||||||||||
The unaudited condensed consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”) and present the unaudited condensed consolidated financial statements of the Company as of September 30, 2013. All intercompany transactions and balances have been eliminated and net earnings are reduced by the portion of the net earnings of subsidiaries applicable to non-controlling interests. Prior periods have been restated in the Company’s consolidated financial statements and related footnotes to conform to this presentation and all transactions relating to the sports and entertainment business are included in discontinued operations. All adjustments (consisting of normal recurring items) necessary to present fairly the Company’s financial position as of September 30, 2013, and the results of operations and cash flows for the nine months ended September 30, 2013 have been included. The results of operations for the nine months ended September 30, 2013 are not necessarily indicative of the results to be expected for the full year. The accounting policies and procedures employed in the preparation of these unaudited condensed consolidated financial statements have been derived from the audited financial statements of the Company for the period ended December 31, 2012, which are contained in the Company’s Form 10-K as filed with the Securities and Exchange Commission (“SEC”) on April 1, 2013. The consolidated balance sheet as of December 31, 2012 was derived from those financial statements. | The consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America ("US GAAP") and present the consolidated financial statements of the Company and its majority-owned subsidiaries as of December 31, 2012. In the preparation of the consolidated financial statements of the Company, intercompany transactions and balances are eliminated and net earnings are reduced by the portion of the net earnings of subsidiaries applicable to non-controlling interests. | |||||||||||||||
Exploration stage company | Exploration Stage Company | |||||||||||||||
On September 1, 2011, the Company exited the sports and entertainment business and sold its Empire subsidiary. The Company is engaged in gold and precious metals exploration. The Company has been in the exploration stage since September 1, 2011 and has not yet realized any revenues from its planned operations. The Company is an exploration stage company as defined in Financial Accounting Standards Board (“FASB”) issued Accounting Standards Codification (“ASC”) Topic 915 “Development Stage Entities”. | On September 1, 2011, the Company exited the sports and entertainment business and disposed of its Empire subsidiary pursuant to a Stock Purchase Agreement. The Company is no longer engaged in or pursuing agreements with artists or athletes for sports and entertainment promotion and events, and will focus its activities exclusively on its new business segment, gold and precious metals exploration company. The Company has been in the exploration stage since September 1, 2011 and has not yet realized any revenues from its planned operations. The Company is an exploration stage company as defined in Financial Accounting Standards Board (“FASB”) issued Accounting Standards Codification (“ASC”) ASC 915 “Development Stage Entities”. | |||||||||||||||
Use of estimates | Use of Estimates and Assumptions | |||||||||||||||
In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the consolidated balance sheet, and revenues and expenses for the period then ended. Actual results may differ significantly from those estimates. Significant estimates made by management include, but are not limited to, allowance for bad debts, the useful life of property and equipment, the assumptions used to calculate fair value of options and warrants granted and derivative liability, beneficial conversion on convertible notes payable, capitalized mineral rights, asset valuations, common stock issued for services, common stock issued for conversion of notes and common stock issued in connection with an acquisition. | In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the consolidated balance sheet, and revenues and expenses for the period then ended. Actual results may differ significantly from those estimates. Significant estimates made by management include, but are not limited to, allowance for bad debts, the useful life of property and equipment, the assumptions used to calculate fair value of options granted and derivative liability, beneficial conversion on convertible notes payable, capitalized mineral rights, asset valuations, common stock issued for services, common stock issued for conversion of notes and common stock issued in connection with an acquisition. | |||||||||||||||
Non-controlling interests in consolidated financial statements | Non-controlling interests in consolidated financial statements | |||||||||||||||
In December 2007, ASC 810-10-65, “Non-controlling Interests in Consolidated Financial Statements” clarified that a non-controlling (minority) interest in a subsidiary is an ownership interest in the entity that should be reported as equity in the consolidated financial statements. It also requires consolidated net income to include the amounts attributable to both the parent and non-controlling interest, with disclosure on the face of the consolidated income statement of the amounts attributed to the parent and to the non-controlling interest. In accordance with ASC 810-10-45-21, those losses attributable to the parent and the non-controlling interest in subsidiary may exceed their interests in the subsidiary’s equity. The excess and any further losses attributable to the parent and the non-controlling interest shall be attributed to those interests even if that attribution results in a deficit non-controlling interest balance. | In December 2007, ASC 810-10-65, “Non-controlling Interests in Consolidated Financial Statements” clarifies that a non-controlling (minority) interest in a subsidiary is an ownership interest in the entity that should be reported as equity in the consolidated financial statements. It also requires consolidated net income to include the amounts attributable to both the parent and non-controlling interest, with disclosure on the face of the consolidated income statement of the amounts attributed to the parent and to the non-controlling interest. In accordance with ASC 810-10-45-21, those losses attributable to the parent and the non-controlling interest in subsidiary may exceed their interests in the subsidiary’s equity. The excess and any further losses attributable to the parent and the non-controlling interest shall be attributed to those interests even if that attribution results in a deficit non-controlling interest balance. As of December 31, 2012 and 2011, the Company reported a deficit non-controlling interest balance of $0 and $1,164, respectively, in connection with a majority-owned subsidiary of Acquisition Sub (see Note 3), as reflected in the accompanying consolidated balance sheets. | |||||||||||||||
Cash and cash equivalents | Cash and Cash Equivalents | |||||||||||||||
The Company considers all highly liquid investments with a maturity of three months or less when acquired to be cash equivalents. The Company places its cash with a high credit quality financial institution. The Company’s accounts at this institution are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. At September 30, 2013, the Company had bank balances exceeding the FDIC insurance limit on interest bearing accounts. To reduce its risk associated with the failure of such financial institution, the Company evaluates at least annually the rating of the financial institution in which it holds deposits. | The Company considers all highly liquid investments with a maturity of three months or less when acquired to be cash equivalents. The Company places its cash with high credit quality financial institutions. The Company’s accounts at these institutions are insured by the Federal Deposit Insurance Corporation ("FDIC") up to $250,000 per account. In addition to the basic insurance deposit coverage, the FDIC was providing temporary unlimited coverage for non-interest bearing transaction accounts through December 31, 2012. At December 31, 2012, the Company has not reached bank balances exceeding the FDIC insurance limit on interest bearing accounts. To reduce its risk associated with the failure of such financial institutions, the Company evaluates at least annually the rating of the financial institutions in which it holds deposits. | |||||||||||||||
Marketable securities | Comprehensive Income (Loss) | |||||||||||||||
Marketable securities consist of the Company’s investment in publicly traded equity securities and are generally restricted for sale under Federal securities laws. The Company’s policy is to liquidate securities received when market conditions are favorable for sale. Since these securities are often restricted, the Company is unable to liquidate them until the restriction is removed. Marketable securities that are bought and held principally for the purpose of selling them in the near term are to be classified as trading securities and reported at fair value, with unrealized gains and losses included in earnings. Pursuant to ASC Topic 320, “Investments — Debt and Equity Securities,” the Company’s marketable securities have a readily determinable and active quoted price, such as from NASDAQ, NYSE Euronext, the Over the Counter Bulletin Board, and the OTC Markets Group. | The Company adopted ASC 220-10, “Reporting Comprehensive Income,” (formerly SFAS No. 130). ASC 220-10 requires the reporting of comprehensive income in addition to net income from operations. Comprehensive income is a more inclusive financial reporting methodology that includes disclosure of information that historically has not been recognized in the calculation of net income. | |||||||||||||||
Trading securities are carried at fair value, with changes in unrealized holding gains and losses included in income and classified within interest and other income, net, in the accompanying consolidated statements of operations. | Marketable securities | |||||||||||||||
Available for sale securities are carried at fair value, with changes in unrealized gains or losses are recognized as an element of comprehensive income based on changes in the fair value of the security. Once liquidated, realized gains or losses on the sale of marketable securities available for sale are reflected in the net income (loss) for the period in which the security was liquidated. | Marketable securities consist of the Company’s investment in publicly traded equity securities and are generally restricted for sale under Federal securities laws. The Company’s policy is to liquidate securities received when market conditions are favorable for sale. Since these securities are often restricted, the Company is unable to liquidate them until the restriction is removed. Marketable securities that are bought and held principally for the purpose of selling them in the near term are to be classified as trading securities and reported at fair value, with unrealized gains and losses included in earnings. Pursuant to ASC Topic 320, “Investments – Debt and Equity Securities” the Company’s marketable securities have a readily determinable and active quoted price, such as from NASDAQ, NYSE Euronext, the Over the Counter Bulletin Board, and the OTC Markets Group. | |||||||||||||||
Fair value of financial instruments | Trading securities are carried at fair value, with changes in unrealized holding gains and losses included in income and classified within interest and other income, net, in the accompanying consolidated statements of operations. | |||||||||||||||
The Company adopted ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”), for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements, establishes a framework for measuring fair value and expands disclosure about such fair value measurements. The adoption of ASC 820 did not have an impact on the Company’s financial position or operating results, but did expand certain disclosures. | Available for sale securities are carried at fair value, with changes in unrealized gains or losses are recognized as an element of comprehensive income based on changes in the fair value of the security. Once liquidated, realized gains or losses on the sale of marketable securities available for sale are reflected in the net income (loss) for the period in which the security was liquidated. | |||||||||||||||
ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below: | Fair value of financial instruments | |||||||||||||||
Level 1: | Observable inputs such as quoted market prices in active markets for identical assets or Liabilities | The Company adopted ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”), for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements, establishes a framework for measuring fair value and expands disclosure about such fair value measurements. The adoption of ASC 820 did not have an impact on the Company’s financial position or operating results, but did expand certain disclosures. | ||||||||||||||
Level 2: | Observable market-based inputs or unobservable inputs that are corroborated by market data | |||||||||||||||
Level 3: | Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions. | ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below: | ||||||||||||||
The Company analyzes all financial instruments with features of both liabilities and equity under the FASB’s accounting standard for such instruments. Under this standard, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. | Level 1: | Observable inputs such as quoted market prices in active markets for identical assets or | ||||||||||||||
liabilities | ||||||||||||||||
Depending on the product and the terms of the transaction, the fair value of notes payable and derivative liabilities were modeled using a series of techniques, including closed-form analytic formula, such as the Black-Scholes option-pricing model. | Level 2: | Observable market-based inputs or unobservable inputs that are corroborated by market data | ||||||||||||||
Level 3: | Unobservable inputs for which there is little or no market data, which require the use of the | |||||||||||||||
The Company classified the investments in marketable securities available for sale as Level 3, adjusted for the effect of restriction. The securities were restricted and cannot be readily resold by the Company absent a registration of the sale of those securities under the Securities Act of 1933 as amended (the “Securities Act”) or the availability of an exemption from the registration. Unrealized gains or losses on marketable securities available for sale were recognized as an element of comprehensive income based on changes in the fair value of the security. Once liquidated, realized gains or losses on the sale of marketable securities available for sale were reflected in net income for the period in which the security was liquidated. At the end of each period, the Company evaluated the carrying value of the marketable securities for a decrease in value. The Company evaluated the entity underlying these marketable securities to determine whether a decline in fair value below the amortized cost basis is other than temporary. If the decline in fair value is judged to be “other- than- temporary”, the cost basis of the individual security is written down to fair value as a new cost basis and the amount of the write-down is charged to earnings. | reporting entity’s own assumptions. | |||||||||||||||
The Company analyzes all financial instruments with features of both liabilities and equity under the FASB’s accounting standard for such instruments. Under this standard, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Depending on the product and the terms of the transaction, the fair value of notes payable and derivative liabilities were modeled using a series of techniques, including closed-form analytic formula, such as the Black-Scholes option-pricing model. | ||||||||||||||||
The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, prepaid expenses, accounts payable and accrued expenses approximate their estimated fair market value based on the short-term maturity of these instruments. The carrying amount of the notes payable at September 30, 2013 approximate their respective fair value based on the Company’s incremental borrowing rate. | ||||||||||||||||
The following table presents a reconciliation of the derivative liability measured at fair value on a recurring basis using significant unobservable input (Level 3) from January 1, 2012 to December 31, 2012: | ||||||||||||||||
Prepaid expenses | Conversion feature derivative liability | |||||||||||||||
Balance at January 1, 2012 | $ | 6,295,400 | ||||||||||||||
Prepaid expenses — current portion of $359,491 and $502,837 at September 30, 2013 and December 31, 2012, respectively, consist primarily of costs paid for future services which will occur within a year. Prepaid expenses principally include prepayments for consulting and business advisory services, insurance premiums and mineral lease fees which are being amortized over the terms of their respective agreements. | Change in fair value included in earnings | 1,454,889 | ||||||||||||||
Reclassification of derivative liability to equity | (7,750,289 | ) | ||||||||||||||
Mineral property acquisition and exploration costs | Balance at December 31, 2012 | $ | — | |||||||||||||
Costs of lease, exploration, carrying and retaining unproven mineral lease properties are expensed as incurred. The Company expenses all mineral exploration costs as incurred as it is still in the exploration stage. If the Company identifies proven and probable reserves in its investigation of its properties and upon development of a plan for operating a mine, it would enter the development stage and capitalize future costs until production is established. When a property reaches the production stage, the related capitalized costs are amortized using the units-of-production method over the estimated life of the proven and probable reserves. If in the future the Company has capitalized mineral properties, these properties will be periodically assessed for impairment. To date, the Company has not established the commercial feasibility of any exploration prospects; therefore, all costs are being expensed. During the nine months ended September 30, 2013 and 2012, the Company incurred exploration costs of $1,793,214 and $4,842,781, respectively. | Investment measured at fair value on a recurring basis: | |||||||||||||||
Fair Value Measurements Using: | ||||||||||||||||
ASC 930-805, “Extractive Activities-Mining: Business Combinations”, states that mineral rights consist of the legal right to explore, extract, and retain at least a portion of the benefits from mineral deposits. Mining assets include mineral rights. Acquired mineral rights are considered tangible assets under ASC 805. ASC 805 requires that mineral rights be recognized at fair value as of the acquisition date. As a result, the direct costs to acquire mineral rights are initially capitalized as tangible assets. Mineral rights include costs associated with acquiring patented and unpatented mining claims. | Quoted Prices | Significant | Significant | |||||||||||||
in Active | Other | Unobservable | ||||||||||||||
ASC 930-805-30-1 and 30-2 provides that in fair valuing mineral assets, an acquirer should take into account both: | Markets | Observable | Inputs | |||||||||||||
(Level 1) | Inputs | (Level 3) | ||||||||||||||
· The value beyond proven and probable reserves (“VBPP”) to the extent that a market participant would include VBPP in determining the fair value of the assets. | (Level 2) | |||||||||||||||
· The effects of anticipated fluctuations in the future market price of minerals in a manner that is consistent with the expectations of market participants. | ||||||||||||||||
Marketable securities – available for sale, net of discount for effect of restriction | $ | — | $ | — | $ | — | ||||||||||
Property and equipment | ||||||||||||||||
The Company classifies the investments in marketable securities available for sale as Level 3, adjusted for the effect of restriction. The securities are restricted and cannot be readily resold by the Company absent a registration of those securities under the Securities Act of 1933 as amended (the “Securities Act”) or the availabilities of an exemption from the registration requirements under the Securities Act. As these securities are often restricted, the Company is unable to liquidate them until the restriction is removed. Unrealized gains or losses on marketable securities available for sale are recognized as an element of comprehensive income based on changes in the fair value of the security. Once liquidated, realized gains or losses on the sale of marketable securities available for sale are reflected in our net income for the period in which the security was liquidated. | ||||||||||||||||
Property and equipment are carried at cost. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition. Depreciation is calculated on a straight-line basis over the estimated useful life of the assets, generally one to twenty five years. | ||||||||||||||||
At the end of each period, the Company evaluates the carrying value of the marketable securities for a decrease in value. The Company evaluates the company underlying these marketable securities to determine whether a decline in fair value below the amortized cost basis is other than temporary. If the decline in fair value is judged to be “other- than- temporary”, the cost basis of the individual security shall be written down to fair value as a new cost basis and the amount of the write-down is charged to earnings. | ||||||||||||||||
Impairment of long-lived assets | ||||||||||||||||
The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, other receivables, prepaid expenses, accounts payable and accrued expenses approximate their estimated fair market value based on the short-term maturity of these instruments. The carrying amount of the notes payable at December 31, 2012, approximate their respective fair value based on the Company’s incremental borrowing rate. The Company did not identify any other assets or liabilities that are required to be presented on the consolidated balance sheets at fair value in accordance with applicable accounting guidance. | ||||||||||||||||
The Company accounts for the impairment or disposal of long-lived assets according to the ASC 360 “Property, Plant and Equipment”. The Company continually monitors events and changes in circumstances that could indicate that the carrying amounts of long-lived assets, including mineral rights, may not be recoverable. Long-lived assets in the exploration stage are monitored for impairment based on factors such as the Company’s continued right to explore the area, exploration reports, assays, technical reports, drill results and the Company’s continued plans to fund exploration programs on the property, and whether sufficient work has been performed to indicate that the carrying amount of the mineral property cost carried forward as an asset will not be fully recovered. The tests for long-lived assets in the exploration stage would be monitored for impairment based on factors such as current market value of the long-lived assets and results of exploration, future asset utilization, business climate, mineral prices and future undiscounted cash flows expected to result from the use of the related assets. | ||||||||||||||||
Prepaid expenses | ||||||||||||||||
Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated future net undiscounted cash flows expected to be generated by the asset. When necessary, impaired assets are written down to estimated fair value based on the best information available. Estimated fair value is generally based on either appraised value or measured by discounting estimated future cash flows. Considerable management judgment is necessary to estimate discounted future cash flows. Accordingly, actual results could vary significantly from such estimates. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The Company did not record any impairment charges of its long-lived assets at September 30, 2013 and December 31, 2012, respectively. | ||||||||||||||||
Prepaid expenses – current portion of $502,837 and $463,737 at December 31, 2012 and 2011, respectively, consist primarily of costs paid for future services which will occur within a year. Prepaid expenses include prepayments (in cash and common stock) of public relation services, consulting and business advisory services, and prepaid insurance and mineral lease payments which are being amortized over the terms of their respective agreements. Prepaid expenses – long term portion of $0 and $37,759 at December 31, 2012 and 2011, respectively, consist primarily of costs paid for future mineral lease payments after one year. | ||||||||||||||||
Goodwill and other intangible assets | ||||||||||||||||
Mineral property acquisition and exploration costs | ||||||||||||||||
In accordance with ASC 350-30-65, “Intangibles - Goodwill and Others”, the Company assesses the impairment of identifiable intangibles whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors the Company considers to be important which could trigger an impairment review include the following: | ||||||||||||||||
Costs of lease, exploration, carrying and retaining unproven mineral lease properties are expensed as incurred. The Company has chosen to expense all mineral exploration costs as incurred given that it is still in the exploration stage. If the Company identifies proven and probable reserves in its investigation of its properties and upon development of a plan for operating a mine, it would enter the development stage and capitalize future costs until production is established. When a property reaches the production stage, the related capitalized costs will be amortized, using the units-of-production method over the estimated life of the proven and probable reserves. If in the future the Company has capitalized mineral properties, these properties will be periodically assessed for impairment. To date, the Company has not established the commercial feasibility of any exploration prospects; therefore, all costs are being expensed. During the years ended December 31, 2012 and 2011, the Company incurred exploration cost of $5,221,001 and $2,298,090, respectively. | ||||||||||||||||
1. Significant underperformance relative to expected historical or projected future operating results; | ||||||||||||||||
2. Significant changes in the manner of use of the acquired assets or the strategy for the overall business; and | ASC 930-805, “Extractive Activities-Mining: Business Combinations”, states that mineral rights consist of the legal right to explore, extract, and retain at least a portion of the benefits from mineral deposits. Mining assets include mineral rights. Acquired mineral rights are considered tangible assets under ASC 805. ASC 805 requires that mineral rights be recognized at fair value as of the acquisition date. As a result, the direct costs to acquire mineral rights are initially capitalized as tangible assets. Mineral rights include costs associated with acquiring patented and unpatented mining claims. | |||||||||||||||
3. Significant negative industry or economic trends. | ||||||||||||||||
ASC 930-805-30-1 and 30-2 provides that in fair valuing mineral assets, an acquirer should take into account both: | ||||||||||||||||
When the Company determines that the carrying value of intangibles may not be recoverable based upon the existence of one or more of the above indicators of impairment and the carrying value of the asset cannot be recovered from projected undiscounted cash flows, the Company records an impairment charge. The Company measures any impairment based on a projected discounted cash flow method using a discount rate determined by management to be commensurate with the risk inherent in the current business model. Significant management judgment is required in determining whether an indicator of impairment exists and in projecting cash flows. The Company did not have any intangible assets as of September 30, 2013 and December 31, 2012. | ||||||||||||||||
• | The value beyond proven and probable reserves (“VBPP”) to the extent that a market participant would include VBPP in determining the fair value of the assets. | |||||||||||||||
Income Taxes | • | The effects of anticipated fluctuations in the future market price of minerals in a manner that is consistent with the expectations of market participants. | ||||||||||||||
The Company accounts for income taxes pursuant to the provision of ASC 740-10, “Accounting for Income Taxes” which requires, among other things, an asset and liability approach to calculating deferred income taxes. The asset and liability approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred asset will not be realized. | Property and equipment | |||||||||||||||
The Company follows the provision of the ASC 740-10 related to Accounting for Uncertain Income Tax Position. When tax returns are filed, there may be uncertainty about the merits of positions taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is most likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. | Property and equipment are carried at cost. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition. Depreciation is calculated on a straight-line basis over the estimated useful life of the assets, generally one to twenty five years. | |||||||||||||||
Tax positions that meet the more likely than not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for uncertain tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company believes its tax positions are all highly certain of being upheld upon examination. As such, the Company has not recorded a liability for uncertain tax benefits. | Impairment of long-lived assets | |||||||||||||||
The Company has adopted ASC 740-10-25, “Definition of Settlement”, which provides guidance on how an entity should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits and provides that a tax position can be effectively settled upon the completion and examination by a taxing authority without being legally extinguished. For tax positions considered effectively settled, an entity would recognize the full amount of tax benefit, even if the tax position is not considered more likely than not to be sustained based solely on the basis of its technical merits and the statute of limitations remains open. The federal and state income tax returns of the Company are subject to examination by the IRS and state taxing authorities, generally for three years after they were filed. | The Company accounts for the impairment or disposal of long-lived assets according to the ASC 360 “Property, Plant and Equipment”. The Company continually monitors events and changes in circumstances that could indicate that the carrying amounts of long-lived assets, including mineral rights, may not be recoverable. Long-lived assets in the exploration stage are monitored for impairment based on factors such as the Company's continued right to explore the area, exploration reports, assays, technical reports, drill results and the Company's continued plans to fund exploration programs on the property, whether sufficient work has been performed to indicate that the carrying amount of the mineral property cost carried forward as an asset will not be fully recovered, even though a viable mine has been discovered. The tests for long-lived assets in the exploration stage would be monitored for impairment based on factors such as current market value of the long-lived assets and results of exploration, future asset utilization, business climate, mineral prices and future undiscounted cash flows expected to result from the use of the related assets. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated future net undiscounted cash flows expected to be generated by the asset. When necessary, impaired assets are written down to estimated fair value based on the best information available. Estimated fair value is generally based on either appraised value or measured by discounting estimated future cash flows. Considerable management judgment is necessary to estimate discounted future cash flows. Accordingly, actual results could vary significantly from such estimates. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The Company did not consider it necessary to record any impairment charges of its long-lived assets at December 31, 2012 and 2011, respectively. | |||||||||||||||
Stock-based compensation | Goodwill and other intangible assets | |||||||||||||||
Stock-based compensation is accounted for based on the requirements of the Share-Based Payment Topic of ASC 718, “Compensation — Stock Compensation”, which requires recognition in the consolidated financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). The ASC also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award. | In accordance with ASC 350-30-65, “Intangibles - Goodwill and Others”, the Company assesses the impairment of identifiable intangibles whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors the Company considers to be important which could trigger an impairment review include the following: | |||||||||||||||
Pursuant to ASC Topic 505-50, “Equity Based Payments to Non-employees”, for share-based payments to consultants and other third-parties, compensation expense is determined at the “measurement date.” The expense is recognized over the vesting period of the award. Until the measurement date is reached, the total amount of compensation expense remains uncertain. The Company initially records compensation expense based on the fair value of the award at the reporting date. | 1 | Significant underperformance relative to expected historical or projected future operating results; | ||||||||||||||
2 | Significant changes in the manner of use of the acquired assets or the strategy for the overall business; and | |||||||||||||||
Recent accounting pronouncements | 3 | Significant negative industry or economic trends. | ||||||||||||||
In July 2013, the FASB issued ASU 2013-11, “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists.” ASU 2013-11 provides guidance on the presentation of unrecognized tax benefits related to any disallowed portion of net operating loss carryforwards, similar tax losses, or tax credit carryforwards, if they exist. ASU 2013-11 is effective for fiscal years beginning after December 15, 2013. The adoption of ASU 2013-11 is not expected to have a material impact on the Company’s consolidated financial statements. | When the Company determines that the carrying value of intangibles may not be recoverable based upon the existence of one or more of the above indicators of impairment and the carrying value of the asset cannot be recovered from projected undiscounted cash flows, the Company records an impairment charge. The Company measures any impairment based on a projected discounted cash flow method using a discount rate determined by management to be commensurate with the risk inherent in the current business model. Significant management judgment is required in determining whether an indicator of impairment exists and in projecting cash flows. The Company did not have any intangible assets as of December 31, 2012 and 2011. | |||||||||||||||
Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures. | Income Taxes | |||||||||||||||
The Company accounts for income taxes pursuant to the provision of ASC 740-10, “Accounting for Income Taxes” which requires, among other things, an asset and liability approach to calculating deferred income taxes. The asset and liability approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred asset will not be realized. | ||||||||||||||||
The Company follows the provision of the ASC 740-10 related to Accounting for Uncertain Income Tax Position. When tax returns are filed, there may be uncertainty about the merits of positions taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is most likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. | ||||||||||||||||
Tax positions that meet the more likely than not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for uncertain tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company believes its tax positions are all highly certain of being upheld upon examination. As such, the Company has not recorded a liability for uncertain tax benefits. | ||||||||||||||||
The Company has adopted ASC 740-10-25, “Definition of Settlement”, which provides guidance on how an entity should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits and provides that a tax position can be effectively settled upon the completion and examination by a taxing authority without being legally extinguished. For tax positions considered effectively settled, an entity would recognize the full amount of tax benefit, even if the tax position is not considered more likely that not to be sustained based solely on the basis of its technical merits and the statute of limitations remains open. The federal and state income tax returns of the Company are subject to examination by the IRS and state taxing authorities, generally for three years after they were filed. | ||||||||||||||||
Advertising | ||||||||||||||||
Advertising costs are expensed as incurred. For the years ended December 31, 2012 and 2011, advertising expense totaled $0 and $441,064, respectively. Such expense is included in loss from discontinued operations on the accompanying consolidated statement of operations. | ||||||||||||||||
Stock-based compensation | ||||||||||||||||
Stock-based compensation is accounted for based on the requirements of the Share-Based Payment Topic of ASC 718, “Compensation – Stock Compensation”, which requires recognition in the consolidated financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). The ASC also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award. | ||||||||||||||||
Pursuant to ASC Topic 505-50, “Equity Based Payments to Non-employees”, for share-based payments to consultants and other third-parties, compensation expense is determined at the “measurement date.” The expense is recognized over the vesting period of the award. Until the measurement date is reached, the total amount of compensation expense remains uncertain. The Company initially records compensation expense based on the fair value of the award at the reporting date. | ||||||||||||||||
Recent accounting pronouncements | ||||||||||||||||
In July 2012, the FASB issued Accounting Standards Update (“ASU”) 2012-02, “Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment”, on testing for indefinite-lived intangible assets for impairment. The new guidance provides an entity to simplify the testing for a drop in value of intangible assets such as trademarks, patents, and distribution rights. The amended standard reduces the cost of accounting for indefinite-lived intangible assets, especially in cases where the likelihood of impairment is low. The changes permit businesses and other organizations to first use subjective criteria to determine if an intangible asset has lost value. The amendments to U.S. GAAP will be effective for fiscal years starting after September 15, 2012. The Company’s adoption of this accounting guidance does not have a material impact on the consolidated financial statements and related disclosures. | ||||||||||||||||
There were other updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to have a material impact on the Company’s financial position, results of operations or cash flows. |
ACQUISITION_DISPOSITION_AND_DE2
ACQUISITION, DISPOSITION AND DECONSOLIDATION | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2013 | Dec. 31, 2012 | |||||
ACQUISITION, DISPOSITION AND DECONSOLIDATION | ' | ' | ||||
Business Combination Disclosure [Text Block] | ' | ' | ||||
NOTE 3 — ACQUISITION, DISPOSITION AND DECONSOLIDATION | NOTE 3 – ACQUISITION, DISPOSITION AND DECONSOLIDATION | |||||
Continental Resources Group, Inc. | Continental Resources Group, Inc. | |||||
On July 22, 2011, the Company, Continental Resources Acquisition Sub Inc. (“Acquisition Sub”) and Continental Resources Group Inc. (“Continental”) entered into a Purchase Agreement and, through Acquisition Sub, completed the purchase of substantially all of the assets of Continental. | On July 22, 2011, the Company, Acquisition Sub and Continental entered into a Purchase Agreement and, through Acquisition Sub, closed on the purchase of substantially all of the assets of Continental in consideration for (i) shares of the Company’s common stock equal to eight shares of the Company’s Common stock for every 10 shares of Continental’s common stock outstanding; (ii) the assumption of the outstanding warrants to purchase shares of Continental’s common stock equal to one warrant to purchase eight shares of the Company’s common stock for every warrant to purchase ten shares Continental’s common stock outstanding at an exercise price equal to such amount as is required pursuant to the terms of the outstanding warrants, and (iii) the assumption of Continental’s 2010 Equity Incentive Plan and all options granted and issued equal to one option to purchase eight shares of the Company’s common stock for every option to purchase 10 shares of Continental’s common stock outstanding with a strike price equal to such amount as is required pursuant to the terms of the outstanding option. Upon the closing of the asset sale, Acquisition Sub assumed the Assumed Liabilities (as defined in the Purchase Agreement) of Continental. Under the terms of the Purchase Agreement, the Company purchased from Continental substantially all of its assets, including, but not limited to, 100% of the outstanding shares of common stock of Continental’s wholly-owned subsidiaries (Green Energy Fields, Inc., and ND Energy, Inc.). | |||||
On February 12, 2013 the SEC declared the Company’s registration statement on Form S-1 effective. The registration statement satisfied a condition of the liquidation of Continental. As a result of the effectiveness of the Form S-1 registration statement, Continental completed its plan of liquidation, including the distribution of 76,095,215 of the Company’s shares on a pro rata basis to Continental shareholders of record as of March 1, 2013. | The Company issued 76,095,215 shares of its common stock, warrants to purchase 41,566,999 shares of common stock, and options to purchase 2,248,000 shares of common stock following the transaction to acquire substantially all of the assets of Continental. Consequently, the issuance of 76,095,215 shares of the Company’s common stock to Continental accounted for approximately 67% of the total issued and outstanding stock of the Company as of July 22, 2011 and the Company had become a majority-owned subsidiary of Continental. Effective February 2012, the Company was considered to be an equity method investee as a result of the decrease in Continental’s ownership interest to less than 50% which is accounted for under the equity method of accounting. | |||||
Sale of Uranium Exploration Properties | ||||||
As of December 31, 2012, Continental held a 28.54% interest in the Company. See Note 17- Subsequent Events regarding the dissolution of Continental and distribution of the Company’s shares held by Continental to its shareholders of record on March 1, 2013. | ||||||
On January 26, 2012, the Company and American Strategic Minerals Corp. (“Amicor”) entered into an Option Agreement whereby Amicor acquired the option to purchase all uranium properties and claims (the “Option”) from the Company for a purchase price of $10.00 in consideration for the issuance of (i) 10,000,000 shares of Amicor’s common stock and (ii) a six month promissory note in the principal amount of $1,000,000. Pursuant to the Option, the consideration received by the Company for the option was non-refundable. | ||||||
The issuance of 76,095,215 shares of common stock and the issuance of warrants to purchase 41,566,999 shares of common stock and options to purchase 2,248,000 shares of common stock were valued at $14,857,676 which primarily represents the fair value of the net asset acquired from Continental of cash of $11,164,514, a note receivable of $2,000,000, prepaid expenses and other current assets of $1,904,997 and assumed liabilities of $293,659. The Company valued the transaction under ASC 805-50-30-2, “Business Combinations” whereby if the consideration is not in the form of cash, the measurement is based on either the cost which shall be measured based on the fair value of the consideration given or the fair value of the assets (or net assets) acquired, whichever is more clearly evident and thus more reliably measurable. The Company deemed that the fair value of the net assets of Continental amounting to $14,857,676 is more clearly evident and more reliable measurement basis. | ||||||
In 2012, $930,000 of the principal amount of note was paid. Under the terms of the note, Amicor was required to pay the balance of the note upon completion of a private placement totaling $1,000,000 or more on or before July 26, 2012. The $1,000,000 private placement was not completed by that date and thus Amicor was not required to pay the final $70,000 due under the note. Accordingly, no amounts under the note receivable from Amicor are currently outstanding. | ||||||
Prior to the asset purchase agreement, Barry Honig, the Company’s director and then Chairman, held 2,685,000 shares of Continental directly and certain entities under Mr. Honig’s control and family members held 3,075,838 shares of Continental. Additionally, one of the shareholders of the Company held 4,569,252 shares of Continental prior to such agreement. Although there was common ownership between the Company and Continental, through the Company's Board Member and a stockholder, such collective interests in the Company only accounted for a total of 15% upon the consummation of the asset purchase agreement. | ||||||
Between February 2012 and January 2013, the Company sold all 10,000,000 shares of Amicor common stock it owned in private transactions and generated net proceeds of $1,641,933. In October 2012, Amicor changed its name to Marathon Patent Group, Inc. | ||||||
Accordingly, pursuant to ASC 805, the Company applied push–down accounting and adjusted to fair value all of the assets and liabilities directly on the financial statements of the subsidiary, Acquisition Sub. The net purchase price paid by the Company was allocated to assets acquired and liabilities assumed on the records of the Company as follows: | ||||||
Sale of Gold Exploration Properties | ||||||
Current assets (including cash of $11,164,514) | $ | 13,069,511 | ||||
A wholly-owned subsidiary of the Company, Red Battle Corp. (“Red Battle”), a Delaware corporation, was formed on April 30, 2012 to hold all of the outstanding membership interests of Arttor Gold and Noble Effort, then subsidiaries of the Company which owned the Red Battle and North Battle Mountain gold exploration properties. The Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) on May 24, 2012 with Valor Gold Corp. and Valor Gold Acquisition Corp., a wholly-owned subsidiary of Valor Gold Corp., for the purpose of divesting its Red Rocks and North Battle Mountain gold properties. As a result of this transaction, Red Battle, together with Arttor Gold and Noble Effort were sold to Valor Gold. | Note receivable | 2,000,000 | ||||
Prepaid expenses – long term portion | 41,912 | |||||
The Merger effectively resulted in the sale of the Company’s two Lander County, Nevada exploration properties, Red Rock Mineral Prospect (including the Centerra Prospect), and North Battle Mountain Mineral Prospect, to Valor Gold for (i) $2,000,000 in cash (the “Cash Consideration”), (ii) a 5% promissory note in the principal amount of $500,000 due 18 months following the issuance date and (iii) 25,000,000 shares of Valor Gold’s common stock. | Property and equipment | 39,912 | ||||
In November 2012, the Company collected the full balance of the note receivable $500,000 plus accrued interest from Valor Gold. | Liabilities assumed (including a 12% note payable of $50,000) | (293,659 | ) | |||
Prior to the Merger, certain entities under the control of Barry Honig, a director of the Company, and Mr. Honig’s family members held 5,600,003 shares of Valor Gold. Additionally, another shareholder of the Company held 750,000 shares of Valor Gold prior to the Merger. Contemporaneously with the closing of the Merger, this shareholder purchased 1,250,000 shares of Valor Gold’s common stock in a private placement by Valor Gold. Additionally, entities under Mr. Honig’s control purchased 5,000,000 shares of Valor Gold’s Series A Preferred Stock in the Valor Gold private placement. | Net purchase price | $ | 14,857,676 | |||
The issuance of 25,000,000 shares of Valor Gold’s common stock to the Company accounted for approximately 38.6% of the total issued and outstanding common stock of Valor Gold as of May 24, 2012. Between February 2013 and May 2013, the Company sold all 25,000,000 shares it owned of Valor Gold common stock in private transactions which generated net proceeds of $1,505,000. As of September 30, 2013, the Company no longer owns any shares in Valor Gold. | On July 18, 2011, the Company borrowed $2,000,000 from Continental, and issued it an unsecured 6% promissory note. On July 22, 2011, in connection with the asset purchase agreement, the Company acquired the note receivable which was payable to Continental and included the acquisition of the $2,000,000 note receivable as part of the purchase price allocation. Accordingly, the acquired note receivable was eliminated against the note payable on the Company’s financial statements. | |||||
The Purchase Agreement constitutes a plan of reorganization within the meaning of Treasury Regulations Section 1.368-2(g) and constitutes a plan of liquidation of Continental. The Company agreed to file a registration statement under the Securities Act of 1933, as amended (“Securities Act”) in connection with liquidation of Continental no later than 30 days following (i) the closing date of the asset sale or (ii) the date that Continental delivered or filed its audited financial statements for the fiscal year ended March 31, 2011, and to distribute the registered shares to its shareholders as part of its liquidation. The Company agreed to use its best efforts to cause such registration to be declared effective within 12 months following the closing date of the asset sale. | ||||||
The Company had agreed to pay liquidated damages of 1% per month, up to a maximum of 5%, in the event that the Company failed to file or was unable to cause the registration statement to be declared effective. Continental was expected to liquidate on or prior to July 1, 2012. | ||||||
In August 2012, the Company entered into an Amendment Agreement with Continental and Acquisition Sub whereby the parties agreed to amend the Asset Purchase Agreement to remove the liquidated damages provision associated with the registration rights obligations of the Company. Such registration statement was declared effective in February 2013, and as a result, Continental has started the process of distribution of the Company’s shares as of March 22, 2013 and expects to complete the distribution as soon as practicable (see Note 17). | ||||||
Continental Resources Acquisition Sub, Inc. | ||||||
On January 26, 2012, the Company and Amicor entered into an Option Agreement whereby Amicor acquired the option to purchase all uranium properties and claims (the “Option”) from the Company for a purchase price of $10.00 in consideration for the issuance of (i) 10,000,000 shares of Amicor’s common stock and (ii) a six month promissory note in the principal amount of $1,000,000. Pursuant to the Option, the consideration received by the Company was non-refundable. The Company and Amicor amended the Option on April 24, 2012 and May 3, 2012 in order to extend the termination date of the Option. On June 11, 2012, Amicor notified the Company of its decision to exercise the Option. The Company and Amicor effected the exercise of the Option, through the assignment of the Company’s wholly-owned subsidiary, Acquisition Sub, which was the owner of 100% of the issued and outstanding common stock of each of Green Energy Fields, Inc., a Nevada corporation (“Green Energy”) (which was the owner of 100% of the issued and outstanding common stock of CPX Uranium, Inc.) and ND Energy, Inc., a Delaware corporation (“ND Energy”). Additionally, ND Energy and Green Energy held a majority of the outstanding membership interests of Secure Energy LLC. As a result of the assignment, Acquisition Sub is no longer a subsidiary of the Company. | ||||||
In 2012, $930,000 of the principal amount of note was paid. Under the terms of the note, Amicor was required to pay the balance of the note upon completion of a private placement totaling $1,000,000 or more on or before July 26, 2012. The $1,000,000 private placement was not completed by that date thus Amicor was not required to pay the final $70,000 due under the note. No amounts under the note receivable from Amicor were outstanding at December 31, 2012. | ||||||
The Company accounted for such transaction pursuant to ASC 845-10, “Nonmonetary Transactions” and related subtopics for an exchange of a nonmonetary asset for a non controlling ownership interest in a second entity. Since the Company received cash in the exchange of its nonmonetary assets and the cash received was greater than 25% of the fair value of the assets exchanged, the transaction was considered a monetary exchange and full or partial gain recognition is required. The fair value of the uranium mining claims exchanged approximates the Company’s carrying value which amounted to $0. In accordance with ASC 845-10, the Company recognized a gain from the sale of uranium assets of $930,000 which represents the cash collected on the note as of December 31, 2012. The Company has no actual or implied commitment, financial or otherwise, to support the operations of the new entity in any manner and the Company planned to liquidate its investment in Amicor. Consequently, the Company treated its investment in Amicor as marketable securities - available for sale with an initial basis of $0. Between February 2012 and December 2012, the Company sold 8,486,667 shares of Amicor’s common stock under private transactions and generated net proceeds of $1,490,600 and recorded a realized gain – available for sale securities of $1,490,600 during the year ended December 31, 2012. Additionally, in January 2013, the Company sold an aggregate of 1,513,333 shares of Amicor’s common stock in a private transaction and generated net proceeds of $151,333 (see Note 17). In October 2012, Amicor changed its name to Marathon Patent Group, Inc. | ||||||
David Rector, a former member of the Company's Board of Directors, was a former director of Amicor. Joshua Bleak, Continental's Chief Executive Officer and director, was a former director of Amicor. On March 8, 2013, Mr. Rector and Mr. Bleak tendered their resignations as members of the Board of Amicor. | ||||||
Red Battle Corp. | ||||||
On May 24, 2012, the Company and Red Battle entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Valor Gold Corp., a Delaware corporation ("Valor Gold"), and Valor Gold Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of Valor Gold (the "Buyer"). The Merger Agreement provides for, upon the terms and subject to the conditions in the Merger Agreement, the merger of the Buyer with and into Red Battle with Red Battle continuing as the surviving entity and the corporate existence of the Buyer ceasing (the "Merger"). The Merger effectively resulted in the sale of the Company’s two Lander County, Nevada exploration properties, Red Rock Mineral Prospect (including Centerra Prospect), and North Battle Mountain Mineral Prospect, to Valor Gold for (i) $2,000,000 in cash (the “Cash Consideration”), (ii) a 5% promissory note in the principal amount of $500,000 due 18 months following the issuance date and (iii) 25,000,000 shares of Valor Gold’s common stock. As further consideration for the Merger, (i) Arthur Leger, the Company’s former Chief Geologist, agreed to surrender to the Company for cancellation of 1,750,000 shares of the Company’s common stock; (ii) Arthur Leger agreed to grant, as lessor, a 1% net smelter returns production royalty on all minerals produced from certain claims under the Red Rock Mineral Prospect and North Battle Mountain Mineral Prospect leases to the Company; and (iii) Mr. Leger agreed to defer certain royalty payments under the terms of the Lease Agreements with Arttor Gold related to the Red Rocks and North Battle Mineral Prospect Properties. Under the terms of the note, all outstanding principal, together with all accrued but unpaid interest, is payable upon the earlier of: (i) the closing of one or more private placements of the Valor Gold’s securities in which Valor Gold receives gross proceeds of at least $7,500,000 or (ii) 18 months following the issuance of the note. | ||||||
In November 2012, the Company collected the full balance of the note receivable $500,000 plus accrued interest from Valor Gold. As of December 31, 2012, the note and interest receivables were $0. | ||||||
Prior to the Merger, certain entities under the control of Barry Honig, a director of the Company, and Mr. Honig’s family members held 5,600,003 shares of Valor Gold. Additionally, one of the shareholders of the Company held 750,000 shares of Valor Gold prior to the Merger. Contemporaneously with the closing of the Merger, such shareholder purchased 1,250,000 shares of Valor Gold’s common stock in a private placement by Valor Gold. Additionally, entities under Mr. Honig’s control purchased 5,000,000 shares of Valor Gold’s Series A Preferred Stock in the Valor Gold private placement. | ||||||
Assuming the conversion into common stock of Valor Gold’s Series A Preferred Stock both the interest of the aforementioned shareholder and entities controlled by Mr. Honig in Valor Gold would account for 18% of Valor Gold’s issued and outstanding common stock at the closing of the Merger. In addition to being large shareholders of the Company and Valor Gold, both the shareholder and Mr. Honig, as well as, entities controlled by Mr. Honig, directly and indirectly, may influence the Company’s decisions with respect to voting of the 25,000,000 shares of Valor Gold owned by the Company, through their investments in both the Company and Valor Gold. Mr. Honig has served as co-Chairman of the Company and currently is a director of the Company. Accordingly, the Company and Mr. Honig are considered to be founders and “promoters” of Valor Gold as defined under the Securities Act. As a result of such shareholder and Mr. Honig, as well as entities controlled by Mr. Honig, being among the largest shareholders of the Company and Valor Gold, there may exist certain conflicts of interest with respect to the business and affairs of each of these companies. The Company believes that the shareholder and Mr. Honig, as well as entities controlled by Mr. Honig, are independent private investors who have no agreements, arrangements or understandings with respect to the ownership or control over any of these companies. | ||||||
The Company also considered the guidance in ASC 805 “Business Combination” (formerly EITF 02-5 “Common Control”), that the Merger Agreement was not treated as a common control transaction as there was no group of shareholders that held more than 50% of the voting ownership interest of each entity with contemporaneous written evidence of an agreement to vote a majority of the entities’ shares in concert. | ||||||
The Company accounted for the 25,000,000 shares of Valor Gold’s common stock under ASC 845-10-S99, “Transfer of Nonmonetary Assets by Promoters or Shareholders” whereby the transfer of nonmonetary assets to a company by its promoters or shareholders in exchange for stock prior to or at the time of the company's initial public offering normally should be recorded at the transferors' historical cost basis determined under US GAAP. The Company recorded the 25,000,000 shares of Valor Gold at the historical cost basis of the nonmonetary assets transferred which amounted to $83,333. As a result of this transaction, during the year ended December 31, 2012, the Company recognized a gain from the sale of its subsidiaries of $2,500,000 as described above which represents the cash and note consideration to the Company pursuant to the Merger Agreement. | ||||||
Consequently, the issuance of 25,000,000 shares of Valor Gold’s common stock to the Company accounted for approximately 38.6% of the total issued and outstanding common stock of Valor Gold as of May 24, 2012. As a result of the Company’s ownership interest of more than 20% of Valor Gold, the Company is considered to be an equity method investor which is accounted for under equity method of accounting. As of December 31, 2012 the Company holds a 32.4% interest in Valor Gold. The Company recorded its share of Valor Gold’s net loss which amounted to $83,333 using the equity method of accounting and such investment has been reduced to $0. Under ASC 323-10-35 “Investments – Equity Method”, the equity method investor shall discontinue applying the equity method when the investment has been reduced to zero and shall not provide for additional losses, unless the equity method investor provides or commits to provide additional funds to the investee, has guaranteed obligations of the investee, or is otherwise committed to provide further financial support to the investee. The Company is not obligated or committed to provide additional funds or further financial support to Valor Gold and as such the Company shall not record additional share of losses of Valor Gold upon reducing such investment to $0. | ||||||
In February 2013 the Company sold an aggregate of 3,000,000 shares of Valor Gold’s common stock in a private transaction and generated net proceeds of $300,000 (see Note 17). | ||||||
MARKETABLE_SECURITIES1
MARKETABLE SECURITIES | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2012 | |||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ||||||||||||||||||||
MARKETABLE SECURITIES | ' | ||||||||||||||||||||
NOTE 4 – MARKETABLE SECURITIES | |||||||||||||||||||||
Marketable securities at December 31, 2012 consisted of the following: | |||||||||||||||||||||
Cost | Gross Unrealized Gains | Gross Unrealized Losses | Realized Gain from Sale of Securities | Fair Value | |||||||||||||||||
Marketable securities – available for sale | — | — | — | 1,490,600 | — | ||||||||||||||||
Total | $ | — | $ | — | $ | — | $ | 1,490,600 | $ | — | |||||||||||
Marketable securities - trading are carried at fair value, with changes in unrealized holding gains and losses included in income and classified within interest and other income, net, in the accompanying consolidated statements of operations. Unrealized gains or losses on marketable securities - available for sale are recognized on a periodic basis as an element of comprehensive income based on changes in the fair value of the security. Realized gains or losses on the sale of marketable securities - available for sale will be reflected in the Company’s net loss for the period in which the securities are liquidated. | |||||||||||||||||||||
In April 2012, the Company sold its marketable securities – trading with a cost basis of $100,000 and generated proceeds of $119,702. The increase in fair value of $19,702 has been recorded as realized gain in the statement of operations for the year ended December 31, 2012. | |||||||||||||||||||||
In January 2012, the Company received 10,000,000 restricted shares of Amicor’s common stock pursuant to the Option with Amicor (see Note 3). At the time of issuance, the Company recorded the cost of investment in accordance with ASC 845-10 and was valued at $0. Between February 2012 and December 2012, the Company sold 8,486,667 shares of Amicor’s common stock under a private transaction and generated net proceeds of $1,490,600 and has recorded a realized gain – available for sale securities of $1,490,600 during the year ended December 31, 2012. Additionally, in January 2013, the Company sold an aggregate of 1,513,333 shares of Amicor’s common stock in a private transaction and generated net proceeds of $151,333 (see Note 17). | |||||||||||||||||||||
The issuance of 10,000,000 shares of Amicor’s common stock to the Company accounted for approximately 26.6% of the total issued and outstanding stock of Amicor as of January 26, 2012. As of December 31, 2012 the Company held an approximate 3% interest in Amicor. The Company accounted for such investment in Amicor as marketable securities - available for sale. |
MINERAL_PROPERTIES1
MINERAL PROPERTIES | 12 Months Ended | ||||||||||||
Dec. 31, 2012 | |||||||||||||
Extractive Industries [Abstract] | ' | ||||||||||||
MINERAL PROPERTIES, | ' | ||||||||||||
NOTE 5 – MINERAL PROPERTIES | |||||||||||||
Relief Canyon Properties | |||||||||||||
The Relief Canyon properties are located about 100 miles northeast of Reno, Nevada. The Relief Canyon properties are located in Pershing County, Nevada at the southern end of the Humboldt Range. The Relief Canyon properties do not currently have any mineral reserves and all activities undertaken and currently proposed are exploratory in nature. | |||||||||||||
Relief Canyon Mine | |||||||||||||
Through the Company’s wholly-owned subsidiary, Gold Acquisition, the Company owns 84 unpatented lode mining claims and 118 unpatented millsites at the Relief Canyon Mine property. The property includes the Relief Canyon Mine and gold processing facilities, currently in a care and maintenance status. The Relief Canyon Mine includes three open pit mines, heap leach pads comprised of six cells, two solution ponds and a cement block constructed adsorption desorption-recovery (ADR) solution processing circuit. The ADR type process plant consists of four carbon columns, acid wash system, stripping vessel, electrolytic cells, a furnace and a retort for the production of gold doré. The process facility was completed in 2008 and produced gold until 2009 by Firstgold Corp and is currently in a care and maintenance status. The facilities are generally in good condition. | |||||||||||||
Pershing Pass Property | |||||||||||||
The Company acquired the Pershing Pass property from Silver Scott Mines, Inc. in March 2012 for $550,000. Pershing Pass Property is located to the south of the Relief Canyon Mine property and consists of 489 unpatented lode mining claims (30 of which were acquired in February 2012) covering approximately 9,700 acres. Silver Scott Mines, Inc. located the claims and was the sole owner of the Pershing Pass property prior to the Company’s purchase. There is evidence of historic mining activity on the Pershing Pass property. In April 2012 the Company purchased an additional 17 mining claims adjacent to the Pershing Pass Property. | |||||||||||||
Newmont Leased Properties | |||||||||||||
On April 5, 2012, the Company purchased from Victoria Gold Corp. and Victoria Resources (US) Inc. (“VRI”) their interest in approximately 13,300 acres of mining claims and private lands adjacent to the Company’s landholdings at the Relief Canyon Mine in Pershing County, Nevada. Approximately 8,900 acres of these properties are held under leases and subleases with Newmont USA Ltd., which the Company refers to as the Newmont Leased properties. Victoria Gold has reserved a 2% net smelter return royalty from the production on 221 of the 283 unpatented mining claims that it owned directly. | |||||||||||||
The assets purchased include (i) unpatented mining claims located in Pershing County, Nevada (the “Owned Claims”); (ii) the assumption by the Company of a leasehold interest in certain unpatented mining claims in Pershing County Nevada referred to as the “Newmont Claims” held by VRI under a Minerals Lease and Sublease dated June 15, 2006, as amended, between Newmont USA Limited, d/b/a in Nevada as Newmont Mining Corporation (“Newmont”) and VRI (the “2006 Mineral Lease”); (iii) the assumption of the sublease, pursuant to the 2006 Mineral Lease, of an interest in certain fee minerals in Pershing County, Nevada in which Newmont holds a leasehold interest pursuant to that Minerals Lease SPL-6700, dated as of August 17, 1987 between Southern Pacific Land Company and SFP Minerals Corporation;(iv) the assumption of the sublease, pursuant to the 2006 Mineral Lease, of an interest in certain fee lands in Pershing County, Nevada, in which Newmont holds a leasehold interest pursuant to a mining lease dated June 1, 1994 between The Atchison, Topeka and Santa Fe Railway Company and Santa Fe Pacific Gold Corporation; and (v) the assumption of the sublease, pursuant to the 2006 Mineral Lease, of an interest in certain fee minerals in Pershing County, Nevada in which Newmont holds a leasehold interest pursuant to a minerals lease, dated as of March 23, 1999 between Nevada Land & Resource Company LLC and Santa Fe Pacific Gold Corporation. | |||||||||||||
In connection with the foregoing purchase, the Company has agreed to purchase all of Seller’s data, information and records related thereto, including all internal analyses and reports prepared by third party consultants or contractors, and to assume all liabilities and obligations of the Sellers arising after the closing of the transaction, including additional expenditures to be made in accordance with the 2006 Mineral Lease in the amount of $750,000 by June 15, 2012. To the extent actual expenditures in any lease year exceed the applicable work commitment requirement they may be carried forward and applied against future work commitment periods. Starting in June 2014, the Company will be required to spend $0.5 million annually on exploration expenditures or pay Newmont rental payments of $10 per acre per year. The rental payments will escalate by 5% per year. Under the current terms of the 2006 Mineral lease agreement, the annual rental starting 2014, if the Company elected not to or failed to incur at least $0.5 million in exploration expenditures per year, would be approximately $0.1 million subject to a 5% increase per year. | |||||||||||||
The Company has satisfactorily fulfilled the work commitment obligation for the year ended June 2012. As of December 2012, the Company has incurred costs in excess of the June 2012 commitment by approximately $2.0 million. The excess satisfies the work commitments for the years ending June 2013 and 2014, respectively, and the majority of the requirement for the year ending June 2015. | |||||||||||||
The closing of the acquisition of the Assets was subject to the satisfaction by the parties of certain obligations, including, among other things, the transfer of title to the Company of the Owned Claims, the assignment of Seller’s leasehold interests to the Company and the payment of consideration by the Company for the Assets (the “Closing Conditions”). On April 5, 2012, the parties satisfied the Closing Conditions and the Company issued to Victoria Gold Corp. 10,000,000 shares of the Company’s common stock, and a 2 year warrant to purchase 5,000,000 shares of common stock at a purchase price of $0.60 per share (see Note 12). | |||||||||||||
The Company also granted a 2% net smelter returns royalty on production from the Owned Claims which are not encumbered by production royalties payable to Newmont under the 2006 Mineral Lease. The Company also paid the Seller $2,000,000 cash. The Company valued the 10 million common shares at the fair market value on the date of grants at approximately $0.46 per share or $4,600,000. The 5 million warrants were valued on the grant date at approximately $0.22 per warrant or a total of $1,109,441 using a Black-Scholes option pricing model with the following assumptions: stock price of $0.46 per share, volatility of 105%, expected term of 2 years, and a risk free interest rate of 0.35%. For the year ended December 31, 2012, the Company recorded the value of such shares and warrants into mineral rights as reflected in the accompanying consolidated balance sheets. | |||||||||||||
The Company has posted bonds with the United States Department of the Interior Bureau of Land Management (“BLM”) as required by the State of Nevada in an amount equal to the maximum cost to reclaim land disturbed in its mining process. The Company posted a reclamation bond deposit of approximately $4.6 million to provide surface reclamation coverage for the Relief Canyon Mine, as required by the BLM to secure remediation costs if the project is abandoned or closed. Due to its investment in the bond and the close monitoring of the BLM Nevada State Office, the Company believes that it has adequately mitigated any liability that could be incurred by the Company to reclaim lands disturbed in its mining process. | |||||||||||||
As of December 31, 2012, based on managements’ review of the carrying value of mineral rights, management determined that there is no evidence that these acquired mineral rights will not be fully recovered and accordingly, the Company has determined that no adjustment to the carrying value of mineral rights was required. | |||||||||||||
As of the date of these consolidated financial statements, the Company has not established any proven or probable reserves on its mineral properties and incurred only acquisition and exploration costs. | |||||||||||||
Mineral properties consisted of the following: | |||||||||||||
31-Dec-12 | 31-Dec-11 | ||||||||||||
Relief Canyon Mine – Gold Acquisition | $ | 8,501,071 | $ | 8,501,071 | |||||||||
Relief Canyon Mine – Newmont Leased Properties | 7,709,441 | - | |||||||||||
Pershing Pass Property | 576,400 | - | |||||||||||
$ | 16,786,912 | $ | 8,501,071 | ||||||||||
PROPERTY_AND_EQUIPMENT1
PROPERTY AND EQUIPMENT | 9 Months Ended | 12 Months Ended | |||||||||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | ||||||||||||||||||||||
PROPERTY AND EQUIPMENT | ' | ' | |||||||||||||||||||||
Property, Plant and Equipment Disclosure [Text Block] | ' | ' | |||||||||||||||||||||
NOTE 6 — PROPERTY AND EQUIPMENT | NOTE 6 – PROPERTY AND EQUIPMENT | ||||||||||||||||||||||
Property and equipment consisted of the following: | Property and equipment consisted of the following: | ||||||||||||||||||||||
Estimated Life | September 30, | December 31, | Estimated Life | 31-Dec-12 | 31-Dec-11 | ||||||||||||||||||
2013 | 2012 | Furniture and fixtures | 5 years | $ | 56,995 | $ | 20,000 | ||||||||||||||||
Furniture and fixtures | 5 years | $ | 56,995 | $ | 56,995 | Office and computer equipment | 1 - 5 years | 220,060 | 26,606 | ||||||||||||||
Office and computer equipment | 1 - 5 years | 227,344 | 220,060 | Land | — | 266,977 | 266,977 | ||||||||||||||||
Land | — | 266,977 | 266,977 | Building and improvements | 5 - 25 years | 727,965 | 727,965 | ||||||||||||||||
Building and improvements | 5 - 25 years | 727,965 | 727,965 | Site costs | 10 years | 1,272,732 | 1,272,732 | ||||||||||||||||
Site costs | 10 years | 1,272,732 | 1,272,732 | Crushing system | 20 years | 2,256,943 | 2,256,943 | ||||||||||||||||
Crushing system | 20 years | 2,256,943 | 2,256,943 | Process plant and equipment | 10 years | 3,166,280 | 3,115,266 | ||||||||||||||||
Process plant and equipment | 10 years | 3,169,442 | 3,166,280 | Vehicles and mining equipment | 5 - 10 years | 682,373 | 659,622 | ||||||||||||||||
Vehicles and mining equipment | 5 - 10 years | 695,825 | 682,373 | 8,650,325 | 8,346,111 | ||||||||||||||||||
8,674,223 | 8,650,325 | Less: accumulated depreciation | (1,263,549 | ) | (315,008 | ) | |||||||||||||||||
Less: accumulated depreciation | (1,993,320 | ) | (1,263,549 | ) | |||||||||||||||||||
$ | 7,386,776 | $ | 8,031,103 | ||||||||||||||||||||
$ | 6,680,903 | $ | 7,386,776 | ||||||||||||||||||||
For the year ended December 31, 2012 and 2011, depreciation expense amounted to $992,648 and $325,928 respectively. | |||||||||||||||||||||||
For the nine months ended September 30, 2013 and 2012, depreciation expense amounted to $729,771 and $756,482, respectively. | |||||||||||||||||||||||
Between November 2011 and December 31, 2011, the Company sold mining and drilling equipment with a net book value of $407,369 to third parties for a sales price of $233,339, realizing a loss on sale of assets of $174,030. As of December 31, 2011, $99,908 of the sales proceeds were included in other receivables as reflected in the accompanying consolidated balance sheet and were collected in January 2012. | |||||||||||||||||||||||
Depreciation expense related to the sold mining and drilling equipment amounted to $10,920 which is included in the $325,928 above. During fiscal 2012, the Company sold mining and drilling equipment with a net book value of $80,309 to third parties for a sales price of $74,074 realizing a loss on sale of assets of $6,235. Depreciation expense related to the sold mining and drilling equipment amounted to $10,318 which is included in the $992,648 above. Additionally, the Company retired certain fully depreciated fixed assets in the amount of $33,789 which was included in the depreciation expense during fiscal 2012. |
SENIOR_CONVERTIBLE_PROMISSORY_
SENIOR CONVERTIBLE PROMISSORY NOTES | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2012 | |||||||||||||||||||||||||
MINERAL PROPERTIES. | ' | ||||||||||||||||||||||||
SENIOR CONVERTIBLE PROMISSORY NOTES. | ' | ||||||||||||||||||||||||
NOTE 7 – SENIOR CONVERTIBLE PROMISSORY NOTES | |||||||||||||||||||||||||
Senior convertible promissory notes consisted of the following: | |||||||||||||||||||||||||
31-Dec-12 | 31-Dec-11 | ||||||||||||||||||||||||
Senior convertible promissory notes | $ | — | $ | 7,999,778 | |||||||||||||||||||||
Less: debt discount | — | (6,933,333 | ) | ||||||||||||||||||||||
Senior convertible promissory notes, net | $ | — | $ | 1,066,445 | |||||||||||||||||||||
The following is the activity from December 31, 2011 through December 31, 2012 regarding the Senior Convertible Promissory Notes to Platinum and Lakewood: | |||||||||||||||||||||||||
Summary of Activity of Senior Convertible Promissory Notes | Platinum and Lakewood | Totals | Interest Expense | Amortization of Discount(Interest Expense) | Loss from Extinguishment of Debt | Preferred Stock Dividend | |||||||||||||||||||
Original Face Amount of Notes Issued to Platinum and Lakewood | 8,000,000 | 8,000,000 | — | — | — | — | |||||||||||||||||||
Assignment and Assumption Agreement with Third Party Investors on February 23, 2012 | (4,000,000 | ) | — | — | — | — | — | ||||||||||||||||||
Note Modification Agreement with Assignors and Assignees on February 23, 2012 | — | — | 3,022,186 | — | — | — | |||||||||||||||||||
Payment of Principal | (1,039,771 | ) | (1,039,771 | ) | 901,135 | — | — | ||||||||||||||||||
Conversion into Common Stock | (262,500 | ) | (262,500 | ) | — | 227,500 | 51,563 | — | |||||||||||||||||
Note Assignment and Assumption Agreement with Third Party Investors on March 30, 2012 | (2,697,729 | ) | 294,285 | 168,163 | (255,047 | ) | 824,196 | — | |||||||||||||||||
Conversion of $1,892,014 of Note into Common Stock at $0.35 per share | — | (1,892,014 | ) | — | 953,333 | 615,138 | — | ||||||||||||||||||
Conversion of $1,100,000 of Note into Class D Preferred Stock | — | (1,100,000 | ) | — | 1,639,745 | 357,635 | 130,949 | ||||||||||||||||||
Conversion of FGIT Note into Series D Preferred Stock on March 30, 2012 | — | (2,400,000 | ) | — | 2,080,000 | 1,262,990 | 286,298 | ||||||||||||||||||
Conversion of $1,600,000 of Note into Common Stock on March 30, 2012 | — | (1,600,000 | ) | — | 1,386,667 | 841,992 | — | ||||||||||||||||||
Outstanding Balance as of December 31, 2012 | — | — | 3,190,349 | 6,933,333 | 3,953,514 | 417,247 | |||||||||||||||||||
As previously disclosed, the Company issued $8,000,000 of senior secured convertible promissory notes to Platinum and Lakewood on August 31, 2011. | |||||||||||||||||||||||||
The notes were joint and several obligations of the Company and Gold Acquisition and bore interest at a rate of 9% per annum with principal and interest payable on the first business day of each month commencing on the earlier of: | |||||||||||||||||||||||||
(i) 3 months after the Company or Gold Acquisition begins producing or extracting gold from the Relief Canyon Mine or (ii) 18 months after the original date of issuance of the note (the “Commencement Date”). The principal amount shall be paid in 12 equal monthly installments, with the initial payment due on the Commencement Date. | |||||||||||||||||||||||||
The notes were convertible into shares of the Company’s common stock, at a price per share equal to $0.55, subject to adjustment in the event of mergers, recapitalizations, dividends and distributions applicable to shareholders generally and are further subject to anti-dilution protection. In October 2011, the conversion price of the senior convertible promissory notes had been adjusted to $0.40 per share as a result of certain anti-dilution provisions contained therein due to the sale of common stock at $0.40 per share. | |||||||||||||||||||||||||
Between January 5, 2012 and February 23, 2012, the Company prepaid a total of $1,039,771 of the senior secured convertible promissory note to Platinum and Lakewood. | |||||||||||||||||||||||||
The Assignment and Assumption Agreement dated February 23, 2012 | |||||||||||||||||||||||||
On February 23, 2012, pursuant to a certain assignment and assumption agreement (the “Assignment and Assumption Agreement”), certain assignees (collectively, the “Assignees”) acquired an aggregate of $4.0 million of the outstanding principal amount of the notes (the “Acquired Notes”) from Platinum and Lakewood (collectively, the “Assignors”). After giving effect to the transactions contemplated under the Assignment and Assumption Agreement and the prepayment of the notes, Platinum retained $2,368,183 and Lakewood retained $592,046 of the Original Notes. The principal amount of Acquired Notes issued to one of the assignees was $2,400,000 and the principal amount of the Acquired Note issued to the other assignee was $1,600,000 and bore interest at 9% per annum. The note holders waived any prepayment penalty in connection with the prepayment and assignment. | |||||||||||||||||||||||||
On February 23, 2012, the Company had entered into Note Modification Agreements, (the “Note Modification Agreements”) with the Assignees and Assignors, respectively, to extend the Maturity Date to February 23, 2014, the definition of Commencement Date to February 23, 2013 and to eliminate the prepayment penalty. The notes were convertible into shares of the Company’s common stock, at a price per share equal to $0.40, subject to adjustment in the event of mergers, recapitalizations, dividends and distributions applicable to shareholders generally and are further subject to full-ratchet anti-dilution protection. | |||||||||||||||||||||||||
The Assignors entered into their Note Modification Agreement in exchange for (i) the issuance to Platinum of warrants to purchase an aggregate of 4,144,320 shares of common stock, (ii) the issuance to Lakewood of warrants to purchase an aggregate of 1,036,080 shares of common stock, (iii) the issuance of 1,600,000 shares of common stock to Platinum, and (iv) the issuance of 400,000 shares of common stock to Lakewood. The warrants may be exercised at any time, in whole or in part, at an exercise price of $0.40 per share. | |||||||||||||||||||||||||
The warrants may be exercised until the fifth anniversary of their issuance. The warrants may be exercised on a cashless basis at any time. On March 29, 2012, such warrants were exercised on a cashless basis into 2,967,143 shares of common stock (see Note 12). | |||||||||||||||||||||||||
Accordingly, the Company valued the 2 million common shares at the fair market value on the date of grant at $0.489 per share or $978,000. The 5,180,400 warrants were valued on the grant date at approximately $0.394 per warrant or a total of $2,044,186 using a Black-Scholes option pricing model with the following assumptions: stock price of $0.489 per share, volatility of 110%, expected term of 5 years, and a risk free interest rate of 0.88%. The Company recognized a total interest expense of $3,022,186 during the year ended December 31, 2012 in connection with the Note Modification Agreement. | |||||||||||||||||||||||||
The Note Assignment and Assumption Agreement dated March 30, 2012 | |||||||||||||||||||||||||
On March 30, 2012, the Company, Platinum and Lakewood entered into agreements to amend the notes (which had current principal balance of $2,960,229) (the “Note Amendments”). Under the Note Amendments, the notes were amended to provide for a $0.35 conversion price. The original holders of the notes agreed to convert $262,500 of the notes in exchange for an aggregate of 750,000 shares of the Company’s common stock. The Company accounted for the reduction of the conversion price from $0.40 to $0.35 per share and such conversion under ASC 470-20-40 “Debt with Conversion and Other Options” and accordingly recorded loss from extinguishment of debts of $51,563 which is equal to the fair value of shares issued in excess of the fair value issuable pursuant to the original conversion terms. | |||||||||||||||||||||||||
The Company also entered into a Note Assignment and Assumption Agreement on March 30, 2012 (the “March Note Assignment and Assumption Agreement”) pursuant to which the original holders assigned the remaining principal amount $2,697,729 (after such conversion discussed above) of the notes to various assignees and such assignees agreed to fully convert the acquired notes into the Company’s common stock in consideration for an aggregate purchase price of $3,256,252. A total of $2,992,014 was assigned to various assignees and the original holders waived $264,238 of the aggregate purchase price payable by the assignees for the notes under the Note Assignment and Assumption Agreement at an amended conversion price of $0.35 per share. The Company recorded loss from extinguishment of debt of $294,285 for the year ended December 31, 2012 which represents the excess of the purchase price over the remaining principal. Such additional principal of $294,285 was considered to have an embedded beneficial conversion feature because the effective conversion price was less than the fair value of the Company’s common stock and as such were treated as a discount and were valued at $168,163 which was fully amortized upon the conversion of the notes and was included in interest expense. | |||||||||||||||||||||||||
In connection with the March Note Assignment and Assumption Agreement, the Company accounted the reduction of the conversion price from $0.40 to $0.35 per share and such conversion discussed below under ASC 470-20-40 “Debt with Conversion and Other Options” and accordingly recorded loss from extinguishment of debts of $529,911 which was equal to the fair value of shares issued in excess of the fair value issuable pursuant to the original conversion terms. | |||||||||||||||||||||||||
These various assignees agreed to convert an aggregate principal amount of $1,892,014 into 5,405,754 shares of the Company’s common stock at a conversion price of $0.35 per share. Such various assignees received an additional 1,118,432 shares of the Company’s Common Stock as consideration for the note conversion and were valued at the fair market value on the date of grant at $0.55 per share or $615,138 and have been included in loss from extinguishment of debts. | |||||||||||||||||||||||||
The remaining assigned amount of $1,100,000 was amended to allow for its conversion into the Company’s Series D Preferred Stock equivalent to the stated value of the Series D Preferred Stock which is $1.00 per share. Each share of Series D Preferred Stock is convertible into shares of the Company’s common stock at an effective conversion price of $0.35 per share subject to anti-dilution provisions. As such, the Company issued a total of 1,100,000 shares of Series D Preferred Stock and an additional 227,586 shares of Series D Preferred Stock in consideration for the conversion of this convertible promissory note into shares of Series D Preferred Stock. For the year ended December 31, 2012, the Company recorded a loss from extinguishment of debts of $357,635 and preferred deemed dividend of $130,049 in connection with the issuance of the additional 227,586 shares of Series D Preferred Stock. Such shares of Series D Preferred Stock were converted into the Company’s common stock in June 2012 (see Note 12). | |||||||||||||||||||||||||
On March 30, 2012, the Company also amended the $2.4 million note assigned to Frost Gamma Investments Trust (“FGIT”) to allow for the conversion of this note into the Company’s Series D Preferred Stock at $1.00 per share. FGIT agreed to fully convert this note (together with accrued and unpaid interest of $21,600) into 2,421,600 shares of Series D Preferred Stock and an additional 501,021 shares of Series D Preferred Stock in consideration for the conversion of this note into shares of Series D Preferred Stock. The Company accounted for the reduction of the conversion price from $0.40 to $0.35 per share and such conversion under ASC 470-20-40 “Debt with Conversion and Other Options” and accordingly recorded loss from extinguishment of debts of $475,671 which was equal to the fair value of shares issued in excess of the fair value issuable pursuant to the original conversion terms. For the year ended December 31, 2012, the Company recorded a loss from extinguishment of debts of $787,319 and preferred deemed dividend of $286,298 in connection with the issuance of the additional 501,021 shares of Series D Preferred Stock. Such shares of Series D Preferred Stock were converted into the Company’s common stock in June 2012 (see Note 12). | |||||||||||||||||||||||||
On March 30, 2012, one of the assignees agreed to convert the assigned $1.6 million note (together with accrued and unpaid interest of $14,400) into 4,612,571 shares of Common Stock at a conversion price of $0.35 per share and an additional 954,325 shares of the Company’s Common Stock as consideration for the note conversion. The Company accounted for the reduction of the conversion price from $0.40 to $0.35 per share and such conversion under ASC 470-20-40 “Debt with Conversion and Other Options” and accordingly recorded loss from extinguishment of debts of $317,114 which is equal to the fair value of shares issued in excess of the fair value issuable pursuant to the original conversion terms. The additional 954,325 shares of common stock were valued at the fair market value on the date of grant at $0.55 per share or $524,878 and have been included in loss from extinguishment of debts for the year ended December 31, 2012. | |||||||||||||||||||||||||
As a result of the conversion of the senior secured convertible promissory notes, the Company fully amortized the remaining unamortized debt discount of $6,933,333 and was included in interest expense for the year ended December 31, 2012. Accrued interest as of December 31, 2012 and 2011 amounted to $0 and $45,999, respectively and was included in accounts payable and accrued expenses. |
CONVERTIBLE_NOTES_PAYABLE
CONVERTIBLE NOTES PAYABLE | 12 Months Ended | ||||||||
Dec. 31, 2012 | |||||||||
MINERAL PROPERTIES. | ' | ||||||||
CONVERTIBLE PROMISSORY NOTES. | ' | ||||||||
NOTE 8 – CONVERTIBLE PROMISSORY NOTES | |||||||||
At December 31, 2012 and 2011, convertible promissory notes consisted of the following: | |||||||||
31-Dec-12 | 31-Dec-11 | ||||||||
Convertible promissory notes | $ | — | $ | 1,015,604 | |||||
Less: debt discount | — | (897,117 | ) | ||||||
Convertible promissory notes, net | $ | — | $ | 118,487 | |||||
On February 1, 2011, the Company raised $750,000 in consideration for the issuance of convertible promissory notes from various investors, including $100,000 from the Company’s member of the Board of Directors. The convertible promissory notes bore interest at 5% per annum and were convertible into shares of the Company’s common stock at a fixed rate of $1.00 per share. The convertible promissory notes were due on February 1, 2012. In connection with these convertible promissory notes, the Company issued 750,000 shares of the Company’s common stock. The Company valued these common shares at the fair market value on the date of grant. The funds were held in escrow and were released only in order to assist the Company in paying third party expenses, which may include activities related to broadening the Company’s shareholder base through shareholder awareness campaigns and other activities. | |||||||||
In accordance with ASC 470-20-25, these convertible promissory notes were considered to have an embedded beneficial conversion feature because the effective conversion price was less than the fair value of the Company’s common stock. In addition the Company allocated the proceeds received from such financing transaction to the convertible promissory note and the detached 750,000 shares of the Company’s common stock on a relative fair value basis in accordance with ASC 470 -20 “Debt with Conversion and Other Options”. Therefore the portion of proceeds allocated to the convertible debentures and the detached common stock amounted to $750,000 and was determined based on the relative fair values of each instruments at the time of issuance. Consequently the Company recorded a debt discount of $750,000 which is limited to the amount of proceeds and is being amortized over the term of the convertible promissory notes. The Company evaluated whether or not the convertible promissory notes contain embedded conversion features, which meet the definition of derivatives under ASC 815-15 “Accounting for Derivative Instruments and Hedging Activities” and related interpretations. | |||||||||
The Company concluded that since the convertible promissory notes had a fixed conversion price of $1.00, the convertible promissory notes were not considered derivatives. On October 31, 2011, the Company entered into amendment agreements with holders of the Company’s outstanding 5% convertible promissory notes dated as of February 1, 2011 in the aggregate principal amount of $750,000. Pursuant to the amendment agreements, the fixed conversion price was adjusted from $1.00 to $0.65. The note holders, including Company Board Member Barry Honig, converted their outstanding notes to the Company’s common stock at a conversion price of $0.65 per share. In total, $750,000 of notes was converted, plus accrued interest of $27,555, with the Company issuing 1,196,238 shares in exchange. The Company accounted the reduction of the original conversion price from $1.00 to $0.65 per share and such conversion under ASC 470-20-40 “Debt with Conversion and Other Options” and accordingly recorded interest expense of $230,192 which is equal to the fair value of shares issued in excess of the fair value issuable pursuant to the original conversion terms. As of December 31, 2011, principal and accrued interest on these convertible promissory notes amounted to $0. | |||||||||
On September 14, 2011, the Company sold $1,715,604 of its 9% secured promissory note. The note was acquired by FGIT. The proceeds of the note were used to post additional bonds with the BLM (the “Additional Bond”) in order to advance certain exploration and Phase One drilling activities at the Company’s Relief Canyon Mining property. The note was a joint and several obligation of the Company and its wholly-owned subsidiary, Gold Acquisition. Principal and interest under the note was payable on the first business day of each month commencing on the later of (i) thirty (30) months from the original date of issuance and (ii) ten (10) days following the payment and/or conversion in full of the senior secured promissory notes dated as of August 30, 2011, issued to Platinum and Lakewood. The note may be pre-paid, in full or in part at a price equal to 105% of the aggregate principal amount of the note plus all accrued and unpaid interest thereon at the election of the Company. The note was convertible into shares of the Company’s common stock at a price equal to $0.50 per share, subject to adjustment in the event of mergers, recapitalizations, dividends and distributions applicable to shareholders generally. The note was subordinated to the payment in full and satisfaction of all obligations owed to Platinum and Lakewood other than the Additional Bond and proceeds of the Additional Bond, in which FGIT had a first priority senior security interest. The note was also secured by a pledge of 100% of the stock of Gold Acquisition held by the Company. The note may be prepaid upon the occurrence of a Qualified Financing, as defined in the note, of at least $1,715,604. Certain holders of senior secured indebtedness of the Company (including Barry Honig, a Member of the Company’s Board of Directors) agreed to subordinate certain senior obligations of the Company to the prior payment of all obligations under the note. The Company concluded that since this convertible promissory note does not include a down-round provision under which the conversion price could be affected by future equity offerings, this convertible promissory note was not considered a derivative. | |||||||||
Pursuant to the terms of the note, the Company was required to prepay the principal amount of the note in full upon the occurrence of a Qualified Financing in which the Company receives from one or more investors, net proceeds of at least $1,715,604 (not including any outstanding debt conversion or investments made by the note holder). The Company determined that the sale of its securities which occurred between September 2011 and October 2011, in the aggregate, constituted a “Qualified Financing” under the terms of the note and accordingly, the Company was required to prepay the outstanding principal value of the note. On October 31, 2011, the Company and note holder entered into a Waiver Agreement pursuant to which the Company and the FGIT agreed that the Company would prepay $700,000 principal of the note and would waive (i) prepayment of the balance of the principal of the note and (ii) any default under the note arising solely from the Company’s partial prepayment of the note upon the occurrence of the Qualified Financing. | |||||||||
On March 30, 2012, the Company amended its 9% Secured Promissory Note to allow for the conversion into the Company’s Series D Cumulative Convertible Preferred Stock at $1.00 per share. The holder of this note agreed to fully convert the remaining note of $1,015,604 (together with accrued and unpaid interest $9,140) into 1,024,744 shares of Series D Preferred Stock and an additional 212,017 shares of Series D Preferred Stock in consideration for the conversion of this note into shares of Series D Preferred Stock. The Company accounted the reduction of the conversion price from $0.40 to $0.35 per share and such conversion under ASC 470-20-40 “Debt with Conversion and Other Options” and accordingly recorded loss from extinguishment of debts of $483,094 which was equal to the fair value of shares issued in excess of the fair value issuable pursuant to the original conversion terms. For the year ended December 31, 2012, the Company recorded a loss from extinguishment of debts of $333,168 and preferred deemed dividend of $121,152 in connection with the issuance of the additional 212,017 shares of Series D Preferred Stock. Such shares of Series D Preferred Stock was converted into the Company’s common stock in June 2012 (see Note 12). | |||||||||
As a result of the conversion of this note, the Company fully amortized the remaining unamortized debt discount of $897,117 for the year ended December 31, 2012 and was included in interest expense. Accrued interest as of December 31, 2012 and 2011 amounted to $0 and $7,882, respectively, and was included in accounts payable and accrued expenses. |
NOTES_PAYABLE1
NOTES PAYABLE | 9 Months Ended | 12 Months Ended | |||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | ||||||||||||||||
NOTES PAYABLE | ' | ' | |||||||||||||||
Debt Disclosure [Text Block] | ' | ' | |||||||||||||||
NOTE 7 — NOTES PAYABLE | NOTE 9 – NOTES PAYABLE | ||||||||||||||||
In August 2012, the Company issued a note payable in the amount of $92,145 in connection with the acquisition of mining equipment. The note payable bears interest at approximately 7% per annum and is secured by a lien on the mining equipment. The note is payable in 48 equal monthly payments of $2,226 beginning in September 2012. | As of December 31, 2012 and 2011, note payable – related party consisted of the following: | ||||||||||||||||
Notes payable — short and long term portion consisted of the following: | 31-Dec-12 | 31-Dec-11 | |||||||||||||||
Note payable - related party | $ | 486,250 | $ | 561,750 | |||||||||||||
September 30, 2013 | December 31, 2012 | Less: debt discount - related party | — | (50,918 | ) | ||||||||||||
Total notes payable | $ | 65,269 | $ | 82,546 | |||||||||||||
Less: current portion | (23,036 | ) | (23,036 | ) | Note payable - related party, net | $ | 486,250 | $ | 510,832 | ||||||||
Long term portion | $ | 42,233 | $ | 59,510 | |||||||||||||
In February 2011, the Company, Empire and its wholly-owned subsidiary, EXCX Funding Corp. (collectively the “Borrowers”), entered into a credit facility agreement (the “Credit Facility Agreement”) with two lenders including Barry Honig, a member of the Company’s Board of Directors. The Credit Facility Agreement consisted of a loan pursuant to which $4.5 million was borrowed on a senior secured basis. The indebtedness under the Credit Facility Agreement was evidenced by a promissory note payable to the order of the lenders. The loan was used exclusively to fund the costs and expenses of certain music and sporting events (the “Events”) as agreed to by the parties. | |||||||||||||||||
The notes bear interest at 6% per annum and matured on January 31, 2012, subject to acceleration in the event the Borrowers undertake third party financing. | |||||||||||||||||
In addition to the 6% interest, the Borrower is required to pay all interest, fees, costs and expenses incurred by lenders in connection with the issuance of this loan facility. Pursuant to the Credit Facility Agreement, the Borrowers entered into a Master Security Agreement, Collateral Assignment and Equity Pledge with the lenders whereby the Borrowers collaterally assigned and pledged to lenders, and granted to lenders a present, absolute, unconditional and continuing security interest in, all of the property, assets and equity interests of the Company as defined in such agreement. Furthermore, in connection with the Credit Facility Agreement, the Lenders entered into a Contribution and Security Agreement (the “Contribution Agreement”) with the Company’s former Chief Executive Officer, Sheldon Finkel (See Note 11). As consideration for the extension of credit pursuant to the Credit Facility Agreement, the Borrowers were obligated to pay a fee equal to 15% of the initial loan commitment of $4.5 million (the “Preferred Return Fee”) of which Sheldon Finkel, shall receive a pro-rata portion (1/3). The Preferred Return Fee was payable if at all, only out of the net profits from the Events. Accordingly, the Company shall record the Preferred Return Fee upon attaining net profits from the Events. The Company issued to the lenders and Sheldon Finkel an aggregate of 2,250,000 shares of the Company’s newly designated Series A Preferred Stock, convertible into one share each of the Company’s common stock. | |||||||||||||||||
The Company valued the 2,250,000 Series A Preferred Stock at the fair market value of the underlying common stock on the date of grant at $1.20 per share or $2,700,000 and recorded a debt discount of $1,800,000 and deferred financing cost of $900,000 which are being amortized over the term of these notes. Such deferred financing cost represents the 750,000 Series A Preferred Stock issued to Sheldon Finkel for guaranteeing one-third of the net losses and assignment of that certain irrevocable letter of credit, as described above. Between May 2011 and December 2011, 2,250,000 of these preferred shares were converted into common stock. During August 2011, the revenues from the Events did not exceed its costs and accordingly the Company is indebted to the lenders, including the Board Member of the Company. As a result, the obligations under the Contribution Agreements became obligations of the parties thereto to each other. Between August 2011 and December 2011, the Company paid a total of $3,326,500 to the lenders and such amount reduced the principal balance of these notes. On November 29, 2011, the holder of this note payable, converted $611,750 principal balance of this note into an aggregate of 1,529,375 of units of the Company offered in a private placement. Each unit was sold for a purchase price of $0.40 per unit and consisted of: (i) one share of common stock and (ii) a two-year warrant to purchase fifty (50%) percent of the number of shares of common stock purchased at an exercise price of $0.60 per share, subject to adjustment upon the occurrence of certain events. | |||||||||||||||||
In March 2012, Mr. Honig, as the sole remaining holder of the note, agreed to extend the maturity date of the remaining balance of the note to February 1, 2013. | |||||||||||||||||
In July 2012, Mr. Honig (the “Assignor”) entered into an Assignment Agreement with a related party (the “Assignee”) whereby the Assignor assigned $42,000 of his outstanding principal note (the “Assigned Note”) in connection with the Credit Facility Agreement. The Assignee purchased the Assigned Note for $42,000. On August 10, 2012, the Company entered into a Cancellation of Debt and Assignment of Shares Agreement with the Assignee and Sheldon Finkel, the Company’s former Chief Executive Officer. Pursuant to the Separation Agreement and Release dated in September 2011, Sheldon Finkel retained 600,000 shares of the Company’s common stock (the “Executive Retained Securities”) which were pledged as collateral security for the repayment of certain amounts owed to the Company by a third party (the “Third Party Receivable”). The Third Party receivable was not collected by the Company and accordingly, the Company was entitled to receive 300,000 shares of the Executive Retained Securities. On August 10, 2012, the Company and Sheldon Finkel agreed that Mr. Finkel would surrender 300,000 shares of the Executive Retained Securities to the Company in consideration for the cancellation of the Third Party Receivable. | |||||||||||||||||
Pursuant to the Cancellation of Debt and Assignment of Shares Agreement, the Company, Sheldon Finkel and the Assignee agreed that in consideration for the cancellation and satisfaction of the Assigned Note, Mr. Finkel would transfer and assign the 300,000 shares of Executive Retained Securities due to the Company to the Assignee. As a result of the transfer and assignment of the 300,000 shares of the Company’s common stock to the Assignee, the Third Party Receivable and the Assigned Note were extinguished. The Company valued the 300,000 common shares at the fair market value on the date of grant or assignment at approximately $0.345 per share or $103,500. In connection with the assignment of the 300,000 shares of common stock, the Company reduced the outstanding principal note by $42,000 and recognized an interest expense of $61,500. | |||||||||||||||||
In October 2012, the Company entered into an Assignment of Rights and Assumption of Obligation Agreement with Barry Honig whereby the Company assigned and transferred the rights arising under the Separation Agreement and General Release executed on March 28, 2011 and Agreement for Payment of Future Proceeds executed in April 2011 (collectively the “Agreement”). The Agreement is in connection with debts and obligations owed by Gregory Cohen, the former President of the Company. In consideration for the assumption by Mr. Honig of all obligations owned by the Company under the Agreement, Mr. Honig reduced the outstanding principal note due to him by $33,500. As of December 31, 2012, the remaining outstanding principal note due to Mr. Honig amounted to $486,250. | |||||||||||||||||
In January 2013, Mr. Honig, as the sole remaining holder of the note, agreed to extend the maturity date of the remaining balance of the note to February 1, 2014. | |||||||||||||||||
As of December 31, 2012 and 2011, accrued interest and fees on this note payable – related party amounted to $142,164 and $109,493, respectively. For the years ended December 31, 2012 and 2011, amortization of debt discount and deferred financing cost amounted to $101,836 and $2,598,163, respectively, and was included in interest expense. | |||||||||||||||||
In March 2012, the Company received $500,000 in connection with a 5% secured promissory note (the “Bridge Note”), which was secured by certain assets of the Company’s wholly-owned subsidiaries, Arttor Gold and Noble Effort. The Company administratively issued such Bridge Note on April 10, 2012. The full amount of principal and accrued interest under the Bridge Note was due and payable on a date that shall be the earlier to occur of: (x) the sale of Noble Effort and Arttor Gold, (or the sale of all or substantially all of the assets of Arttor Gold and Noble Effort) to a third party purchaser or (y) October 10, 2012. The Bridge Note was fully paid on May 29, 2012. As of December 31, 2012, accrued interest on this note amounted to $0. | |||||||||||||||||
In August 2012, the Company issued a note payable amounting to $92,145 in connection with the acquisition of mining equipment. The note payable bears interest at approximately 7% per annum and is secured by a lien of the mining equipment. The note is payable in 48 equal monthly payments of $2,226 beginning in September 2012. As of December 31, 2012, the current and long term portion of this note amounted to $23,036 and $59,510, respectively. | |||||||||||||||||
Notes payable – short and long term portion consisted of the following: | |||||||||||||||||
31-Dec-12 | 31-Dec-11 | ||||||||||||||||
Total notes payable | $ | 82,546 | $ | — | |||||||||||||
Less: current portion | (23,036 | ) | — | ||||||||||||||
Long term portion | $ | 59,510 | $ | — | |||||||||||||
DERIVATIVE_LIABILITY
DERIVATIVE LIABILITY | 12 Months Ended | |||||
Dec. 31, 2012 | ||||||
MINERAL PROPERTIES. | ' | |||||
DERIVATIVE LIABILITY.. | ' | |||||
NOTE 10 – DERIVATIVE LIABILITY | ||||||
In connection with the issuance of the 9% senior convertible promissory notes dated August 30, 2011, the Company determined that the terms of the convertible notes include a down-round provision under which the conversion price could be affected by future equity offerings undertaken by the Company. Accordingly, under the provisions of FASB ASC Topic No. 815-40, “Derivatives and Hedging – Contracts in an Entity’s Own Stock”, the convertible instrument was accounted for as a derivative liability at the date of issuance and adjusted to fair value through earnings at each reporting date. The Company has recognized a derivative liability of $0 and $6,295,400 at December 31, 2012 and 2011, respectively. Gain (loss) resulting from the decrease (increase) in fair value of this convertible instrument was $(1,454,889) and $6,902,806 for the years ended December 31, 2012 and 2011, respectively. During the year ended December 31, 2012, the Company reclassified $7,750,289, the full amount of the derivative liability, to paid-in capital due to the conversion of the senior convertible promissory notes into common stock on March 30, 2012 (see Note 7). | ||||||
The Company used the following assumptions for determining the fair value of the convertible instruments under the Black-Scholes option pricing model: | ||||||
2012 | 2011 | |||||
Dividend rate | 0% | 0% | ||||
Term (in years) | 2.00 - 2.17 Years | 2.25 - 2.50 Years | ||||
Volatility | 103% - 110% | 106% - 193% | ||||
Risk-free interest rate | 0.27% - 0.33% | 0.25% - 0.42% |
RELATED_PARTY_TRANSACTIONS1
RELATED PARTY TRANSACTIONS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2013 | Dec. 31, 2012 | |
RELATED PARTY TRANSACTIONS | ' | ' |
Related Party Transactions Disclosure [Text Block] | ' | ' |
NOTE 8 — RELATED PARTY TRANSACTIONS | NOTE 11 – RELATED PARTY TRANSACTIONS | |
Parties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. The Company discloses all related party transactions. | Parties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. The Company discloses all related party transactions. | |
Note payable - related party | Note payable - related party | |
In February 2011, Mr. Honig, a Director of the Company advanced $2,250,000 to the Company under a Credit Facility Agreement. Between August 2011 and December 2011, the Company paid a total of $1,688,250 to Mr. Honig. Additionally, between July 2012 and October 2012, a total of $75,500 was extinguished on a non-cash basis reducing the principal balance of the note to $486,250. | In connection with the Credit Facility Agreement (see Note 9), certain lenders, including Mr. Honig, the Company’s Board Member, funded $2,250,000 to the Company under this Credit Facility Agreement. Furthermore, in connection with the Credit Facility Agreement, the lenders entered into a Contribution Agreement with the Company’s former Chief Executive Officer, Sheldon Finkel, pursuant to which Sheldon Finkel agreed to pay or reimburse the lenders the pro rata portion (1/3) of any net losses from Events and irrevocably pledged to lenders a certain irrevocable letter of credit dated in June 2010 in favor of Sheldon Finkel. The Company also issued to Sheldon Finkel and the Company’s Board Member 750,000 shares each of the Company’s newly designated Series A Preferred Stock, convertible into one share each of the Company’s common stock. As consideration for the extension of credit pursuant to the Credit Facility Agreement, the borrowers are obligated to pay a fee equal to 15% of the initial loan commitment of $4.5 million of which Sheldon Finkel, shall receive a pro-rata portion (1/3). The Preferred Return Fee shall be payable if at all, only out of the net profits from the Events. The Company did not generate net profits from the Events. On May 4, 2011, Sheldon Finkel and the Company’s Board Member converted their shares into 1,500,000 shares of Common Stock. Between August 2011 and December 2011, the Company paid a total of $1,688,250 to the Company’s Board Member and such amount reduced the principal balance of his note. | |
Subsequently, in August 2013, Mr. Honig exchanged the note including accrued interest of $159,230 for Company’s Series E Convertible Preferred Stock and warrants and the Credit Facility was terminated (see Note 9). | At December 31, 2012 and 2011 principal amount of the note payable – related party amounted to $486,250 and $561,750, respectively. | |
As of September 30, 2013 and December 31, 2012 principal balance of the note amounted to $0 and $486,250, respectively. As of September 30, 2013 and December 31, 2012, accrued interest on this note payable — related party amounted to $0 and $142,164, respectively. | Convertible promissory note - related party | |
Continental Resources Group, Inc. | On February 1, 2011, the Company raised $750,000 in consideration for the issuance of convertible promissory notes from various investors, including $100,000 from the Company’s Member of the Board of Directors. The convertible promissory notes bore interest at 5% per annum and were convertible into shares of the Company’s common stock at a fixed rate of $1.00 per share. On October 31, 2011, the Company entered into amendment agreements (the “Amendments”) with holders of the Company’s outstanding 5% convertible promissory notes dated as of February 1, 2011 in the aggregate principal amount of $750,000. Pursuant to the Amendments, the fixed conversion price was adjusted from $1.00 to $0.65. The note holders, including Company’s Member of the Board of Directors, Barry Honig, converted their outstanding notes to the Company’s common stock at a conversion price of $0.65 per share. | |
In January 2013, the Company paid $15,066 of Continental’s expenses. The Company recorded such advances to additional paid in capital which represents distributions to the Company’s former parent company for a total of $15,066 and $611,589 at September 30, 2013 and December 31, 2012, respectively. | Member of the board of directors | |
As of December 31, 2012, a member of the Company's Board of Directors, Barry Honig, held 9,474,759 shares of Continental, directly or indirectly. In addition, family members, including trusts for the benefit of Mr. Honig's minor children, currently own 3,685,000 shares of Continental of which Mr. Honig disclaims beneficial ownership. Accordingly, as one of the largest shareholder of Continental, Mr. Honig may be deemed to be in control of Continental and accordingly there may exist certain conflicts of interest as a result. See Note 17- Subsequent Events regarding the dissolution of Continental and distribution of the Company’s shares held by Continental to its shareholders of record on March 1, 2013. | ||
Continental Resources Group, Inc. | ||
As of December 31, 2012, Continental holds a 28.54% interest in the Company. The Company is considered to be an equity method investee as a result of Continental’s ownership interest of less than 50% which is accounted for under equity method of accounting. In March 2012, the Company issued 250,000 shares of its common stock to a third party for the payment of Continental’s accrued legal fees of $170,614 (see Note 12) and was considered an advance to Continental. Additionally, between April 2012 and December 2012, the Company paid an aggregate of $93,640 for the payment of Continental’s accounting, legal and other public company fees. During the year ended December 31, 2012, the Company recorded such advances to additional paid in capital which represents distributions to the Company’s former parent company for a total of $611,589. At December 31, 2012 and 2011, the Company had a receivable from Continental amounting to $0 and $347,335 respectively. These advances were short-term in nature and non-interest bearing and were recorded as due from equity method investor. See Note 17- Subsequent Events regarding the dissolution of Continental and distribution of the Company’s shares held by Continental to its shareholders of record on March 1, 2013. | ||
STOCKHOLDERS_EQUITY1
STOCKHOLDERS EQUITY | 9 Months Ended | 12 Months Ended | ||||||||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | |||||||||||||||||||||
STOCKHOLDERS' EQUITY | ' | ' | ||||||||||||||||||||
Stockholders' Equity Note Disclosure [Text Block] | ' | ' | ||||||||||||||||||||
NOTE 9 — STOCKHOLDERS’ EQUITY | ||||||||||||||||||||||
NOTE 12 – STOCKHOLDERS’ EQUITY | ||||||||||||||||||||||
Preferred Stock | ||||||||||||||||||||||
Preferred Stock | ||||||||||||||||||||||
The Company is authorized within the limitations and restrictions stated in the Amended and Restated Articles of Incorporation to provide by resolution or resolutions for the issuance of 50,000,000 shares of Preferred Stock, par value $0.0001 per share in such series and with such designations, preferences and relative, participating, optional or other special rights and qualifications, limitations or restrictions as the Company’s Board of Directors establish. | ||||||||||||||||||||||
The Company is authorized within the limitations and restrictions stated in the Amended and Restated Articles of Incorporation of the Company, to provide by resolution or resolutions for the issuance of 50,000,000 shares of Preferred Stock, par value $0.0001 per share in such series and with such designations, preferences and relative, participating, optional or other special rights and qualifications, limitations or restrictions as the Company’s Board of Directors shall fix by resolution or resolutions providing for the issuance thereof duly adopted by the Board of Directors. | ||||||||||||||||||||||
Convertible Series A Preferred Stock | ||||||||||||||||||||||
Series A Convertible Preferred Stock | ||||||||||||||||||||||
As of September 30, 2013, 2,250,000 shares of Series A Preferred Stock, $0.0001 par value were authorized with none issued and outstanding. | ||||||||||||||||||||||
In connection with the Credit Facility Agreement, the Company agreed to issue to the lenders and Sheldon Finkel an aggregate of 2,250,000 shares of the Company’s newly designated Series A Preferred Stock, convertible into one share each of the Company’s common stock (see Note 9). The holders of the Company’s Series A Preferred Stock were entitled to the same number of votes per share of common stock that the holder of these Series A Preferred Stock may convert into at the time of the vote. In the event of a liquidation, dissolution or winding up of the business of the Company, the holder of the Series A Preferred Stock would have preferential payment and distribution rights over any other class or series of capital stock that provide for Series A Preferred Stock’s preferential payment and over the Company’s Common Stock. The Company valued the 2,250,000 Series A Preferred Stock at the fair market value of the underlying common stock on the date of grant at $1.20 per share or $2,700,000 and recorded a debt discount of $1,800,000 and deferred financing cost of $900,000 which were amortized over the term of these notes. Between May 2011 and December 2011, 2,250,000 Series A Preferred Stock were converted into 2,250,000 shares of common stock. As of December 31, 2012, 2,250,000 shares of Series A Preferred Stock, $0.0001 par value were authorized with none issued and outstanding. | ||||||||||||||||||||||
Convertible Series B Preferred Stock | ||||||||||||||||||||||
Series B Convertible Preferred Stock | ||||||||||||||||||||||
As of September 30, 2013, 8,000,000 shares of Series B Preferred Stock, $0.0001 par value were authorized with none issued and outstanding. | ||||||||||||||||||||||
Each share of Series B Convertible Preferred Stock is convertible into one share each of the Company’s common stock. The holders of the Company’s Series B Preferred Stock are entitled to the same number of votes per share of common stock that the holder of the Series B Preferred Stock may convert into at the time of the vote. In the event of a liquidation, dissolution or winding up of the business of the Company, the holder of the Series B Preferred Stock would have preferential payment and distribution rights over any other class or series of capital stock that provides for Series B Preferred Stock’s preferential payment and over the Company’s Common Stock. | ||||||||||||||||||||||
Convertible Series C Preferred Stock | ||||||||||||||||||||||
On May 24, 2011, the Company entered into four limited liability company membership interests purchase agreements with the former owners of Arttor Gold. Each of the owners of Arttor Gold, sold their interests in Arttor Gold in privately negotiated sales resulting in the Company acquiring 100% of Arttor Gold. Pursuant to the Agreements, the Company issued 8,000,000 shares of preferred stock, designated Series B Convertible Preferred Stock, and 13,000,000 shares of Common Stock in exchange for 100% membership interests in Arttor Gold. | ||||||||||||||||||||||
As of September 30, 2013, 3,284,396 shares of Series C Preferred Stock, $0.0001 par value were authorized with none issued and outstanding. | ||||||||||||||||||||||
Between October 2011 and December 2011, 7,500,000 shares of Series B Preferred Stock were converted into 7,500,000 shares of common stock. On February 3, 2012, 500,000 shares of Series B Preferred Stock were converted into 500,000 shares of common stock. The Company valued these common shares at par value. The Series B Preferred stock does not include any mandatory redeemable provisions. As of December 31, 2012, 8,000,000 shares of Series B Preferred Stock, $0.0001 par value were authorized with none issued and outstanding. | ||||||||||||||||||||||
Convertible Series D Preferred Stock | ||||||||||||||||||||||
As of September 30, 2013, there were 7,500,000 shares of Series D Preferred Stock authorized and none issued and outstanding. | Series C Convertible Preferred Stock | |||||||||||||||||||||
Convertible Series E Preferred Stock | On September 29, 2011, the Company sold 3,284,396 shares of Series C Convertible Preferred Stock and two-year warrants (the “Series C Preferred Warrants”) to purchase 9,853,188 shares of Common Stock at an exercise price of $0.60 per share for an aggregate purchase price of $3,284,396. | |||||||||||||||||||||
On August 5, 2013, the Company designated 15,151 shares of Series E Convertible Preferred Stock. Each share of Series E is convertible into shares of the Company’s common stock at a conversion rate of 3,000 shares of common stock for each share of Series E which is equivalent to a conversion price of $0.33 per share of common stock, subject to certain adjustments in the event of stock dividends, stock splits and subsequent equity sales. | In accordance with ASC 505, “Equity - Dividends and Stock Splits”, the Series C Convertible Preferred Stock was considered to have an embedded beneficial conversion feature (ECF) because the conversion price was less than the fair value of the Company’s common stock. This Series C Convertible Preferred Stock was fully convertible at the issuance date, therefore a portion of proceeds allocated to the Series C Convertible Preferred Stock of $3,284,396 was determined to be the value of the beneficial conversion feature and was recorded as a deemed dividend. | |||||||||||||||||||||
The holders of the Series E Preferred Stock will vote on an as-converted basis on all matters on which the holders of the common stock have a right to vote. The Company may, at any time after February 8, 2014, redeem all then outstanding Series E Preferred Stock for cash in an amount equal to 110% of the purchase price for the Series E Preferred Stock, provided that the optional redemption provisions are met as defined in the certificate of designation. Upon liquidation, dissolution or winding up of the Company, each holder of Series E Preferred Stock is entitled to receive the greater of: (i) 110% of the purchase price of the Series E Preferred Stock, and (ii) the amount each holder would be entitled to receive if such holder’s shares of Series E Preferred Stock were converted into common stock. Upon a change of control, all outstanding shares of Series E Preferred Stock will automatically convert into shares of common stock and the holders will also be entitled to receive a cash payment equal to 10% of the purchase price paid for the Series E Preferred Stock. The Company believes that the occurrence of the optional redemption is considered conditional events and as a result the instrument does not meet the definition of mandatorily redeemable financial instrument based from ASC 480-10-25, “Distinguishing Liabilities from Equity”. | In connection with the initial sales of the Series C Preferred Stock, the initial estimated fair values allocated to the ECF were $1,172,999 and the fair value allocated to the warrants of $ 2,111,397 was recorded as a deemed dividend on September 29, 2011. | |||||||||||||||||||||
In August 2013, the Company completed private placements to several accredited investors for the purchase of 10,533 shares of its Series E Convertible Preferred Stock and warrants to acquire 12,639,600 shares of the Company’s common stock for aggregate net proceeds of approximately $10.2 million. Each purchaser of Series E received a 3-year warrant to acquire a number of shares of the Company’s common stock equal to 40% of the number of shares of common stock issuable upon conversion of the Series E shares. The warrants are exercisable immediately at an exercise price of $0.40 per share of the Company’s common stock, subject to adjustments in the event of stock dividends, recapitalizations or certain other transactions and expire three years from the date of issuance. The purchase price of one share of Series E Preferred Stock and the associated warrant was $990. | The assumptions used valuing the Preferred Warrants include: | |||||||||||||||||||||
In accordance with ASC 505, “Equity - Dividends and Stock Splits”, the Series E Preferred Stock was considered to have an embedded beneficial conversion feature (ECF) because the conversion price was less than the fair value of the Company’s common stock. The Series E Preferred Stock was fully convertible at the issuance date, therefore a portion of proceeds allocated to the Series E Preferred Stock was determined to be the value of the beneficial conversion feature and was recorded as a preferred deemed dividend. In connection with the initial sales of the Series E Preferred Stock, the initial estimated fair value allocated to the ECF was $2,188,792 and the fair value allocated to the warrants of $1,912,867 was recorded as a preferred deemed dividend in August 2013. | Risk free interest rate (annual) | 0.27% | ||||||||||||||||||||
Expected volatility | 112% | |||||||||||||||||||||
The assumptions used valuing the warrants include: | Expected life | 2 Years | ||||||||||||||||||||
Assumed dividends | none | |||||||||||||||||||||
Risk free interest rate (annual) | 0.61% to 0.82% | |||||||||||||||||||||
Expected volatility | 86% | Each share of Series C Preferred Stock is convertible into shares of common stock at a conversion price of $0.50 per share, subject to adjustment in the event the Company issues common stock or securities convertible into or exercisable for shares of common stock at a price lower than the conversion price then in effect, but not less than $0.30 per share. The Series C Preferred Stock has a stated value of $1.50 per share. In the event of the liquidation, dissolution or winding up of the business of the Company, each share of Series C Preferred Stock shall be entitled to receive, a preferential amount in cash equal to the stated value. The Series C Preferred Warrants may be exercised until the second anniversary of issuance at a cash exercise price of $0.60 per share, subject to adjustment. The Series C Preferred Warrants may be exercised on a cashless basis at any time after the original date of issuance. On September 29, 2011, the Company issued 4,429,415 shares of common stock in connection with the exercise of the 9,853,188 Series C Preferred Warrants on a cashless basis. In June 2012, the conversion price of the Series C Preferred Stock was adjusted to $0.32 per share as a result of certain anti-dilution provisions contained therein due to the sale of the Company’s common stock at $0.32 per share. In June 2012, 3,284,396 shares of Series C Preferred Stock were converted into 10,263,738 shares of the Company’s common stock. The Series C Preferred Stock does not include any mandatory redeemable provisions. As of December 31, 2012, 3,284,396 shares of Series C Preferred Stock, $0.0001 par value were authorized with none issued and outstanding. | ||||||||||||||||||||
Expected life | 3 Years | |||||||||||||||||||||
Assumed dividends | none | Series D Convertible Preferred Stock | ||||||||||||||||||||
In connection with these private placements, the Company paid legal fees of approximately $124,000 and commissions of approximately $76,000 in cash and the issuance of warrants to purchase 13,590 shares of the Company’s Common Stock. | On February 21, 2012, the Company designated 1,000,000 shares of 9.0% Series D Cumulative Convertible Preferred Stock. Each share of Series D Preferred Stock is convertible (together with accrued and unpaid dividends thereon) into shares of the Company’s common stock at a conversion price of $0.40 per share, subject to equitable adjustments after such events as stock dividends, stock splits or fundamental corporate transactions, and subject to anti-dilution provisions. The holders of the Company’s Series D Convertible Preferred Stock do not have voting rights. Upon liquidation, dissolution or winding up of the Company’s business, each holder of Series D Preferred Stock shall be entitled to receive, for each share thereof a preferential amount in cash equal to $1.00. | |||||||||||||||||||||
Additionally, Mr. Honig exchanged the outstanding principal and accrued interest of $645,480 owed by the Company under a Credit Facility Agreement (see Note 8) for 652 shares of Series E Convertible Preferred Stock and warrants to acquire 782,400 shares of the Company’s common stock on equivalent terms to those of investors purchasing in the private placement. | ||||||||||||||||||||||
All preferential amounts to be paid to the holders of Series D Preferred Stock in connection with such liquidation, dissolution or winding up shall be paid before the payment or distribution of any assets to the holders of (i) any other class or series of capital stock and (ii) of the Company’s common stock. The Company is required to redeem in cash all or portion of the Series D Preferred Stock upon the occurrence of a major transactions such as a consolidation, merger or other business combination, sale and transfer of more than 50% of any of the Company’s assets, or the closing of a purchase with more than 50% of the outstanding shares of stock tendered and the inability of the Company to convert any portion of the Series D Preferred stock due to insufficient authorized number of shares of common stock as defined in the certificate of designation. The redemption price is equivalent to the sum of (i) the greater of (A) 110% of the aggregate stated value of the outstanding shares of the Series D Preferred Stock plus all accrued dividends and (B) the aggregate stated value of the outstanding shares of the Series D Preferred Stock plus all accrued dividends divided by the conversion price on the date of the major transaction redemption price is demanded or the date the major transaction redemption price is paid in full whichever is less multiplied by the volume weighted average price on (x) the date of the major transaction redemption price is demanded and (y) the date the major transaction redemption price is paid in full, whichever is greater and (ii) all other amounts, costs, expenses and liquidated damages. The Company believes that the occurrence of the major transactions as defined in the certificate of designations are considered conditional events and as a result the instrument does not meet the definition of mandatorily redeemable financial instrument based from ASC 480-10-25, “Distinguishing Liabilities from Equity”. | ||||||||||||||||||||||
As of September 30, 2013, there were 15,151 shares of Series E Preferred Stock authorized and 11,185 shares issued and outstanding. | ||||||||||||||||||||||
This financial instrument was assessed at each reporting period to determine whether circumstances have changed such that the instrument met the definition of a mandatorily redeemable instrument (that is, the event is no longer conditional). If the event has occurred, the condition is resolved, or the event has become certain to occur, the financial instrument will be reclassified as a liability. On April 11, 2012, the Company filed an amendment to the Certificate of Designation for the Series D Preferred Stock with the Secretary of State of the State of Nevada to increase the number of authorized shares of Series D Preferred Stock that could be issued by the Company to 7,500,000. In June 2012, the conversion price of the Company’s Series D Convertible Preferred Stock was adjusted to $0.32 per share as a result of certain anti-dilution provisions contained therein due to the sale of the Company’s common stock at $0.32 per share. | ||||||||||||||||||||||
Common Stock | ||||||||||||||||||||||
On February 23, 2012, the Company entered into a Stock Purchase Agreement with two subscribers and sold 1,000,000 shares of the Series D Preferred Stock and an aggregate of 8,750,000 warrants to acquire shares of Common Stock for an aggregate purchase price of $1,000,000 (the “Series D Preferred Stock Purchase Price”). | ||||||||||||||||||||||
On February 9, 2012, the Company issued 12,000,000 shares of restricted common stock to Stephen Alfers, the Company’s Chief Executive Officer, pursuant to his employment agreement. On February 8, 2013, the Company and Mr. Alfers amended his employment agreement, at the Company’s request, to extend the vesting of 6,000,000 shares of restricted stock until March 14, 2014. These shares originally would have vested on February 9, 2013. | ||||||||||||||||||||||
All of the proceeds from the Series D Preferred Stock Purchase Price were used to prepay (i) $800,000 of that certain senior secured convertible promissory note to Platinum and (ii) $200,000 of that certain senior secured convertible promissory note to Lakewood (see Note 7). | ||||||||||||||||||||||
On June 18, 2012, the Company granted 3,000,000 shares of restricted common stock to a director of the Company that were valued at fair market value on the date of grant at approximately $0.34 per share. These restricted shares vest one third at the end of each of the first three years following the date of issuance. | ||||||||||||||||||||||
In accordance with ASC 505, “Equity - Dividends and Stock Splits”, the Series D Preferred Stock was considered to have an embedded beneficial conversion feature (ECF) because the conversion price was less than the fair value of the Company’s common stock. This Series D Preferred Stock was fully convertible at the issuance date, therefore a portion of proceeds allocated to the Series D Preferred Stock of $1,000,000 was determined to be the value of the beneficial conversion feature and was recorded as a preferred deemed dividend. In connection with the initial sales of the Series D Preferred Stock, the initial estimated fair values allocated to the ECF were $226,629 and the fair value allocated to the warrants of $773,371 was recorded as a preferred deemed dividend on February 23, 2012. | ||||||||||||||||||||||
On June 18, 2012, the Company issued 5,000,000 shares of restricted common stock to Mr. Alfers. On February 8, 2013, the Company and Mr. Alfers amended, at the Company’s request, the related restricted stock agreement to extend the vesting schedule of the first one third of the shares until March 14, 2014. These shares originally would have vested on June 18, 2014. | ||||||||||||||||||||||
On November 21, 2012, the Company issued 200,000 shares of restricted common stock to Eric Alexander, the Company’s Vice President of Finance and Controller. On February 8, 2013, the Company and Mr. Alexander amended, at the Company’s request, his restricted stock agreement to extend vesting of the first third of his grant until March 14, 2014. These shares originally would have vested on November 30, 2013. | The assumptions used valuing the warrants include: | |||||||||||||||||||||
On February 12, 2013, the Company granted an aggregate of 6,700,000 shares of restricted common stock to a director of the Company and certain employees and consultants of the Company, which were valued at fair market value on the date of grant at approximately $3,417,000 or $0.51 per share. These restricted shares vest one third at the end of each of the first three years from the date of issuance. | Risk free interest rate (annual) | 0.88 | % | |||||||||||||||||||
Expected volatility | 110 | % | ||||||||||||||||||||
During the nine months ended September 30, 2013, the Company recorded stock-based compensation expense in connection with restricted stock awards of $3,475,523. At September 30, 2013, there was a total of $3,904,349 unrecognized compensation expense in connection with restricted stock awards. | Expected life | 5 Years | ||||||||||||||||||||
Assumed dividends | none | |||||||||||||||||||||
Common Stock Options | ||||||||||||||||||||||
In connection with the March Note Assignment and Assumption Agreement, $1,100,000 of the notes were amended to allow for their conversion into the Company’s Series D Preferred Stock equivalent to the stated value of the Series D Preferred Stock. As such, the Company issued a total of 1,100,000 shares of Series D Preferred Stock and an additional 227,586 shares of Series D Preferred Stock in consideration for the conversion of this convertible promissory note into shares of Series D Preferred Stock (see Note 7). | ||||||||||||||||||||||
A summary of the Company’s outstanding stock options as of September 30, 2013 and changes during the period then ended are presented below: | ||||||||||||||||||||||
On March 30, 2012, the Company also amended the $2.4 million note assigned to FGIT to allow for the conversion of this note into the Company’s Series D Preferred Stock at $1.00 per share. FGIT agreed to fully convert this note (together with accrued and unpaid interest thereon) into 2,421,600 shares of Series D Preferred Stock and an additional 501,021 shares of Series D Preferred Stock in consideration for the conversion of this note into shares of Series D Preferred Stock (see Note 7). | ||||||||||||||||||||||
Number of | Weighted | Weighted | ||||||||||||||||||||
Options | Average | Average | On March 30, 2012, the Company amended a convertible promissory note to allow for the conversion of such note into the Company’s Series D Preferred Stock at $1.00 per share. The holder of this note agreed to fully convert this note (together with accrued and unpaid interest thereon) into 1,024,744 shares of Series D Preferred Stock and an additional 212,017 shares of Series D Preferred Stock in consideration for the conversion of this Note into shares of Series D Preferred Stock (see Note 8). | |||||||||||||||||||
Exercise | Remaining | |||||||||||||||||||||
Price | Contractual | The Company recorded loss from extinguishment of debts for a total of $2,436,888 in connection with the note conversions and preferred deemed dividend of $537,499 for the year ended December 31, 2012 in connection with the issuance of the additional shares of Series D Preferred Stock discussed above. | ||||||||||||||||||||
Life | ||||||||||||||||||||||
(Years) | On March 30, 2012, the holder of the 400,000 shares of the Company’s Series D Preferred Stock converted his shares of Series D Preferred Stock into 1,153,143 shares of the Company’s Common Stock (which included accrued and unpaid dividends thereon). The Company recorded preferred deemed dividend of $79,278 in connection with the conversion of the Series D Preferred Stock into the Company’s common stock at an adjusted conversion price of $0.35 per share. | |||||||||||||||||||||
Balance at December 31, 2012 | 35,298,000 | $ | 0.46 | 9.11 | ||||||||||||||||||
Granted | 350,000 | 0.42 | 3.83 | In June 2012, 6,086,968 shares of Series D Preferred Stock were converted into 19,021,775 shares of the Company’s common stock in June 2012. Additionally, as consideration for agreeing to convert its Series C Preferred Stock and Series D Preferred Stock, the Company issued an additional 3,000,000 shares of common stock to the preferred shareholder and such shares were valued at the fair market value on the date of grant at $0.36 per share or $1,086,000 and have been included in preferred stock deemed dividend. | ||||||||||||||||||
Exercised | — | — | — | |||||||||||||||||||
Forfeited | (2,248,000 | ) | 1.3 | 7 | The Company recognized preferred stock dividends of $21,150 related to the Series D Preferred Stock during the year ended December 31, 2012. Accrued dividends amounted to $17,550 as of December 31, 2012. As of December 31, 2012, there were 7,500,000 shares of Series D Preferred Stock authorized and none issued and outstanding. | |||||||||||||||||
Cancelled | — | — | — | |||||||||||||||||||
Balance at September 30, 2013 | 33,400,000 | 0.4 | 8.43 | |||||||||||||||||||
Options exercisable at end of period | 31,600,000 | $ | 0.4 | Common Stock | ||||||||||||||||||
Options expected to vest through December 31, 2014 | 1,800,000 | |||||||||||||||||||||
Weighted average fair value of options granted during the period | $ | 0.25 | In February 2011, the Company issued 200,000 shares of the Company’s common stock in connection with a one year public relations and consulting agreement. The Company valued these common shares at the fair market value on the date of grant at $1.40 per share or $280,000. In November 2011, the Company and the consultant agreed to terminate such agreement in consideration for (i) a cash payment of $50,000 and (iii) the issuance of 50,000 shares of the Corporation’s common stock. The Company valued the 50,000 common shares at the fair market value on the date of grant at $0.68 per share or $34,000. Accordingly, the Company recognized stock based consulting expense of $314,000 during the year ended December 31, 2011. | |||||||||||||||||||
Stock options outstanding at September 30, 2013 as disclosed in the above table have approximately $731,700 of intrinsic value at the end of the period. | In March 2011, the Company entered into a Separation Agreement and General Release (the “Settlement Agreement”) with the former president of the Company. Pursuant to the Settlement Agreement, the former President, Mr. Cohen returned 900,000 shares of the Company’s common stock for cancellation and sold 1,200,000 shares of the Company’s common stock he owned to one or more purchasers who are accredited investors on the closing date (the “Closing”). At the Closing, the proceeds from the private sale of the 1,200,000 shares were distributed for payment and reimbursement of various fees and obligations outstanding to the Company, a certain vendor, the Member of the Company’s Board of Directors and $115,000 to Mr. Cohen. The Closing occurred in April 2011. The Company received a total of $77,250 for reimbursement of certain costs and expenses on the closing date pursuant to this agreement and such amount has been applied against live events expenses in the accompanying consolidated statements of operations. In addition, Mr. Cohen’s employment agreement was terminated and the parties exchanged releases. In addition, at the Closing, the Company and Mr. Cohen agreed to: (i) assignments of certain boxing promotional rights agreements (subject to any required consents or approvals), and (ii) various profit sharing agreements with respect to certain of the boxing promotional rights agreements under which Mr. Cohen may elect to continue as the promoter of the boxers named therein. In connection with the return of the 900,000 shares of common stock, the Company valued the cancelled shares at $59,612 which represents the carrying amount of the assigned promotional advances and was allocated to retained earnings as a result of the Separation agreement entered into between the Company and the former president of the Company on March 28, 2011 in accordance with ASC 505-30 “Treasury Stock”. | |||||||||||||||||||||
On September 29, 2010, the Company’s Board of Directors and stockholders adopted the 2010 Stock Incentive Plan (the “2010 Plan”). Under the 2010 Plan, options may be granted which are intended to qualify as Incentive Stock Options under Section 422 of the Internal Revenue Code of 1986 (the “Code”) or which are not intended to qualify as Incentive Stock Options thereunder. In addition, direct grants of stock or restricted stock may be awarded. The 2010 Plan has reserved 2,800,000 shares of common stock for issuance, and there are currently outstanding stock-based awards to purchase 2,150,000 shares of the Company’s common stock under the 2010 Plan. | In April 2011, the Company sold an aggregate of 410,000 shares of common stock at a purchase price of $0.60 per share which generated gross proceeds of $246,000. | |||||||||||||||||||||
On February 9, 2012, the holders of approximately 53% of the outstanding shares of the Company’s common stock voted in favor of the adoption of the Company’s 2012 Equity Incentive Plan (the “ 2012 Plan”). The Board approved the 2012 Plan on February 9, 2012, which reserves 40,000,000 shares of common stock for issuance thereunder in the form of qualified incentive stock options, non-qualified stock options and restricted stock grants, issuable to the Company’s officers, directors, employees and consultants. As of September 30, 2013, there are no remaining available stock-based awards for future issuances under the 2012 Plan. | On July 22, 2011, the Company issued 76,095,215 shares of its common stock pursuant to an asset purchase agreement entered into between the Company, the Company’s wholly-owned subsidiary, Acquisition Sub, and Continental. The purchase considerations included 76,095,215 shares of the Company’s stock and the issuance of 41,566,999 stock warrants and 2,248,000 stock options and were valued at $14,857,676 (see Note 3). The Company accounted the value under ASC 805-50-30-2 “Business Combinations” whereby if the consideration is not in the form of cash, the measurement is based on either the cost which shall be measured based on the fair value of the consideration given or the fair value of the assets (or net assets) acquired, whichever is more clearly evident and thus more reliably measurable. The Company deemed that the fair value of the net asset of Continental amounting to $14,857,676 is more clearly evident and more reliable measurement basis. | |||||||||||||||||||||
On February 12, 2013, the Board approved the adoption of a 2013 Equity Incentive Plan (the “2013 Plan”). The 2013 Plan provides for the grant of incentive stock options, nonqualified stock options, restricted stock, restricted stock units, stock appreciation rights and other types of stock-based awards to the Company’s employees, officers, directors and consultants. Pursuant to the terms of the 2013 Plan, either the Board or a board committee is authorized to administer the plan, including by determining which eligible participants will receive awards, the number of shares of common stock subject to the awards and the terms and conditions of such awards. Up to 40 million shares of common stock are issuable pursuant to awards under the 2013 Plan. As of September 30, 2013, there were 33,300,000 remaining available stock-based awards for future issuances under the 2013 Plan. | On September 2, 2011, the Company, Empire, EXCX, Capital Hoedown, Inc. and Sheldon Finkel, the Company’s former Chief Executive Officer and former Co-Chairman of the Board of Directors (“Executive”), entered into a Separation Agreement (the “Agreement”) under which Executive resigned from all positions with the Company and each of its subsidiaries and affiliates. Pursuant to the Agreement, Executive agreed to the following: | |||||||||||||||||||||
In March 2013, the Company granted 150,000 3-year options to purchase shares of common stock exercisable at $0.44 per share to consultants of the Company pursuant to a consulting agreement for business advisory services. The stock options fully vested by May 31, 2013. The 150,000 options were valued on the grant date at approximately $0.25 per option or a total of $38,058 using a Black-Scholes option pricing model with the following assumptions: stock price of $0.44 per share, volatility of 92%, expected term of 3 years, no dividend yield and a risk free interest rate of 0.35%. | ||||||||||||||||||||||
i. | Cancellation of 750,000 shares of common stock, par value $0.001 per share, of the Company’s Common Stock owned by Executive; and | |||||||||||||||||||||
In March 2013, the Company extended the exercise period of stock options to purchase 500,000 shares of common stock previously granted to the Company’s former Vice President of Finance and Administration and director on June 18, 2012. The exercise period was extended to December 31, 2013 from March 31, 2013. The Company valued the extension of the option period utilizing the Black-Scholes option pricing model using the following assumptions: estimated volatility of 92%, risk-free interest rate of 0.14%, no dividend yield, and an expected life of 0.75 years, and recorded $35,079 as stock based compensation during the nine months ended September 30, 2013. | ii. | All unvested shares and options of the Company shall be cancelled and returned to the Company, other than outstanding options awarded to Executive to purchase 400,000 shares of Common Stock and additionally, Executive shall be entitled to retain 600,000 shares of Common Stock presently owned (the options to purchase 400,000 shares of Common Stock and 600,000 shares of Common Stock, the “Executive Retained Securities”). The Executive Retained Securities shall secure for collection of certain outstanding receivables of approximately $112,500, and thereafter be pledged to Lenders as collateral security for the payment by the Executive of $150,000 of indebtedness to Lenders in accordance with a payment schedule set forth in the Agreement; and | ||||||||||||||||||||
iii. | 1,950,000 shares of Executive’s Common Stock shall be sold to Michael Brauser, one of the Lenders; and | |||||||||||||||||||||
In August 2013, the Company granted 200,000 5-year options to purchase shares of common stock exercisable at $0.40 per share to consultants of the Company pursuant to a consulting agreement for investor relations services. The stock options vest immediately and were valued on the grant date at approximately $0.23 per option or a total of $45,080 using a Black-Scholes option pricing model with the following assumptions: stock price of $0.35 per share, volatility of 86%, expected term of 5 years, no dividend yield and a risk free interest rate of 1.57%. | iv. | That certain Letter of Credit issued by Signature Bank, NA, (the “Letter of Credit”) pledged to Lenders as collateral security for the Loan Agreement, shall be assigned by Executive to the Lenders to repay the obligations under the Credit facility agreement. | ||||||||||||||||||||
During the nine months ended September 30, 2013, the Company recorded stock based compensation expense related to options of $323,750. At September 30, 2013, there was a total of $156,651 of unrecognized compensation expense related to non-vested options. | Additionally, the employment agreement of Executive was terminated upon execution of the Separation Agreement. The Executive and the Companies agreed to release each other from any and all claims and further obligations. Pursuant to the Agreement, Sheldon Finkel agreed to return 750,000 shares of common stock. The Company valued and recorded the cancelled shares at par value or $75 against additional paid in capital. | |||||||||||||||||||||
Common Stock Warrants | Between September 2011 and October 2011, the Company sold $1,718,000 of units pursuant to subscription agreements (the “Subscription Agreements”) for an aggregate sale of 3,436,000 units, at a purchase price of $0.50 per unit. Each unit consists of: (i) one share of common stock and (ii) a two year warrant to purchase 50% percent of the number of shares of common stock (1,718,000 warrants) at an exercise price of $0.60 per share. The warrants may be exercised until the second anniversary of their issuance at a cash exercise price of $0.60 per share, subject to adjustment. The warrants may be exercised on a cashless basis if at any time at 100% of the closing price for the common stock on the business day immediately prior to the exercise. In September 2011, the Company issued 866,065 shares of common stock in connection with the exercise of these 1,678,000 warrants on a cashless basis. | |||||||||||||||||||||
A summary of the Company’s outstanding stock warrants as of September 30, 2013 and changes during the period then ended are presented below: | Between October 2011 and December 2011, the Company sold $1,830,000 of units pursuant to subscription agreements for an aggregate sale of 4,575,000 units. Additionally, on November 29, 2011, the holder of the Company’s 6% note payable converted $611,750 principal balance of the note into an aggregate of 1,529,375 of units (see Note 9). Each unit was sold for a purchase price of $0.40 per unit and consists of: (i) one share of common stock and (ii) a two-year warrant to purchase fifty percent of the number of shares of common stock (3,052,188 warrants) purchased at an exercise price of $0.60 per share, subject to adjustment upon the occurrence of certain events. The warrants may be exercised at any time on a cashless basis at 100% of the closing price for the common stock on the business day immediately prior to the date of exercise. During the year ended December 31, 2011, the Company paid placement agent fees of $370,583 in cash to broker-dealers in connection with the sale of the units above. | |||||||||||||||||||||
Number of | Weighted | Weighted | In October 2011, the Company issued 500,000 shares of the Company’s common stock in connection with a public and investor relations agreement. The Company valued these common shares at the fair market value on the date of grant at $0.971 per share or $485,500. Accordingly, the Company recognized stock based consulting expense of $485,500 during the year ended December 31, 2011. | |||||||||||||||||||
Warrants | Average | Average | ||||||||||||||||||||
Exercise | Remaining | |||||||||||||||||||||
Price | Contractual | In December 2011, the Company issued 600,000 shares of the Company’s common stock in connection with an advisory and consulting agreement. The consultant previously acted as a placement agent of the Parent Company whereby the consultant received warrants to purchase Continental’s common stock. Such warrants were assumed by the Company pursuant to the asset purchase agreement entered into with Continental. Additionally, the consultant agreed to cancel 1,056,046 assumed warrants and waive any right to receive the Company’s warrants. The Company valued these common shares at the fair market value on the date of grant at $0.53 per share or $318,000. Accordingly, the Company recognized stock based consulting expense of $318,000 during the year ended December 31, 2011. | ||||||||||||||||||||
Life | ||||||||||||||||||||||
(Years) | Following the consummation of the asset purchase agreement with Continental, certain holders of Continental’s warrants that were received in connection with the private placement of Continental securities (the “Continental Offering”) asserted certain rights against the Company under Section 5(f) of the Continental Warrants (the “Put Right”), which the Company disputed. On October 3, 2011, the Company, Continental and each of the holders of the Continental Warrants that exercised their Put Right, entered into an Agreement and Release (the “Release”) in which the Company agreed to issue to such holder 2 shares of the Company’s common stock (the “Additional Stock”) for every $1.00 invested in the Continental Offering in exchange for cancellation of the Continental Warrants and waiver of ratchet anti-dilution protection from future offerings. A total of 5,350,000 shares were issued and a total of 4,280,000 stock warrants to purchase shares of the Company’s common stock (equivalent to 5,350,000 Continental warrants) were cancelled in connection with the settlement of the Put Rights. The Company valued these common shares at the fair market value on the date of grant at $0.89 per share or $4,761,500. Accordingly, the Company recognized settlement expense of $4,761,500 during the year ended December 31, 2011. | |||||||||||||||||||||
Balance at December 31, 2012 | 16,255,779 | $ | 0.54 | 2.42 | ||||||||||||||||||
Granted | 13,435,590 | 0.4 | 3 | On November 18, 2011, the Company received an acknowledgment letter pursuant to which the beneficial owner of 500,000 shares of the common stock and a stock option agreement to purchase 600,000 shares of the Company’s common stock agreed, regardless of vesting, to cancel 450,000 shares of common stock and the termination of the 600,000 options. The Company valued and recorded the cancelled shares at par value or $45 against additional paid in capital. | ||||||||||||||||||
Cancelled | (3,446,748 | ) | 0.65 | 0.14 | ||||||||||||||||||
Forfeited | — | — | — | Between January 2012 and February 2012, the Company sold an aggregate of 2,237,500 units with net proceeds to the Company of $847,500. Each unit was sold for a purchase price of $0.40 per unit and consisted of: (i) one share of common stock and (ii) a two-year warrant to purchase 50% (1,118,750 warrants) of the number of shares of common stock purchased at an exercise price of $0.60 per share, subject to adjustment upon the occurrence of certain events. The warrants may be exercised at any time on a cashless basis at 100% of the closing price for the common stock on the business day immediately prior to the date of exercise. The Company has agreed to file a “resale” registration statement with the SEC covering all shares of common stock and shares of common stock underlying the warrants (including as issued to placement agents) within 60 days of the final closing date of the sale of any units and to maintain the effectiveness of the registration statement until all securities have been sold or are otherwise able to be sold pursuant to Rule 144. The Company has agreed to use its reasonable best efforts to have the registration statement declared effective within 120 days of the final closing on the sale of units. | ||||||||||||||||||
Exercised | — | — | — | |||||||||||||||||||
Balance at September 30, 2013 | 26,244,621 | $ | 0.45 | 2.47 | The Company is obligated to pay to investors a fee of one (1%) per month in cash for every thirty day period up to a maximum of six (6%) percent, (i) that the registration statement has not been filed after the filing date, and (ii) following the effectiveness date that the registration statement has not been declared effective; provided, however, that the Company shall not be obligated to pay any such liquidated damages if the Company is unable to fulfill its registration obligations as a result of rules, regulations, positions or releases issued or actions taken by the SEC pursuant to its authority with respect to “Rule 415”, provided the Company registers at such time the maximum number of shares of common stock permissible upon consultation with the staff of the SEC. | |||||||||||||||||
Warrants exercisable at September 30, 2013 | 26,244,621 | $ | 0.45 | 2.47 | ||||||||||||||||||
In August 2012, the Company entered into waiver agreements with majority of the investors who purchased units pursuant to subscription agreements dated between September 2011 and February 2012 whereby the Company agreed to register the shares of common stock underlying the units with the SEC. The waiver agreement irrevocably and unconditionally waives the liquidated damages in cash or kind related to any failure by the Company to cause the registration statement to be filed on or before a designated filing date or declared effective by the SEC on or before the effectiveness date. Furthermore, the shares of common stock that would be covered by the above discussed registration statement are no longer considered “Registrable Securities” as such term is defined in the governing Registration Rights Agreement and therefore the Company believes it no longer has any obligation under such Registration Rights Agreement to register such shares. | ||||||||||||||||||||||
Weighted average fair value of warrants granted during the period | $ | 0.17 | ||||||||||||||||||||
In April 2012, the Company sold an aggregate 4,385,716 shares of common stock to certain investors for an aggregate purchase price of $1,535,000 or a purchase price of $0.35 per share. | ||||||||||||||||||||||
In May 2013, the Company paid a total of $45,484 in connection with the cancellation of 3,446,748 warrants to acquire the Company’s common stock. This was reflected as warrant settlement expense in the Company’s Statement of Operations during the nine months ended September 30, 2013. | ||||||||||||||||||||||
On June 19, 2012, the Company issued 12,500,000 shares of its common stock to certain investors in a private placement for an aggregate purchase price of $4,000,000 or a purchase price of $0.32 per share. In connection with the private placement, the Company paid fees of $75,000 and issued 234,375 shares of its common stock to a placement agent as consideration for certain placement agent services. In connection with the private placement, the Company and the purchasers entered into a registration rights agreement dated June 19, 2012 which provides the purchasers certain rights relating to the registration of the common stock under the Securities Act. Pursuant to the registration rights agreement, at any time after December 19, 2012, the purchasers have the right to require the Company to file a registration statement under the Securities Act to register the common stock. In addition, if the Company registers any of its equity securities under the Securities Act, the Company is required to give the purchasers prompt notice of its intention to do so, and the purchasers may request the common stock to be included in the registration statement. | ||||||||||||||||||||||
In August 2013, as part of the Series E Preferred Stock private placement, the Company issued a total of 13,435,590 3-year warrant to purchase shares of the Company’s common stock at an exercise price of $0.40 per share. | ||||||||||||||||||||||
On February 9, 2012, the Board of Directors of the Company appointed Stephen Alfers as Chairman and Chief Executive Officer of the Company. Simultaneously with Mr. Alfers’ appointment, Barry Honig resigned from his position as Chairman of the Company but remains a member of the Board of Directors. On February 9, 2012, the Company entered into an employment agreement with Mr. Alfers, pursuant to which Mr. Alfers shall serve as the Chief Executive Officer of the Company until December 31, 2015, subject to renewal. Pursuant to the terms of his employment agreement, Mr. Alfers will be entitled to a base salary of $250,000 per year and was issued (i) 12,000,000 shares of the Company’s restricted common stock and (ii) an option to purchase 10,000,000 shares of the Company’s common stock with a term of ten years and an exercise price equal to the closing price of the Company’s common stock on the trading day immediately prior to the date of issuance of such grant or $0.49 which shall be vested in full on the effective date. | ||||||||||||||||||||||
Vesting of restricted stock grant is as follows: | ||||||||||||||||||||||
i. | 6,000,000 shares of restricted common stock (less any shares sooner vested upon registration of 3,000,000 shares of the restricted common stock with the Securities Exchange Commission) shall vest on the earlier of (a) such date that the Company consummates a secondary public offering of its securities in which the Company receives gross proceeds of at least $7,000,000 or (b) one (1) year from the effective date of the employment agreement; | |||||||||||||||||||||
ii. | 3,000,000 shares of restricted common stock shall vest two (2) years from the effective date of the employment agreement; and | |||||||||||||||||||||
iii. | 3,000,000 shares of restricted common stock shall vest three (3) years from the effective date of the employment agreement. | |||||||||||||||||||||
Additionally, during the year ended December 31, 2012, the Company recorded stock-based compensation expense of $3,817,917 in connection with the vested restricted stock grants. At December 31, 2012, there was a total of $2,062,083 of unrecognized compensation expense related to these non-vested restricted stock grants arrangement. | ||||||||||||||||||||||
On February 23, 2012, the Company issued 2 million common shares to the original holders of the senior secured promissory note in connection with the Note Modification Agreement (see Note 7). Accordingly, the Company valued the 2 million common shares at the fair market value on the date of grant at $0.489 per share or $978,000 and was recognized as interest expense during the year ended December 31 2012 in connection with the Note Modification Agreement. | ||||||||||||||||||||||
On March 30, 2012, in connection with the March Note Assignment and Assumption Agreement (see Note 7), the various assignees agreed to convert an aggregate principal amount of $1,892,014 into 5,405,754 shares of the Company’s Common Stock at a conversion price of $0.35 per share. Such various assignees received an additional 1,118,432 shares of the Company’s Common Stock as consideration for the note conversion and were valued at the fair market value on the date of grant at $0.55 per share or $615,138 and have been included in loss from extinguishment of debts for the year ended December 31, 2012. | ||||||||||||||||||||||
On March 30, 2012, the original holders of the senior secured notes agreed to convert $262,500 of the notes in exchange for an aggregate of 750,000 shares of the Company’s common stock (see Note 7). The Company accounted the reduction of the conversion price from $0.40 to $0.35 per share and such conversion under ASC 470-20-40 “Debt with Conversion and Other Options” and accordingly, for the year ended December 31, 2012, recorded loss from extinguishment of debts of $51,563 which is equal to the fair value of shares issued in excess of the fair value issuable pursuant to the original conversion terms. | ||||||||||||||||||||||
On March 30, 2012, the holder of the assigned $1.6 million note (together with accrued and unpaid interest of $14,400) agreed to convert such note into 4,612,571 shares of common stock at a conversion price of $0.35 per share and an additional 954,325 shares of the Company’s common stock as consideration for the note conversion. The Company accounted for the reduction of the conversion price from $0.40 to $0.35 per share and such conversion under ASC 470-20-40 “Debt with Conversion and Other Options” and accordingly recorded loss from extinguishment of debts of $317,114 which is equal to the fair value of shares issued in excess of the fair value issuable pursuant to the original conversion terms. The additional 954,325 shares of common stock were valued at the fair market value on the date of grant at $0.55 per share or $524,878 and have been included in loss from extinguishment of debts for the year ended December 31, 2012. | ||||||||||||||||||||||
On March 20, 2012, the Company issued 250,000 shares of common stock to a third party in consideration for payment of legal services rendered of $129,028 and Continental’s accrued legal fees of $170,614 for a total amount of $299,642. The Company valued these common shares for $299,642 (see Note 11). | ||||||||||||||||||||||
In March 2012, the Company issued 200,000 shares of common stock to a consultant in consideration for payment of public relations services rendered. The Company recorded stock based consulting expense and valued these common shares at the fair market value on the date of grants at approximately $0.55 per share or $110,000 for the year ended December 31, 2012. | ||||||||||||||||||||||
In March 2012, the Company issued an aggregate of 6,229,718 shares of common stock in connection with the exercise of the 11,399,150 stock warrants on a cashless basis. The Company valued these common shares at par value. | ||||||||||||||||||||||
On February 23, 2012, a majority of the Company’s outstanding voting capital stock authorized by written consent, in lieu of a special meeting of the Company’s stockholders, the Company to effectuate a reverse stock split at a ratio not less than two-for-one and not greater than fifteen-for-one, with the exact ratio to be set and the amendment to the Company’s Articles of Incorporation to be filed at the discretion of the Company’s Board of Directors. Currently, the Company’s Board has not set an exact ratio for the reverse stock split. | ||||||||||||||||||||||
On April 27, 2012, the Company issued 50,000 shares of common stock to a consultant in consideration for certain consulting services rendered. The Company had accrued such consulting expense prior to issuance amounting to $45,000. The Company valued these common shares at the fair market value on the date of grants at approximately $0.90 per share or $45,000. | ||||||||||||||||||||||
On April 5, 2012, the Company issued to Victoria Gold. and Victoria Resources (US) Inc. 10 million shares of the Company’s common stock, and a 2 year warrant to purchase 5 million shares of Common Stock at a purchase price of $0.60 per share in connection with the acquisition of rights to approximately 13,300 acres of mining claims and private lands adjacent to the Company’s landholdings at the Relief Canyon Mine in Pershing County, Nevada (see Note 5). The Company valued the 10 million common shares at the fair market value on the date of grants at approximately $0.46 per share or $4,600,000. For the year ended December 31, 2012, the Company recorded the value of such shares and warrants into mineral rights as reflected in the accompanying consolidated balance sheets. | ||||||||||||||||||||||
As previously disclosed, on July 22, 2011, the Company purchased substantially all of the assets of Continental in consideration for (i) 8 shares of the Company’s common stock for every 10 shares of Common Stock of Continental outstanding; (ii) the assumption by the Company of the outstanding warrants to purchase shares of Continental’s common stock at a ratio of one warrant (the “Company Warrants”) to purchase 8 shares of the Company’s Common Stock for every Continental Warrant to purchase 10 shares of Continental’s common stock; and (iii) the assumption of Continental’s 2010 Equity Incentive Plan and all options granted and issued thereunder at a ratio of one option to purchase 8 shares of the Company Common Stock for every option to purchase 10 shares of Continental’s common stock outstanding. Between April 2012 and June 2012, the Company issued an aggregate of 9,729,285 shares of its common stock to holders of Company Warrants in consideration for the cancellation of such Company Warrants. Additionally, such holders agreed to the elimination of certain most favored nations provisions or price protection associated with the shares of Continental’s common stock issued in connection with the Continental Warrants (the “Warrant Cancellation Transaction”). The Company issued 9,729,285 shares of the Company’s common stock at a ratio of 300 shares for every 1,000 Company Warrants held. An aggregate of 32,430,954 Company Warrants were cancelled as a result of the Warrant Cancellation Transaction. Accordingly, the Company valued the 9,729,285 common shares at the fair market value on the date of grants ranging between $0.29 to $0.505 per share or $4,883,196. This was reflected as a settlement expense in the Company’s Statement of Operations during the year ended December 31, 2012. | ||||||||||||||||||||||
In connection with the Merger Agreement between the Company, Red Battle, and Valor Gold, the Company cancelled 1,750,000 shares of the Company’s common stock (see Note 3). The Company valued these cancelled common shares at par value. | ||||||||||||||||||||||
On June 18, 2012, the Company granted an aggregate of 8,000,000 shares of restricted common stock to the Company’s CEO and a director of the Company and which were valued at fair market value on the date of grant at approximately $0.34 per share. Such restricted shares shall vests one third at the end of each three years from the date of issuance. Additionally, during the year ended December 31, 2012, the Company recorded stock-based compensation expense of $886,519 in connection with the vested restricted stock grants. At December 31, 2012, there was a total of $1,833,481 of unrecognized compensation expense related to these non-vested restricted stock grants arrangement. | ||||||||||||||||||||||
Additionally, on June 18, 2012, the Company issued 1,000,000 shares of restricted common stock to the Company’s former Vice President of Finance and Administration and director, which were valued at fair market value on the date of grant at approximately $0.34 per share and vest either (i) in three equal annual installments beginning one year from the date of issuance, or, if earlier, (ii) upon the termination of his employment by, and services as a director of the Company without cause, or for reasons other than death, disability, normal or early retirement or good reason, in which case the restricted common stock shall vest as of the later of the dates of his termination of employment by the Company and his termination of services as a director of the Company. The former Vice President of Finance and Administration and director resigned from his position as a director of the Company on November 20, 2012 and as an employee of the Company on December 31, 2012, causing his restricted common stock to vest. During the year ended December 31, 2012, the Company recorded stock-based compensation expense of $340,000 in connection with the vested restricted stock grants. | ||||||||||||||||||||||
On November 21, 2012, the Company granted 200,000 shares of restricted common stock to the Company’s Vice President of Finance and Controller and which were valued at fair market value on the date of grant at approximately $0.35 per share. Such restricted shares shall vest as follows: 33.33% on November 30, 2013, 33.33% on November 30, 2014, and 33.34% on November 30, 2015. During the year ended December 31, 2012, the Company recorded stock-based compensation expense of $3,612 in connection with the vested restricted stock grants. At December 31, 2012, there was a total of $67,308 of unrecognized compensation expense related to these non-vested restricted stock grants arrangement. | ||||||||||||||||||||||
On December 3, 2012, the Company completed a private placement to several accredited investors (the “Purchasers”) for 9,469,548 shares of its common stock and 3,787,819 warrants for aggregate gross proceeds of $3,124,950. The purchase price for one share of common stock and a warrant to acquire 0.40 of a share of common stock was $0.33. The warrants are exercisable immediately at an exercise price of $0.50 per share and will expire on December 7, 2015. The warrant contains customary adjustment provisions in the event of dividends or recapitalizations. In addition, the Company paid aggregate consideration of 303,030 shares of the Company’s common stock and 121,212 warrants, in lieu of $100,000 as consideration for certain placement agent services in connection with the private placement. In connection with the issuance of the 303,030 shares to the placement agent, the Company valued these common shares at par value. | ||||||||||||||||||||||
Common Stock Options | ||||||||||||||||||||||
A summary of the stock options as of December 31, 2012 and 2011 and changes during the period are presented below: | ||||||||||||||||||||||
Number of Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (Years) | ||||||||||||||||||||
Balance at December 31, 2010 | 2,850,000 | $ | 0.6 | 9.45 | ||||||||||||||||||
Granted | 2,648,000 | 1.36 | 8.96 | |||||||||||||||||||
Exercised | - | - | - | |||||||||||||||||||
Forfeited | (1,950,000 | ) | 0.41 | 8.84 | ||||||||||||||||||
Cancelled | - | - | - | |||||||||||||||||||
Balance at December 31, 2011 | 3,548,000 | 1.11 | 8.45 | |||||||||||||||||||
Granted | 32,250,000 | 0.39 | 10 | |||||||||||||||||||
Exercised | - | - | - | |||||||||||||||||||
Forfeited | (500,000 | ) | 0.81 | 8.59 | ||||||||||||||||||
Cancelled | - | - | - | |||||||||||||||||||
Balance outstanding at December 31, 2012 | 35,298,000 | $ | 0.46 | 9.11 | ||||||||||||||||||
Options exercisable at end of year | 33,055,067 | $ | 0.46 | |||||||||||||||||||
Options expected to vest | 2,242,933 | |||||||||||||||||||||
Weighted average fair value of options granted during the period | $ | 0.36 | ||||||||||||||||||||
Stock options outstanding at December 31, 2012 as disclosed in the above table have approximately $943,000 intrinsic value at the end of the year. | ||||||||||||||||||||||
On September 29, 2010, the Company’s Board of Directors and stockholders adopted the 2010 Stock Incentive Plan (the “2010 Plan”). Under the 2010 Plan, options may be granted which are intended to qualify as Incentive Stock Options under Section 422 of the Internal Revenue Code of 1986 (the "Code") or which are not intended to qualify as Incentive Stock Options thereunder. In addition, direct grants of stock or restricted stock may be awarded. The 2010 Plan has reserved 2,800,000 shares of common stock for issuance. Upon the closing of the Exchange, the Company had outstanding options to purchase 2,800,000 shares of the Company’s common stock under the 2010 Plan which represents an exchange of 2,800,000 options previously granted prior to the reverse merger and recapitalization with similar terms as discussed below. | ||||||||||||||||||||||
In connection with the Company’s 2010 Stock Incentive Plan (the “2010 Plan”), for the years ended December 31, 2012 and 2011, the Company recorded stock-based compensation expense of $93,080 and $584,903 respectively. At December 31, 2012, there was a total of $39,878 of unrecognized compensation expense related to these non-vested option-based compensation arrangements under the 2010 Plan. | ||||||||||||||||||||||
On May 31, 2011, pursuant to a termination acknowledgement letter, the Company agreed to grant a former employee 50,000 10-year options to purchase shares of common stock at $1.01 per share. The 50,000 options were valued on the grant date at $1.19 per option or a total of $59,500 using a Black-Scholes option pricing model with the following assumptions: stock price of $1.19 per share, volatility of 205%, expected term of 6.5 years, and a risk free interest rate of 3.05%. For the year ended December 31, 2011, the Company recorded stock-based compensation expense of $59,500. | ||||||||||||||||||||||
On July 22, 2011, the Company granted 2,248,000 stock options and warrants to purchase 41,566,999 shares of common stock pursuant to an asset purchase agreement entered into between the Company, Acquisition Sub and Continental (see Note 3). The 2,248,000 9-year options to purchase shares of common stock at $1.423 per share are subject to a vesting schedule based on the stock option holder's continued employment and services. For the years ended December 31, 2012 and 2011, the Company recognized stock based compensation of $1,260,423 and $706,281, respectively, which represent the portion of the vested replacement option awards attributable to post-combination services due to the assumption of the stock options of Continental which was accounted for under ASC 805-30-30-9 (“Acquirer Share-Based Payment Awards Exchanged for Awards Held by the Acquiree’s Employees). These options were valued on the grant date at $1.11 per option using a Black-Scholes option pricing model with the following assumptions: stock price of $1.10 per share, volatility of 196%, expected term of 10 years, and a risk free interest rate of 2.99%. At December 31, 2012, there was a total of $27,860 of unrecognized compensation expense related to these non-vested replacement option awards. | ||||||||||||||||||||||
During the year ended December 31, 2012 and 2011, 500,000 and 1,950,000 options, respectively, were forfeited in accordance with the termination of employee and consultant relationships. | ||||||||||||||||||||||
Common Stock Warrants | ||||||||||||||||||||||
A summary of the status of the Company's outstanding stock warrants as of December 31, 2012 and 2011 and changes during the period then ended is as follows: | ||||||||||||||||||||||
Number of Warrants | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (Years) | ||||||||||||||||||||
Balance at December 31, 2010 | - | $ | - | - | ||||||||||||||||||
Granted | 56,190,375 | 2.25 | 3.25 | |||||||||||||||||||
Cancelled | -5,336,045 | 2.84 | 4.4 | |||||||||||||||||||
Forfeited | -3,720,000 | 2.84 | - | |||||||||||||||||||
Exercised | -11,531,188 | 0.6 | 2 | |||||||||||||||||||
Balance at December 31, 2011 | 35,603,142 | $ | 2.64 | 3.94 | ||||||||||||||||||
Granted | 24,482,741 | 0.56 | 4.59 | |||||||||||||||||||
Cancelled | (32,430,954 | ) | 2.83 | 3.86 | ||||||||||||||||||
Forfeited | - | - | - | |||||||||||||||||||
Exercised | (11,399,150 | ) | 0.42 | 4.64 | ||||||||||||||||||
Balance at December 31, 2012 | 16,255,779 | $ | 0.54 | 2.42 | ||||||||||||||||||
Warrants exercisable at December 31, 2012 | 16,255,779 | $ | 0.54 | 2.42 | ||||||||||||||||||
Weighted average fair value of options granted during the year ended December 31, 2012 | $ | 0.46 | ||||||||||||||||||||
On July 22, 2011, the Company granted 2,248,000 stock options and warrants to purchase 41,566,999 shares of common stock pursuant to an asset purchase agreement entered into between the Company, Acquisition Sub, and Continental (see Note 3). The assumption of stock warrants was replaced with the Company’s 3,200,000 4.5-year warrants to purchase shares of common stock at $2.835 per share granted to an affiliated company and its assignees which are subject to a vesting schedule based on the warrant holder's continued services and the Company’s 38,366,999 (ranging from 5 months to 4.60 years) warrants to purchase shares of common stock at an exercise price of $2.835 which were related to private placement sale of the Company’s common stock. For the years ended December 31, 2012 and 2011, the Company recognized stock based compensation of $165,730 and $1,528,158, respectively, which represents the portion of the vested replacement warrants awards attributable to post-combination services due to the assumption of the stock warrants of Continental which was accounted for under ASC 805-30-30-9 (“Acquirer Share-Based Payment Awards Exchanged for Awards Held by the Acquiree’s Employees). These warrants were valued on the grant date at $1.11 per option using a Black-Scholes option pricing model with the following assumptions: stock price of $1.10 per share, volatility of 193%, expected term of 10 years, and a risk free interest rate of 1.56%. | ||||||||||||||||||||||
Between September 2011 and October 2011, the Company sold $1,718,000 of units pursuant to subscription agreements for an aggregate sale of 3,436,000 units at a purchase price of $0.50 per unit. Each unit consists of: (i) one share of common stock and (ii) a two year warrant to purchase 50% percent (1,718,000 warrants) of the number of shares of common stock at an exercise price of $0.60 per share. The warrants may be exercised until the second anniversary of their issuance at a cash exercise price of $0.60 per share, subject to adjustment. In September 2011, the Company issued 866,065 shares of common stock in connection with the exercise of these 1,678,000 stock warrants on a cashless basis. | ||||||||||||||||||||||
Between October 2011 and December 2011, the Company sold $1,830,000 of units pursuant to subscription agreements for an aggregate sale of 4,575,000 units. Additionally, on November 29, 2011, the holder of the Company’s 6% note payable converted $611,750 principal balance of the note into an aggregate of 1,529,375 of units (see Note 9). Each Unit was sold for a purchase price of $0.40 per unit and consists of: (i) one share of common stock and (ii) a two-year warrant to purchase fifty percent of the number of shares of common stock (3,052,188 warrants) purchased at an exercise price of $0.60 per share, subject to adjustment upon the occurrence of certain events. | ||||||||||||||||||||||
The warrants sold in the units above may be exercised at any time on a cashless basis at 100% of the closing price of the common stock on the business day immediately prior to the date of exercise. | ||||||||||||||||||||||
Following the consummation of the asset purchase agreement with Continental, certain holders of Continental’s warrants that were received in connection with the private placement of Continental securities (the “Continental Offering”) asserted certain rights against the Company under Section 5(f) of the Continental Warrants (the “Put Right”), which the Company disputed. On October 3, 2011, the Company, Continental and each of the holders of the Continental Warrants that exercised their Put Right, entered into an Agreement and Release (the “Release”) in which the Company agreed to issue to such holder 2 shares of the Company’s common stock (the “Additional Stock”) for every $1.00 invested in the Continental Offering in exchange for cancellation of the Continental Warrants and waiver of ratchet anti-dilution protection from future offerings. A total of 5,350,000 shares were issued and a total of 4,280,000 stock warrants to purchase shares of the Company’s common stock (equivalent to 5,350,000 Continental warrants) were cancelled in connection with the settlement of the Put Rights. | ||||||||||||||||||||||
In connection with an advisory and consulting agreement, in December 2011, the Company issued 600,000 shares of common stock to a consultant who previously acted as a placement agent of the Parent Company whereby the consultant received warrants to purchase Continental’s common stock. Such warrants were assumed by the Company pursuant to the asset purchase agreement entered into with Continental. Additionally, the consultant agreed to cancel 1,056,045 assumed warrants and waive any right to receive the Company’s warrants. | ||||||||||||||||||||||
Between January and February 2012, the Company sold an aggregate of 2,237,500 units with net proceeds to the Company of $847,500. Each unit was sold for a purchase price of $0.40 per unit and consisted of: (i) one share of common stock and (ii) a two-year warrant to purchase 50% (1,118,750 warrants) of the number of shares of common stock purchased at an exercise price of $0.60 per share, subject to adjustment upon the occurrence of certain events. The warrants may be exercised at any time on a cashless basis at 100% of the closing price for the common stock on the business day immediately prior to the date of exercise. In March 2012, the Company issued 336,974 shares of common stock in connection with the exercise of these 968,750 stock warrants on a cashless basis. | ||||||||||||||||||||||
On February 23, 2012, the Company entered into a Stock Purchase Agreement with two subscribers and sold 1,000,000 shares of the Series D Preferred Stock and an aggregate of 8,750,000 warrants to acquire shares of Common Stock for an aggregate purchase price of $1,000,000 (see Note 12 – Preferred Stock). On March 29, 2012, the Company issued 2,967,143 shares of common stock in connection with the exercise of 5,250,000 stock warrants on a cashless basis. | ||||||||||||||||||||||
On February 23, 2012, as previously discussed, in connection with a Note Modification Agreement, the Company issued warrants to purchase an aggregate of 4,144,320 shares of common stock to Platinum and warrants to purchase an aggregate of 1,036,080 shares of common stock to Lakewood (see Note 7). The warrants may be exercised at any time, in whole or in part, at an exercise price of $0.40 per share until the fifth anniversary of their issuance. The warrants may be exercised on a cashless basis at any time. In February 2012, the Company issued 2,925,601 shares of common stock in connection with the exercise of these 5,180,400 stock warrants on a cashless basis. | ||||||||||||||||||||||
On March 6, 2012, the Company issued a warrant to purchase 400,000 shares of the Company’s common stock at an exercise price equal to the market price of the Company’s common stock on the date of issuance or at $0.45 per share to a consultant in consideration for services rendered. The 400,000 warrants were valued on the grant date at approximately $0.41 per option or a total of $163,155 using a Black-Scholes option pricing model with the following assumptions: stock price of $0.45 per share, volatility of 110%, expected term of 10 years, and a risk free interest rate of 1.98%. For the year ended December 31, 2012, the Company recognized stock based consulting of $163,155. | ||||||||||||||||||||||
On April 5, 2012, the Company issued to Victoria Gold and Victoria Resources (US) Inc. 10 million shares of the Company’s common stock, and a 2 year warrant to purchase 5 million shares of common stock at a purchase price of $0.60 per share in connection with the acquisition of rights to approximately 13,300 acres of mining claims and private lands adjacent to the Company’s landholdings at the Relief Canyon Mine in Pershing County, Nevada (see Note 5). The 5 million warrants were valued on the grant date at approximately $0.22 per warrant or a total of $1,109,441 using a Black-Scholes option pricing model with the following assumptions: stock price of $0.46 per share, volatility of 105%, expected term of 2 years, and a risk free interest rate of 0.35%. For the year ended December 31, 2012, the Company recorded the value of such shares and warrants into mineral rights as reflected in the accompanying consolidated balance sheets. The warrant may be exercised in whole, or in part, at any time by means of a “cashless” exercise. In the event of an “Organic Change”, as defined in the warrant, the Company may elect to: (i) require the holder to exercise the warrant prior to the consummation of such Organic Change or (ii) secure from the person or entity purchasing such assets or the successor resulting from such Organic Change, a written agreement to deliver to the holder, in exchange for the warrant, a warrant of such acquiring or successor entity. | ||||||||||||||||||||||
On December 3, 2012, the Company completed a private placement to several accredited investors for 9,469,548 shares of its common stock and 3,787,819 warrants for aggregate gross proceeds of $3,124,950. The warrants are exercisable immediately at an exercise price of $0.50 per share and will expire on December 7, 2015. The warrant contains customary adjustment provisions in the event of dividends or recapitalizations. In addition, the Company paid aggregate consideration of 303,030 shares of the Company’s common stock and 121,212 warrants, in lieu of $100,000 as consideration for certain placement agent services in connection with the private placement. | ||||||||||||||||||||||
NET_LOSS_PER_COMMON_SHARE1
NET LOSS PER COMMON SHARE | 9 Months Ended | 12 Months Ended | ||||||||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | |||||||||||||||||||||
NET LOSS PER COMMON SHARE | ' | ' | ||||||||||||||||||||
Earnings Per Share [Text Block] | ' | ' | ||||||||||||||||||||
NOTE 10 — NET LOSS PER COMMON SHARE | ||||||||||||||||||||||
NOTE 13 — NET LOSS PER COMMON SHARE | ||||||||||||||||||||||
Net loss per common share is calculated in accordance with ASC Topic 260, “Earnings Per Share”. Basic loss per share is computed by dividing net loss available to common stockholder, adjusted for preferred dividends, by the weighted average number of shares of common stock outstanding during the period. The computation of diluted net loss per share does not include anti-dilutive common stock equivalents in the weighted average shares outstanding. The following table sets forth the computation of basic and diluted loss per share: | ||||||||||||||||||||||
Net loss per common share is calculated in accordance with ASC Topic 260, “Earnings Per Share”. Basic loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. The computation of diluted net loss per share does not include dilutive common stock equivalents in the weighted average shares outstanding as they would be anti-dilutive. | ||||||||||||||||||||||
For the Three | For the Three | For the Nine | For the Nine | |||||||||||||||||||
Months ended | Months ended | Months ended | Months ended | For the | For the | |||||||||||||||||
September 30, | September 30, | September 30, | September 30, | year ended | year ended | |||||||||||||||||
2013 | 2012 | 2013 | 2012 | December 31, 2012 | December 31, 2011 | |||||||||||||||||
Numerator: | Numerator: | |||||||||||||||||||||
Loss from continuing operations available to common stockholders | $ | (8,023,233 | ) | $ | (5,078,909 | ) | $ | (13,067,459 | ) | $ | (48,266,585 | ) | Loss from continuing operations | $ | (49,052,749 | ) | $ | (21,469,563 | ) | |||
Loss from discontinued operations | $ | — | $ | — | $ | — | $ | (50,298 | ) | Loss from discontinued operations | $ | (50,298 | ) | $ | (3,088,373 | ) | ||||||
Denominator: | Denominator: | |||||||||||||||||||||
Denominator for basic and diluted loss per share | 273,292,023 | 256,619,449 | 272,236,712 | 206,120,456 | Denominator for basic and diluted loss per share (weighted-average shares) | 219,530,283 | 70,372,421 | |||||||||||||||
(weighted-average shares) | ||||||||||||||||||||||
Loss per common share, basic and diluted: | ||||||||||||||||||||||
Loss per common share, basic and diluted: | Loss from continuing operations | $ | (0.22 | ) | $ | (0.31 | ) | |||||||||||||||
Loss from continuing operations | $ | (0.03 | ) | $ | (0.02 | ) | $ | (0.05 | ) | $ | (0.23 | ) | Loss from discontinued operations | $ | (0.00 | ) | $ | (0.04 | ) | |||
Loss from discontinued operations | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | ||||||||||
The following were excluded from the computation of diluted shares outstanding as they would have had an anti-dilutive impact on the Company’s loss from continuing operations and loss from discontinued operations. In periods where the Company has a net loss, all dilutive securities are excluded. | ||||||||||||||||||||||
The following were excluded from the computation of diluted shares outstanding as they would have had an anti-dilutive impact on the Company’s loss from continuing operations and loss from discontinued operations. In periods where the Company has a net loss, all dilutive securities are excluded. | ||||||||||||||||||||||
December 31, | December 31, | |||||||||||||||||||||
September 30, | September 30, | 2012 | 2011 | |||||||||||||||||||
2013 | 2012 | Common stock equivalents: | ||||||||||||||||||||
Common stock equivalents: | Stock options | 35,298,000 | 3,548,000 | |||||||||||||||||||
Stock options | 33,400,000 | 35,298,000 | Stock warrants | 16,255,779 | 35,603,142 | |||||||||||||||||
Stock warrants | 26,244,621 | 12,222,188 | Convertible preferred stock | — | 8,710,990 | |||||||||||||||||
Convertible preferred stock | 33,555,000 | — | Convertible promissory notes embedded conversion feature | — | 22,030,656 | |||||||||||||||||
93,199,621 | 47,520,188 | 51,553,779 | 69,892,788 | |||||||||||||||||||
DISCONTINUED_OPERATIONS1
DISCONTINUED OPERATIONS | 12 Months Ended | ||||||||
Dec. 31, 2012 | |||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ||||||||
DISCONTINUED OPERATIONS | ' | ||||||||
NOTE 14 – DISCONTINUED OPERATIONS | |||||||||
In September 2011, the Company decided to discontinue its sports and entertainment business and prior periods have been restated in the Company’s consolidated financial statements and related footnotes to conform to this presentation. On September 1, 2011, the Company disposed of its Empire subsidiary pursuant to a stock purchase agreement by and between the Company, Empire and CII. Prior to the purchase, CII was the owner of a 33 1/3% minority interest with Empire in Capital Hoedown, Inc., an Ontario corporation, formed to undertake an event held during August 2011. Pursuant to the stock purchase agreement, the Company agreed to sell Empire to CII, including the 66.67% equity ownership interest in Capital Hoedown, for $500,000 which was payable on March 31, 2012 pursuant to a Senior Promissory Note issued by CII to the Company which bears interest at 8% per annum. As a result, on September 1, 2011, Empire and Capital Hoedown are no longer considered subsidiaries of the Company. As of December 31, 2012, the Company has not collected such note from CII. Accordingly, as of December 31, 2012 and December 31, 2011, this note receivable, net of allowance for bad debt of $500,000, amounted to $0. | |||||||||
The remaining assets and liabilities of discontinued operations are presented in the balance sheet under the caption “Assets and Liabilities of discontinued operation" and relates to the discontinued operations of the sports and entertainment business. The carrying amounts of the major classes of these assets and liabilities are summarized as follows: | |||||||||
31-Dec-12 | 31-Dec-11 | ||||||||
Assets: | |||||||||
Accounts receivable, net | $ | — | $ | 44,300 | |||||
Notes and loan receivable | — | 16,750 | |||||||
Assets of discontinued operations | $ | — | $ | 61,050 | |||||
Liabilities: | |||||||||
Accounts payables and accrued expenses | $ | — | $ | 21,622 | |||||
Liabilities of discontinued operations | $ | — | $ | 21,622 | |||||
The following table sets forth for the years ended December 31, 2012 and 2011 indicated selected financial data of the Company’s discontinued operations of its sports and entertainment business. | |||||||||
December 31, | December 31, | ||||||||
2012 | 2011 | ||||||||
Revenues | $ | - | $ | 3,041,329 | |||||
Cost of sales | - | 5,060,393 | |||||||
Gross profit (loss) | - | (2,019,064 | ) | ||||||
Operating and other non-operating expenses | (50,298 | ) | (2,191,837 | ) | |||||
Loss from discontinued operations | (50,298 | ) | (4,210,901 | ) | |||||
Gain from sale of sports and entertainment business | - | 1,122,528 | |||||||
Loss from discontinued operations | $ | (50,298 | ) | $ | (3,088,373 | ) | |||
COMMITMENTS_AND_CONTINGENCIES1
COMMITMENTS AND CONTINGENCIES | 9 Months Ended | 12 Months Ended | ||||||||
Sep. 30, 2013 | Dec. 31, 2012 | |||||||||
COMMITMENTS AND CONTINGENCIES | ' | ' | ||||||||
Commitments and Contingencies Disclosure [Text Block] | ' | ' | ||||||||
NOTE 12 — COMMITMENTS AND CONTINGENCIES | NOTE 15 – COMMITMENTS AND CONTINGENCIES | |||||||||
Operating Lease | Operating Lease | |||||||||
In February 2012, the Company signed a three year lease agreement for office space located in Lakewood, Colorado containing approximately 2,390 net rentable square feet with a term commencing in March 2012 and expiring in April 2015. The lease requires the Company to pay an annual base rent of $18.50 per rentable square foot or $44,215 plus a pro rata share of operating expenses. The base rent is subject to annual increases beginning on May 1, 2013 as defined in the lease agreement. Future minimum rental payments required under the lease are as follows: | In February 2012, the Company signed a three year lease agreement for office space located in Lakewood, Colorado containing approximately 2,390 net rentable square feet with a term commencing in March 2012 and expiring in April 2015. The lease requires the Company to pay an annual base rent of $18.50 per rentable square feet or $44,215 plus a pro rata share of operating expenses. The base rent is subject to annual increases beginning on May 1, 2013 as defined in the lease agreement. Future minimum rental payments required under these operating leases are as follows: | |||||||||
2013 | $ | 11,353 | 2013 | $ | 45,011 | |||||
2014 | 46,207 | 2014 | 46,207 | |||||||
2015 and thereafter | 15,535 | 2015 and thereafter | 15,535 | |||||||
$ | 106,753 | |||||||||
$ | 73,095 | |||||||||
Rent expense was $28,050 and $56,583 for the years ended December 31, 2012 and 2011, respectively. | ||||||||||
Rent expense was $33,759 for the nine months ended September 30, 2013. | ||||||||||
Litigation | ||||||||||
Relief Gold | ||||||||||
Relief Gold Group, Inc., v Sagebrush Gold Ltd, Gold Acquisition Corp., Barry C. Honig, and David S. Rector (12 civ 0952) | ||||||||||
On February 7, 2012, the Company obtained a copy of a complaint filed in the United States District Court for the Southern District of New York (the “Complaint”) entitled Relief Gold Group, Inc., v Sagebrush Gold Ltd, Gold Acquisition Corp., Barry C. Honig, and David S. Rector (12 civ 0952). Relief Gold alleges various causes of action including breach of contract, intentional interference with contract, intentional interference with prospective business relationship/economic relations, misappropriation of trade secrets and unjust enrichment, related to the Company’s acquisition on August 30, 2011 of the assets of the Relief Canyon Mine pursuant to Chapter 11 of the Bankruptcy Code. Relief Gold seeks money damages and to enjoin Sagebrush, Honig, Rector and GAC from exercising its rights and privileges gained or acquired as a result of any alleged unlawful conduct, including any management rights over GAC or the assets acquired by GAC as a result of the alleged wrongful conduct of the other defendants. Relief Gold further seeks to disgorge the profits, benefits and any other advantages gained by reason of the alleged unlawful conduct. The Company served and filed its answer to the Complaint on May 24, 2012, in which it denied the material allegations and asserted a number of affirmative defenses. On September 18, 2012, a stipulation and order to transfer the case to the Northern District of Nevada was filed and the case was transferred to said court. The parties currently are engaged in discovery. | ||||||||||
The Company disputes the allegations in the Complaint and believes the Complaint to be wholly without merit and intends vigorously to defend the claims. On or about February 29, 2012, Gold Acquisition Corp. commenced an adversary proceeding in the United States Bankruptcy Court for the District of Nevada against FirstGold, Terence Lynch and Relief Gold Group, and moved, by order to show cause, for a preliminary injunction and temporary restraining order staying the prosecution of the above-referenced action pending in the Southern District. The motion for a preliminary injunction was denied on or about March 15, 2012. Relief Gold and Lynch have filed a motion to dismiss which is set for hearing in May 2013. | ||||||||||
Gold Acquisition Corp., v FirstGold Corp. et al (Case No. 12-05013-GWZ) | ||||||||||
On or about February 29, 2012, Gold Acquisition Corp. ("GAC") commenced an adversary proceeding in the United States Bankruptcy Court for the District of Nevada against FirstGold, Terence Lynch and Relief Gold Group, and moved, by order to show cause, for a preliminary injunction and temporary restraining order staying the prosecution of the above-referenced action pending in the Southern District. The motion for a preliminary injunction was denied on or about March 15, 2012. Firstgold filed a motion to dismiss the complaint on April 23, 2012. On June 27, 2012, the Court ordered a "stand still" of this litigation, effectively staying any further action, until December 12, 2012, extended until the hearing on the Adversary Complaint Defendants’ Motion to Dismiss in May 2013. | ||||||||||
GAC also filed a Motion for Order to Show Cause in Firstgold’s main bankruptcy action Case No. 10-50215-GWZ requesting that the court require Firstgold to complete documentation for conveyance of property. That motion was granted on or about February 28, 2012. |
INCOME_TAXES
INCOME TAXES | 12 Months Ended | ||||||||
Dec. 31, 2012 | |||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||
INCOME TAXES | ' | ||||||||
NOTE 16 - INCOME TAXES | |||||||||
The Company accounts for income taxes under ASC Topic 740: Income Taxes which requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statements and the tax basis of assets and liabilities, and for the expected future tax benefit to be derived from tax losses and tax credit carryforwards. ASC Topic 740 additionally requires the establishment of a valuation allowance to reflect the likelihood of realization of deferred tax assets. The Company has a net operating loss carryforward for tax purposes totaling approximately $19.7 million at December 31, 2012, expiring through the year 2032. Internal Revenue Code Section 382 places a limitation on the amount of taxable income that can be offset by carryforwards after certain ownership shifts. | |||||||||
The table below summarizes the differences between the Company’s effective tax rate and the statutory federal rate as follows for the year ended December 31, 2012 and 2011: | |||||||||
December 31, | December 31, | ||||||||
2012 | 2011 | ||||||||
Tax benefit computed at "expected" statutory rate | $ | (16,695,036 | ) | $ | (8,349,698 | ) | |||
State income taxes, net of benefit | - | - | |||||||
Permanent differences : | |||||||||
Stock based compensation and consulting | 240,786 | 520,660 | |||||||
Derivative expense | - | 896,000 | |||||||
Loss (gain) from change in fair value of derivative liability | 494,700 | (579,564 | ) | ||||||
Amortization of debt discount, deferred | 3,768,000 | 883,400 | |||||||
financing cost, and other non-cash interest | |||||||||
Stock based settlement expense | 1,660,300 | 1,618,900 | |||||||
Loss on extinguishment of debts | 1,621,700 | - | |||||||
Other | 55,334 | 3,050 | |||||||
Increase in valuation allowance | 8,854,216 | 5,007,252 | |||||||
Net income tax benefit | $ | - | $ | - | |||||
The table below summarizes the differences between the Company’s effective tax rate and the statutory federal rate as follows for the year ended December 31, 2012 and 2011: | |||||||||
December 31, | December 31, | ||||||||
2012 | 2011 | ||||||||
Computed "expected" tax expense (benefit) | (34.0 | )% | (34.0 | )% | |||||
State income taxes | (0 | )% | (0.0 | )% | |||||
Permanent differences | 15.5 | % | 13.6 | % | |||||
Change in valuation allowance | 18.5 | % | 20.4 | % | |||||
Effective tax rate | 0 | % | 0 | % | |||||
The Company has a deferred tax asset which is summarized as follows at December 31, 2012 and 2011: | |||||||||
Deferred tax assets: | |||||||||
December 31, | December 31, | ||||||||
2012 | 2011 | ||||||||
Net operating loss carryover | $ | 6,694,996 | $ | 4,430,250 | |||||
Stock based compensation | 6,940,860 | 993,620 | |||||||
Stock held for sale | -1,131,290 | - | |||||||
Depreciable and depletable assets | 1,145,470 | -181,985 | |||||||
Mining explorations | 836,910 | 392,925 | |||||||
Capital loss carryforward | 271,490 | 271,490 | |||||||
Other | -228,780 | -230,860 | |||||||
Less: valuation allowance | (14,529,656 | ) | (5,675,440 | ) | |||||
Net deferred tax asset | $ | - | $ | - | |||||
After consideration of all the evidence, both positive and negative, management has recorded a full valuation allowance at December 31, 2012, due to the uncertainty of realizing the deferred income tax assets. The valuation allowance was increased by approximately $8.9 million. |
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2012 | |
SUBSEQUENT EVENTS | ' |
Subsequent Events [Text Block] | ' |
NOTE 17 – SUBSEQUENT EVENTS | |
In January 2013, Mr. Honig, as the sole remaining holder of the note, agreed to extend the maturity date of the remaining balance of the note to February 1, 2014. | |
In January 2013, the Company sold an aggregate of 1,513,333 shares of Amicor’s common stock in a private transaction and generated net proceeds of $151,333. As a result of the sale the Company no longer owns any shares of Amicor. | |
In February 2013, the Company sold an aggregate of 3,000,000 shares of Valor Gold’s common stock in a private transaction and generated net proceeds of $300,000. After the sale the Company continues to own 22 million shares of Valor. | |
On February 8, 2013, the Company and Eric Alexander, the Company’s Vice President of Finance and Controller, entered into the First Amendment to Restricted Stock Agreement (the “Alexander Amendment”) to amend, at the Company’s request that certain Restricted Stock Agreement, dated as of November 21, 2012, by and between the Company and Mr. Alexander. | |
Pursuant to the Alexander Amendment, the vesting schedule of the shares of restricted stock was extended as follows: (i) 33.33% on March 14, 2014, (ii) 33.33% on November 30, 2014, and (iii) 33.34% on November 30, 2015. The original vesting schedule of the shares of restricted stock was as follows: (i) 33.33% on November 30, 2013, (ii) 33.33% on November 30, 2014, and (iii) 33.34% on November 30, 2015. | |
On February 8, 2013, the Company and Stephen Alfers, the Company’s Chief Executive Officer and President, entered into the First Amendment to Restricted Stock Agreement (the “Alfers Amendment”) to amend, at the Company’s request, that certain Restricted Stock Agreement, dated as of August 24, 2012, by and between the Company and Mr. Alfers. Pursuant to the Alfers Amendment, the vesting schedule of the shares of restricted stock was extended as follows: (i) 33.33% on March 14, 2014, (ii) 33.33% on June 18, 2014, and (iii) 33.34% on June 18, 2015. The original vesting schedule of the shares of restricted stock was as follows: (i) 33.33% on June 18, 2013, (ii) 33.33% on June 18, 2014, and (iii) 33.34% on June 18, 2015. | |
On February 8, 2013, the Company and Mr. Alfers entered into the First Amendment to Executive Employment Agreement (the “Executive Amendment”) to amend, at the Company’s request, that certain Executive Employment Agreement (the “Executive Employment Agreement”), dated as of February 9, 2012, by and between the Company and Mr. Alfers. Pursuant to the Executive Amendment, the vesting schedule was extended as follows: (i) 3,000,000 shares of restricted stock on February 9, 2014, (ii) 6,000,000 shares of restricted stock on March 14, 2014, and (iii) 3,000,000 shares of restricted stock on February 9, 2015. The 6,000,000 shares of restricted stock vesting on March 14, 2014 originally would have vested on February 9, 2013. | |
On February 12, 2013 the SEC declared the Company’s registration statement on Form S-1 effective. The registration statement satisfies a condition allowing for the dissolution of Continental. As a result of the effectiveness of the Form S-1 registration statement, Continental is proceeding with its plan of liquidation, including the distribution of the Company’s shares, on a pro rata basis to Continental shareholders of record as of March 1, 2013. Continental has started the process of distribution of the Company’s shares as of March 22, 2013 and expects to complete the distribution as soon as practicable. Neither the Company nor Continental are issuing any new share capital via this registration statement and will not receive any proceeds from the sale of the registered shares. | |
On February 12, 2013, the Board approved the adoption of a 2013 Equity Incentive Plan (the “2013 Plan”). The 2013 Plan provides for the grant of incentive stock options, nonqualified stock options, restricted stock, restricted stock units, stock appreciation rights and other types of stock-based awards to the Company’s employees, officers, directors and consultants. Pursuant to the terms of the 2013 Plan, either the Board or a board committee is authorized to administer the plan, including by determining which eligible participants will receive awards, the number of shares of common stock subject to the awards and the terms and conditions of such awards. Up to 40 million shares of common stock are issuable pursuant to awards under the 2013 Plan. | |
On February 12, 2013, the Company granted an aggregate of 4,300,000 shares of restricted common stock to the Company’s director and 5 employees of the Company and which were valued at fair market value on the date of | |
grant at approximately $0.51 per share. Such restricted shares shall vests one third at the end of each three years from the date of issuance. | |
On February 12, 2013, the Company granted an aggregate of 2,400,000 shares of restricted common stock to 5 consultants of the Company and which were valued at fair market value on the date of grant at approximately $0.51 per share. Such restricted shares shall vests one third at the end of each three years from the date of issuance. | |
SUMMARY_OF_SIGNIFICANT_ACCOUNT4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended | 12 Months Ended | ||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | |||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ' | ||||||||||||||
Organization, Consolidation, Basis of Presentation, Business Description and Accounting Policies [Text Block] | ' | ' | ||||||||||||||
Basis of presentation and principles of consolidation | Basis of Presentation and Principle of Consolidation | |||||||||||||||
The unaudited condensed consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”) and present the unaudited condensed consolidated financial statements of the Company as of September 30, 2013. All intercompany transactions and balances have been eliminated and net earnings are reduced by the portion of the net earnings of subsidiaries applicable to non-controlling interests. Prior periods have been restated in the Company’s consolidated financial statements and related footnotes to conform to this presentation and all transactions relating to the sports and entertainment business are included in discontinued operations. All adjustments (consisting of normal recurring items) necessary to present fairly the Company’s financial position as of September 30, 2013, and the results of operations and cash flows for the nine months ended September 30, 2013 have been included. The results of operations for the nine months ended September 30, 2013 are not necessarily indicative of the results to be expected for the full year. The accounting policies and procedures employed in the preparation of these unaudited condensed consolidated financial statements have been derived from the audited financial statements of the Company for the period ended December 31, 2012, which are contained in the Company’s Form 10-K as filed with the Securities and Exchange Commission (“SEC”) on April 1, 2013. The consolidated balance sheet as of December 31, 2012 was derived from those financial statements. | The consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America ("US GAAP") and present the consolidated financial statements of the Company and its majority-owned subsidiaries as of December 31, 2012. In the preparation of the consolidated financial statements of the Company, intercompany transactions and balances are eliminated and net earnings are reduced by the portion of the net earnings of subsidiaries applicable to non-controlling interests. | |||||||||||||||
Development Stage Enterprise General Disclosures [Text Block] | ' | ' | ||||||||||||||
Exploration stage company | Exploration Stage Company | |||||||||||||||
On September 1, 2011, the Company exited the sports and entertainment business and sold its Empire subsidiary. The Company is engaged in gold and precious metals exploration. The Company has been in the exploration stage since September 1, 2011 and has not yet realized any revenues from its planned operations. The Company is an exploration stage company as defined in Financial Accounting Standards Board (“FASB”) issued Accounting Standards Codification (“ASC”) Topic 915 “Development Stage Entities”. | On September 1, 2011, the Company exited the sports and entertainment business and disposed of its Empire subsidiary pursuant to a Stock Purchase Agreement. The Company is no longer engaged in or pursuing agreements with artists or athletes for sports and entertainment promotion and events, and will focus its activities exclusively on its new business segment, gold and precious metals exploration company. The Company has been in the exploration stage since September 1, 2011 and has not yet realized any revenues from its planned operations. The Company is an exploration stage company as defined in Financial Accounting Standards Board (“FASB”) issued Accounting Standards Codification (“ASC”) ASC 915 “Development Stage Entities”. | |||||||||||||||
Use of Estimates, Policy [Policy Text Block] | ' | ' | ||||||||||||||
Use of estimates | Use of Estimates and Assumptions | |||||||||||||||
In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the consolidated balance sheet, and revenues and expenses for the period then ended. Actual results may differ significantly from those estimates. Significant estimates made by management include, but are not limited to, allowance for bad debts, the useful life of property and equipment, the assumptions used to calculate fair value of options and warrants granted and derivative liability, beneficial conversion on convertible notes payable, capitalized mineral rights, asset valuations, common stock issued for services, common stock issued for conversion of notes and common stock issued in connection with an acquisition. | In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the consolidated balance sheet, and revenues and expenses for the period then ended. Actual results may differ significantly from those estimates. Significant estimates made by management include, but are not limited to, allowance for bad debts, the useful life of property and equipment, the assumptions used to calculate fair value of options granted and derivative liability, beneficial conversion on convertible notes payable, capitalized mineral rights, asset valuations, common stock issued for services, common stock issued for conversion of notes and common stock issued in connection with an acquisition. | |||||||||||||||
Consolidation, Policy [Policy Text Block] | ' | ' | ||||||||||||||
Non-controlling interests in consolidated financial statements | Non-controlling interests in consolidated financial statements | |||||||||||||||
In December 2007, ASC 810-10-65, “Non-controlling Interests in Consolidated Financial Statements” clarified that a non-controlling (minority) interest in a subsidiary is an ownership interest in the entity that should be reported as equity in the consolidated financial statements. It also requires consolidated net income to include the amounts attributable to both the parent and non-controlling interest, with disclosure on the face of the consolidated income statement of the amounts attributed to the parent and to the non-controlling interest. In accordance with ASC 810-10-45-21, those losses attributable to the parent and the non-controlling interest in subsidiary may exceed their interests in the subsidiary’s equity. The excess and any further losses attributable to the parent and the non-controlling interest shall be attributed to those interests even if that attribution results in a deficit non-controlling interest balance. | In December 2007, ASC 810-10-65, “Non-controlling Interests in Consolidated Financial Statements” clarifies that a non-controlling (minority) interest in a subsidiary is an ownership interest in the entity that should be reported as equity in the consolidated financial statements. It also requires consolidated net income to include the amounts attributable to both the parent and non-controlling interest, with disclosure on the face of the consolidated income statement of the amounts attributed to the parent and to the non-controlling interest. In accordance with ASC 810-10-45-21, those losses attributable to the parent and the non-controlling interest in subsidiary may exceed their interests in the subsidiary’s equity. The excess and any further losses attributable to the parent and the non-controlling interest shall be attributed to those interests even if that attribution results in a deficit non-controlling interest balance. As of December 31, 2012 and 2011, the Company reported a deficit non-controlling interest balance of $0 and $1,164, respectively, in connection with a majority-owned subsidiary of Acquisition Sub (see Note 3), as reflected in the accompanying consolidated balance sheets. | |||||||||||||||
Cash and Cash Equivalents, Policy [Policy Text Block] | ' | ' | ||||||||||||||
Cash and cash equivalents | Cash and Cash Equivalents | |||||||||||||||
The Company considers all highly liquid investments with a maturity of three months or less when acquired to be cash equivalents. The Company places its cash with a high credit quality financial institution. The Company’s accounts at this institution are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. At September 30, 2013, the Company had bank balances exceeding the FDIC insurance limit on interest bearing accounts. To reduce its risk associated with the failure of such financial institution, the Company evaluates at least annually the rating of the financial institution in which it holds deposits. | The Company considers all highly liquid investments with a maturity of three months or less when acquired to be cash equivalents. The Company places its cash with high credit quality financial institutions. The Company’s accounts at these institutions are insured by the Federal Deposit Insurance Corporation ("FDIC") up to $250,000 per account. In addition to the basic insurance deposit coverage, the FDIC was providing temporary unlimited coverage for non-interest bearing transaction accounts through December 31, 2012. At December 31, 2012, the Company has not reached bank balances exceeding the FDIC insurance limit on interest bearing accounts. To reduce its risk associated with the failure of such financial institutions, the Company evaluates at least annually the rating of the financial institutions in which it holds deposits. | |||||||||||||||
Comprehensive Income (Loss) | ' | ' | ||||||||||||||
Comprehensive Income (Loss) | ||||||||||||||||
The Company adopted ASC 220-10, “Reporting Comprehensive Income,” (formerly SFAS No. 130). ASC 220-10 requires the reporting of comprehensive income in addition to net income from operations. Comprehensive income is a more inclusive financial reporting methodology that includes disclosure of information that historically has not been recognized in the calculation of net income. | ||||||||||||||||
Marketable Securities, Policy [Policy Text Block] | ' | ' | ||||||||||||||
Marketable securities | Marketable securities | |||||||||||||||
Marketable securities consist of the Company’s investment in publicly traded equity securities and are generally restricted for sale under Federal securities laws. The Company’s policy is to liquidate securities received when market conditions are favorable for sale. Since these securities are often restricted, the Company is unable to liquidate them until the restriction is removed. Marketable securities that are bought and held principally for the purpose of selling them in the near term are to be classified as trading securities and reported at fair value, with unrealized gains and losses included in earnings. Pursuant to ASC Topic 320, “Investments — Debt and Equity Securities,” the Company’s marketable securities have a readily determinable and active quoted price, such as from NASDAQ, NYSE Euronext, the Over the Counter Bulletin Board, and the OTC Markets Group. | Marketable securities consist of the Company’s investment in publicly traded equity securities and are generally restricted for sale under Federal securities laws. The Company’s policy is to liquidate securities received when market conditions are favorable for sale. Since these securities are often restricted, the Company is unable to liquidate them until the restriction is removed. Marketable securities that are bought and held principally for the purpose of selling them in the near term are to be classified as trading securities and reported at fair value, with unrealized gains and losses included in earnings. Pursuant to ASC Topic 320, “Investments – Debt and Equity Securities” the Company’s marketable securities have a readily determinable and active quoted price, such as from NASDAQ, NYSE Euronext, the Over the Counter Bulletin Board, and the OTC Markets Group. | |||||||||||||||
Trading securities are carried at fair value, with changes in unrealized holding gains and losses included in income and classified within interest and other income, net, in the accompanying consolidated statements of operations. | Trading securities are carried at fair value, with changes in unrealized holding gains and losses included in income and classified within interest and other income, net, in the accompanying consolidated statements of operations. | |||||||||||||||
Available for sale securities are carried at fair value, with changes in unrealized gains or losses are recognized as an element of comprehensive income based on changes in the fair value of the security. Once liquidated, realized gains or losses on the sale of marketable securities available for sale are reflected in the net income (loss) for the period in which the security was liquidated. | Available for sale securities are carried at fair value, with changes in unrealized gains or losses are recognized as an element of comprehensive income based on changes in the fair value of the security. Once liquidated, realized gains or losses on the sale of marketable securities available for sale are reflected in the net income (loss) for the period in which the security was liquidated. | |||||||||||||||
Fair Value of Financial Instruments, Policy [Policy Text Block] | ' | ' | ||||||||||||||
Fair value of financial instruments | ||||||||||||||||
Fair value of financial instruments | ||||||||||||||||
The Company adopted ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”), for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements, establishes a framework for measuring fair value and expands disclosure about such fair value measurements. The adoption of ASC 820 did not have an impact on the Company’s financial position or operating results, but did expand certain disclosures. | ||||||||||||||||
The Company adopted ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”), for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements, establishes a framework for measuring fair value and expands disclosure about such fair value measurements. The adoption of ASC 820 did not have an impact on the Company’s financial position or operating results, but did expand certain disclosures. | ||||||||||||||||
ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below: | ||||||||||||||||
ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below: | ||||||||||||||||
Level 1: | Observable inputs such as quoted market prices in active markets for identical assets or Liabilities | |||||||||||||||
Level 2: | Observable market-based inputs or unobservable inputs that are corroborated by market data | Level 1: | Observable inputs such as quoted market prices in active markets for identical assets or | |||||||||||||
Level 3: | Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions. | liabilities | ||||||||||||||
Level 2: | Observable market-based inputs or unobservable inputs that are corroborated by market data | |||||||||||||||
The Company analyzes all financial instruments with features of both liabilities and equity under the FASB’s accounting standard for such instruments. Under this standard, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. | Level 3: | Unobservable inputs for which there is little or no market data, which require the use of the | ||||||||||||||
reporting entity’s own assumptions. | ||||||||||||||||
Depending on the product and the terms of the transaction, the fair value of notes payable and derivative liabilities were modeled using a series of techniques, including closed-form analytic formula, such as the Black-Scholes option-pricing model. | The Company analyzes all financial instruments with features of both liabilities and equity under the FASB’s accounting standard for such instruments. Under this standard, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Depending on the product and the terms of the transaction, the fair value of notes payable and derivative liabilities were modeled using a series of techniques, including closed-form analytic formula, such as the Black-Scholes option-pricing model. | |||||||||||||||
The Company classified the investments in marketable securities available for sale as Level 3, adjusted for the effect of restriction. The securities were restricted and cannot be readily resold by the Company absent a registration of the sale of those securities under the Securities Act of 1933 as amended (the “Securities Act”) or the availability of an exemption from the registration. Unrealized gains or losses on marketable securities available for sale were recognized as an element of comprehensive income based on changes in the fair value of the security. Once liquidated, realized gains or losses on the sale of marketable securities available for sale were reflected in net income for the period in which the security was liquidated. At the end of each period, the Company evaluated the carrying value of the marketable securities for a decrease in value. The Company evaluated the entity underlying these marketable securities to determine whether a decline in fair value below the amortized cost basis is other than temporary. If the decline in fair value is judged to be “other- than- temporary”, the cost basis of the individual security is written down to fair value as a new cost basis and the amount of the write-down is charged to earnings. | The following table presents a reconciliation of the derivative liability measured at fair value on a recurring basis using significant unobservable input (Level 3) from January 1, 2012 to December 31, 2012: | |||||||||||||||
Conversion feature derivative liability | ||||||||||||||||
The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, prepaid expenses, accounts payable and accrued expenses approximate their estimated fair market value based on the short-term maturity of these instruments. The carrying amount of the notes payable at September 30, 2013 approximate their respective fair value based on the Company’s incremental borrowing rate. | Balance at January 1, 2012 | $ | 6,295,400 | |||||||||||||
Change in fair value included in earnings | 1,454,889 | |||||||||||||||
Reclassification of derivative liability to equity | (7,750,289 | ) | ||||||||||||||
Balance at December 31, 2012 | $ | — | ||||||||||||||
Investment measured at fair value on a recurring basis: | ||||||||||||||||
Fair Value Measurements Using: | ||||||||||||||||
Quoted Prices | Significant | Significant | ||||||||||||||
in Active | Other | Unobservable | ||||||||||||||
Markets | Observable | Inputs | ||||||||||||||
(Level 1) | Inputs | (Level 3) | ||||||||||||||
(Level 2) | ||||||||||||||||
Marketable securities – available for sale, net of discount for effect of restriction | $ | — | $ | — | $ | — | ||||||||||
The Company classifies the investments in marketable securities available for sale as Level 3, adjusted for the effect of restriction. The securities are restricted and cannot be readily resold by the Company absent a registration of those securities under the Securities Act of 1933 as amended (the “Securities Act”) or the availabilities of an exemption from the registration requirements under the Securities Act. As these securities are often restricted, the Company is unable to liquidate them until the restriction is removed. Unrealized gains or losses on marketable securities available for sale are recognized as an element of comprehensive income based on changes in the fair value of the security. Once liquidated, realized gains or losses on the sale of marketable securities available for sale are reflected in our net income for the period in which the security was liquidated. | ||||||||||||||||
At the end of each period, the Company evaluates the carrying value of the marketable securities for a decrease in value. The Company evaluates the company underlying these marketable securities to determine whether a decline in fair value below the amortized cost basis is other than temporary. If the decline in fair value is judged to be “other- than- temporary”, the cost basis of the individual security shall be written down to fair value as a new cost basis and the amount of the write-down is charged to earnings. | ||||||||||||||||
The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, other receivables, prepaid expenses, accounts payable and accrued expenses approximate their estimated fair market value based on the short-term maturity of these instruments. The carrying amount of the notes payable at December 31, 2012, approximate their respective fair value based on the Company’s incremental borrowing rate. The Company did not identify any other assets or liabilities that are required to be presented on the consolidated balance sheets at fair value in accordance with applicable accounting guidance. | ||||||||||||||||
Other Income and Other Expense Disclosure [Text Block] | ' | ' | ||||||||||||||
Prepaid expenses | Prepaid expenses | |||||||||||||||
Prepaid expenses — current portion of $359,491 and $502,837 at September 30, 2013 and December 31, 2012, respectively, consist primarily of costs paid for future services which will occur within a year. Prepaid expenses principally include prepayments for consulting and business advisory services, insurance premiums and mineral lease fees which are being amortized over the terms of their respective agreements. | Prepaid expenses – current portion of $502,837 and $463,737 at December 31, 2012 and 2011, respectively, consist primarily of costs paid for future services which will occur within a year. Prepaid expenses include prepayments (in cash and common stock) of public relation services, consulting and business advisory services, and prepaid insurance and mineral lease payments which are being amortized over the terms of their respective agreements. Prepaid expenses – long term portion of $0 and $37,759 at December 31, 2012 and 2011, respectively, consist primarily of costs paid for future mineral lease payments after one year. | |||||||||||||||
Mineral Industries Disclosures [Text Block] | ' | ' | ||||||||||||||
Mineral property acquisition and exploration costs | Mineral property acquisition and exploration costs | |||||||||||||||
Costs of lease, exploration, carrying and retaining unproven mineral lease properties are expensed as incurred. The Company expenses all mineral exploration costs as incurred as it is still in the exploration stage. If the Company identifies proven and probable reserves in its investigation of its properties and upon development of a plan for operating a mine, it would enter the development stage and capitalize future costs until production is established. When a property reaches the production stage, the related capitalized costs are amortized using the units-of-production method over the estimated life of the proven and probable reserves. If in the future the Company has capitalized mineral properties, these properties will be periodically assessed for impairment. To date, the Company has not established the commercial feasibility of any exploration prospects; therefore, all costs are being expensed. During the nine months ended September 30, 2013 and 2012, the Company incurred exploration costs of $1,793,214 and $4,842,781, respectively. | Costs of lease, exploration, carrying and retaining unproven mineral lease properties are expensed as incurred. The Company has chosen to expense all mineral exploration costs as incurred given that it is still in the exploration stage. If the Company identifies proven and probable reserves in its investigation of its properties and upon development of a plan for operating a mine, it would enter the development stage and capitalize future costs until production is established. When a property reaches the production stage, the related capitalized costs will be amortized, using the units-of-production method over the estimated life of the proven and probable reserves. If in the future the Company has capitalized mineral properties, these properties will be periodically assessed for impairment. To date, the Company has not established the commercial feasibility of any exploration prospects; therefore, all costs are being expensed. During the years ended December 31, 2012 and 2011, the Company incurred exploration cost of $5,221,001 and $2,298,090, respectively. | |||||||||||||||
ASC 930-805, “Extractive Activities-Mining: Business Combinations”, states that mineral rights consist of the legal right to explore, extract, and retain at least a portion of the benefits from mineral deposits. Mining assets include mineral rights. Acquired mineral rights are considered tangible assets under ASC 805. ASC 805 requires that mineral rights be recognized at fair value as of the acquisition date. As a result, the direct costs to acquire mineral rights are initially capitalized as tangible assets. Mineral rights include costs associated with acquiring patented and unpatented mining claims. | ASC 930-805, “Extractive Activities-Mining: Business Combinations”, states that mineral rights consist of the legal right to explore, extract, and retain at least a portion of the benefits from mineral deposits. Mining assets include mineral rights. Acquired mineral rights are considered tangible assets under ASC 805. ASC 805 requires that mineral rights be recognized at fair value as of the acquisition date. As a result, the direct costs to acquire mineral rights are initially capitalized as tangible assets. Mineral rights include costs associated with acquiring patented and unpatented mining claims. | |||||||||||||||
ASC 930-805-30-1 and 30-2 provides that in fair valuing mineral assets, an acquirer should take into account both: | ASC 930-805-30-1 and 30-2 provides that in fair valuing mineral assets, an acquirer should take into account both: | |||||||||||||||
· The value beyond proven and probable reserves (“VBPP”) to the extent that a market participant would include VBPP in determining the fair value of the assets. | • | The value beyond proven and probable reserves (“VBPP”) to the extent that a market participant would include VBPP in determining the fair value of the assets. | ||||||||||||||
· The effects of anticipated fluctuations in the future market price of minerals in a manner that is consistent with the expectations of market participants. | • | The effects of anticipated fluctuations in the future market price of minerals in a manner that is consistent with the expectations of market participants. | ||||||||||||||
Property, Plant and Equipment, Policy [Policy Text Block] | ' | ' | ||||||||||||||
Property and equipment | Property and equipment | |||||||||||||||
Property and equipment are carried at cost. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition. Depreciation is calculated on a straight-line basis over the estimated useful life of the assets, generally one to twenty five years. | Property and equipment are carried at cost. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition. Depreciation is calculated on a straight-line basis over the estimated useful life of the assets, generally one to twenty five years. | |||||||||||||||
Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block] | ' | ' | ||||||||||||||
Impairment of long-lived assets | Impairment of long-lived assets | |||||||||||||||
The Company accounts for the impairment or disposal of long-lived assets according to the ASC 360 “Property, Plant and Equipment”. The Company continually monitors events and changes in circumstances that could indicate that the carrying amounts of long-lived assets, including mineral rights, may not be recoverable. Long-lived assets in the exploration stage are monitored for impairment based on factors such as the Company’s continued right to explore the area, exploration reports, assays, technical reports, drill results and the Company’s continued plans to fund exploration programs on the property, and whether sufficient work has been performed to indicate that the carrying amount of the mineral property cost carried forward as an asset will not be fully recovered. The tests for long-lived assets in the exploration stage would be monitored for impairment based on factors such as current market value of the long-lived assets and results of exploration, future asset utilization, business climate, mineral prices and future undiscounted cash flows expected to result from the use of the related assets. | The Company accounts for the impairment or disposal of long-lived assets according to the ASC 360 “Property, Plant and Equipment”. The Company continually monitors events and changes in circumstances that could indicate that the carrying amounts of long-lived assets, including mineral rights, may not be recoverable. Long-lived assets in the exploration stage are monitored for impairment based on factors such as the Company's continued right to explore the area, exploration reports, assays, technical reports, drill results and the Company's continued plans to fund exploration programs on the property, whether sufficient work has been performed to indicate that the carrying amount of the mineral property cost carried forward as an asset will not be fully recovered, even though a viable mine has been discovered. The tests for long-lived assets in the exploration stage would be monitored for impairment based on factors such as current market value of the long-lived assets and results of exploration, future asset utilization, business climate, mineral prices and future undiscounted cash flows expected to result from the use of the related assets. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated future net undiscounted cash flows expected to be generated by the asset. When necessary, impaired assets are written down to estimated fair value based on the best information available. Estimated fair value is generally based on either appraised value or measured by discounting estimated future cash flows. Considerable management judgment is necessary to estimate discounted future cash flows. Accordingly, actual results could vary significantly from such estimates. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The Company did not consider it necessary to record any impairment charges of its long-lived assets at December 31, 2012 and 2011, respectively. | |||||||||||||||
Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated future net undiscounted cash flows expected to be generated by the asset. When necessary, impaired assets are written down to estimated fair value based on the best information available. Estimated fair value is generally based on either appraised value or measured by discounting estimated future cash flows. Considerable management judgment is necessary to estimate discounted future cash flows. Accordingly, actual results could vary significantly from such estimates. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The Company did not record any impairment charges of its long-lived assets at September 30, 2013 and December 31, 2012, respectively. | ||||||||||||||||
Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block] | ' | ' | ||||||||||||||
Goodwill and other intangible assets | Goodwill and other intangible assets | |||||||||||||||
In accordance with ASC 350-30-65, “Intangibles - Goodwill and Others”, the Company assesses the impairment of identifiable intangibles whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors the Company considers to be important which could trigger an impairment review include the following: | In accordance with ASC 350-30-65, “Intangibles - Goodwill and Others”, the Company assesses the impairment of identifiable intangibles whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors the Company considers to be important which could trigger an impairment review include the following: | |||||||||||||||
1. Significant underperformance relative to expected historical or projected future operating results; | 1 | Significant underperformance relative to expected historical or projected future operating results; | ||||||||||||||
2. Significant changes in the manner of use of the acquired assets or the strategy for the overall business; and | 2 | Significant changes in the manner of use of the acquired assets or the strategy for the overall business; and | ||||||||||||||
3. Significant negative industry or economic trends. | 3 | Significant negative industry or economic trends. | ||||||||||||||
When the Company determines that the carrying value of intangibles may not be recoverable based upon the existence of one or more of the above indicators of impairment and the carrying value of the asset cannot be recovered from projected undiscounted cash flows, the Company records an impairment charge. The Company measures any impairment based on a projected discounted cash flow method using a discount rate determined by management to be commensurate with the risk inherent in the current business model. Significant management judgment is required in determining whether an indicator of impairment exists and in projecting cash flows. The Company did not have any intangible assets as of September 30, 2013 and December 31, 2012. | When the Company determines that the carrying value of intangibles may not be recoverable based upon the existence of one or more of the above indicators of impairment and the carrying value of the asset cannot be recovered from projected undiscounted cash flows, the Company records an impairment charge. The Company measures any impairment based on a projected discounted cash flow method using a discount rate determined by management to be commensurate with the risk inherent in the current business model. Significant management judgment is required in determining whether an indicator of impairment exists and in projecting cash flows. The Company did not have any intangible assets as of December 31, 2012 and 2011. | |||||||||||||||
Income Tax, Policy [Policy Text Block] | ' | ' | ||||||||||||||
Income Taxes | Income Taxes | |||||||||||||||
The Company accounts for income taxes pursuant to the provision of ASC 740-10, “Accounting for Income Taxes” which requires, among other things, an asset and liability approach to calculating deferred income taxes. The asset and liability approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred asset will not be realized. | The Company accounts for income taxes pursuant to the provision of ASC 740-10, “Accounting for Income Taxes” which requires, among other things, an asset and liability approach to calculating deferred income taxes. The asset and liability approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred asset will not be realized. | |||||||||||||||
The Company follows the provision of the ASC 740-10 related to Accounting for Uncertain Income Tax Position. When tax returns are filed, there may be uncertainty about the merits of positions taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is most likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. | The Company follows the provision of the ASC 740-10 related to Accounting for Uncertain Income Tax Position. When tax returns are filed, there may be uncertainty about the merits of positions taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is most likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. | |||||||||||||||
Tax positions that meet the more likely than not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for uncertain tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company believes its tax positions are all highly certain of being upheld upon examination. As such, the Company has not recorded a liability for uncertain tax benefits. | Tax positions that meet the more likely than not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for uncertain tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company believes its tax positions are all highly certain of being upheld upon examination. As such, the Company has not recorded a liability for uncertain tax benefits. | |||||||||||||||
The Company has adopted ASC 740-10-25, “Definition of Settlement”, which provides guidance on how an entity should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits and provides that a tax position can be effectively settled upon the completion and examination by a taxing authority without being legally extinguished. For tax positions considered effectively settled, an entity would recognize the full amount of tax benefit, even if the tax position is not considered more likely than not to be sustained based solely on the basis of its technical merits and the statute of limitations remains open. The federal and state income tax returns of the Company are subject to examination by the IRS and state taxing authorities, generally for three years after they were filed. | The Company has adopted ASC 740-10-25, “Definition of Settlement”, which provides guidance on how an entity should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits and provides that a tax position can be effectively settled upon the completion and examination by a taxing authority without being legally extinguished. For tax positions considered effectively settled, an entity would recognize the full amount of tax benefit, even if the tax position is not considered more likely that not to be sustained based solely on the basis of its technical merits and the statute of limitations remains open. The federal and state income tax returns of the Company are subject to examination by the IRS and state taxing authorities, generally for three years after they were filed. | |||||||||||||||
Advertising | ' | ' | ||||||||||||||
Advertising | ||||||||||||||||
Advertising costs are expensed as incurred. For the years ended December 31, 2012 and 2011, advertising expense totaled $0 and $441,064, respectively. Such expense is included in loss from discontinued operations on the accompanying consolidated statement of operations. | ||||||||||||||||
Stock-based compensation | ' | ' | ||||||||||||||
Stock-based compensation | ||||||||||||||||
Stock-based compensation | ||||||||||||||||
Stock-based compensation is accounted for based on the requirements of the Share-Based Payment Topic of ASC 718, “Compensation — Stock Compensation”, which requires recognition in the consolidated financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). The ASC also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award. | ||||||||||||||||
Stock-based compensation is accounted for based on the requirements of the Share-Based Payment Topic of ASC 718, “Compensation – Stock Compensation”, which requires recognition in the consolidated financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). The ASC also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award. | ||||||||||||||||
Pursuant to ASC Topic 505-50, “Equity Based Payments to Non-employees”, for share-based payments to consultants and other third-parties, compensation expense is determined at the “measurement date.” The expense is recognized over the vesting period of the award. Until the measurement date is reached, the total amount of compensation expense remains uncertain. The Company initially records compensation expense based on the fair value of the award at the reporting date. | ||||||||||||||||
Pursuant to ASC Topic 505-50, “Equity Based Payments to Non-employees”, for share-based payments to consultants and other third-parties, compensation expense is determined at the “measurement date.” The expense is recognized over the vesting period of the award. Until the measurement date is reached, the total amount of compensation expense remains uncertain. The Company initially records compensation expense based on the fair value of the award at the reporting date. | ||||||||||||||||
New Accounting Pronouncements, Policy [Policy Text Block] | ' | ' | ||||||||||||||
Recent accounting pronouncements | Recent accounting pronouncements | |||||||||||||||
In July 2013, the FASB issued ASU 2013-11, “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists.” ASU 2013-11 provides guidance on the presentation of unrecognized tax benefits related to any disallowed portion of net operating loss carryforwards, similar tax losses, or tax credit carryforwards, if they exist. ASU 2013-11 is effective for fiscal years beginning after December 15, 2013. The adoption of ASU 2013-11 is not expected to have a material impact on the Company’s consolidated financial statements. | In July 2012, the FASB issued Accounting Standards Update (“ASU”) 2012-02, “Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment”, on testing for indefinite-lived intangible assets for impairment. The new guidance provides an entity to simplify the testing for a drop in value of intangible assets such as trademarks, patents, and distribution rights. The amended standard reduces the cost of accounting for indefinite-lived intangible assets, especially in cases where the likelihood of impairment is low. The changes permit businesses and other organizations to first use subjective criteria to determine if an intangible asset has lost value. The amendments to U.S. GAAP will be effective for fiscal years starting after September 15, 2012. The Company’s adoption of this accounting guidance does not have a material impact on the consolidated financial statements and related disclosures. | |||||||||||||||
Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures. | There were other updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to have a material impact on the Company’s financial position, results of operations or cash flows. | |||||||||||||||
SUMMARY_OF_SIGNIFICANT_ACCOUNT5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2012 | |||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ||||||||||||
Derivative liability measured at fair value on a recurring basis | ' | ||||||||||||
Conversion feature derivative liability | |||||||||||||
Balance at January 1, 2012 | $ | 6,295,400 | |||||||||||
Change in fair value included in earnings | 1,454,889 | ||||||||||||
Reclassification of derivative liability to equity | (7,750,289 | ) | |||||||||||
Balance at December 31, 2012 | $ | — | |||||||||||
Investment measured at fair value on a recurring basis | ' | ||||||||||||
Fair Value Measurements Using: | |||||||||||||
Quoted Prices | Significant | Significant | |||||||||||
in Active | Other | Unobservable | |||||||||||
Markets | Observable | Inputs | |||||||||||
(Level 1) | Inputs | (Level 3) | |||||||||||
(Level 2) | |||||||||||||
Marketable securities – available for sale, net of discount for effect of restriction | $ | — | $ | — | $ | — |
ACQUISITION_DISPOSITION_AND_DE3
ACQUISITION, DISPOSITION AND DECONSOLIDATION (Tables) | 12 Months Ended | ||||
Dec. 31, 2012 | |||||
ACQUISITION, DISPOSITION AND DECONSOLIDATION | ' | ||||
Assets acquired and liabilities assumed | ' | ||||
Current assets (including cash of $11,164,514) | $ | 13,069,511 | |||
Note receivable | 2,000,000 | ||||
Prepaid expenses – long term portion | 41,912 | ||||
Property and equipment | 39,912 | ||||
Liabilities assumed (including a 12% note payable of $50,000) | (293,659 | ) | |||
Net purchase price | $ | 14,857,676 |
MARKETABLE_SECURITIES_Tables1
MARKETABLE SECURITIES (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2012 | |||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ||||||||||||||||||||
Marketable securities | ' | ||||||||||||||||||||
Cost | Gross Unrealized Gains | Gross Unrealized Losses | Realized Gain from Sale of Securities | Fair Value | |||||||||||||||||
Marketable securities – available for sale | — | — | — | 1,490,600 | — | ||||||||||||||||
Total | $ | — | $ | — | $ | — | $ | 1,490,600 | $ | — |
MINERAL_PROPERTIES_Tables1
MINERAL PROPERTIES (Tables) | 9 Months Ended | 12 Months Ended | |||||||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | ||||||||||||||||||||
Extractive Industries [Abstract] | ' | ' | |||||||||||||||||||
Cost Incurred in Oil and Gas Property Acquisition, Exploration, and Development Activities Disclosure [Table Text Block] | ' | ' | |||||||||||||||||||
31-Dec-12 | 31-Dec-11 | ||||||||||||||||||||
September 30, | December 31, | Relief Canyon Mine – Gold Acquisition | $ | 8,501,071 | $ | 8,501,071 | |||||||||||||||
2013 | 2012 | Relief Canyon Mine – Newmont Leased Properties | 7,709,441 | - | |||||||||||||||||
Relief Canyon Mine — Gold Acquisition | $ | 8,501,071 | $ | 8,501,071 | Pershing Pass Property | 576,400 | - | ||||||||||||||
Relief Canyon Mine — Newmont Leased Properties | 7,709,441 | 7,709,441 | |||||||||||||||||||
Pershing Pass Property | 576,400 | 576,400 | $ | 16,786,912 | $ | 8,501,071 | |||||||||||||||
$ | 16,786,912 | $ | 16,786,912 | ||||||||||||||||||
PROPERTY_AND_EQUIPMENT_Tables1
PROPERTY AND EQUIPMENT (Tables) | 9 Months Ended | 12 Months Ended | |||||||||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | ||||||||||||||||||||||
PROPERTY AND EQUIPMENT | ' | ' | |||||||||||||||||||||
Property and equipment | ' | ' | |||||||||||||||||||||
Estimated Life | 31-Dec-12 | 31-Dec-11 | |||||||||||||||||||||
Furniture and fixtures | 5 years | $ | 56,995 | $ | 20,000 | ||||||||||||||||||
Estimated Life | September 30, | December 31, | Office and computer equipment | 1 - 5 years | 220,060 | 26,606 | |||||||||||||||||
2013 | 2012 | Land | — | 266,977 | 266,977 | ||||||||||||||||||
Furniture and fixtures | 5 years | $ | 56,995 | $ | 56,995 | Building and improvements | 5 - 25 years | 727,965 | 727,965 | ||||||||||||||
Office and computer equipment | 1 - 5 years | 227,344 | 220,060 | Site costs | 10 years | 1,272,732 | 1,272,732 | ||||||||||||||||
Land | — | 266,977 | 266,977 | Crushing system | 20 years | 2,256,943 | 2,256,943 | ||||||||||||||||
Building and improvements | 5 - 25 years | 727,965 | 727,965 | Process plant and equipment | 10 years | 3,166,280 | 3,115,266 | ||||||||||||||||
Site costs | 10 years | 1,272,732 | 1,272,732 | Vehicles and mining equipment | 5 - 10 years | 682,373 | 659,622 | ||||||||||||||||
Crushing system | 20 years | 2,256,943 | 2,256,943 | 8,650,325 | 8,346,111 | ||||||||||||||||||
Process plant and equipment | 10 years | 3,169,442 | 3,166,280 | Less: accumulated depreciation | (1,263,549 | ) | (315,008 | ) | |||||||||||||||
Vehicles and mining equipment | 5 - 10 years | 695,825 | 682,373 | ||||||||||||||||||||
8,674,223 | 8,650,325 | $ | 7,386,776 | $ | 8,031,103 | ||||||||||||||||||
Less: accumulated depreciation | (1,993,320 | ) | (1,263,549 | ) | |||||||||||||||||||
$ | 6,680,903 | $ | 7,386,776 | ||||||||||||||||||||
SENIOR_CONVERTIBLE_PROMISSORY_1
SENIOR CONVERTIBLE PROMISSORY NOTES (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2012 | |||||||||||||||||||||||||
MINERAL PROPERTIES. | ' | ||||||||||||||||||||||||
Senior convertible promissory notes | ' | ||||||||||||||||||||||||
31-Dec-12 | 31-Dec-11 | ||||||||||||||||||||||||
Senior convertible promissory notes | $ | — | $ | 7,999,778 | |||||||||||||||||||||
Less: debt discount | — | (6,933,333 | ) | ||||||||||||||||||||||
Senior convertible promissory notes, net | $ | — | $ | 1,066,445 | |||||||||||||||||||||
Senior convertible promissory notes to Platinum and Lakewood | ' | ||||||||||||||||||||||||
Summary of Activity of Senior Convertible Promissory Notes | Platinum and Lakewood | Totals | Interest Expense | Amortization of Discount(Interest Expense) | Loss from Extinguishment of Debt | Preferred Stock Dividend | |||||||||||||||||||
Original Face Amount of Notes Issued to Platinum and Lakewood | 8,000,000 | 8,000,000 | — | — | — | — | |||||||||||||||||||
Assignment and Assumption Agreement with Third Party Investors on February 23, 2012 | (4,000,000 | ) | — | — | — | — | — | ||||||||||||||||||
Note Modification Agreement with Assignors and Assignees on February 23, 2012 | — | — | 3,022,186 | — | — | — | |||||||||||||||||||
Payment of Principal | (1,039,771 | ) | (1,039,771 | ) | 901,135 | — | — | ||||||||||||||||||
Conversion into Common Stock | (262,500 | ) | (262,500 | ) | — | 227,500 | 51,563 | — | |||||||||||||||||
Note Assignment and Assumption Agreement with Third Party Investors on March 30, 2012 | (2,697,729 | ) | 294,285 | 168,163 | (255,047 | ) | 824,196 | — | |||||||||||||||||
Conversion of $1,892,014 of Note into Common Stock at $0.35 per share | — | (1,892,014 | ) | — | 953,333 | 615,138 | — | ||||||||||||||||||
Conversion of $1,100,000 of Note into Class D Preferred Stock | — | (1,100,000 | ) | — | 1,639,745 | 357,635 | 130,949 | ||||||||||||||||||
Conversion of FGIT Note into Series D Preferred Stock on March 30, 2012 | — | (2,400,000 | ) | — | 2,080,000 | 1,262,990 | 286,298 | ||||||||||||||||||
Conversion of $1,600,000 of Note into Common Stock on March 30, 2012 | — | (1,600,000 | ) | — | 1,386,667 | 841,992 | — | ||||||||||||||||||
Outstanding Balance as of December 31, 2012 | — | — | 3,190,349 | 6,933,333 | 3,953,514 | 417,247 |
CONVERTIBLE_NOTES_PAYABLE_Tabl
CONVERTIBLE NOTES PAYABLE (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2012 | |||||||||
MINERAL PROPERTIES. | ' | ||||||||
Convertible promissory notes | ' | ||||||||
31-Dec-12 | 31-Dec-11 | ||||||||
Convertible promissory notes | $ | — | $ | 1,015,604 | |||||
Less: debt discount | — | (897,117 | ) | ||||||
Convertible promissory notes, net | $ | — | $ | 118,487 |
NOTES_PAYABLE_Tables1
NOTES PAYABLE (Tables) | 9 Months Ended | 12 Months Ended | |||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | ||||||||||||||||
NOTES PAYABLE | ' | ' | |||||||||||||||
Note payable, related party | ' | ' | |||||||||||||||
31-Dec-12 | 31-Dec-11 | ||||||||||||||||
Note payable - related party | $ | 486,250 | $ | 561,750 | |||||||||||||
Less: debt discount - related party | — | (50,918 | ) | ||||||||||||||
Note payable - related party, net | $ | 486,250 | $ | 510,832 | |||||||||||||
Schedule of Debt [Table Text Block] | ' | ' | |||||||||||||||
31-Dec-12 | 31-Dec-11 | ||||||||||||||||
September 30, 2013 | December 31, 2012 | Total notes payable | $ | 82,546 | $ | — | |||||||||||
Total notes payable | $ | 65,269 | $ | 82,546 | Less: current portion | (23,036 | ) | — | |||||||||
Less: current portion | (23,036 | ) | (23,036 | ) | Long term portion | $ | 59,510 | $ | — | ||||||||
Long term portion | $ | 42,233 | $ | 59,510 | |||||||||||||
DERIVATIVE_LIABILITY_Tables
DERIVATIVE LIABILITY (Tables) | 12 Months Ended | |||||
Dec. 31, 2012 | ||||||
MINERAL PROPERTIES. | ' | |||||
Fair value of the convertible instruments | ' | |||||
2012 | 2011 | |||||
Dividend rate | 0% | 0% | ||||
Term (in years) | 2.00 - 2.17 Years | 2.25 - 2.50 Years | ||||
Volatility | 103% - 110% | 106% - 193% | ||||
Risk-free interest rate | 0.27% - 0.33% | 0.25% - 0.42% |
NET_LOSS_PER_COMMON_SHARE_Tabl1
NET LOSS PER COMMON SHARE (Tables) | 9 Months Ended | 12 Months Ended | |||||||||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | ||||||||||||||||||||||
NET LOSS PER COMMON SHARE | ' | ' | |||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | ' | ' | |||||||||||||||||||||
NOTE 10 — NET LOSS PER COMMON SHARE | For the | For the | |||||||||||||||||||||
year ended | year ended | ||||||||||||||||||||||
The computation of diluted net loss per share does not include anti-dilutive common stock equivalents in the weighted average shares outstanding. The following table sets forth the computation of basic and diluted loss per share: | 31-Dec-12 | 31-Dec-11 | |||||||||||||||||||||
Numerator: | |||||||||||||||||||||||
For the Three | For the Three | For the Nine | For the Nine | Loss from continuing operations | $ | -49,052,749 | $ | -21,469,563 | |||||||||||||||
Months ended | Months ended | Months ended | Months ended | Loss from discontinued operations | $ | -50,298 | $ | -3,088,373 | |||||||||||||||
September 30, | September 30, | September 30, | September 30, | ||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | Denominator: | |||||||||||||||||||
Numerator: | Denominator for basic and diluted loss per share | ||||||||||||||||||||||
Loss from continuing operations available to common stockholders | $ | (8,023,233 | ) | $ | (5,078,909 | ) | $ | (13,067,459 | ) | $ | (48,266,585 | ) | (weighted-average shares) | 219,530,283 | 70,372,421 | ||||||||
Loss from discontinued operations | $ | — | $ | — | $ | — | $ | (50,298 | ) | ||||||||||||||
Loss per common share, basic and diluted: | |||||||||||||||||||||||
Denominator: | Loss from continuing operations | $ | -0.22 | $ | -0.31 | ||||||||||||||||||
Denominator for basic and diluted loss per share | 273,292,023 | 256,619,449 | 272,236,712 | 206,120,456 | Loss from discontinued operations | $ | 0 | $ | -0.04 | ||||||||||||||
(weighted-average shares) | |||||||||||||||||||||||
Loss per common share, basic and diluted: | |||||||||||||||||||||||
Loss from continuing operations | $ | (0.03 | ) | $ | (0.02 | ) | $ | (0.05 | ) | $ | (0.23 | ) | |||||||||||
Loss from discontinued operations | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | |||||||||||
Schedule of Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Table Text Block] | ' | ' | |||||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||||||
September 30, | September 30, | 2012 | 2011 | ||||||||||||||||||||
2013 | 2012 | Common stock equivalents: | |||||||||||||||||||||
Common stock equivalents: | Stock options | 35,298,000 | 3,548,000 | ||||||||||||||||||||
Stock options | 33,400,000 | 35,298,000 | Stock warrants | 16,255,779 | 35,603,142 | ||||||||||||||||||
Stock warrants | 26,244,621 | 12,222,188 | Convertible preferred stock | - | 8,710,990 | ||||||||||||||||||
Convertible preferred stock | 33,555,000 | — | Convertible promissory notes embedded conversion feature | - | 22,030,656 | ||||||||||||||||||
93,199,621 | 47,520,188 | 51,553,779 | 69,892,788 | ||||||||||||||||||||
DISCONTINUED_OPERATIONS_Tables1
DISCONTINUED OPERATIONS (Tables) | 9 Months Ended | 12 Months Ended | |||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | ||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ' | |||||||||||||||
Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures [Table Text Block] | ' | ' | |||||||||||||||
The following table sets forth indicated selected financial data of the Company’s discontinued operations of its sports and entertainment business during the nine months ended September 30, 2013 and 2012. | 31-Dec-12 | 31-Dec-11 | |||||||||||||||
Assets: | |||||||||||||||||
September | September | Accounts receivable, net | $ | — | $ | 44,300 | |||||||||||
30, 2013 | 30, 2012 | Notes and loan receivable | — | 16,750 | |||||||||||||
Revenues | $ | — | $ | — | Assets of discontinued operations | $ | — | $ | 61,050 | ||||||||
Cost of sales | — | — | |||||||||||||||
Gross profit (loss) | — | — | Liabilities: | ||||||||||||||
Operating and other non-operating expenses | — | (50,298 | ) | Accounts payables and accrued expenses | $ | — | $ | 21,622 | |||||||||
Liabilities of discontinued operations | $ | — | $ | 21,622 | |||||||||||||
Loss from discontinued operations | — | (50,298 | ) | ||||||||||||||
Gain from sale of sports and entertainment business | — | — | |||||||||||||||
Loss from discontinued operations | $ | — | $ | (50,298 | ) | ||||||||||||
Discontinued operations of its sports and entertainment business | ' | ' | |||||||||||||||
December 31, | December 31, | ||||||||||||||||
2012 | 2011 | ||||||||||||||||
Revenues | $ | - | $ | 3,041,329 | |||||||||||||
Cost of sales | - | 5,060,393 | |||||||||||||||
Gross profit (loss) | - | (2,019,064 | ) | ||||||||||||||
Operating and other non-operating expenses | (50,298 | ) | (2,191,837 | ) | |||||||||||||
Loss from discontinued operations | (50,298 | ) | (4,210,901 | ) | |||||||||||||
Gain from sale of sports and entertainment business | - | 1,122,528 | |||||||||||||||
Loss from discontinued operations | $ | (50,298 | ) | $ | (3,088,373 | ) | |||||||||||
COMMITMENTS_AND_CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended | 12 Months Ended | ||||||||
Sep. 30, 2013 | Dec. 31, 2012 | |||||||||
COMMITMENTS AND CONTINGENCIES | ' | ' | ||||||||
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | ' | ' | ||||||||
2013 | $ | 45,011 | ||||||||
2013 | $ | 11,353 | 2014 | 46,207 | ||||||
2014 | 46,207 | 2015 and thereafter | 15,535 | |||||||
2015 and thereafter | 15,535 | $ | 106,753 | |||||||
$ | 73,095 | |||||||||
INCOME_TAXES_Tables
INCOME TAXES (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2012 | |||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||
Effective tax rate and the statutory federal rate | ' | ||||||||
December 31, | December 31, | ||||||||
2012 | 2011 | ||||||||
Tax benefit computed at "expected" statutory rate | $ | (16,695,036 | ) | $ | (8,349,698 | ) | |||
State income taxes, net of benefit | - | - | |||||||
Permanent differences : | |||||||||
Stock based compensation and consulting | 240,786 | 520,660 | |||||||
Derivative expense | - | 896,000 | |||||||
Loss (gain) from change in fair value of derivative liability | 494,700 | (579,564 | ) | ||||||
Amortization of debt discount, deferred | 3,768,000 | 883,400 | |||||||
financing cost, and other non-cash interest | |||||||||
Stock based settlement expense | 1,660,300 | 1,618,900 | |||||||
Loss on extinguishment of debts | 1,621,700 | - | |||||||
Other | 55,334 | 3,050 | |||||||
Increase in valuation allowance | 8,854,216 | 5,007,252 | |||||||
Net income tax benefit | $ | - | $ | - | |||||
The table below summarizes the differences between the Company’s effective tax rate and the statutory federal rate as follows for the year ended December 31, 2012 and 2011: | |||||||||
December 31, | December 31, | ||||||||
2012 | 2011 | ||||||||
Computed "expected" tax expense (benefit) | (34.0 | )% | (34.0 | )% | |||||
State income taxes | (0 | )% | (0.0 | )% | |||||
Permanent differences | 15.5 | % | 13.6 | % | |||||
Change in valuation allowance | 18.5 | % | 20.4 | % | |||||
Effective tax rate | 0 | % | 0 | % | |||||
Deferred tax assets | ' | ||||||||
Deferred tax assets: | |||||||||
December 31, | December 31, | ||||||||
2012 | 2011 | ||||||||
Net operating loss carryover | $ | 6,694,996 | $ | 4,430,250 | |||||
Stock based compensation | 6,940,860 | 993,620 | |||||||
Stock held for sale | -1,131,290 | - | |||||||
Depreciable and depletable assets | 1,145,470 | -181,985 | |||||||
Mining explorations | 836,910 | 392,925 | |||||||
Capital loss carryforward | 271,490 | 271,490 | |||||||
Other | -228,780 | -230,860 | |||||||
Less: valuation allowance | (14,529,656 | ) | (5,675,440 | ) | |||||
Net deferred tax asset | $ | - | $ | - |
STOCKHOLDERS_EQUITY_Tables1
STOCKHOLDERS EQUITY (Tables) | 9 Months Ended | 12 Months Ended | ||||||||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | |||||||||||||||||||||
STOCKHOLDERS' EQUITY | ' | ' | ||||||||||||||||||||
Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block] | ' | ' | ||||||||||||||||||||
A summary of the Company’s outstanding stock warrants as of September 30, 2013 and changes during the period then ended are presented below: | Risk free interest rate (annual) | 0.27% | ||||||||||||||||||||
Expected volatility | 112% | |||||||||||||||||||||
Number of | Weighted | Weighted | Expected life | 2 Years | ||||||||||||||||||
Warrants | Average | Average | Assumed dividends | none | ||||||||||||||||||
Exercise | Remaining | |||||||||||||||||||||
Price | Contractual | |||||||||||||||||||||
Life | ||||||||||||||||||||||
(Years) | ||||||||||||||||||||||
Balance at December 31, 2012 | 16,255,779 | $ | 0.54 | 2.42 | ||||||||||||||||||
Granted | 13,435,590 | 0.4 | 3 | |||||||||||||||||||
Cancelled | (3,446,748 | ) | 0.65 | 0.14 | ||||||||||||||||||
Forfeited | — | — | — | |||||||||||||||||||
Exercised | — | — | — | |||||||||||||||||||
Balance at September 30, 2013 | 26,244,621 | $ | 0.45 | 2.47 | ||||||||||||||||||
Warrants exercisable at September 30, 2013 | 26,244,621 | $ | 0.45 | 2.47 | ||||||||||||||||||
Weighted average fair value of warrants granted during the period | $ | 0.17 | ||||||||||||||||||||
Assumptions used valuing the warrants include | ' | ' | ||||||||||||||||||||
Risk free interest rate (annual) | 0.88 | % | ||||||||||||||||||||
Expected volatility | 110 | % | ||||||||||||||||||||
Expected life | 5 Years | |||||||||||||||||||||
Assumed dividends | none | |||||||||||||||||||||
Summary of the stock options | ' | ' | ||||||||||||||||||||
Number of Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (Years) | ||||||||||||||||||||
Balance at December 31, 2010 | 2,850,000 | $ | 0.6 | 9.45 | ||||||||||||||||||
Granted | 2,648,000 | 1.36 | 8.96 | |||||||||||||||||||
Exercised | - | - | - | |||||||||||||||||||
Forfeited | (1,950,000 | ) | 0.41 | 8.84 | ||||||||||||||||||
Cancelled | - | - | - | |||||||||||||||||||
Balance at December 31, 2011 | 3,548,000 | 1.11 | 8.45 | |||||||||||||||||||
Granted | 32,250,000 | 0.39 | 10 | |||||||||||||||||||
Exercised | - | - | - | |||||||||||||||||||
Forfeited | (500,000 | ) | 0.81 | 8.59 | ||||||||||||||||||
Cancelled | - | - | - | |||||||||||||||||||
Balance outstanding at December 31, 2012 | 35,298,000 | $ | 0.46 | 9.11 | ||||||||||||||||||
Options exercisable at end of year | 33,055,067 | $ | 0.46 | |||||||||||||||||||
Options expected to vest | 2,242,933 | |||||||||||||||||||||
Weighted average fair value of options granted during the period | $ | 0.36 | ||||||||||||||||||||
Summary of outstanding stock warrants | ' | ' | ||||||||||||||||||||
Number of Warrants | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (Years) | ||||||||||||||||||||
Balance at December 31, 2010 | - | $ | - | - | ||||||||||||||||||
Granted | 56,190,375 | 2.25 | 3.25 | |||||||||||||||||||
Cancelled | -5,336,045 | 2.84 | 4.4 | |||||||||||||||||||
Forfeited | -3,720,000 | 2.84 | - | |||||||||||||||||||
Exercised | -11,531,188 | 0.6 | 2 | |||||||||||||||||||
Balance at December 31, 2011 | 35,603,142 | $ | 2.64 | 3.94 | ||||||||||||||||||
Granted | 24,482,741 | 0.56 | 4.59 | |||||||||||||||||||
Cancelled | (32,430,954 | ) | 2.83 | 3.86 | ||||||||||||||||||
Forfeited | - | - | - | |||||||||||||||||||
Exercised | (11,399,150 | ) | 0.42 | 4.64 | ||||||||||||||||||
Balance at December 31, 2012 | 16,255,779 | $ | 0.54 | 2.42 | ||||||||||||||||||
Warrants exercisable at December 31, 2012 | 16,255,779 | $ | 0.54 | 2.42 | ||||||||||||||||||
Weighted average fair value of options granted during the year ended December 31, 2012 | $ | 0.46 |
ORGANIZATION_AND_DESCRIPTION_O4
ORGANIZATION AND DESCRIPTION OF BUSINESS (Details Narrative) (USD $) | 0 Months Ended | 12 Months Ended | ||||||
Aug. 30, 2011 | 25-May-11 | Dec. 31, 2008 | Dec. 31, 2012 | Sep. 02, 2011 | Sep. 01, 2011 | Jul. 22, 2011 | 23-May-11 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ' | ' | ' | ' | ' | ' | ' |
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share, Planned Sale, Investments Not Identified, Percentage | ' | ' | ' | ' | 66.70% | 66.67% | ' | ' |
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share, Planned Sale, Investments Not Identified, Value | ' | ' | ' | ' | $500,000 | $500,000 | ' | ' |
Acquisition of Arrtor Gold interests | ' | ' | ' | ' | ' | ' | ' | 100.00% |
Issued shares Series B Convertible Preferred stock for acquisition | ' | 8,000,000 | ' | ' | ' | ' | ' | ' |
Shares of common stock issued in acquisition | ' | 13,000,000 | ' | ' | ' | ' | ' | ' |
Shares of common stock issued to Acquisition Sub | ' | ' | ' | ' | ' | ' | 76,095,215 | ' |
Warrants issued to Acquisition Sub | ' | ' | ' | ' | ' | ' | 41,566,999 | ' |
Stock options issued to Acquisition Sub | ' | ' | ' | ' | ' | ' | 2,248,000 | ' |
Shares of common stock issued to Continental | ' | ' | ' | ' | ' | ' | 76,095,215 | ' |
Shares of common stock issued to Continental of total issued | ' | ' | ' | ' | ' | ' | 67.00% | ' |
Maximum ownership interest in Continental | ' | ' | ' | 50.00% | ' | ' | ' | ' |
Interest Continental holds in the Company | ' | ' | ' | 28.54% | ' | ' | ' | ' |
Payments to Acquire Businesses, Gross | 12,000,000 | ' | 550,000 | ' | ' | ' | ' | ' |
Business Combination, Consideration Transferred, Other | $8,000,000 | ' | ' | ' | ' | ' | ' | ' |
Going_Concern_Details_Narrativ
Going Concern (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | 16 Months Ended | 25 Months Ended | |||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | Sep. 30, 2013 | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | ' | ' | ' | ' | ' | ' | ' | ' |
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | ($3,921,574) | ($5,078,909) | ($8,965,800) | ($45,592,956) | ($49,103,047) | ($24,557,936) | ($60,721,832) | ($69,687,632) |
Net cash used in operating activities | ' | ' | -6,009,619 | -7,392,342 | -9,943,307 | -7,500,568 | -11,905,766 | -17,915,385 |
Income (Loss) from Continuing Operations Attributable to Parent | ' | ' | ' | ' | ' | ' | $82,000,000 | ($95,000,000) |
SUMMARY_OF_SIGNIFICANT_ACCOUNT6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Derivative liability measured at fair value on a recurring basis (Details) (USD $) | 9 Months Ended | 12 Months Ended | 16 Months Ended | 25 Months Ended | |
Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | Sep. 30, 2013 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ' | ' | ' | ' |
Balance at January 1, 2012 | $6,295,400 | $6,295,400 | ' | ' | ' |
Change in fair value of derivative liability | -1,454,889 | 1,454,889 | -6,902,806 | -5,447,917 | 5,447,917 |
Reclassification of derivative liability to equity | -7,750,289 | -7,750,289 | ' | -7,750,289 | -7,750,289 |
Balance at December 31, 2012 | ' | ' | $6,295,400 | ' | ' |
SUMMARY_OF_SIGNIFICANT_ACCOUNT7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Investment measured at fair value on a recurring basis (Details) (USD $) | Dec. 31, 2012 |
Quoted Prices in Active Markets (Level 1) | ' |
Marketable securities - available for sale, net of discount for effect of restriction | ' |
Significant Other Observable Inputs (Level 2) | ' |
Marketable securities - available for sale, net of discount for effect of restriction | ' |
Significant Unobservable Inputs (Level 3) | ' |
Marketable securities - available for sale, net of discount for effect of restriction | ' |
SUMMARY_OF_SIGNIFICANT_ACCOUNT8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | 16 Months Ended | 25 Months Ended | |||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | Sep. 30, 2013 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ' | ' | ' | ' | ' | ' | ' |
Stockholders' Equity Attributable to Noncontrolling Interest | ' | ' | ' | ' | ' | ($1,164) | ' | ' |
Cash, FDIC Insured Amount | ' | ' | ' | ' | 250,000 | ' | 250,000 | ' |
Prepaid Expense, Current | 359,491 | ' | 359,491 | ' | 502,837 | 463,737 | 502,837 | 359,491 |
Prepaid expenses - long-term portion | ' | ' | ' | ' | ' | 37,759 | ' | ' |
Exploration Expense, Mining | 1,078,139 | 1,782,820 | 1,793,214 | 4,842,781 | 5,221,001 | 2,298,090 | 7,021,023 | 8,814,237 |
Advertising expense | ' | ' | ' | ' | $0 | $441,064 | ' | ' |
ACQUISITION_DISPOSITION_AND_DE4
ACQUISITION, DISPOSITION AND DECONSOLIDATION - Assets acquired and liabilities assumed (Details) (USD $) | 12 Months Ended |
Dec. 31, 2012 | |
ACQUISITION, DISPOSITION AND DECONSOLIDATION | ' |
Current assets (including cash of $11,164,514) | $13,069,511 |
Note receivable | 2,000,000 |
Prepaid expenses - long term portion | 41,912 |
Property and equipment | 39,912 |
Liabilities assumed (including a 12% note payable of $50,000) | -293,659 |
Net purchase price | $14,857,676 |
ACQUISITION_DISPOSITION_AND_DE5
ACQUISITION, DISPOSITION AND DECONSOLIDATION (Details Narrative) (USD $) | 0 Months Ended | 9 Months Ended | 12 Months Ended | 16 Months Ended | 25 Months Ended | ||
Aug. 30, 2011 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2008 | Dec. 31, 2012 | Sep. 30, 2013 | |
ACQUISITION, DISPOSITION AND DECONSOLIDATION | ' | ' | ' | ' | ' | ' | ' |
Stock Issued During Period, Shares, Purchase of Assets | ' | ' | 10,000,000 | ' | ' | ' | ' |
Warrants Issued for purchase of assets or interest | ' | ' | 500,000 | ' | ' | ' | ' |
Maximum ownership interest in Continental | ' | ' | 50.00% | ' | ' | 50.00% | ' |
Interest Continental holds in the Company | ' | ' | 28.54% | ' | ' | 28.54% | ' |
Note receivable | ' | ' | $2,000,000 | ' | ' | $2,000,000 | ' |
Liabilities assumed (including a 12% note payable of $50,000) | ' | ' | -293,659 | ' | ' | -293,659 | ' |
Net purchase price | ' | ' | 14,857,676 | ' | ' | ' | ' |
Notes Payable. | ' | ' | 82,546 | ' | ' | 82,546 | 65,269 |
Issuance of a note receivable in connection with sale of uranuim assets pursuant to an option agreement | ' | 930,000 | 930,000 | ' | ' | 930,000 | 930,000 |
Cash paid for acquisition | 12,000,000 | ' | ' | ' | 550,000 | ' | ' |
Senior Secured Convertible Promissory Notes issued for acquisition | 8,000,000 | ' | ' | ' | ' | ' | ' |
Accounts and Other Receivables, Net, Current | ' | ' | 77,364 | 113,241 | ' | 77,364 | ' |
Gain from sale of subsidiary | ' | $2,500,000 | $2,500,000 | ' | ' | $2,500,000 | $2,500,000 |
MARKETABLE_SECURITIES_Marketab
MARKETABLE SECURITIES - Marketable securities (Details) (USD $) | 3 Months Ended | 9 Months Ended | 11 Months Ended | 12 Months Ended | 16 Months Ended | 25 Months Ended | ||
Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | Sep. 30, 2013 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ' | ' | ' | ' | ' | ' | ' |
Cost | ' | ' | ' | ' | ' | ' | ' | ' |
Gross Unrealized Gains | ' | ' | ' | ' | ' | ' | ' | ' |
Gross Unrealized Losses | ' | ' | ' | ' | ' | ' | ' | ' |
Realized gain - available for sale securities | 415,000 | 1,656,333 | 755,600 | 1,490,600 | 1,490,600 | ' | 1,490,600 | 3,146,933 |
Fair Value | ' | ' | ' | ' | ' | ' | ' | ' |
MARKETABLE_SECURITIES_Details_1
MARKETABLE SECURITIES (Details Narrative) (USD $) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 11 Months Ended | 12 Months Ended | 16 Months Ended | 25 Months Ended | |||||
Jan. 31, 2013 | Apr. 30, 2012 | Jan. 31, 2012 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | Sep. 30, 2013 | Jan. 26, 2012 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sale of marketable securities, cost basis | ' | $100,000 | ' | ' | $1,656,333 | $875,302 | ' | $1,610,302 | ' | $1,610,302 | $3,266,635 | ' |
Net proceeds on sale of marketable securities | ' | 119,702 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Realized gain - trading securities | ' | ' | ' | ' | ' | ' | ' | 19,702 | ' | ' | ' | ' |
Restricted shares of Amicor's common stock received | ' | ' | 10,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Recorded the cost of investment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 |
Shares of Amicor Sold Private Placement | 1,513,333 | ' | ' | ' | ' | ' | 8,486,667 | ' | ' | ' | ' | ' |
Available-for-sale Securities, Gross Realized Gain (Loss) | ' | ' | ' | 415,000 | 1,656,333 | 755,600 | 1,490,600 | 1,490,600 | ' | 1,490,600 | 3,146,933 | ' |
Proceeds from Issuance of Long-term Debt and Capital Securities, Net | $151,333 | ' | $151,333 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Company's percentage ownership of Amicor | ' | ' | ' | ' | ' | ' | 3.00% | 3.00% | ' | 3.00% | ' | 26.60% |
MINERAL_PROPERTIES_Mineral_pro
MINERAL PROPERTIES - Mineral properties (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Extractive Industries [Abstract] | ' | ' | ' |
Relief Canyon Mine - Gold Acquisition | $8,501,071 | $8,501,071 | $8,501,071 |
Relief Canyon Mine - Newmont Leased Properties | 7,709,441 | 7,709,441 | ' |
Pershing Pass Property | 576,400 | 576,400 | ' |
Total Mineral Properties | $16,786,912 | $16,786,912 | $8,501,071 |
MINERAL_PROPERTIES_Details_Nar
MINERAL PROPERTIES (Details Narrative) (USD $) | 0 Months Ended | 12 Months Ended | 27 Months Ended | ||||||
Aug. 30, 2011 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2008 | Jun. 30, 2014 | Sep. 30, 2013 | Apr. 05, 2012 | Mar. 31, 2012 | Feb. 29, 2012 | |
Extractive Industries [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unpatented Lode Mining Claims Owned | ' | ' | ' | 489 | ' | ' | ' | 84 | 283 |
Unpatented Millsites Owned | ' | ' | ' | ' | ' | ' | ' | 118 | ' |
Cash paid for acquisition | $12,000,000 | ' | ' | $550,000 | ' | ' | ' | ' | ' |
Royalty Acquired | ' | ' | ' | ' | ' | ' | 2.00% | ' | ' |
Acres of Property | ' | ' | ' | 9,700 | ' | ' | 13,300 | ' | ' |
Additional expenditures with Mineral Lease | ' | ' | ' | ' | ' | ' | 750,000 | ' | ' |
Required annual expenditure on exploration | ' | ' | ' | ' | 500,000 | ' | ' | ' | ' |
Operating Leases, Future Minimum Payments Due | ' | 106,753 | ' | ' | ' | 73,095 | 10 | ' | ' |
Rental Payments Percentage Increase Per Year | ' | ' | ' | ' | 5.00% | ' | ' | ' | ' |
Incurred costs in excess | ' | 2,000,000 | ' | ' | ' | ' | ' | ' | ' |
Stock Issued During Period, Shares, Purchase of Assets | ' | 10,000,000 | ' | ' | ' | ' | ' | ' | ' |
Warrants Issued for purchase of assets or interest | ' | 500,000 | ' | ' | ' | ' | ' | ' | ' |
Warrant Exercise Price | ' | $0.60 | ' | ' | ' | ' | ' | ' | ' |
Common shares | ' | ' | ' | ' | ' | ' | 10,000,000 | ' | ' |
Common shares, price per share | ' | ' | ' | ' | ' | ' | $0.46 | ' | ' |
Common shares, Value | ' | ' | ' | ' | ' | ' | $4,600,000 | ' | ' |
Fair Value Assumptions, Expected Volatility Rate | ' | 103.00% | 106.00% | ' | ' | ' | ' | ' | ' |
Expected term of stock | ' | '2 years | ' | ' | ' | ' | ' | ' | ' |
PROPERTY_AND_EQUIPMENT_Propert
PROPERTY AND EQUIPMENT - Property and equipment (Details) (USD $) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
PROPERTY AND EQUIPMENT | ' | ' | ' |
Furniture and Fixtures, Gross | $56,995 | $56,995 | $20,000 |
Property, Plant and Equipment Useful Life Furniture Fixtures | '5 years | '5 years | ' |
Property, Plant, and Equipment, Fair Value Disclosure | 227,344 | 220,060 | 26,606 |
Property, Plant and Equipment Useful Life Office Computer Min | '1 year | '1 year | ' |
Property, Plant and Equipment, Useful Life, Office Computer | '5 years | '5 years | ' |
Land | 266,977 | 266,977 | 266,977 |
Buildings and Improvements, Gross | 727,965 | 727,965 | 727,965 |
Property, Plant and Equipment, Useful Life, Building | '5 years | '5 years | ' |
Property, Plant and Equipment, Useful Life, Building, Max | '25 years | '25 years | ' |
Development Costs, Period Cost | 1,272,732 | 1,272,732 | 1,272,732 |
Property, Plant and Equipment, Useful Life, Site Costs | '10 years | '10 years | ' |
Crushing System, Gross | 2,256,943 | 2,256,943 | 2,256,943 |
Property, Plant and Equipment, Useful Life, Crushing System | '20 years | '20 years | ' |
Public Utilities, Property, Plant and Equipment, Generation or Processing | 3,169,442 | 3,166,280 | 3,115,266 |
Property, Plant and Equipment, Useful Life | '10 years | '10 years | ' |
Public Utilities, Property, Plant and Equipment, Vehicles | 695,825 | 682,373 | 659,622 |
Property, Plant and Equipment, Useful Life, Vehicles, Minimum | '5 years | '5 years | ' |
Property, Plant and Equipment, Useful Life, Vehicles, Maximum | '10 years | '10 years | ' |
Property, Plant, and Equipment, Owned, Net | 8,674,223 | 8,650,325 | 8,346,111 |
Less: accumulated depreciation | -1,993,320 | -1,263,549 | -315,008 |
Property, Plant and Equipment, Gross | $6,680,903 | $7,386,776 | $8,031,103 |
PROPERTY_AND_EQUIPMENT_Details1
PROPERTY AND EQUIPMENT (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2012 | Dec. 31, 2011 | |
PROPERTY AND EQUIPMENT | ' | ' |
Depreciation, Depletion and Amortization | $992,648 | $325,928 |
Mining and drilling equipment sold, book value | 80,309 | 407,369 |
Sales price of mining and drilling equipment sold | 74,074 | 233,339 |
Loss on sale of assets | 6,235 | 174,030 |
Sales proceeds | ' | 99,908 |
Depreciation expense related to the sold mining and drilling equipment | 10,318 | 10,920 |
Retired fully depreciated fixed assets | $33,789 | ' |
SENIOR_CONVERTIBLE_PROMISSORY_2
SENIOR CONVERTIBLE PROMISSORY NOTES - Senior convertible promissory notes (Details) (USD $) | Dec. 31, 2012 | Dec. 31, 2011 |
MINERAL PROPERTIES. | ' | ' |
Senior convertible promissory notes | ' | $7,999,778 |
Less: debt discount | 6,933,333 | -6,933,333 |
Senior convertible promissory notes, net | ' | $1,066,445 |
SENIOR_CONVERTIBLE_PROMISSORY_3
SENIOR CONVERTIBLE PROMISSORY NOTES - Senior convertible promissory notes to Platinum and Lakewood (Details) (USD $) | Dec. 31, 2012 | Feb. 23, 2012 | Dec. 31, 2011 | Aug. 31, 2011 | Dec. 31, 2012 | Mar. 30, 2012 | Feb. 23, 2012 | Dec. 31, 2012 | Mar. 30, 2012 | Feb. 23, 2012 | Dec. 31, 2012 | Mar. 30, 2012 | Feb. 23, 2012 | Dec. 31, 2012 | Mar. 30, 2012 | Feb. 23, 2012 | Dec. 31, 2012 | Mar. 30, 2012 | Feb. 23, 2012 | Dec. 31, 2012 | Mar. 30, 2012 | Feb. 23, 2012 |
Platinum and Lakewood | Platinum and Lakewood | Platinum and Lakewood | Totals | Totals | Totals | Interest Expense | Interest Expense | Interest Expense | Amortization of Discount (Interest Expense) | Amortization of Discount (Interest Expense) | Amortization of Discount (Interest Expense) | Loss from Extinguishment of Debt | Loss from Extinguishment of Debt | Loss from Extinguishment of Debt | Preferred Stock [Member] | Preferred Stock [Member] | Preferred Stock [Member] | |||||
Original Face Amount of Notes Issued to Platinum and Lakewood | $2,697,729 | ' | ' | $8,000,000 | ' | ' | $8,000,000 | ' | ' | $8,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Assignment and Assumption Agreement with Third Party Investors | ' | 4,000,000 | ' | ' | ' | -2,697,729 | -4,000,000 | ' | 294,285 | ' | ' | 168,163 | ' | ' | -255,047 | ' | ' | 824,196 | ' | ' | ' | ' |
Note Modification Agreement with Assignors and Assignees | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,022,186 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Payment of Principal | ' | 1,039,771 | ' | ' | ' | ' | -1,039,771 | ' | ' | -1,039,771 | ' | ' | ' | ' | ' | 901,135 | ' | ' | ' | ' | ' | ' |
Conversion into Common Stock | ' | ' | ' | ' | ' | ' | -262,500 | ' | ' | -262,500 | ' | ' | ' | ' | ' | 227,500 | ' | ' | 51,563 | ' | ' | ' |
Conversion of Note Into Common Stock | ' | ' | ' | ' | ' | ' | ' | ' | -1,892,014 | ' | ' | ' | ' | ' | 953,333 | ' | ' | 615,138 | ' | ' | ' | ' |
Conversion of Note into Class D Preferred Stock | ' | ' | ' | ' | ' | ' | ' | ' | -1,100,000 | ' | ' | ' | ' | ' | 1,639,745 | ' | ' | 357,635 | ' | ' | 130,949 | ' |
Conversion of FGIT Note into Series D Preferred Stock | ' | ' | ' | ' | ' | ' | ' | ' | -2,400,000 | ' | ' | ' | ' | ' | 2,080,000 | ' | ' | 1,262,990 | ' | ' | 286,298 | ' |
Conversion of Note (B) into Common Stock | ' | ' | ' | ' | ' | ' | ' | ' | 1,600,000 | ' | ' | ' | ' | ' | 1,386,667 | ' | ' | 841,992 | ' | ' | ' | ' |
Outstanding Balance | ' | ' | $1,066,445 | ' | ' | ' | ' | ' | ' | ' | $3,190,349 | ' | ' | $6,933,333 | ' | ' | $3,953,514 | ' | ' | $417,247 | ' | ' |
SENIOR_CONVERTIBLE_PROMISSORY_4
SENIOR CONVERTIBLE PROMISSORY NOTES (Details Narrative) (USD $) | 1 Months Ended | 9 Months Ended | 12 Months Ended | 16 Months Ended | 25 Months Ended | |||||||
Mar. 31, 2012 | Dec. 31, 2012 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | Sep. 30, 2013 | Aug. 31, 2013 | Mar. 31, 2013 | Mar. 30, 2012 | Feb. 23, 2012 | Aug. 31, 2011 | |
MINERAL PROPERTIES. | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Senior secured convertible promissory notes to Platinum and Lakewood | ' | $2,697,729 | ' | $2,697,729 | ' | $2,697,729 | ' | ' | ' | ' | ' | $8,000,000 |
Interest on notes | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 9.00% |
Notes converted into shares, price per share | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.55 | ' |
Notes converted into shares, adjusted price per share | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.40 | ' |
Payment of Principal | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,039,771 | ' |
Assignment and Assumption Agreement with Third Party Investors | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,000,000 | ' |
Retained original notes, by Platinum | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,368,183 | ' |
Retained original notes, by Lakewood | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 592,046 | ' |
Warrants issued to Platinum | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,144,320 | ' |
Warrants issued to Lakewood | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,036,080 | ' |
Warrants exercised on a cashless basis | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,967,143 | ' |
Shares issued to Platinum | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,600,000 | ' |
Shares issued to Lakewood | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 400,000 | ' |
Shares issued in Note Modification Agreement | ' | ' | ' | ' | ' | ' | ' | ' | ' | 750,000 | 2,000,000 | ' |
Warrants issued in Note Modification agreement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,180,400 | ' |
Warrant Exercise Price | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.40 | $0.40 | ' |
Fair Value of Shares issued in Note Modification Agreement, per share | ' | ' | ' | ' | ' | ' | ' | ' | ' | $2,960,229 | $0.49 | ' |
Fair Value of Shares issued in Note Modification Agreement, value | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.35 | 978,000 | ' |
Fair value of Warrants issued in Note Modification Agreement, per warrant | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.39 | ' |
Fair value of Warrants issued in Note Modification Agreement, value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,044,186 | ' |
FV Notes Modification, share price | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.49 | ' |
FV Notes modification, expected volatility | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 110.00% | ' |
FV Notes modification, expected term | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '5 years | ' |
FV Notes modification, risk-free interest rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.88% | ' |
Reduced conversion price, per share | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.35 | ' | ' |
Common stock, purchase price | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,256,252 | ' | ' |
Extinguishment of Debt, Amount | 294,285 | 2,436,888 | ' | 357,635 | ' | ' | ' | ' | ' | ' | ' | ' |
Notes converted to shares, value allocated to assignees | 2,992,014 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Notes converted to shares, value waived | 264,238 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Extinguishment of Debt, realized due to conversion price reduction | 529,911 | ' | ' | 475,671 | ' | ' | ' | ' | ' | ' | ' | ' |
Additional Shares issued in conversion | 1,118,432 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share Price | ' | ' | ' | ' | ' | ' | ' | $0.35 | $0.44 | $0.56 | $1 | ' |
Series D Preferred Stock stated value | ' | ' | ' | ' | ' | ' | ' | ' | ' | $1,100,000 | ' | ' |
Notes converted to shares, Series D Preferred Stock Issued | 1,100,000 | 7,500,000 | ' | 2,421,600 | ' | ' | ' | ' | ' | ' | ' | ' |
Additional Series D Preferred Stock Issued | 227,586 | 227,586 | ' | 501,021 | ' | ' | ' | ' | ' | ' | ' | ' |
Preferred Stock Deemed Dividend | 130,049 | 537,499 | 1,616,777 | 1,616,777 | 3,284,396 | 4,901,173 | 4,901,173 | ' | ' | ' | ' | ' |
Series D Preferred Stock per share | ' | ' | ' | ' | ' | ' | ' | ' | ' | $1 | ' | ' |
Accrued Interest converted to shares, value | 21,600 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Conversion of assgned note | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,600,000 | ' | ' |
Shares from conversion of assigned note | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,612,571 | ' | ' |
Remaining unamortized debt discount | ' | 6,933,333 | ' | 6,933,333 | -6,933,333 | 6,933,333 | ' | ' | ' | ' | ' | ' |
Accrued Interest | ' | $0 | ' | $0 | $45,999 | $0 | ' | ' | ' | ' | ' | ' |
CONVERTIBLE_NOTES_PAYABLE_Conv
CONVERTIBLE NOTES PAYABLE - Convertible promissory notes (Details) (USD $) | Dec. 31, 2012 | Dec. 31, 2011 |
MINERAL PROPERTIES. | ' | ' |
Convertible promissory notes | ' | $1,015,604 |
Less: debt discount | ' | -897,117 |
Convertible promissory notes, net | ' | $118,487 |
CONVERTIBLE_NOTES_PAYABLE_Deta
CONVERTIBLE NOTES PAYABLE (Details Narrative) (USD $) | 12 Months Ended | ||||||||
Dec. 31, 2012 | Dec. 31, 2011 | Mar. 31, 2012 | Mar. 30, 2012 | Feb. 23, 2012 | Oct. 31, 2011 | Sep. 14, 2011 | Aug. 30, 2011 | Feb. 02, 2011 | |
MINERAL PROPERTIES. | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Raised for issuance of convertible promissory notes | ' | ' | ' | ' | ' | ' | ' | ' | $750,000 |
Contributed from Company's Board of Directors | ' | ' | ' | ' | ' | ' | ' | ' | 100,000 |
Convertible promissory notes, interest per annum | ' | ' | ' | ' | ' | ' | ' | ' | 5.00% |
Convertible promissory notes, per share | ' | ' | ' | ' | ' | ' | ' | ' | $1 |
Issued common shares from convertible promissory notes | ' | ' | ' | ' | ' | ' | ' | ' | 750,000 |
Convertible debentures and common stock value | ' | ' | ' | ' | ' | ' | ' | ' | 750,000 |
Adjusted fixed conversion price | ' | ' | ' | ' | ' | $0.65 | ' | ' | ' |
Accrued interest on converted notes | ' | ' | ' | ' | ' | 27,555 | ' | ' | ' |
Shares issued for accrued interest | ' | ' | ' | ' | ' | 1,196,238 | ' | ' | ' |
Recorded interest expense | ' | ' | ' | ' | ' | 230,192 | ' | ' | ' |
Secured promissory note sold | ' | ' | ' | ' | ' | ' | 1,715,604 | ' | ' |
Secured promissory note sold, percentage | ' | ' | ' | ' | ' | ' | 9.00% | ' | ' |
Secured pledge for note | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' |
Prepayment on principal of note | ' | ' | ' | ' | ' | 700,000 | ' | ' | ' |
Series D Cumulative Convertible Preferred Stock, per share | ' | ' | $0.35 | $1 | $0.40 | ' | ' | ' | ' |
Remainder of note to be fully converted | ' | ' | ' | 1,015,604 | ' | ' | ' | ' | ' |
Unpaid interest on remainder of note | ' | ' | ' | 9,140 | ' | ' | ' | ' | ' |
Shares of Series D Preferred Stock from conversion | ' | ' | ' | 1,024,744 | ' | ' | ' | ' | ' |
Additional shares of Series D Preferred Stock | ' | ' | ' | 212,017 | ' | ' | ' | ' | ' |
Extinguishment of debts, promissory notes | ' | ' | ' | 483,094 | ' | ' | ' | ' | ' |
Loss from extinguishment of debt, promissory notes | 333,168 | ' | ' | ' | ' | ' | ' | ' | ' |
Preferred deemed dividend, promissory notes | 121,152 | ' | ' | ' | ' | ' | ' | ' | ' |
Unamortized debt discount, promissory notes | 897,117 | ' | ' | ' | ' | ' | ' | ' | ' |
Accrued interest, promissory notes | $7,882 | $0 | ' | ' | ' | ' | ' | ' | ' |
NOTES_PAYABLE_Note_payable_rel
NOTES PAYABLE - Note payable, related party (Details) (USD $) | Dec. 31, 2012 | Dec. 31, 2011 |
NOTES PAYABLE | ' | ' |
Note payable - related party | $486,250 | $561,750 |
Less: debt discount - related party | ' | -50,918 |
Note payable - related party, net | $486,250 | $510,832 |
NOTES_PAYABLE_Notes_payable_sh
NOTES PAYABLE - Notes payable, short and long term portion (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
NOTES PAYABLE | ' | ' | ' |
Total Notes Payable | $65,269 | $82,546 | ' |
Less: current portion | -23,036 | -23,036 | ' |
Long term portion | $42,233 | $59,510 | ' |
NOTES_PAYABLE_Details_Narrativ
NOTES PAYABLE (Details Narrative) (USD $) | 1 Months Ended | 12 Months Ended | ||||||||
Feb. 28, 2011 | Dec. 31, 2012 | Sep. 30, 2013 | Oct. 31, 2012 | Sep. 30, 2012 | Aug. 31, 2012 | Jul. 31, 2012 | Mar. 31, 2012 | Dec. 31, 2011 | Nov. 29, 2011 | |
NOTES PAYABLE | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Loan borrowed on a senior secured basis | $4.50 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest on loan, per annum | 6.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued to lenders and Sheldon Finkel | 2,250,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Series A Preferred Stock, shares | 2,250,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Par value of preferred stock authorized (in dollars per share) | $1.20 | $0.00 | $0.00 | ' | ' | ' | ' | ' | $0.00 | ' |
Series A Preferred Stock, value | 2,700,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Recorded debt discount | 1,800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred financing costs | 900,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Series A Preferred Stock issued to Sheldon Finkel | 750,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount paid to lenders | ' | ' | ' | ' | ' | ' | ' | ' | 3,326,500 | ' |
Principal balance converted to units | ' | ' | ' | ' | ' | ' | ' | ' | ' | 611,750 |
Units converted from principal balance | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,529,375 |
Purchase price of units | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.40 |
Assigned note from outstanding principal | ' | ' | ' | ' | ' | ' | 42,000 | ' | ' | ' |
Retired shares of common stock, from Sheldon Finkel | ' | ' | ' | ' | ' | ' | 600,000 | ' | ' | ' |
Received shares of Executive Retained Securities | ' | ' | ' | ' | 300,000 | ' | ' | ' | ' | ' |
Executive Retained Securities, per share | ' | ' | ' | ' | $0.35 | ' | ' | ' | ' | ' |
Executive Retained Securities, value | ' | ' | ' | ' | 103,500 | ' | ' | ' | ' | ' |
Recognized interest expense | ' | ' | ' | ' | 61,500 | ' | ' | ' | ' | ' |
Reduction to outstanding principal note | ' | ' | ' | 33,500 | ' | ' | ' | ' | ' | ' |
Reduced outstanding principal note | ' | ' | ' | 486,250 | ' | ' | ' | ' | ' | ' |
Received from Bridge Note | 500,000 | ' | ' | ' | ' | ' | ' | 500,000 | ' | ' |
Percent in connection with Bridge Note | 5.00% | ' | ' | ' | ' | ' | ' | 5.00% | ' | ' |
Note Payable in Connection with Acquisition | 92,145 | ' | ' | ' | ' | 92,145 | ' | ' | ' | ' |
Note Payable Connection with Acquisition Interest | ' | ' | ' | ' | ' | 7.00% | ' | ' | ' | ' |
Current portion of note | ' | 23,036 | ' | ' | ' | ' | ' | ' | ' | ' |
Long term portion of note | ' | $59,510 | ' | ' | ' | ' | ' | ' | ' | ' |
DERIVATIVE_LIABILITY_Fair_valu
DERIVATIVE LIABILITY - Fair value of the convertible instruments (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2012 | Dec. 31, 2011 | |
MINERAL PROPERTIES. | ' | ' |
Dividend rate | $0 | $0 |
Fair Value Assumptions, Expected Term | '2 years | '2 years |
Volatility, minimum | 103.00% | 106.00% |
Volatility, maximum | 110.00% | 193.00% |
Fair Value Assumptions, Risk Free Interest Rate | 0.27% | 0.25% |
Risk-free interest rate, maximum | 0.33% | 0.42% |
DERIVATIVE_LIABILITY_Details_N
DERIVATIVE LIABILITY (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2012 | Dec. 31, 2011 | |
MINERAL PROPERTIES. | ' | ' |
Derivative liability | $0 | $6,295,400 |
Gain (loss) from fair value of convertible instruments | -1,454,889 | 6,902,806 |
Reclassified derivative liability | $7,750,289 | ' |
RELATED_PARTY_TRANSACTIONS_Det1
RELATED PARTY TRANSACTIONS (Details Narrative) (USD $) | 1 Months Ended | 9 Months Ended | 12 Months Ended | 16 Months Ended | 25 Months Ended | |||
Feb. 28, 2011 | Dec. 31, 2012 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | Sep. 30, 2013 | Mar. 27, 2013 | |
RELATED PARTY TRANSACTIONS | ' | ' | ' | ' | ' | ' | ' | ' |
Debt under the Credit Facility Agreement | $2,250,000 | ' | ' | ' | ' | ' | ' | ' |
Shares issued to Sheldon Finkel | 750,000 | ' | ' | ' | ' | ' | ' | ' |
Fee obligation of inital loan commitment, payable to Sheldon Finkel | 15.00% | ' | ' | ' | ' | ' | ' | ' |
Converted Series A stock into common stock | 1,500,000 | ' | ' | ' | ' | ' | ' | ' |
Principal balance paid to Sheldon Finkel | 1,688,250 | ' | ' | ' | ' | ' | ' | ' |
Notes Payable, Related Parties | 486,250 | ' | ' | ' | ' | ' | ' | ' |
Shares of Contiental | ' | 9,474,759 | ' | 9,474,759 | ' | 9,474,759 | ' | 3,685,000 |
Continental's ownership in Pershing | ' | 28.54% | ' | 28.54% | ' | 28.54% | ' | ' |
Shares issued for payment of Continental's accrued legal fees | ' | 250,000 | ' | ' | ' | ' | ' | ' |
Issuance of Common Stock for Expenses Adjustment | ' | 170,614 | 170,614 | 170,614 | ' | 170,614 | 170,614 | ' |
Payments for Continental Expenses | ' | 93,640 | ' | ' | ' | ' | ' | ' |
Distribution to former parent company | ' | 611,589 | 606,339 | -611,589 | ' | ' | 517,949 | ' |
Due from equity method investor (former Parent Company) | ' | $0 | ' | $0 | $347,335 | $0 | ' | ' |
STOCKHOLDERS_EQUITY_Assumption
STOCKHOLDERS EQUITY - Assumptions used valuing the warrants include (Details) (USD $) | 12 Months Ended | 1 Months Ended | 12 Months Ended | ||
Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | Aug. 31, 2013 | Dec. 31, 2012 | |
Preferred Warrants | Warrant [Member] | Warrant [Member] | |||
Risk-free interest rate (annual) | 0.27% | 0.25% | 0.88% | ' | 0.27% |
Expected volatility (as a percent) | 103.00% | 106.00% | 110.00% | 86.00% | 112.00% |
Expected term | '2 years | '2 years | '5 years | '3 years | '2 years |
Expected dividend yield | $0 | $0 | ' | ' | ' |
STOCKHOLDERS_EQUITY_Summary_of
STOCKHOLDERS EQUITY - Summary of the stock options (Details) (USD $) | 1 Months Ended | 12 Months Ended | |||
Aug. 31, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | |
STOCKHOLDERS' EQUITY | ' | ' | ' | ' | ' |
Beginning Balance at December 31, 2012 (in shares) | ' | ' | 3,548,000 | 2,850,000 | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures | ' | ' | ' | 32,250,000 | 2,648,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period | ' | ' | ' | -500,000 | -1,950,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Expirations in Period | ' | ' | ' | ' | ' |
Balance outstanding at September 30, 2013 (in shares) | ' | ' | 35,298,000 | 3,548,000 | 2,850,000 |
Options Exercisable | ' | ' | 33,055,067 | ' | ' |
Options expected to vest | ' | ' | 2,242,933 | ' | ' |
Beginning Balance at December 31, 2012 (in dollars per share) | ' | ' | $1.11 | $0.60 | ' |
Granted | ' | ' | ' | $0.39 | $1.36 |
Exercised | ' | ' | ' | ' | ' |
Forfeited | ' | ' | ' | $0.81 | $0.41 |
Cancelled | ' | ' | ' | ' | ' |
Balance outstanding at September 30, 2013 (in dollars per share) | ' | ' | $0.46 | $1.11 | $0.60 |
Options Exercisable | ' | ' | $0.46 | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $0.23 | $0.25 | $0.36 | ' | ' |
Share Based Compensation Arrangement by Share Based Payment Award, Options, Outstanding Weighted Average Remaining Contractual Term 3 | ' | ' | '9 years 2 months | '8 years 5 months | '9 years 5 months |
Share Based Compensation Arrangement by Share Based Payment Award, Options, Grants in Period, Weighted Average Remaining Contractual Term | ' | ' | ' | '10 years | '8 years 11 months |
Share Based Compensation Arrangement by Share Based Payment Award Options Forfeitures in Period Weighted Average Remaining Contractual Term | ' | ' | ' | '8 years 7 months | '8 years 9 months |
STOCKHOLDERS_EQUITY_Summary_of1
STOCKHOLDERS EQUITY - Summary of outstanding stock warrants (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2012 | Dec. 31, 2011 | |
STOCKHOLDERS' EQUITY | ' | ' |
Beginning balance at December 31, 2012 (in shares) | 35,603,142 | ' |
Granted | 24,482,741 | 56,190,375 |
Cancelled | -32,430,954 | -5,336,045 |
Forfeited | ' | -3,720,000 |
Exercised | -11,399,150 | -11,531,188 |
Ending Balance at September 30, 2013 (in shares) | 16,255,779 | 35,603,142 |
Warrants exercisable | 16,255,779 | ' |
Beginning Balance | $2.64 | ' |
Granted | $0.56 | $2.25 |
Cancelled | $2.83 | $2.84 |
Forfeited | ' | $2.84 |
Exercised | $0.42 | $0.60 |
Ending Balance | $0.54 | $2.64 |
Warrants exercisable | $0.54 | ' |
Weighted average fair value of options granted | $0.46 | ' |
Beginning Balance | '2 years 5 months | '3 years 11 months |
Granted | '4 years 7 months | '3 years 3 months |
Cancelled | '3 years 11 months | '4 years 5 months |
Exercised | '4 years 7 months | '2 years |
Ending Balance at September 30, 2013 | '2 years 5 months | '3 years 11 months |
Warrants exercisable | '2 years 5 months | ' |
STOCKHOLDERS_EQUITY_Details_Na
STOCKHOLDERS EQUITY (Details Narrative) (USD $) | 1 Months Ended | 2 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 16 Months Ended | 25 Months Ended | |||||||||||||
Jun. 30, 2012 | Mar. 31, 2012 | Jul. 31, 2011 | Apr. 30, 2011 | Mar. 31, 2011 | Feb. 28, 2011 | Feb. 29, 2012 | Oct. 31, 2011 | Dec. 31, 2011 | Dec. 31, 2012 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | Sep. 30, 2013 | Aug. 31, 2013 | Mar. 31, 2013 | Mar. 30, 2012 | Feb. 23, 2012 | Sep. 29, 2011 | |
STOCKHOLDERS' EQUITY | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Preferred stock, Par Value (in dollars per share) | ' | ' | ' | ' | ' | $1.20 | ' | ' | $0.00 | $0.00 | ' | $0.00 | $0.00 | $0.00 | $0.00 | ' | ' | ' | ' | ' |
Stock authorized, shares | ' | ' | ' | ' | ' | ' | ' | ' | 50,000,000 | 50,000,000 | ' | 50,000,000 | 50,000,000 | 50,000,000 | 50,000,000 | ' | ' | ' | ' | ' |
Preferred Shares converted | 6,086,968 | ' | ' | ' | ' | ' | ' | ' | ' | 7,500,000 | ' | ' | 2,250,000 | ' | ' | ' | ' | ' | ' | ' |
Shares of common stock converted into | 19,021,775 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,250,000 | ' | ' | ' | ' | ' | ' | ' |
Shares sold for cash | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,250,000 | ' | ' | ' | ' | ' | ' | ' |
Proceeds from sale of shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $2,700,000 | ' | ' | ' | ' | ' | ' | ' |
Series C Convertible Preferred Stock sold | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,284,396 |
Series C Convvertible Preferred Stock sold, purchase price | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 9,853,188 |
Series C Convvertible Preferred Stock sold, purchase price per share | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.60 |
Series D Cumulative Convertible Preferred Stock | ' | 400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,000,000 | ' |
Series D Cumulative Convertible Preferred Stock, per share | ' | $0.35 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $1 | $0.40 | ' |
Conversion Price | ' | ' | ' | ' | ' | ' | ' | ' | ' | $21,150 | ' | $21,150 | ' | $21,150 | ' | ' | ' | ' | ' | ' |
Preferred Stock Deemed Dividend | ' | 130,049 | ' | ' | ' | ' | ' | ' | ' | 537,499 | 1,616,777 | 1,616,777 | 3,284,396 | 4,901,173 | 4,901,173 | ' | ' | ' | ' | ' |
Notes converted to shares, value | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share Price | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.35 | $0.44 | $0.56 | $1 | ' |
Notes converted to shares, Series D Preferred Stock Issued | ' | 1,100,000 | ' | ' | ' | ' | ' | ' | ' | 7,500,000 | ' | 2,421,600 | ' | ' | ' | ' | ' | ' | ' | ' |
Additional Series D Preferred Stock Issued | ' | 227,586 | ' | ' | ' | ' | ' | ' | ' | 227,586 | ' | 501,021 | ' | ' | ' | ' | ' | ' | ' | ' |
Extinguishment of Debt, Amount | ' | 294,285 | ' | ' | ' | ' | ' | ' | ' | 2,436,888 | ' | 357,635 | ' | ' | ' | ' | ' | ' | ' | ' |
Preferred stock dividends | ' | ' | ' | ' | ' | ' | ' | ' | ' | 79,278 | -21,150 | -21,150 | ' | -21,150 | -21,150 | ' | ' | ' | ' | ' |
Additional Common Stock Issued | ' | ' | 76,095,215 | 410,000 | 900,000 | 200,000 | ' | 500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Value of Common Stock Issued | ' | ' | 14,857,676 | 246,000 | 59,612 | 280,000 | ' | 485,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Value of Common Stock Issued, per share | ' | ' | ' | $0.60 | ' | $1.40 | ' | $0.97 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sold units pursuant to subscriptions | ' | ' | ' | ' | ' | ' | $2,237,500 | $1,718,000 | $1,830,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate sale, number of units | ' | ' | ' | ' | ' | ' | 847,500 | 3,436,000 | 4,575,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Purchase price per unit | ' | ' | ' | ' | ' | ' | $0.40 | $0.50 | $0.40 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Warrant issued | ' | ' | ' | ' | ' | ' | 1,118,750 | 1,718,000 | 1,529,375 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash exercise price per share | ' | ' | ' | ' | ' | ' | $0.60 | $0.60 | $0.60 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock issued in connection with exercise of warrants | ' | ' | ' | ' | ' | ' | ' | 866,065 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Warrants issued on cashless basis | ' | ' | ' | ' | ' | ' | ' | 1,678,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
NET_LOSS_PER_COMMON_SHARE_Comp
NET LOSS PER COMMON SHARE - Computation of diluted net loss per share (Details) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | 16 Months Ended | 25 Months Ended | |||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | Sep. 30, 2013 | |
Numerator [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' |
Loss from continuing operations | ($3,921,574) | ($5,078,909) | ($8,965,800) | ($45,542,658) | ($49,052,749) | ($21,469,563) | ($61,524,199) | ($70,489,999) |
Loss from discontinued operations | ' | ' | ' | ($50,298) | ($50,298) | ($3,088,373) | $802,367 | $802,367 |
Denominator for basic and diluted loss per share (in shares) | 273,292,023 | 256,619,449 | 272,236,712 | 206,120,460 | 219,530,283 | 70,372,421 | 242,840,594 | 224,003,492 |
Income (Loss) from Continuing Operations, Per Basic and Diluted Share | ($0.03) | ($0.02) | ($0.05) | ($0.23) | ($0.22) | ($0.31) | ($0.25) | ($0.36) |
Income (Loss) from Discontinued Operations and Disposal of Discontinued Operations, Net of Tax, Per Basic and Diluted Share | $0 | $0 | $0 | $0 | $0 | ($0.04) | $0 | $0 |
NET_LOSS_PER_COMMON_SHARE_Excl
NET LOSS PER COMMON SHARE - Excluded from the computation of diluted shares outstanding (Details) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | |
Dilutive Securities, Effect on Basic Earnings Per Share [Abstract] | ' | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share Amount Options | 33,400,000 | 35,298,000 | 35,298,000 | 3,548,000 |
Antidilutive Securities Excluded from Computation of Earnings Per Share Amount Warrants | 26,244,621 | 12,222,188 | 16,255,779 | 35,603,142 |
Antidilutive Securities Excluded from Computation of Earnings Per Share Amount Convertible Preferred | 33,555,000 | ' | ' | 8,710,990 |
Convertible promissory notes embedded conversion feature | ' | ' | ' | 22,030,656 |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 93,199,621 | 47,520,188 | 51,553,779 | 69,892,788 |
DISCONTINUED_OPERATIONS_Remain
DISCONTINUED OPERATIONS - Remaining assets and liabilities of discontinued operations (Details) (USD $) | Dec. 31, 2012 | Dec. 31, 2011 |
Assets: | ' | ' |
Accounts receivable, net | ' | $44,300 |
Notes and loan receivable | ' | 16,750 |
Assets of discontinued operations | ' | 61,050 |
Liabilities: | ' | ' |
Accounts payables and accrued expenses | ' | 21,622 |
Liabilities of discontinued operations | ' | $21,622 |
DISCONTINUED_OPERATIONS_Discon
DISCONTINUED OPERATIONS - Discontinued operations of its sports and entertainment business (Details) (USD $) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ' | ' | ' |
Revenues | ' | ' | ' | $3,041,329 |
Cost of sales | ' | ' | ' | 5,060,393 |
Gross profit | ' | ' | ' | -2,019,064 |
Operating and other non-operating expenses | ' | ' | -50,298 | -2,191,837 |
Loss from discontinued operations | ' | ' | -50,298 | -4,210,901 |
Gain from sale of sports and entertainment business | ' | ' | ' | 1,122,528 |
Loss from discontinued operations | ' | ' | ($50,298) | ($3,088,373) |
DISCONTINUED_OPERATIONS_Detail2
DISCONTINUED OPERATIONS (Details Narrative) (USD $) | 12 Months Ended | ||
Dec. 31, 2012 | Dec. 31, 2011 | Aug. 31, 2011 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ' | ' |
Sale of Empire and interest in Hoedown | ' | ' | $500,000 |
Net of allowance for bad debt | $500,000 | $0 | ' |
COMMITMENTS_AND_CONTINGENCIES_4
COMMITMENTS AND CONTINGENCIES - Future minimum rental payments required under these operating (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Apr. 05, 2012 |
COMMITMENTS AND CONTINGENCIES | ' | ' | ' |
Operating Leases, Future Minimum Payments, Next Rolling Twelve Months | $11,353 | $45,011 | ' |
Operating Leases, Future Minimum Payments, Due in Rolling Year Two | 46,207 | 46,207 | ' |
Operating Leases, Future Minimum Payments, Due Thereafter | 15,535 | 15,535 | ' |
Total | $73,095 | $106,753 | $10 |
COMMITMENTS_AND_CONTINGENCIES_5
COMMITMENTS AND CONTINGENCIES (Details Narrative) (USD $) | 1 Months Ended | 9 Months Ended | 12 Months Ended | |
Feb. 29, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
COMMITMENTS AND CONTINGENCIES | ' | ' | ' | ' |
Operating Leases, Rent Expense, Contingent Rentals | $44,215 | $44,215 | ' | ' |
Operating Leases, Rent Expense, Net | ' | $33,759 | $28,050 | $56,583 |
INCOME_TAXES_Effective_tax_rat
INCOME TAXES - Effective tax rate and the statutory federal rate (Details) (USD $) | 12 Months Ended | 16 Months Ended | |
Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | |
Income Tax Disclosure [Abstract] | ' | ' | ' |
Tax benefit computed at ""expected"" statutory rate | ($16,695,036) | ($8,349,698) | ' |
State income taxes, net of benefit | ' | ' | ' |
Stock based compensation and consulting | 240,786 | 520,660 | ' |
Derivative expense | ' | 896,000 | ' |
Loss (gain) from change in fair value of derivative liability | 494,700 | -579,564 | ' |
Amortization of debt discount, deferred financing cost, and other non-cash interest | 3,768,000 | 883,400 | ' |
Stock based settlement expense | 1,660,300 | 1,618,900 | ' |
Loss on extinguishment of debts | 1,621,700 | ' | ' |
Other | 55,334 | 3,050 | ' |
Increase in valuation allowance | 8,854,216 | 5,007,252 | ' |
Income Tax Expense (Benefit) | ' | ' | ' |
Percentages | ' | ' | ' |
Computed ""expected"" tax expense (benefit) | 34.00% | 34.00% | ' |
State income taxes | 0.00% | 0.00% | ' |
Permanent differences | 15.50% | 13.60% | ' |
Change in valuation allowance | 18.50% | 20.40% | ' |
Effective tax rate | 0.00% | 0.00% | ' |
INCOME_TAXES_Deferred_tax_asse
INCOME TAXES - Deferred tax assets (Details) (USD $) | Dec. 31, 2012 | Dec. 31, 2011 |
Deferred tax assets: | ' | ' |
Net operating loss carryover | $6,694,996 | $4,430,250 |
Stock based compensation. | 6,940,860 | 993,620 |
Stock held for sale | -1,131,290 | ' |
Depreciable and depletable assets | 1,145,470 | -181,985 |
Mining explorations | 836,910 | 392,925 |
Capital loss carryforward | 271,490 | 271,490 |
Other | -228,780 | -230,860 |
Less: valuation allowance | -14,529,656 | -5,675,440 |
Net deferred tax asset | ' | ' |
INCOME_TAXES_Details_Narrative
INCOME TAXES (Details Narrative) (USD $) | Dec. 31, 2012 |
Income Tax Disclosure [Abstract] | ' |
Net operating loss carryforward for tax purposes | $19,700,000 |
Increased valuation allowance | $8,900,000 |
SUBSEQUENT_EVENTS_Details_Narr
SUBSEQUENT EVENTS (Details Narrative) (USD $) | 1 Months Ended | ||||||||||||
Feb. 28, 2013 | Jan. 31, 2013 | Nov. 30, 2015 | Jun. 18, 2015 | Feb. 09, 2015 | Nov. 30, 2014 | Jun. 18, 2014 | Mar. 14, 2014 | Feb. 09, 2014 | Nov. 30, 2013 | Jun. 18, 2013 | Feb. 12, 2013 | Feb. 09, 2013 | |
SUBSEQUENT EVENTS | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares sold in private transaction | 3,000,000 | 1,513,333 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net proceeds from hares sold in private transaction | $300,000 | $151,333 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares owned after the sale in private transaction | 22,000,000 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Vesting schedule of restriced stock, extension | ' | ' | 33.34% | 33.34% | ' | 33.33% | 33.33% | 33.33% | ' | 33.33% | 33.33% | ' | ' |
Vesting schedule of restricted stock, shares | ' | ' | ' | ' | 3,000,000 | ' | ' | 6,000,000 | 3,000,000 | ' | ' | ' | 6,000,000 |
Maximum shares of common stock issuable under 2013 Plan | 40,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares of restricted stock granted to director and five employees | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,300,000 | ' |
Restricted stock granted to director and five employees, per share | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.51 | ' |
Restricted stock granted to five consultants | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,400,000 | ' |
Restricted stock granted to five consultants, per share | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.51 | ' |