| Equity Transaction | NOTE 10 EQUITY TRANSACTIONS On February 2, 2015, the
Company cancelled 910,000 shares of common stock previously issued to Michael Stanford pursuant to a court order issued in connection
with the Companys lawsuit against Mr. Stanford. These shares were valued at par value $0.001. See Note 11 Legal
Proceedings. On March 1, 2015, the Company
issued 50,000 shares of common stock pursuant to the employment agreement for the President. These shares were valued at $1.20
per share. See Note 7 Contracts and Lease Agreements. On March 17, 2015, the
Company issued 114,000 shares of its common stock in exchange for payment of $20,500 and a mutual release of a claim by an investor.
The investor claimed to have purchased and paid for 32,000 shares of the Companys unregistered common stock in November
2013 but did not receive the shares purchased. On May 15, 2015, the Company
issued 1,550,000 shares of its common stock to related parties for services rendered and to be rendered during the six months ended
June 30, 2015. These shares were valued at $1.10 per share. On June 30, 2015, the Company
issued 310,000 shares of its common stock in exchange for equity investments totaling $105,000 received during the period ended
June, 2015. On September 30, 2015,
the Company issued 2,150,000 shares of its common stock to related parties for services rendered and to be rendered during the
year ended December 31, 2015. The shares were valued at $1.10 per share. On September 30, 2015,
the Company issued 100,000 shares of its common stock to unrelated parties for services rendered and to be rendered during the
year ended December 31, 2015. The shares were valued at $1.10 per share. On September 30, 2015,
the Company issued 500,000 shares of its common stock to an unrelated party as good faith partial payment for the acquisition of
a mine discussed in Note 12. The shares were valued at $1.10 per share. Series B Preferred Stock On September 30, 2015,
the Company filed with the Secretary of State of Nevada a certificate of designation of preferences, rights and limitations creating
the Companys Series B preferred stock and designating the rights and preferences of the Series B preferred stock (the Series
B Certificate of Designation). The Series B Certificate of Designation authorized the issuance of up to 100,000 shares of
Series B preferred stock, par value $0.001 per share. Holders of the Series B preferred stock are entitled to 100 votes per share
on matters submitted to a vote of the Companys stockholders. Upon any liquidation, dissolution
or winding-up of the Company, whether voluntary of involuntary, the holders of the Series B preferred stock will be entitled to
receive out of the assets of the Company an amount equal to the par value of the Series B Preferred and any other fees or liquidated
damages then due and owing, for each share of Series B preferred stock before any distribution or payment is made to the holders
of any junior securities, and if the assets of the Company are insufficient to pay in full such amounts, then the entire assets
to be distributed to the holders of the Series B preferred stock will be ratably distributed among the holders in accordance with
the respective amounts that would be payable on such shares if all amounts payable thereon were paid in full. The preference rights
of the Series B Preferred Stock precedes the rights of the Series C Preferred Stock. Subject to the terms of
the Series B Certificate of Designation, the Series B preferred stock is convertible, at any time after six months after the date
of issuance into that number of shares of common stock determined by multiplying the number of shares of Series B preferred stock
by 100, subject to adjustment as provided in the Series B Certificate of Designation. The Company will not effect any conversion
of Series B preferred stock, and the holder of Series B preferred stock will not have the right to convert any portion of the Series
B preferred stock, to the extent that, after giving effect to the conversion, the holder and its affiliates and any person acting
as a group with the holder or any of its affiliates would beneficially own in excess of 4.99% of the Companys outstanding
common stock. On September 30, 2015,
the Company had issued 5,000 shares to a related party of its Series B preferred stock for services rendered and to be rendered
during the year ended December 31, 2015. Each share of the Series C preferred stock was valued at $1.10 per share to reflect the
value of the 500,000 shares of common stock issuable upon conversion of the Series B preferred stock. Series C Preferred Stock On September 30, 2015,
the Company filed with the Secretary of State of Nevada a certificate of designation of preferences, rights and limitations creating
the Companys Series C preferred stock and designating the rights and preferences of the Series C preferred stock (the Series
C Certificate of Designation). The Series C Certificate of Designation authorized the issuance of up to 5,000,000 shares
of Series C preferred stock, par value $0.001 per share, with a stated value equal to $1.00 per share, subject to increase as set
forth in the Series C Certificate of Designation. Holders of the Series C
preferred stock are entitled to 10 votes per share on matters submitted to a vote of the Companys stockholders. Upon any liquidation, dissolution
or winding-up of the Company, whether voluntary of involuntary, the holders of the Series C preferred stock will be entitled to
receive out of the assets of the Company an amount equal to the par value of the Series C Preferred and any other fees or liquidated
damages then due and owing, for each share of Series C preferred stock before any distribution or payment is made to the holders
of any junior securities, and if the assets of the Company are insufficient to pay in full such amounts, then the entire assets
to be distributed to the holders of the Series C preferred stock will be ratably distributed among the holders in accordance with
the respective amounts that would be payable on such shares if all amounts payable thereon were paid in full. The preference rights
of the Series C Preferred Stock are secondary to those of the Series B Preferred Stock. Subject to the terms of
the Series C Certificate of Designation, the Series C preferred stock is convertible, at any time after six months after the date
of issuance into that number of shares of common stock determined by multiplying the number of shares of Series C preferred stock
by one, subject to adjustment as provided in the Series C Certificate of Designation. The Company will not effect any conversion
of Series C preferred stock, and the holder of Series C preferred stock will not have the right to convert any portion of the Series
C preferred stock, to the extent that, after giving effect to the conversion, the holder and its affiliates and any person acting
as a group with the holder or any of its affiliates would beneficially own in excess of 4.99% of the Companys outstanding
common stock. At the period ending September
30, 2015, there were no Series C preferred shares issued. Unit Offering On June 30, 2015, the Company
completed the closing of its offering of 1,000 units (the Units) of its common stock and warrants at a price of $1,000
per Unit for an aggregate offering amount of $1,000,000. To cover an over-allotment in this offering, we sold an additional 250
Units for an additional aggregate offering amount of $250,000 bringing the total amount sold in this offering to $1,250,000. The
Units were sold to 13 accredited investors one of whom included our Chief Executive Officer who purchased 141 Units by converting
$141,000 previously loaned to the Company. Each Unit consists of 2,000 shares of common stock together with callable common stock
purchase warrants entitling the holder thereof to purchase 2,000 shares of common stock at an exercise price of $1.00 per share
for a period of three years from the date of acquisition, unless earlier called by the Company in the event the common stock trades
at or above three dollars ($3.00) per share for a period exceeding ten (10) consecutive trading days (the Warrant).
The Company elected to sell to an unrelated party 110 Units in this offering for a promissory note in the principal amount of $110,000
due July 10, 2015. The note accrues interest at the rate of 5% per annum. At the closing of this offering, the Company issued an
aggregate of 2,280,000 shares of common stock and warrants to purchase 2,280,000 shares of common stock. Including the receipt
of the $110,000 from the promissory note, the offering totaled $1,250,000. The value of the promissory note was recorded as common
stock receivable. As of the filing of this report, the promissory note is in default. On July 13, 2015, the Company
agreed to issue 55 Units to an unrelated party and to extend the payment terms of the remaining $55,000 for an additional 55 units
as part of the $110,000 promissory note it received from that party in connection with the Companys offering of its Units
discussed above. Neither the shares nor warrants associated with this purchase of 55 units have yet been issued. In addition, on
July 28, 2015, the Company agreed to sell the remaining 55 Units from this offering to its Chief Executive Officer who converted
$55,000 of principal amount of his previous loan to the Company. The 110,000 shares and warrants associated with the purchase of
these 55 units were issued in July, 2015. Stock Options Effective March 1, 2015,
as part of an employment agreement, an option was granted to purchase 250,000 shares of the Companys common stock with an
exercise price of $0.50 per share. The option vests with respect to 50,000 shares upon execution of the Employment Agreement. With
respect to the remaining 200,000 shares, the option vests at the rate of 50,000 shares upon the close of each fiscal quarter from
and commencing on the close of the first fiscal quarter from and after the date of the Employment Agreement. The Company valued
the issuance of these warrants using the Black Scholes valuation model assuming a maturity of 2.7 years, 0.693% risk free rate
and an 88.83% volatility. At the nine months ended September 30, 2015, the vested value of the option was $170,576. This was recorded
as stock compensation expense. The following is a summary
of the status of all Companys stock options as of September 30, 2015 and changes during the nine months ended on that date:
Number Weighted
of Stock Average
Options Exercise Price
Oustanding at January 1, 2015 0 $ -
Granted 250,000 $ 0.50
Exercised 0 $ -
Cancelled 0 $ -
Outstanding at September 30, 2015 250,000 $ 0.50
Options exercisable at September 30, 2015 200,000 $ 0.50 Warrants During the nine months
ended September 30, 2015, the Company issued a total of 2,390,000 common stock purchase warrants that were issued as part of Units
sold to investors as part of the offering discussed above. The following is a summary
of the status of all of the Companys stock warrants as of September 30, 2015 and changes during the nine months ended on
that date:
Number Weighted
of Stock Average
Warrants Exercise Price
Oustanding at January 1, 2015 0 $ -
Granted 2,390,000 $ 1.00
Exercised 0 $ -
Cancelled 0 $ -
Outstanding at September 30, 2015 2,390,000 $ 1.00
Warrants exercisable at September 30, 2015 2,390,000 $ 1.00 |
