Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Apr. 11, 2016 | Jun. 30, 2015 | |
Document And Entity Information | |||
Entity Registrant Name | Star Mountain Resources, Inc. | ||
Entity Central Index Key | 1,477,168 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 11,343,946 | ||
Entity Common Stock, Shares Outstanding | 38,301,229 | ||
Trading Symbol | SMRS | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,015 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 1,201 | $ 46 |
Prepaid and other | 333 | $ 16 |
Parts and supplies inventory | 500 | |
Total current assets | 2,034 | $ 62 |
Land | 1,876 | 21 |
Property & equipment, net | 24,552 | $ 58 |
Mineral reserves | 3,165 | |
Mineral rights | 3,684 | $ 24 |
Restricted cash - reclamation deposits | 1,688 | 24 |
TOTAL ASSETS | 36,999 | 189 |
CURRENT LIABILITIES | ||
Accounts payable and accrued liabilities | 404 | 260 |
Accounts payable - related party | 19 | $ 38 |
Notes payable | 1,380 | |
Notes payable - related party | 875 | $ 254 |
Discount on notes payable - related parties | (105) | |
Purchase price obligation - Balmat acquisition | 500 | |
Stipulated agreement liability - related party | 79 | $ 79 |
Total current liabilities | 3,152 | $ 631 |
LONG TERM LIABILITIES | ||
Asset retirement obligation | 17,906 | |
Purchase price obligation - Balmat acquisition | 11,931 | |
Total long term liabilities | 29,837 | |
Total Liabilities | 32,989 | $ 631 |
STOCKHOLDERS' EQUITY (DEFICIT) | ||
Preferred stock, 50,000,000 authorized, $.001 par value, consisting of Series B preferred stock, 100,000 shares authorized, 5,000 and 0 shares issued and outstanding, respectively, and Series C preferred stock, 5,000,000 shares authorized, 3,130,000 and 0 shares issued and outstanding, respectively | 3 | |
Common stock, authorized 350,000,000 shares, $.001 par value 37,951,229 and 17,969,729 issued and outstanding, respectively | 38 | $ 18 |
Common stock subscribed | 27 | |
Additional paid in capital | 18,476 | $ 7,378 |
Accumulated deficit | (14,534) | (7,838) |
Total Stockholdes' Equity (Deficit) | 4,010 | (442) |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | $ 36,999 | $ 189 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2015 | Sep. 30, 2015 | Dec. 31, 2014 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 | |
Preferred stock, par value | $ 0.001 | $ 0.001 | |
Common stock, shares authorized | 350,000,000 | 350,000,000 | |
Common stock, par value | $ 0.001 | $ 0.001 | |
Common stock, shares issued | 37,951,229 | 17,969,729 | |
Common stock, shares outstanding | 37,951,229 | 17,969,729 | |
Series B Preferred Stock [Member] | |||
Preferred stock, shares authorized | 100,000 | 100,000 | |
Preferred stock, par value | $ 0.001 | ||
Preferred stock, shares issued | 5,000 | 0 | |
Preferred stock, shares outstanding | 5,000 | 0 | |
Series C Preferred Stock [Member] | |||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | |
Preferred stock, par value | $ 0.001 | ||
Preferred stock, shares issued | 3,130,000 | 0 | |
Preferred stock, shares outstanding | 3,130,000 | 0 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Income Statement [Abstract] | ||
REVENUE | ||
OPERATING EXPENSES | ||
Compensation | $ 1,853 | $ 554 |
Exploration and development costs | 214 | $ 67 |
Mine maintenance costs | 332 | |
Depreciation and amortization | 260 | $ 13 |
General and administrative | 2,107 | 941 |
General and administrative - related party | 1,851 | 1,098 |
Total Operating Expenses | 6,617 | 2,673 |
Loss from Operations | (6,617) | $ (2,673) |
OTHER INCOME (EXPENSES) | ||
Interest income | 2 | |
Interest expense - related party | (40) | $ (962) |
Intrest expenses - debt discount | (21) | |
Interest expense | $ (20) | $ (498) |
Loss on disposition of asset | (24) | |
Total Other Income (Expense) | $ (79) | (1,484) |
Income Tax Expense | 0 | 0 |
NET LOSS | $ (6,696) | $ (4,157) |
Basic Loss Per Share | $ (0.30) | $ (0.12) |
Weighted Average Number of Common Shares Outstanding | 22,580,852 | 33,818,976 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity (Deficit) - USD ($) $ in Thousands | Preferred Shares [Member] | Common Shares [Member] | Additional Paid-In Capital [Member] | Common Stock Suscribed [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2013 | $ 40 | $ 4,367 | $ (3,681) | $ 726 | ||
Balance, shares at Dec. 31, 2013 | 40,253,862 | |||||
Shares issued for services | $ 1 | 454 | 455 | |||
Shares issued for services, shares | 650,000 | |||||
Shares issued for services - related party | $ 2 | 2,044 | 2,046 | |||
Shares issued for services - related party, shares | 2,325,000 | |||||
Shares cancelled as part of a default judgment - related party | $ (25) | (1,402) | (1,427) | |||
Shares cancelled as part of a default judgment - related party,shares | (25,000,000) | |||||
Shares cancelled per negotiated agreement | $ (4) | (346) | (350) | |||
Shares cancelled per negotiated agreement, shares | (4,360,000) | |||||
Shares issued for conversion of convertible debt | $ 3 | 1,672 | $ 1,675 | |||
Shares issued for conversion of convertible debt, shares | 3,350,867 | |||||
Shares issued for cashless exercies of warrants | $ 1 | (1) | ||||
Shares issued for cashless exercies of warrants, shares | 750,000 | |||||
Contributed capital | 104 | $ 104 | ||||
Beneficial Conversion Discount | 299 | 299 | ||||
Change in warrant terms at conversion | $ 187 | $ 187 | ||||
Stock option expense | ||||||
Net Loss | $ (4,157) | $ (4,157) | ||||
Balance at Dec. 31, 2014 | $ 18 | $ 7,378 | $ (7,838) | (442) | ||
Balance, shares at Dec. 31, 2014 | 17,969,729 | |||||
Shares issued for services | $ 0 | 220 | $ 220 | |||
Shares issued for services, shares | 200,000 | 3,600,000 | ||||
Shares issued for services - related party | $ 4 | 4,539 | $ 4,543 | |||
Shares issued for services - related party, shares | 4,750 | 3,650,000 | ||||
Shares issued in private placements | $ 2 | $ 6 | 2,668 | 2,676 | ||
Shares issued in private placements, shares | 2,630,000 | 5,709,500 | ||||
Shares issued in exchange for debt - related party | $ 1 | $ 1 | 389 | 391 | ||
Shares issued in exchange for debt - related party, shares | 500,000 | 782,000 | ||||
Shares issued for acquisition | $ 10 | 3,041 | $ 27 | $ 3,078 | ||
Shares issued for acquisition, shares | 10,550,000 | 10,628,857 | ||||
Stock option expense | 213 | $ 213 | ||||
Shares issued to settle accounts payable | 27 | $ 27 | ||||
Shares issued to settle accounts payable, shares | 250 | |||||
Shares cancelled as part of default judment | $ (1) | $ 1 | ||||
Shares cancelled as part of default judment, shares | (910,000) | |||||
Net Loss | $ (6,696) | $ (6,696) | ||||
Balance at Dec. 31, 2015 | $ 3 | $ 38 | $ 18,476 | $ 27 | $ (14,534) | $ 4,010 |
Balance, shares at Dec. 31, 2015 | 3,135,000 | 37,951,229 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Cash flows from operating activies | ||
Net loss | $ (6,696) | $ (4,157) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 260 | 13 |
Shares and warrants issued for services | 4,763 | $ 2,501 |
Stock options | $ 213 | |
Contributed capital | $ 104 | |
Loss on disposition of asset | 24 | |
Loss on change in warrant terms | 187 | |
Cancellation of shares for services | (350) | |
Amortization of debt discount | $ 21 | 1,120 |
Mineral rights write down | 2 | |
Changes in operating assets and liabilities | ||
Prepaid expense | $ (44) | 16 |
Deposits | 5 | |
Accounts payable and accrued liabilities | $ 96 | $ (92) |
Accounts payable and accrued liabilities - related party | 68 | |
Accrued interest | 17 | |
Accrued interest - related party | $ 6 | $ 145 |
Accrued compensation | (4) | |
Contract payable | (24) | |
Stipulated agreement liability - related party | (13) | |
Net cash used in operating activities | $ (1,296) | (523) |
Cash flows from investing activities | ||
Advances to related party shareholders | $ (228) | |
Acquisition of Balmat | $ (927) | |
Sale (Purchase) of equipment | (2) | $ 44 |
Net cash used in investing activities | (929) | $ (184) |
Cash flows from financing activities | ||
Proceeds from issuance of convertible debt - related party | $ 748 | |
Proceeds from issuance of convertible debt | $ 500 | |
Proceeds from loans - related party | $ 270 | |
Loans repayments - related party | (195) | |
Loan repayments | (119) | |
Proceeds from issuance of stock and warrants | $ 2,676 | |
Proceeds (payments) to/from related party shareholders | $ 254 | |
Net cash provided by financing activities | $ 3,380 | 754 |
Net increase in cash | 1,155 | 46 |
Cash, beginning of period | 46 | 0 |
Cash, end of period | $ 1,201 | $ 46 |
Supplemental Information: | ||
Taxes | ||
Interest Expense | ||
Non-cash investing and financing activities | ||
Debt converted to shares of common stock | $ 1,675 | |
Repayment of advances through stock cancellation | 1,427 | |
Repayment of advances through return of assets | 64 | |
Cashless exercise of warrants | $ 1 | |
Stock and warrants issued for settlement of related party debt | $ 391 | |
Stock and warrants issued for settlement of accounts payable | 27 | |
Stock and warrants issued for investment in acquisition | 3,078 | |
Debt issued for prepaid expense | 109 | |
Debt issued for investment in acquisition | $ 14,748 |
Organization and Nature of Busi
Organization and Nature of Business | 12 Months Ended |
Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Nature of Business | NOTE 1 – ORGANIZATION AND NATURE OF BUSINESS Star Mountain Resources, Inc. and subsidiaries (the “Company”, “we”, “us”, “our”) is a minerals exploration company focused on acquiring and consolidating mining claims, mineral leases, producing mines, and historic mines with production and future growth potential identified through our exploration efforts. Currently, our operations are focused on re-commencing mining activities at the Balmat Zinc Mine in the Balmat mining district in St. Lawrence County, New York and evaluating the feasibility of further exploration of minerals at the Star Mountain Mining District, Beaver County, Utah. The Company was incorporated on September 2, 2009 in Nevada initially as MyOtherCountryClub.com for the purpose of developing a website that would offer reciprocal golf privileges, and other related services, to members of private country clubs throughout the United States. On October 29, 2012, Jameson Stanford Resources Corporation merged with Bolcán Mining Corporation (the “Merger”). Prior to the Merger, the Company was a publicly traded shell company with no business operations. Effective December 15, 2014, the name of the Company was changed to Star Mountain Resources, Inc. to better reflect its primary focus to explore and conduct pre-extraction activities for mineral rights it holds in the Star Mining District. In addition, the Company increased its authorized capital stock from 350,000,000 shares to 400,000,000 shares, of which 350,000,000 shares are common stock and 50,000,000 shares are preferred stock. On November 2, 2015, the Company acquired a 100% interest in Northern Zinc, LLC, a Nevada limited liability company (“Northern Zinc”) pursuant to an October 13, 2015 purchase agreement the Company entered into with Northern Zinc and its sole member, Aviano Financial Group, LLC, a Delaware limited liability company (“Aviano”) (the “Northern Zinc Purchase Agreement”). Northern Zinc and Aviano are unrelated third parties. Concurrent with the Company’s purchase of Northern Zinc, Northern Zinc acquired (a) 100% of the issued and outstanding common stock of Balmat Holding Corporation (“Balmat”) and its wholly owned subsidiary, St. Lawrence Zinc Company, LLC, (“SLZ”) the owner of the mining property known as the Balmat Zinc Mine and (b) certain mining and processing equipment pursuant to an October 13, 2015 purchase agreement the Company entered into with Northern Zinc, HudBay Minerals Inc. (“Hudbay”), Balmat and SLZ (the “Balmat Purchase Agreement”). Balmat, SLZ and Hudbay are unrelated third parties. The Balmat Mine is located in upstate New York. See Note 3 for further details. |
Going Concern
Going Concern | 12 Months Ended |
Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern | NOTE 2– GOING CONCERN The financial statements have been prepared on a going concern basis, which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company has incurred losses the past two years and had total current assets of $2,034 and total current liabilities of $3,152, resulting in a negative working capital balance of $1,118 as of December 31, 2015. Further losses are anticipated in the development of its business. In view of these matters, there is substantial doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations. Management plans to finance the Company’s operating costs over the next twelve months with loans from significant shareholders and directors, debt financing, and/or the issuance of the Company’s securities. There can be no assurance that we will be able to raise the necessary financing on acceptable terms or at all. If management is unsuccessful in these efforts, discontinuance of operations is possible. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. |
Balmat Acquisition
Balmat Acquisition | 12 Months Ended |
Dec. 31, 2015 | |
Business Combinations [Abstract] | |
Balmat Acquisition | NOTE 3 – BALMAT ACQUISITION On November 2, 2015, the Company completed the acquisition of Northern Zinc. Concurrent with the Company’s acquisition of Northern Zinc, Northern Zinc acquired Balmat and its wholly owned subsidiary, SLZ (together referred to as the “Balmat Acquisition.”). Each of the agreements is outlined further below. Northern Zinc Purchase Agreement Pursuant to the terms of the Northern Zinc Purchase Agreement, we issued 10,000,000 shares of our unregistered common stock to Aviano and assumed $1,390 in debts of Northern Zinc in exchange for 100% of Northern Zinc’s membership interests previously owned by Aviano. We also entered into a corporate development consulting agreement with David Linsley, a principal of Northern Zinc; appointed Wayne Rich as our Chief Financial Officer; agreed to appoint two members to our board of directors designated by Aviano; and offered advisory board positions for a period of at least three years to three other individuals associated with Aviano. Balmat Purchase Agreement Upon closing, we acquired 100% of the issued and outstanding common stock of Balmat from Hudbay for a purchase price of $17,000 payable in cash (the “Balmat Cash Amount”) and issued Hudbay 550,000 shares of our unregistered common stock. Subsequent to closing, and in accordance with the purchase agreement, we issued HudBay an additional 78,857 shares of our unregistered common stock. The Balmat Cash Amount is able to be satisfied in any of the following ways: Option 1 ● $500 upon completion of the first shipment of ore concentrate from the Balmat Mine; ● $5,000 on the 12-month anniversary of the first shipment of ore concentrate from the Balmat Mine; and ● $2,500 on each of the following dates from the first shipment of ore concentrate from the Balmat Mine: 18 th th th th Option 2 Under Option 2, Northern Zinc would also immediately assume all environmental liabilities in respect of the Balmat Mine and all liabilities relating to or arising from any claims by existing or former employees relating to employment, termination, on-the-job injuries or death, unsafe working conditions or exposure to potentially harmful substances and waive its right to indemnification by HudBay in respect of certain damages identified in the purchase agreement with Hudbay. Option 3 ● $400 upon completion of the first shipment of ore concentrate from the Balmat Mine; and ● $4,700 on each of the following dates from the first shipment of ore concentrate from the Balmat Mine: 12 th th th Notwithstanding the above Balmat Cash Amount options, if any portion of the purchase price has not been paid under Options 1 or 3 within 48 months of the closing date (or 54 months of the closing date if we have not elected one of the options) then the entire unpaid balance shall be immediately due and payable no later than the end of the 48 th th Fair Value Determination and Allocation of Consideration The purchase price allocation presented below is preliminary and includes the use of estimates. This preliminary allocation is based on information that was available to management at the time these audited consolidated financial statements were prepared. We believe the estimates used are reasonable and the significant effects of the transaction are properly reflected. However, the estimates are subject to change as additional information becomes available and is assessed by the Company. These amounts will be finalized as soon as possible, but no later than one year from the acquisition date. Upon the completion of this acquisition, the Company acquired the following assets and assumed the following liabilities: Assets received: Cash $ 72 Prepaid expense 163 Spare parts inventory 500 Land 1,855 Buildings 850 Machinery and equipment 23,903 Mineral reserves 3,165 Mineral rights 3,660 Restricted cash – surety bond 1,664 Total assets received $ 35,832 Liabilities assumed: Loans payable 1,390 Asset retirement obligation 17,906 Liabilities 28 Total liabilities assumed $ 19,324 Total consideration paid $ 16,508 The consideration paid was comprised of $1,000 in cash, $12,431 in a deferred payment liability, and 10,628,857 shares of the Company’s stock (including 78,857 shares subscribed as of December 31, 2015) valued at $3,078. Acquisition-related costs of $210 were incurred during the year ended December 31, 2015 and are included in General and administrative line item in our statement of operations. The acquisition generated no revenue since the November 2, 2015 acquisition date. The following unaudited pro forma information has been prepared for illustrative purposes only and assumes the acquisition occurred on January 1, 2014. The unaudited pro forma results have been prepared based on estimates and assumptions, which we believe are reasonable, however, they are not necessarily indicative of the consolidated results of operations had the acquisition occurred on January 1, 2014, or of future results of operations. Balmat Acquisition related costs of $210 have been excluded from the pro forma amounts. Year Ended December 31, 2015 2014 Total revenues: As reported $ - $ - Pro forma $ - $ - Net Loss: As reported $ (6,696 ) $ (4,157 ) Pro forma $ (10,499 ) $ (9,324 ) Basic and diluted loss per share: As reported $ (0.29 ) $ (0.12 ) Pro forma $ (0.46 ) $ (0.28 ) |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 4 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting and Principles of consolidation These consolidated financial statements have been prepared in accordance with U.S. GAAP and are inclusive of the accounts of Star Mountain Resources, Inc. and its wholly-owned subsidiaries, which consist of its wholly-owned subsidiaries, Bolcan Mining, LLC and Northern Zinc, LLC and Northern Zinc’s wholly-owned subsidiary, Balmat Holding Corporation, and Balmat’s wholly owned subsidiary, St. Lawrence Zinc Company, LLC. Certain comparative figures have been reclassified to conform to the financial statement presentation adopted for the current year. All numbers in the consolidated financial statements are presented in U.S. dollars, unless otherwise denoted. Recent Accounting Pronouncements In August 2014, FASB issued Accounting Standards Update (“ASU”) No. 2014-15, “Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern” (“ASU 2014-15”). ASU 2014-15 is intended to define management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures. The amendments in this ASU are effective for reporting periods beginning after December 15, 2016, with early adoption permitted. We are currently assessing the impact the adoption of ASU 2014-15 will have on our financial statements and related disclosures. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. The amounts which involve significant estimates include (i) Balmat Acquisition purchase price estimates including land, PP&E, mineral reserves, mineral rights and the deferred purchase price obligation (ii) property, plant and equipment estimated salvage values and assessment of impairment, (ii) fair value of certain assets and liabilities, (iii) contingent liabilities and (iv) asset retirement obligations. These estimates are reviewed and, as adjustments become necessary, they are reported in earnings in the period in which they became known. Actual results could differ from those estimates. Cash and Cash Equivalents Cash and cash equivalents consist of all cash balances and liquid investments with an original maturity of three months or less. Restricted Cash The Company maintains, at times, cash deposits and/or surety bonds as required by regulatory bodies as assurance for the funding of future reclamation costs associated with the Company’s reclamation obligations. These funds held in cash deposits and/or used as collateral for surety bonds are restricted to that purpose and are not available for the Company’s use until the reclamation obligations have been fulfilled. Restricted cash is classified as a non-current asset. At December 31, 2015, the amounts of these restricted cash deposits totaled $1,688 of which $1,664 is invested in a certificate of deposit which renews automatically for additional terms of one year or more. This amount is in lieu of a mine land reclamation bond and is held in escrow for the New York State Department of Environmental Conservation. Interest earned on the certificate of deposit is not part of the bonding obligation and as such is classified as a current asset. The remaining balance of $24 is associated with a cash surety bond held with the state of Utah. At December 31, 2014, only the cash surety bond of $24 with the state of Utah was held. Concentration of Credit Risk The Company maintains cash in bank deposit accounts, which at times may exceed federally insured limits. The Company has not experienced any losses in such accounts and does not believe it is exposed to any significant credit risk with its cash and cash equivalents. Inventories Parts and supplies are expected to be held and consumed during development or resumption of mining activities and are valued at the lower of cost or replacement value. Cost is determined on an average basis. Property and Equipment (i) Mineral property, exploration and mine development expenditures: Mineral property acquisition costs, including indirectly related acquisition costs, are capitalized when incurred. Acquisition costs include cash consideration and the fair market value of common shares issued as consideration. Exploration costs are expensed as incurred. When it is determined that a mining deposit can be economically and legally extracted or produced based on established proven and probable reserves under SEC Industry Guide 7, development costs related to such reserves incurred after such determination will be considered for capitalization. The establishment of proven and probable reserves is based on results of feasibility studies which indicate whether a property is economically feasible. Upon commencement of commercial production, capitalized costs will be amortized over their estimated useful lives or units of production, whichever is a more reliable measure. Capitalized amounts relating to a property that is abandoned or otherwise considered uneconomic for the foreseeable future will be written off. (ii) Property, plant and equipment (PP&E): Expenditures for PP&E additions, major replacements and improvements are capitalized at cost. PP&E is depreciated using the straight-line method and is depreciated over the estimated useful lives of the assets. Productive/useful lives range from 5 to 10 years, but do not exceed the useful life of the individual asset. Determination of expected useful lives for depreciation calculations are made on a property-by-property or asset-by-asset basis. Our estimates for reserves, mineralized material, and other resources are a key component in determining our units of production depreciation rates. (iii) Impairment of assets The Company reviews and evaluates the carrying value of its assets when events or circumstances indicate that the carrying amounts of related assets or groups of assets may not be recoverable, or at least annually. If the estimated future economic benefit is less than the carrying amount of the asset, an impairment charge is recorded based on the difference between the carrying amount and its estimated fair value (less costs to sell for assets to be disposed of by sale) as a charge to operations. For the years ended December 31, 2015 and 2014, impairment charges of nil and $2 were recorded, respectively. Business Combinations We account for business combinations using the purchase method of accounting. The purchase method requires us to determine the fair value of all acquired assets, including identifiable intangible assets and all assumed liabilities. The total cost of acquisitions is allocated to the underlying identifiable net assets, based on their respective estimated fair values. Determining the fair value of assets acquired and liabilities assumed requires management’s judgment and the utilization of independent valuation experts, and often involves the use of significant estimates and assumptions, including assumptions with respect to future cash inflows and outflows, discount rates and asset lives, among other items. Income Taxes The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under the asset and liability method, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recognized if it is more likely than not that the entire or some portion of the deferred tax asset will not be recognized. The Company’s policy is to recognize potential accrued interest and penalties related to unrecognized tax benefits within income tax expense. For the years ended December 31, 2015 and 2014, the Company did not recognize any interest or penalties, nor did we have any interest or penalties accrued as of December 31, 2015 and 2014, related to unrecognized benefits. Asset Retirement Obligations In connection with the Company’s business, it is required to reclaim the sites at which it is conducting its mining activities once those activities have been completed. The fair value of that liability is measured based on an expected cash flow approach, discounted using a credit-adjusted risk-free rate. If a change in timing or estimated expected cash flows results in a downward revision of the asset retirement obligation, then the undiscounted revised estimate of expected cash flows is discounted using the credit-adjusted risk-free rate in effect at the date of initial measurement and recognition of the original asset retirement obligation. Changes in our asset retirement obligations are summarized in the following table (in thousands): Year ended December 31, 2015 2014 Balance, beginning of period $ - $ - Additions (Balmat Acquisition, see Note 3) 17,906 - Releases - - Revisions to cost estimates - - Balance, end of period $ 17,906 $ - Common Shares Common shares issued for non-monetary consideration are recorded at fair market value based upon the trading price of our shares on the share issuance date. Common shares issued for monetary consideration are recorded at the amount received, less issuance costs. Stock-based Compensation The fair value of share-based compensation awards issued to employees and directors of the Company is measured at the date of grant and amortized over the requisite service period, which is generally the vesting period. The Company uses the Black-Scholes option valuation model to calculate the fair value of awards granted. When a share-based compensation award is exercised and the resulting common shares are issued, the fair value of such award as determined on the date of grant is transferred to common shares. In the case of a share-based compensation award that is either cancelled or forfeited prior to vesting, the amortized expense associated with the unvested awards is reversed. Loss per Share The loss per share is computed using the weighted average number of shares outstanding during the period. To calculate diluted loss per share, the Company uses the treasury stock method and the if-converted method. Diluted loss per share is not presented as the effect on the basic loss per share would be anti-dilutive. At December 31, 2015 and 2014, the Company had 12,475,000 and nil in potentially dilutive securities, respectively. Fair value of financial instruments Our financial instruments may at times consist of cash and cash equivalents, accounts receivable, restricted cash, accounts payable and accrued liabilities, notes payable and asset retirement obligations. U.S. GAAP defines fair value as the price that would be received to sell an asset or be paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price) and establishes a fair-value hierarchy that prioritizes the inputs used to measure fair value using the following definitions (from highest to lowest priority): ● Level 1 — Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. ● Level 2 — Observable inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data by correlation or other means. ● Level 3 — Prices or valuation techniques requiring inputs that are both significant to the fair-value measurement and unobservable. The Company continually monitors its cash positions with, and the credit quality of, the financial institutions with which it invests. The Company maintains balances in various U.S. financial institutions in excess of U.S. federally insured limits. The Company’s balances of cash and cash equivalents, accounts payable and accrued liabilities, and notes payable approximate fair value. The following table presents information about financial instruments recognized at fair value on a recurring basis as of December 31, 2015 and 2014, and indicates the fair value hierarchy (in thousands): December 31, 2015 December 31, 2014 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets Reclamation deposits - $ 1,688 - 1,688 - 24 - 24 Total financial assets $ - $ 1,688 $ - $ 1,688 $ - $ 24 $ - $ 24 Liabilities Purchase price obligation – Balmat Acquisition - - 12,431 12,431 - - - - Asset retirement obligation - - 17,906 17,906 - - - - Total financial assets and liabilities $ - $ 1,688 $ 30,337 $ 32,025 $ - $ 24 $ - $ 24 The fair value of the Company’s purchase price obligation was estimated by a third party as part of the purchase price accounting for the Balmat Acquisition. The third party used a probability-weighted discounted cash flow model in order to arrive at a fair value of the liability. A discounted cash flow model was used to calculate the net present value of the various payment options to satisfy the outstanding purchase price obligation. See Note 3 – Balmat Acquisition for a detailed description of each payment option able to satisfy the remaining obligation. An estimated probability weighting was then assigned to each option’s estimated net present value to arrive at the overall estimated fair value. Significant unobservable inputs include management’s estimated timing of activities (including option election dates and timing of first concentrate shipments) associated with payments due under the agreement as well as the discount rate applied within the model. A discount rate of 4.6% was applied. Acceleration of timing of elections or shipments of first concentrates would accelerate payments due, therefore increasing the net present value of a given payment option. An upward/downward adjustment to the discount rate would result in an inverse effect on the overall fair value, all else being equal. The fair value of the Company’s asset retirement obligation was estimated by a third party as part of the purchase price accounting for the Balmat Acquisition. The third party used the cost method to estimate the fair value of the liability. Significant unobservable inputs include management’s cost estimates and the estimated timing of those costs, the annual inflation rate applied to cost estimates and the discount rate used to discount the inflated cost estimates. The undiscounted costs of reclamation were estimated at $19,126 and are expected to be incurred within the next 1 to 28 years. A 3.6% annual inflation rate and 4.6% discount rate were applied. Any upward/downward adjustments to the estimated costs or inflation rate would result in a corresponding adjustment to the fair value estimate, all else being equal. An upward/downward adjustment to the discount rate would result in an inverse effect on the overall fair value, all else being equal. |
Prepaid Expenses and Other
Prepaid Expenses and Other | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Prepaid Expenses and Other | NOTE 5 – PREPAID EXPENSES AND OTHER At December 31, 2015, the Company had prepaid expenses totaling $333 that was for property taxes, insurance premiums and consulting contracts. All are being amortized over the time period associated with the prepaid expense. |
Mineral Rights and Reserves
Mineral Rights and Reserves | 12 Months Ended |
Dec. 31, 2015 | |
Extractive Industries [Abstract] | |
Mineral Rights and Reserves | NOTE 6 – MINERAL RIGHTS AND RESERVES At December 31, 2015, the Company had certain mining claims, mineral leases and excavation rights for its exploration properties in the Star Mining District in Beaver County, Utah and its Balmat Mine in Gouverneur, New York. Mineral rights associated with the Balmat Mine include 51,428 acres of mineral rights located in St. Lawrence and Franklin Counties of New York and are comprised of multiple individual parcels in selected areas in and around the mines. In addition, there are 4,774 acres of leased and optioned mineral rights in the Balmat mine area and surrounding areas of interest. These mineral rights were acquired through purchase or lease agreements and are subject to varying royalty interests, some of which are indexed to the sale price of minerals excavated from these properties. For the years ended December 31, 2015 and 2014, no minerals were extracted from these properties. Capitalized cost for mineral rights totaled $3,684 and $24 as of December 31, 2015 and 2014, respectively. Proven and Probable Reserves On November 2, 2015, as part of the Balmat Acquisition, the Company acquired mineral reserves valued at $3,165. “Reserves” are defined by the SEC Industry Guide 7 as that part of a mineral deposit, which could be economically and legally extracted or produced at the time of the reserve determination. “Recoverable” reserves mean zinc that is economically recoverable using existing equipment and methods under federal and state laws currently in effect. “Proven (measured) reserves” are defined by Guide 7 as reserves for which (a) quantity is computed from dimensions revealed in outcrops, trenches, workings or drill holes; grade and/or quality are computed from the results of detailed sampling and (b) the sites for inspection, sampling and measurement are spaced so closely and the geologic character is so well defined that size, shape, depth and mineral content of reserves are well-established. “Probable reserves” are defined by Guide 7 as reserves for which quantity and grade and/or quality are computed from information similar to that used for proven (measured) reserves, but the sites for inspection, sampling, and measurement are farther apart or are otherwise less adequately spaced. The degree of assurance, although lower than that for proven reserves, is high enough to assume continuity between points of observation. Our reserve estimates were prepared by Mark Odell, P.E.; Laura Symmes; and Sarah Bull, P.E. of Practical Mining LLC. The report titled Mineral Reserves at the Balmat Mine, St. Lawrence County, New York Reserve classifications were assigned each block based on the distance along the plunge direction from the nearest underground excavation. The quantity or distance from drill composites had no bearing on classification adding a degree of conservatism to the estimates. All reserves are stated as a final salable product. As of December 31, 2015, our estimate of proven and probable reserves was: Reserve Class Tons (000’s) Zinc % Proven 152 9.0 Probable 434 9.2 Total 585 9.2 1. Mineral Reserves have been estimated at a zinc price of $0.92/pound. 2. Metallurgical recovery for zinc is 96%. 3. Mine losses of 5% and unplanned mining dilution of 10% have been applied to the designed mine excavations. 4. Zinc grades and contained zinc metal are run-of-mine estimates before applying metallurgical recoveries. |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | NOTE 7– PROPERTY, PLANT AND EQUIPMENT At December 31, 2015 and 2014, property, plant and equipment consisted of the following: December 31, 2015 December 31, 2014 Accumulated Net Book Accumulated Net Book Cost Depreciation Value Cost Depreciation Value Buildings $ 892 $ 16 $ 876 $ 43 $ - $ 43 Machinery & Equipment 18,911 231 18,680 18 6 12 Mobile Equipment 4,984 16 4,967 - - - Office Furniture & Equipment 33 4 28 5 2 3 $ 24,820 $ 268 $ 24,552 $ 66 $ 8 $ 58 Depreciation expense for the year ended December 31, 2015 and 2014 was $260 and $13, respectively. As part of the Balmat Acquisition (see Note 3), we acquired 2,699 acres of surface rights located within St. Lawrence County in north-central New York. The fair value of this property at acquisition was estimated at $1,855. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 8 – RELATED PARTY TRANSACTIONS 2014 Joseph Marchal, the Company’s CEO and Executive Chairman, loaned the Company $254 bearing interest at 12% per annum. The balance payable to Mr. Marchal, including accrued interest, was $260 as of December 31, 2014. As of December 31, 2014, the Company had an outstanding liability to Michael Christiansen, a former officer of the Company. See additional information in Note 9 – Debt. 2015 Mr. Marchal loaned the Company an aggregate of $270 in cash and paid expenses totaling $62 on behalf of the Company at various times during the year ended December 31, 2015. The Company made cash payments to Mr. Marchal during the year totaling $195 and $32, respectively, of principal and interest on these advances. In addition, Mr. Marchal agreed to convert $141 of the amounts lent as part of the Unit Offering that closed on June 30, 2015. See Note 12 – Shareholders’ Equity. Mr. Marchal also agreed to convert the remaining $250 of the amounts loaned as part of the Unit Offering that closed on October 31, 2015. See Note 12 – Shareholders’ Equity for further details related to the offering. On November 10, 2015, Mr. Marchal purchased $275 in convertible notes as further described in Note 9 – Debt. As of December 31, 2015, the Company owed Mr. Marchal $275 in principal and $4 in accrued interest associated with these convertible notes. Edward Brogan, one of the Company’s Directors, purchased $250 and $750 worth of units in the June 30, 2015 and October 31, 2015 unit offerings, respectively. See Note 12 – Shareholders’ Equity for further details related to each offering. Additionally, on November 10, 2015, Mr. Brogan purchased $600 in convertible notes as further described in Note 9 – Debt. As of December 31, 2015, the Company owed Mr. Brogan $600 in principal and $10 in accrued interest associated with these convertible notes. Donald Sutherland, one of the Company’s Directors, purchased $200 worth of units in the October 31, 2015 unit offering. See Note 12 – Shareholders’ Equity for further details related to the offering. On March 1, 2015, Mark Osterberg, the Company’s President and COO, was issued 50,000 shares as a one-time signing bonus as part of his employment agreement. The value of the shares was estimated at $1.20 per share. During the year ended December 31 2015, related parties were issued shares of common stock for services rendered. These shares were issued at $1.10 per share. The related party, date of issuance and number of shares are outlined below: Related Party Date of Issuance Number of Shares Issued Joseph Marchal, CEO and Executive Chairman May 15, 2015 500,000 Edward Brogan, Director May 15, 2015 250,000 Donna Moore, Controller and CAO May 15, 2015 50,000 Doug MacLellan, Director May 15, 2015 50,000 Donald Sutherland, Director May 15, 2015 50,000 Mark Osterberg, President and COO May 15, 2015 50,000 Summit Capital USA, Inc. May 15, 2015 500,000 Joseph Marchal, CEO and Executive Chairman October 1, 2015 1,000,000 Edward Brogan, Director October 1, 2015 1,000,000 Donna Moore, Controller and CAO October 1, 2015 50,000 Doug MacLellan, Director October 1, 2015 50,000 Donald Sutherland, Director October 1, 2015 50,000 TOTAL 3,600,000 On September 30, 2015, the Company issued 5,000 shares of the Company’s Series B preferred stock to Summit Capital USA, Inc., a significant stockholder of the Company (“Summit”), in consideration of (i) the cancellation of $28 of $55 of fees due and payable as of August 31, 2015 by the Company to Summit, and (ii) payment in respect of consulting services, business advisory, operational, Securities and Exchange Commission compliance and litigation support services provided by Summit for the period commencing July 1, 2015 through to and including December 31, 2015. As of December 31, 2015, the Company had an outstanding liability to Michael Christiansen, a former officer of the Company. See additional information in Note 9 – Debt. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
Debt | NOTE 9 –DEBT Stipulated Agreement Liability – Related Party The Company entered into an agreement with Michael Christiansen (“Christiansen”), a former officer of the Company on August 13, 2013 (the “Stipulated Agreement”) to pay Christiansen $123 (the “Amount Due”) relating to a promissory note, accrued compensation and out-of-pocket expenses incurred on behalf of the Company. The Amount Due was agreed to be paid as follows: $11 on or before August 15, 2013; $11 on or before September 15, 2013; $11 on or before October 15, 2013; and the balance in installments of $15 beginning on the earlier of (a) the first day of the month following the date on which the Company receives at least three million dollars of equity funding, or (b) December 31, 2014. The payment of this stipulated agreement is in default. Subject to completion of the payments due under the agreement, the parties agreed to release certain claims against each other related to or arising in connection with the matters that gave rise to our agreement to pay the Amount Due. During the year ended December 31, 2014, the Company made payments of $13. At December 31, 2014 and 2015, the remaining liability of $79 is recorded as Stipulated Agreement Liability in the accompanying financial statements. Notes Payable On November 2, 2015, the Company issued an $850 promissory note bearing interest at 8% per annum as part of the Balmat Acquisition (see Note 3), of which $750 was payable within ten days of issuance with the remaining $100 to be paid no later than November 2, 2016, or such earlier date as the Company has completed a transaction resulting in cash proceeds of at least $6,000. As of December 31, 2015, the Company had not paid any part of this promissory note and had recorded $11 of accrued interest associated with this note. On November 2, 2015, the Company issued a $540 promissory note bearing interest at 8% per annum for payment of legal fees relating to the Balmat Acquisition. The Company is obligated to pay $50 per month for ten consecutive months with a final payment of $40 plus accrued interest due on the 15 th There was no issuance costs incurred related to these notes. Notes Payable – Related Party On November 10, 2015, the Company sold a total of 87.5 units to the CEO and Executive Chairman and a Director in a private offering. Each unit consisted of: (i) one convertible note in the principal amount of $10 per unit that bears simple interest at the rate of 10% per annum and is payable by the Company on a lump sum basis with respect to principal and interest on or before October 31, 2016, unless earlier repaid at the sole option of the Company or converted into common stock at a conversion price of $1.00 per share; (ii) 5,000 shares of the Company’s common stock; and (iii) a warrant to purchase 5,000 shares of the Company’s common stock at $2.00 per share for a period of three years from the date of issuance. Therefore, the aggregate total of all notes issued was $875. The Company issued a total of 437,500 common shares and warrants to purchase a total of 437,500 common shares. As equity treatment was determined appropriate for the common stock and warrants issued with the convertible notes, the proceeds were allocated based on relative fair values. The fair value of the common stock issuance of 437,500 shares was estimated at $127, or $0.29 per share as estimated by independent valuation experts as part of the purchase price valuation performed for the Balmat Acquisition. The fair value of the warrants was estimated at $21 using a Black-Scholes model with inputs including a market price of the Company’s common shares of $0.29 per share, an exercise price of $1.00, a two-year term, volatility of 70%, a risk-free rate of 0.75% and no assumed dividends. Based on the relative fair values, initial note principal and note discount of $875 and $126, respectively, were recorded. As of December 31, 2015, the Company had recorded $21 in accretion of the note discount and $14 of accrued interest associated with these related party notes. The effective interest rate of the notes is 24.5%. Purchase Price Obligation – Balmat Acquisition As is described in detail in Note 3, the Company is able to satisfy the remaining amount owed to HudBay related to the Balmat Acquisition in one of three ways (the purchase price obligation) where: ● the estimated fair value of this purchase price obligation of $12,431 was determined using a discounted cash flow model, with future cash flows estimated based upon probability-weighted scenarios of payments under the three repayment options; ● the current portion of this purchase price obligation of $500 reflects the Company’s plan to resume production at the Balmat Mine within the next 12-months; and ● because of the repayment options available to the Company and the fact that the Company has not yet selected one of these repayment options, we are not able to say with certainty when the long-term portions of this purchase price obligation will be paid. Notwithstanding the above, if any portion of the purchase price obligation has not been paid within 48 months of the closing date (or 54 months of the closing date if we have not elected one of the options) then the entire unpaid balance is immediately due and payable to Hudbay no later than November 2, 2019 or May 2, 2020, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 10 – INCOME TAXES The provision for income taxes consisted of the following as of December 31, 2015 and 2014: December 31, 2015 December 31, 2014 Current taxes $ - $ - Deferred Tax Benefit (5,288 ) (180 ) Benefits of Operating Loss Carryforwards 5,288 180 Actual provision $ - $ - Any deferred tax asset has been fully offset by a valuation allowance because at this time the Company believes that it is more likely than not that the future tax benefit will not be realized as the Company cannot predict when or if it will have taxable income in the future. December 31, 2015 December 31, 2014 DEFERRED TAX ASSETS Current $ - $ - Noncurrent - - Net operating losses 6,375 573 Total Deferred Tax Assets 6,375 573 DEFERRED TAX LIABILITIES Current - - Noncurrent (4,798 ) (14 ) Valuation Allowance (1,577 ) (559 ) Net Deferred Taxes $ - $ - The Company’s provision for income taxes was $0 for the year ended December 31, 2015 since the Company incurred net operating losses that have a full valuation allowance through December 31, 2015. The Company’s net federal operating loss carry forward of approximately $16,348 begins to expire in 2031. Operating Losses Expires Amount 2031 $ 67 2032 225 2033 1,815 2034 681 2035 13,560 Total $ 16,348 ASC 740 requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The total deferred tax asset is calculated by multiplying a 39% marginal tax rate by the cumulative Net Operating Loss (“NOL”) of $16,348. The total valuation allowance is equal to the total deferred tax asset of $6,375, less the total deferred tax liability of $4,798, resulting in an increase of $5,288 from the year ended December 31, 2014. A reconciliation between income taxes at statutory tax rates (39%) and the actual income tax provision for continuing operations as of December 31, 2015 and 2014 follows: December 31, 2015 December 31, 2014 Expected provision (based on statutory rate) $ (2,612 ) $ (1,621 ) Effect of: Increase in valuation allowance 5,288 180 Non-deductible expenses (2,676 ) 1,441 Actual provision $ - $ - The Company has not made any adjustments to deferred tax assets or liabilities. The Company did not identify any material uncertain tax positions of the Company on returns that have been filed or that will be filed. The Company has not had income from operations and has deferred items consisting entirely of unused net operating losses as disclosed above. Since it is unknown whether this net operating loss will ever produce a tax benefit, or if examined by taxing authorities and disallowed entirely, there would be no effect on the financial statements. The Company’s policy is to recognize potential interest and penalties accrued related to unrecognized tax benefits within income tax expense. For the years ended December 31, 2015 and 2014, the Company did not recognize any interest or penalties, nor did we have any interest or penalties accrued as of December 31, 2015 and 2014 related to unrecognized benefits. The Company has not yet filed its U.S. federal income tax return for the year ended December 31, 2015 but has filed an extension. With the extension, our U.S. federal return will be due on or before September 15, 2016. The tax years ended December 31, 2015 and 2014 are open for examination for federal income tax purposes as well as other taxing jurisdictions to which we are subject. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 11 – COMMITMENTS AND CONTINGENCIES Royalty Payments On a portion of the Balmat Mine’s mineral leases, the Company is subject to royalty payments of up to 4% of the net smelter return on ores mined from these properties. Potential environmental contingency Our exploration and development activities are subject to various federal and state laws and regulations governing the protection of the environment. These laws and regulations are continually changing and generally becoming more restrictive. The Company conducts its operations so as to protect public health and the environment and believes its operations are materially in compliance with all applicable laws and regulations. We have made, and expect to make in the future, expenditures to comply with such laws and regulations. Legal Matters In connection with our litigation involving Michael Stanford in which the Fifth District Court of Beaver County (Civil Case No. 140500023) awarded us a judgment against Mr. Stanford as previously disclosed, the court issued a further order on February 2, 2015 authorizing us to cancel 910,000 shares of our common stock previously issued to Mr. Stanford. This cancellation of shares was in addition the 25,000,000 shares that Mr. Stanford returned to the Company and were cancelled by us on September 22, 2014. The 910,000 shares were cancelled on February 2, 2015. We are evaluating what future legal proceedings we may pursue in order to collect money damages of approximately $23,495 awarded to us pursuant to the judgment. Our ability to collect any further amounts on the judgment is, however, inherently unpredictable and is subject to significant uncertainties and, therefore, determining the likelihood of a recovery and/or the measurement of any recovery is complex. Consequently, we are unable to estimate the range of reasonably possible further recovery. Our assessment is based on estimates and assumptions deemed reasonable by management, but the assessment process relies heavily on estimates and assumptions that may prove to be incomplete or inaccurate, and unanticipated events and circumstances may occur that might cause us to change those estimates and assumptions. Other than as set forth above, we are not presently a party to any material litigation nor to the knowledge of management is any litigation threatened against us that may have a material adverse effect on our consolidated financial position, results of operations or cash flows. |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
Shareholders’ Equity | NOTE 12 – SHAREHOLDERS’ EQUITY Common Stock 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 Company’s lawsuit against Mr. Stanford. These shares were valued at par value $0.001. See Note 11 – Legal Matters. On March 1, 2015, the Company issued 50,000 shares of common stock pursuant to the employment agreement with Mark Osterberg, the Company’s President and COO. These shares were valued at $1.20 per share. On March 17, 2015, the Company issued 114,000 shares of its common stock in exchange for payment of $21 and a mutual release of a claim by an investor. The investor claimed to have purchased and paid for 32,000 shares of the Company’s 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. See Note 8 – Related Party Transactions. On June 30, 2015, the Company issued 310,000 shares of its common stock in exchange for equity investments totaling $105. On June 30, 2015, the Company issued 2,280,000 shares of its common stock as part of the June 30, 2015 Unit Offering, described in further detail below. On July 28, 2015, the Company issued 110,000 shares of its common stock to a related party as part of the June 30, 2015 Unit Offering, described in further detail below. See Note 8 – Related Party Transactions. 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. See Note 8 – Related Party Transactions. 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 a good-faith, partial payment for the Balmat Acquisition. The shares were valued at $0.29 per share. See Note 3. On October 28, 2015, the Company issued the remaining 50,000 shares of its common stock to an unrelated party as payment for the Balmat Acquisition. The shares were valued at $0.29 per share. See Note 3. On October 31, 2015, the Company issued 3,130,000 shares of its common stock as part of the Series C Preferred Offering discussed below for total funds received of $1,315 and $250 of related party note payable cancellation. See Note 8 – Related Party Transactions. On November 2, 2015, the Company issued 10,000,000 shares of its common stock as partial consideration of the Balmat Acquisition. The shares were issued at $0.29 per share. On November 10, 2015, the Company issued 437,500 shares of its common stock as part of a convertible note offering with two related parties. See Note 7 for related party details and Note 9 – Notes Payable – Related Party. On December 22, 2015, the Company issued 110,000 shares of its common stock for payment received of $55 that was part of the June 30, 2015 Unit Offering, described in further detail below. 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 Company’s 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 with a par value of $0.001 per share. Holders of the Series B preferred stock are entitled to one hundred votes per share on matters submitted to a vote of the Company’s 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 one hundred, subject to adjustment as provided in the Series B Certificate of Designation. The Company will not affect 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 Company’s outstanding common stock. On September 30, 2015, the Company issued 5,000 shares of its Series B preferred stock to an unrelated party for services rendered and to be rendered during the year ended December 31, 2015, for a value of $550. Each share of the Series B 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 Company’s 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 with par value of $0.001 per share, with a stated value equal to $.50 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 ten votes per share on matters submitted to a vote of the Company’s 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-half, subject to adjustment as provided in the Series C Certificate of Designation. The Company will not affect 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 Company’s outstanding common stock. October 31, 2015 Series C Preferred Offering On October 31, 2015, the Company issued 3,130,000 shares of Series C Preferred Stock as part of its Series C Preferred Offering for total funds of $1,315 and $250 of related party note payable cancellation. See Note 8 – Related Party Transactions. Unit Offerings June 30, 2015 Offering On June 30, 2015, the Company completed its offering of 1,000 units (the “Units”) of its common stock and warrants at a price of $1 per Unit for an aggregate offering amount of $1,000. To cover an over-allotment in this offering, we sold an additional 250 Units for an additional aggregate offering amount of $250 bringing the total amount sold in this offering to $1,250. The Units were sold to thirteen accredited investors, one of whom included our CEO and Executive Chairman, who purchased 141 Units by converting $141 previously loaned to the Company. Each Unit consisted 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 due July 10, 2015. The note accrued 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 from the promissory note, the offering totaled $1,250. On July 28, 2015, the Company agreed to issue 55 Units to an unrelated party and to extend the payment terms of the remaining $55 for an additional 55 units as part of the $110 promissory note it received from that party in connection with the Company’s offering of its Units discussed above. By December 31, 2015, the promissory note was paid and 110,000 shares were issued for the $55 received. In addition, on July 28, 2015, the Company agreed to sell the remaining 55 Units from this offering to its CEO and Executive Chairman who converted $55 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. October 31, 2015 Offering On October 31, 2015, the Company completed its offering of 3,130 units (the “October Units”) of its common stock, Series C Preferred stock and Series A and Series B warrants at a price of $0.50 per Unit. The proceeds from the offering totaled $1,565, which included $250 from our CEO and Executive Chairman who purchased 500 Units by converting amounts previously loaned to the Company. The October Units were sold to nine accredited investors. Each October Unit consisted of one share of the Company’s Series C Preferred Stock, one share of the Company’s common stock, one Series A common stock warrant entitling the holder to purchase an additional share of the Company’s common stock at an exercise price of $0.75 per share for a period of two years, and one Series B common stock warrant entitling the holder to purchase one share of the Company’s common stock at an exercise price of $1.50 per share for a period of three years. In total, the Company issued 3,130,000 shares of common stock and 3,130,000 shares of the Company’s Series C Preferred Stock. The Series A warrants were valued at $123 and the Series B warrants were valued at $93. See further details on the warrants’ fair value calculations below. November 10, 2015 Offering On November 10, 2015, the Company completed an offering totaling $875 to two related parties. See details of the offering at Note 9 – Debt. Stock Options On March 1, 2015, as part of an employment agreement, the Company granted an option to purchase 250,000 shares of the Company’s common stock with an exercise price of $0.50 per share. The option vested as follows: 50,000 shares upon execution of the employment agreement; 50,000 shares each on March 31, 2015; June 30, 2015; September 30, 2015; and December 31, 2015. On the grant date, the Company estimated the fair value of the grant using the Black Scholes option pricing model using the closing price of our common shares on the grant date as quoted on the stock exchange where the majority of our trading volume and value of the shares occurs, assuming a maturity of 2.7 years, 0.896% risk free rate and an 88.83% volatility. The stock-based compensation cost recognized in our consolidated statements of operations for the years ended December 31, 2015 and 2014 was $213 and $0, respectively, and is included within Compensation in the consolidated statements of operations. As of December 31, 2015, there was no unrecognized compensation cost related to unvested stock options, as all outstanding options were fully vested. No options were exercised during the years ended December 31, 2015 and 2014. At December 31, 2015, there was $40 in aggregate intrinsic value of outstanding and exercisable stock options, using an assumed value $0.66 per share of our common stock. The following is a summary of the status of the Company’s stock options as of the year ended December 31, 2015 and 2014 and changes through the periods ended on those dates: For the years ended December 31, 2015 2014 Number of Stock Options Weighted Average Exercise Price Number of Stock Options Weighted Average Exercise Price Outstanding, beginning of period - $ - - $ - Granted 250,000 0.50 - - Exercised - - - - Cancelled/Expired - - - - Outstanding, end of period 250,000 $ 0.50 - $ - Exercisable, end of period 250,000 $ 0.50 - $ - Weighted-average fair value per share of options granted during period $ 0.85 $ - Warrants The Company issued warrants, each exercisable for one of the Company’s common shares, to investors in connection with offerings of the Company that closed on June 30, 2015; October 31, 2015; and November 2, 2015. The exercise price and exercise period are outlined below: Total Warrants Exercise Price Expiration Date June 30, 2015 Offering 2,500,000 $ 1.00 6/30/2018 October 31, 2015 Offering - Series A Warrants 3,130,000 $ 0.75 10/31/2017 October 31, 2015 Offering - Series B Warrants 3,130,000 $ 1.50 10/31/2018 November 10, 2015 Offering 437,500 $ 2.00 11/10/2018 9,197,500 The fair value of the warrants issued during the year ended December 31, 2015 was estimated using a Black-Scholes model with significant inputs including: Risk-free interest rate 0.75%-0.896 % Expected volatility 70.0%-88.83 % Expected dividend yield 0 Expected term in years 2.0 – 3.0 Estimated forfeiture rate 0 Based on the above inputs, the value of these warrants was estimated at $234 See Note 9 – Notes Payable – Related Party for details related to valuation and accounting for the warrants issued as part of the November 10, 2015 Offering. The following table summarizes our warrant activity for the years ended December 31, 2015 and 2014: For the year ended December 31, 2015 For the year ended December 31, 2014 Number of Warrants Weighted- Average Exercise Price (USD$) Number of Warrants Weighted- Average Exercise Price (USD$) Outstanding, beginning of period - $ - - $ - Granted 9,197,500 1.13 - - Exercised - - - - Expired - - - - Outstanding, end of period 9,197,500 $ 1.13 - $ - |
Quarterly Financial Information
Quarterly Financial Information (Unaudited) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information (Unaudited) | NOTE 13 - QUARTERLY FINANCIAL INFORMATION (UNAUDITED) Summarized quarterly results for the years ended December 31, 2015 and 2014: For the year ended December 31, 2015 4th Quarter 3rd Quarter 2nd Quarter 1st Quarter Total Revenue $ - $ - $ - $ - Net Loss (2,727 ) (1,752 ) (1,776 ) (441 ) Basic and Diluted Loss Per Share (0.08 ) (0.08 ) (0.10 ) (0.03 ) For the year ended December 31, 2014 4th Quarter 3rd Quarter 2nd Quarter 1st Quarter Total Revenue $ - $ - $ - $ - Net Loss (2,618 ) (433 ) (364 ) (742 ) Basic and Diluted Loss Per Share (0.17 ) (0.01 ) (0.01 ) (0.02 ) |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 14 – SUBSEQUENT EVENTS On January 1, 2016, the Company entered into a six-month consulting agreement for services relating to shareholder information and public relations. As compensation for these services, the consulting firm was issued 200,000 shares of the Company’s common stock valued at $0.66 per share. On February 24, 2016, the Company entered into a six-month consulting agreement for services relating to management consulting and business advisory. As compensation for these services, the consulting firm was issued 150,000 shares of the Company’s common stock valued at $0.51 per share. On March 17, 2016, the Company closed a $500 bridge loan with the Development Authority of North Country, bearing interest at 2.25%. The loan is secured by an assignment of mineral and mining rights and by certain pieces of equipment at our Balmat Mine. Net proceeds received after fees were $492. |
Summary of Significant Accoun21
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Basis of Accounting and Principles of consolidation | Basis of Accounting and Principles of consolidation These consolidated financial statements have been prepared in accordance with U.S. GAAP and are inclusive of the accounts of Star Mountain Resources, Inc. and its wholly-owned subsidiaries, which consist of its wholly-owned subsidiaries, Bolcan Mining, LLC and Northern Zinc, LLC and Northern ZincÂ’s wholly-owned subsidiary, Balmat Holding Corporation, and BalmatÂ’s wholly owned subsidiary, St. Lawrence Zinc Company, LLC. Certain comparative figures have been reclassified to conform to the financial statement presentation adopted for the current year. All numbers in the consolidated financial statements are presented in U.S. dollars, unless otherwise denoted. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In August 2014, FASB issued Accounting Standards Update (“ASU”) No. 2014-15, “Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern” (“ASU 2014-15”). ASU 2014-15 is intended to define management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures. The amendments in this ASU are effective for reporting periods beginning after December 15, 2016, with early adoption permitted. We are currently assessing the impact the adoption of ASU 2014-15 will have on our financial statements and related disclosures. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. The amounts which involve significant estimates include (i) Balmat Acquisition purchase price estimates including land, PP&E, mineral reserves, mineral rights and the deferred purchase price obligation (ii) property, plant and equipment estimated salvage values and assessment of impairment, (ii) fair value of certain assets and liabilities, (iii) contingent liabilities and (iv) asset retirement obligations. These estimates are reviewed and, as adjustments become necessary, they are reported in earnings in the period in which they became known. Actual results could differ from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of all cash balances and liquid investments with an original maturity of three months or less. |
Restricted Cash | Restricted Cash The Company maintains, at times, cash deposits and/or surety bonds as required by regulatory bodies as assurance for the funding of future reclamation costs associated with the CompanyÂ’s reclamation obligations. These funds held in cash deposits and/or used as collateral for surety bonds are restricted to that purpose and are not available for the CompanyÂ’s use until the reclamation obligations have been fulfilled. Restricted cash is classified as a non-current asset. At December 31, 2015, the amounts of these restricted cash deposits totaled $1,688 of which $1,664 is invested in a certificate of deposit which renews automatically for additional terms of one year or more. This amount is in lieu of a mine land reclamation bond and is held in escrow for the New York State Department of Environmental Conservation. Interest earned on the certificate of deposit is not part of the bonding obligation and as such is classified as a current asset. The remaining balance of $24 is associated with a cash surety bond held with the state of Utah. At December 31, 2014, only the cash surety bond of $24 with the state of Utah was held. |
Concentration of Credit Risk | Concentration of Credit Risk The Company maintains cash in bank deposit accounts, which at times may exceed federally insured limits. The Company has not experienced any losses in such accounts and does not believe it is exposed to any significant credit risk with its cash and cash equivalents. |
Inventories | Inventories Parts and supplies are expected to be held and consumed during development or resumption of mining activities and are valued at the lower of cost or replacement value. Cost is determined on an average basis. |
Property and Equipment | Property and Equipment (i) Mineral property, exploration and mine development expenditures: Mineral property acquisition costs, including indirectly related acquisition costs, are capitalized when incurred. Acquisition costs include cash consideration and the fair market value of common shares issued as consideration. Exploration costs are expensed as incurred. When it is determined that a mining deposit can be economically and legally extracted or produced based on established proven and probable reserves under SEC Industry Guide 7, development costs related to such reserves incurred after such determination will be considered for capitalization. The establishment of proven and probable reserves is based on results of feasibility studies which indicate whether a property is economically feasible. Upon commencement of commercial production, capitalized costs will be amortized over their estimated useful lives or units of production, whichever is a more reliable measure. Capitalized amounts relating to a property that is abandoned or otherwise considered uneconomic for the foreseeable future will be written off. (ii) Property, plant and equipment (PP&E): Expenditures for PP&E additions, major replacements and improvements are capitalized at cost. PP&E is depreciated using the straight-line method and is depreciated over the estimated useful lives of the assets. Productive/useful lives range from 5 to 10 years, but do not exceed the useful life of the individual asset. Determination of expected useful lives for depreciation calculations are made on a property-by-property or asset-by-asset basis. Our estimates for reserves, mineralized material, and other resources are a key component in determining our units of production depreciation rates. (iii) Impairment of assets The Company reviews and evaluates the carrying value of its assets when events or circumstances indicate that the carrying amounts of related assets or groups of assets may not be recoverable, or at least annually. If the estimated future economic benefit is less than the carrying amount of the asset, an impairment charge is recorded based on the difference between the carrying amount and its estimated fair value (less costs to sell for assets to be disposed of by sale) as a charge to operations. For the years ended December 31, 2015 and 2014, impairment charges of nil and $2 were recorded, respectively. |
Business Combinations | Business Combinations We account for business combinations using the purchase method of accounting. The purchase method requires us to determine the fair value of all acquired assets, including identifiable intangible assets and all assumed liabilities. The total cost of acquisitions is allocated to the underlying identifiable net assets, based on their respective estimated fair values. Determining the fair value of assets acquired and liabilities assumed requires managementÂ’s judgment and the utilization of independent valuation experts, and often involves the use of significant estimates and assumptions, including assumptions with respect to future cash inflows and outflows, discount rates and asset lives, among other items. |
Income Taxes | Income Taxes The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under the asset and liability method, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recognized if it is more likely than not that the entire or some portion of the deferred tax asset will not be recognized. The CompanyÂ’s policy is to recognize potential accrued interest and penalties related to unrecognized tax benefits within income tax expense. For the years ended December 31, 2015 and 2014, the Company did not recognize any interest or penalties, nor did we have any interest or penalties accrued as of December 31, 2015 and 2014, related to unrecognized benefits. |
Asset Retirement Obligations | Asset Retirement Obligations In connection with the CompanyÂ’s business, it is required to reclaim the sites at which it is conducting its mining activities once those activities have been completed. The fair value of that liability is measured based on an expected cash flow approach, discounted using a credit-adjusted risk-free rate. If a change in timing or estimated expected cash flows results in a downward revision of the asset retirement obligation, then the undiscounted revised estimate of expected cash flows is discounted using the credit-adjusted risk-free rate in effect at the date of initial measurement and recognition of the original asset retirement obligation. Changes in our asset retirement obligations are summarized in the following table (in thousands): Year ended December 31, 2015 2014 Balance, beginning of period $ - $ - Additions (Balmat Acquisition, see Note 3) 17,906 - Releases - - Revisions to cost estimates - - Balance, end of period $ 17,906 $ - |
Common Shares | Common Shares Common shares issued for non-monetary consideration are recorded at fair market value based upon the trading price of our shares on the share issuance date. Common shares issued for monetary consideration are recorded at the amount received, less issuance costs. |
Stock-Based Compensation | Stock-based Compensation The fair value of share-based compensation awards issued to employees and directors of the Company is measured at the date of grant and amortized over the requisite service period, which is generally the vesting period. The Company uses the Black-Scholes option valuation model to calculate the fair value of awards granted. When a share-based compensation award is exercised and the resulting common shares are issued, the fair value of such award as determined on the date of grant is transferred to common shares. In the case of a share-based compensation award that is either cancelled or forfeited prior to vesting, the amortized expense associated with the unvested awards is reversed. |
Loss per Share | Loss per Share The loss per share is computed using the weighted average number of shares outstanding during the period. To calculate diluted loss per share, the Company uses the treasury stock method and the if-converted method. Diluted loss per share is not presented as the effect on the basic loss per share would be anti-dilutive. At December 31, 2015 and 2014, the Company had 12,475,000 and nil in potentially dilutive securities, respectively. |
Fair value of financial instruments | Fair value of financial instruments Our financial instruments may at times consist of cash and cash equivalents, accounts receivable, restricted cash, accounts payable and accrued liabilities, notes payable and asset retirement obligations. U.S. GAAP defines fair value as the price that would be received to sell an asset or be paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price) and establishes a fair-value hierarchy that prioritizes the inputs used to measure fair value using the following definitions (from highest to lowest priority): ● Level 1 — Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. ● Level 2 — Observable inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data by correlation or other means. ● Level 3 — Prices or valuation techniques requiring inputs that are both significant to the fair-value measurement and unobservable. The Company continually monitors its cash positions with, and the credit quality of, the financial institutions with which it invests. The Company maintains balances in various U.S. financial institutions in excess of U.S. federally insured limits. The Company’s balances of cash and cash equivalents, accounts payable and accrued liabilities, and notes payable approximate fair value. The following table presents information about financial instruments recognized at fair value on a recurring basis as of December 31, 2015 and 2014, and indicates the fair value hierarchy (in thousands): December 31, 2015 December 31, 2014 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets Reclamation deposits - $ 1,688 - 1,688 - 24 - 24 Total financial assets $ - $ 1,688 $ - $ 1,688 $ - $ 24 $ - $ 24 Liabilities Purchase price obligation – Balmat Acquisition - - 12,431 12,431 - - - - Asset retirement obligation - - 17,906 17,906 - - - - Total financial assets and liabilities $ - $ 1,688 $ 30,337 $ 32,025 $ - $ 24 $ - $ 24 The fair value of the Company’s purchase price obligation was estimated by a third party as part of the purchase price accounting for the Balmat Acquisition. The third party used a probability-weighted discounted cash flow model in order to arrive at a fair value of the liability. A discounted cash flow model was used to calculate the net present value of the various payment options to satisfy the outstanding purchase price obligation. See Note 3 – Balmat Acquisition for a detailed description of each payment option able to satisfy the remaining obligation. An estimated probability weighting was then assigned to each option’s estimated net present value to arrive at the overall estimated fair value. Significant unobservable inputs include management’s estimated timing of activities (including option election dates and timing of first concentrate shipments) associated with payments due under the agreement as well as the discount rate applied within the model. A discount rate of 4.6% was applied. Acceleration of timing of elections or shipments of first concentrates would accelerate payments due, therefore increasing the net present value of a given payment option. An upward/downward adjustment to the discount rate would result in an inverse effect on the overall fair value, all else being equal. The fair value of the Company’s asset retirement obligation was estimated by a third party as part of the purchase price accounting for the Balmat Acquisition. The third party used the cost method to estimate the fair value of the liability. Significant unobservable inputs include management’s cost estimates and the estimated timing of those costs, the annual inflation rate applied to cost estimates and the discount rate used to discount the inflated cost estimates. The undiscounted costs of reclamation were estimated at $19,126 and are expected to be incurred within the next 1 to 28 years. A 3.6% annual inflation rate and 4.6% discount rate were applied. Any upward/downward adjustments to the estimated costs or inflation rate would result in a corresponding adjustment to the fair value estimate, all else being equal. An upward/downward adjustment to the discount rate would result in an inverse effect on the overall fair value, all else being equal. |
Balmat Acquisition (Tables)
Balmat Acquisition (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions | Upon the completion of this acquisition, the Company acquired the following assets and assumed the following liabilities: Assets received: Cash $ 72 Prepaid expense 163 Spare parts inventory 500 Land 1,855 Buildings 850 Machinery and equipment 23,903 Mineral reserves 3,165 Mineral rights 3,660 Restricted cash – surety bond 1,664 Total assets received $ 35,832 Liabilities assumed: Loans payable 1,390 Asset retirement obligation 17,906 Liabilities 28 Total liabilities assumed $ 19,324 Total consideration paid $ 16,508 |
Schedule of Business Acquisition, Pro Forma Information | Balmat Acquisition related costs of $210 have been excluded from the pro forma amounts. Year Ended December 31, 2015 2014 Total revenues: As reported $ - $ - Pro forma $ - $ - Net Loss: As reported $ (6,696 ) $ (4,157 ) Pro forma $ (10,499 ) $ (9,324 ) Basic and diluted loss per share: As reported $ (0.29 ) $ (0.12 ) Pro forma $ (0.46 ) $ (0.28 ) |
Summary of Significant Accoun23
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Schedule of Asset Retirement Obligations | Changes in our asset retirement obligations are summarized in the following table (in thousands): Year ended December 31, 2015 2014 Balance, beginning of period $ - $ - Additions (Balmat Acquisition, see Note 3) 17,906 - Releases - - Revisions to cost estimates - - Balance, end of period $ 17,906 $ - |
Schedule of Fair Value Assets and Liabilities Recurring | The following table presents information about financial instruments recognized at fair value on a recurring basis as of December 31, 2015 and 2014, and indicates the fair value hierarchy (in thousands): December 31, 2015 December 31, 2014 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets Reclamation deposits - $ 1,688 - 1,688 - 24 - 24 Total financial assets $ - $ 1,688 $ - $ 1,688 $ - $ 24 $ - $ 24 Liabilities Purchase price obligation – Balmat Acquisition - - 12,431 12,431 - - - - Asset retirement obligation - - 17,906 17,906 - - - - Total financial assets and liabilities $ - $ 1,688 $ 30,337 $ 32,025 $ - $ 24 $ - $ 24 |
Mineral Rights and Reserves (Ta
Mineral Rights and Reserves (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Schedule of Provon and Probable Reserves | As of December 31, 2015, our estimate of proven and probable reserves was: Reserve Class Tons (000Â’s) Zinc % Proven 152 9.0 Probable 434 9.2 Total 585 9.2 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | At December 31, 2015 and 2014, property, plant and equipment consisted of the following: December 31, 2015 December 31, 2014 Accumulated Net Book Accumulated Net Book Cost Depreciation Value Cost Depreciation Value Buildings $ 892 $ 16 $ 876 $ 43 $ - $ 43 Machinery & Equipment 18,911 231 18,680 18 6 12 Mobile Equipment 4,984 16 4,967 - - - Office Furniture & Equipment 33 4 28 5 2 3 $ 24,820 $ 268 $ 24,552 $ 66 $ 8 $ 58 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | The related party, date of issuance and number of shares are outlined below: Related Party Date of Issuance Number of Shares Issued Joseph Marchal, CEO and Executive Chairman May 15, 2015 500,000 Edward Brogan, Director May 15, 2015 250,000 Donna Moore, Controller and CAO May 15, 2015 50,000 Doug MacLellan, Director May 15, 2015 50,000 Donald Sutherland, Director May 15, 2015 50,000 Mark Osterberg, President and COO May 15, 2015 50,000 Summit Capital USA, Inc. May 15, 2015 500,000 Joseph Marchal, CEO and Executive Chairman October 1, 2015 1,000,000 Edward Brogan, Director October 1, 2015 1,000,000 Donna Moore, Controller and CAO October 1, 2015 50,000 Doug MacLellan, Director October 1, 2015 50,000 Donald Sutherland, Director October 1, 2015 50,000 TOTAL 3,600,000 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | The provision for income taxes consisted of the following as of December 31, 2015 and 2014: December 31, 2015 December 31, 2014 Current taxes $ - $ - Deferred Tax Benefit (5,288 ) (180 ) Benefits of Operating Loss Carryforwards 5,288 180 Actual provision $ - $ - |
Schedule of Deferred Tax Assets and Liabilities | December 31, 2015 December 31, 2014 DEFERRED TAX ASSETS Current $ - $ - Noncurrent - - Net operating losses 6,375 573 Total Deferred Tax Assets 6,375 573 DEFERRED TAX LIABILITIES Current - - Noncurrent (4,798 ) (14 ) Valuation Allowance (1,577 ) (559 ) Net Deferred Taxes $ - $ - |
Summary of Operating Loss Carryforwards | Operating Losses Expires Amount 2031 $ 67 2032 225 2033 1,815 2034 681 2035 13,560 Total $ 16,348 |
Schedule of Reconciliation Income Tax Provision for Continuing Operations | December 31, 2015 December 31, 2014 Expected provision (based on statutory rate) $ (2,612 ) $ (1,621 ) Effect of: Increase in valuation allowance 5,288 180 Non-deductible expenses (2,676 ) 1,441 Actual provision $ - $ - |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
Summary of Stock Options | The following is a summary of the status of the CompanyÂ’s stock options as of the year ended December 31, 2015 and 2014 and changes through the periods ended on those dates: For the years ended December 31, 2015 2014 Number of Stock Options Weighted Average Exercise Price Number of Stock Options Weighted Average Exercise Price Outstanding, beginning of period - $ - - $ - Granted 250,000 0.50 - - Exercised - - - - Cancelled/Expired - - - - Outstanding, end of period 250,000 $ 0.50 - $ - Exercisable, end of period 250,000 $ 0.50 - $ - Weighted-average fair value per share of options granted during period $ 0.85 $ - |
Schedule of Warrants Exercise Price and Exercise Period | Total Warrants Exercise Price Expiration Date June 30, 2015 Offering 2,500,000 $ 1.00 6/30/2018 October 31, 2015 Offering - Series A Warrants 3,130,000 $ 0.75 10/31/2017 October 31, 2015 Offering - Series B Warrants 3,130,000 $ 1.50 10/31/2018 November 10, 2015 Offering 437,500 $ 2.00 11/10/2018 9,197,500 |
Schedule of Warrants Issued Black-Scholes | Risk-free interest rate 0.75%-0.896 % Expected volatility 70.0%-88.83 % Expected dividend yield 0 Expected term in years 2.0 – 3.0 Estimated forfeiture rate 0 |
Schedule of Warrants Activity | For the year ended December 31, 2015 For the year ended December 31, 2014 Number of Warrants Weighted- Average Exercise Price (USD$) Number of Warrants Weighted- Average Exercise Price (USD$) Outstanding, beginning of period - $ - - $ - Granted 9,197,500 1.13 - - Exercised - - - - Expired - - - - Outstanding, end of period 9,197,500 $ 1.13 - $ - |
Quarterly Financial Informati29
Quarterly Financial Information (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information | Summarized quarterly results for the years ended December 31, 2015 and 2014: For the year ended December 31, 2015 4th Quarter 3rd Quarter 2nd Quarter 1st Quarter Total Revenue $ - $ - $ - $ - Net Loss (2,727 ) (1,752 ) (1,776 ) (441 ) Basic and Diluted Loss Per Share (0.08 ) (0.08 ) (0.10 ) (0.03 ) For the year ended December 31, 2014 4th Quarter 3rd Quarter 2nd Quarter 1st Quarter Total Revenue $ - $ - $ - $ - Net Loss (2,618 ) (433 ) (364 ) (742 ) Basic and Diluted Loss Per Share (0.17 ) (0.01 ) (0.01 ) (0.02 ) |
Organization and Nature of Bu30
Organization and Nature of Business (Details Narrative) - shares | Dec. 31, 2015 | Nov. 02, 2015 | Dec. 31, 2014 |
Common stock, shares authorized | 350,000,000 | 350,000,000 | |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 | |
Northern Zinc, LLC [Member] | |||
Business acquisition interest rate | 100.00% | ||
Percentage of issued and outstanding common stock | 100.00% | ||
Minimum [Member] | |||
Authorized capital stock | 350,000,000 | ||
Maximum [Member] | |||
Authorized capital stock | 400,000,000 |
Going Concern (Details Narrativ
Going Concern (Details Narrative) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Total current assets | $ 2,034 | $ 62 |
Total current liabilities | 3,152 | $ 631 |
Working capital balance | $ 1,118 |
Balmat Acquisition (Details Nar
Balmat Acquisition (Details Narrative) - USD ($) $ in Thousands | Nov. 02, 2015 | Jan. 02, 2014 | Dec. 31, 2015 | Dec. 31, 2014 |
Number of shares issued for debt, value | $ 391 | |||
Purchase price payable in cash | 1,000 | |||
Number of common stock value issued for acquisition | 3,078 | |||
Deferred payment liability | $ 12,431 | |||
Number of common stock shares issued for acquisition | 10,628,857 | |||
Shares subscribed | 78,857 | |||
Acquisition-related costs | $ 210 | |||
Balmat Acquisition [Member] | ||||
Acquisition-related costs | $ 210 | |||
Northern Zinc Purchase Agreement [Member] | ||||
Number of unregistered common stock issued for debt | 10,000,000 | |||
Number of shares issued for debt, value | $ 1,390 | |||
Percentage of membership interest previouely owned | 100.00% | |||
Balmat Purchase Agreement [Member] | ||||
Business acquisition interest rate | 100.00% | |||
Purchase price payable in cash | $ 17,000 | |||
Number of unregistered common stock shares issued | 550,000 | |||
Additional unregistered common stock shares issued | 78,857 | |||
Payment of debt | $ 15,500 | |||
Balmat Purchase Agreement [Member] | Option 2 [Memebr] | ||||
Reduction of purchase price | 9,000 | |||
Number of common stock value issued for acquisition | 500 | |||
Balmat Purchase Agreement [Member] | Option 3 [Member] | ||||
Purchase price payable in cash | 14,500 | |||
Reduction of purchase price | 16,500 | |||
Number of common stock value issued for acquisition | 500 | |||
Balmat Purchase Agreement [Member] | Closing Date [Member] | ||||
Payment of debt | 1,500 | |||
Balmat Purchase Agreement [Member] | Closing Date [Member] | Option 2 [Memebr] | ||||
Payment of debt | 1,500 | |||
Balmat Purchase Agreement [Member] | Upon Completion of First Shipment [Member] | ||||
Payment of debt | 500 | |||
Balmat Purchase Agreement [Member] | Upon Completion of First Shipment [Member] | Option 3 [Member] | ||||
Payment of debt | 400 | |||
Balmat Purchase Agreement [Member] | 12 Month Anniversary [Member] | ||||
Payment of debt | 5,000 | |||
Balmat Purchase Agreement [Member] | 18th Month [Member] | ||||
Payment of debt | 2,500 | |||
Balmat Purchase Agreement [Member] | 18th Month [Member] | Option 3 [Member] | ||||
Payment of debt | 4,700 | |||
Balmat Purchase Agreement [Member] | 24th Month [Member] | ||||
Payment of debt | 2,500 | |||
Balmat Purchase Agreement [Member] | 24th Month [Member] | Option 3 [Member] | ||||
Payment of debt | 4,700 | |||
Balmat Purchase Agreement [Member] | 30th Month [Member] | ||||
Payment of debt | 2,500 | |||
Balmat Purchase Agreement [Member] | 36th Month [Member] | ||||
Payment of debt | 2,500 | |||
Balmat Purchase Agreement [Member] | Within Three Days [Member] | Option 2 [Memebr] | ||||
Payment of debt | 7,000 | |||
Balmat Purchase Agreement [Member] | 12th Month [Member] | Option 3 [Member] | ||||
Payment of debt | $ 4,700 |
Balmat Acquisition - Schedule o
Balmat Acquisition - Schedule of Business Acquisitions (Details) - Balmat Acquisition [Member] $ in Thousands | Nov. 02, 2015USD ($) |
Cash | $ 72 |
Prepaid expense | 163 |
Spare parts inventory | 500 |
Land | 1,855 |
Buildings | 850 |
Machinery and equipment | 23,903 |
Mineral reserves | 3,165 |
Mineral rights | 3,660 |
Restricted cash – surety bond | 1,664 |
Total assets received | 35,832 |
Loans payable | 1,390 |
Asset retirement obligation | 17,906 |
Liabilities | 28 |
Total liabilities assumed | 19,324 |
Total consideration paid | $ 16,508 |
Balmat Acquisition - Schedule34
Balmat Acquisition - Schedule of Business Acquisition, Pro Forma Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Business Combinations [Abstract] | ||||||||||
Total revenues: As reported | ||||||||||
Total revenues: Pro forma | ||||||||||
Net Loss: As reported | $ (2,727) | $ (1,752) | $ (1,776) | $ (441) | $ (2,618) | $ (433) | $ (364) | $ (742) | $ (6,696) | $ (4,157) |
Net Loss: Pro forma | $ (10,499) | $ (9,324) | ||||||||
Basic and diluted loss per share: As reported | $ (0.29) | $ (0.12) | ||||||||
Basic and diluted loss per share: Pro forma | $ (0.46) | $ (0.28) |
Summary of Significant Accoun35
Summary of Significant Accounting Policies (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Restricted cash deposits | $ 1,688 | |
Invested in certificate of deposit | $ 1,664 | |
Impairment of assets | $ 2 | |
Potentially dilutive securities | 12,475,000 | |
Fair value discount rate | 4.60% | |
Undiscounted costs of reclamation estimated | $ 19,126 | |
Fair value annual inflation rate | 3.60% | |
Balmat Acquisition [Member] | ||
Fair value discount rate | 4.60% | |
Minimum [Member] | ||
Property and equipment useful lives range | 5 years | |
Fair value expected term | 1 year | |
Maximum [Member] | ||
Property and equipment useful lives range | 10 years | |
Fair value expected term | 28 years | |
Surety Bond [Member] | ||
Cash surety bond | $ 24 | $ 24 |
Summary of Significant Accoun36
Summary of Significant Accounting Policies - Schedule of Asset Retirement Obligations (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Accounting Policies [Abstract] | ||
Balance, beginning of period | ||
Additions (Balmat Acquisition, see Note 3) | $ 17,906 | |
Releases | ||
Revisions to cost estimates | ||
Balance, end of period | $ 17,906 |
Summary of Significant Accoun37
Summary of Significant Accounting Policies - Schedule of Fair Value Assets and Liabilities Recurring (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Reclamation deposits | $ 1,688 | $ 24 |
Total financial assets | 1,688 | $ 24 |
Purchase price obligation - Balmat Acquisition | 12,431 | |
Asset retirement obligation | 17,906 | |
Total financial assets and liabilities | $ 32,025 | $ 24 |
Level 1 [Member] | ||
Reclamation deposits | ||
Total financial assets | ||
Purchase price obligation - Balmat Acquisition | ||
Asset retirement obligation | ||
Total financial assets and liabilities | ||
Level 2 [Member] | ||
Reclamation deposits | $ 1,688 | $ 24 |
Total financial assets | $ 1,688 | $ 24 |
Purchase price obligation - Balmat Acquisition | ||
Asset retirement obligation | ||
Total financial assets and liabilities | $ 1,688 | $ 24 |
Level 3 [Member] | ||
Reclamation deposits | ||
Total financial assets | ||
Purchase price obligation - Balmat Acquisition | $ 12,431 | |
Asset retirement obligation | 17,906 | |
Total financial assets and liabilities | $ 30,337 |
Prepaid Expenses and Other (Det
Prepaid Expenses and Other (Details Narrative) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Prepaid Expenses And Other Details Narrative | ||
Prepaid expenses | $ 333 | $ 16 |
Mineral Rights (Details Narrati
Mineral Rights (Details Narrative) $ / shares in Units, $ in Thousands | Dec. 31, 2015USD ($)a$ / shares | Nov. 02, 2015USD ($)a | Dec. 31, 2014USD ($) |
Capitalized cost of mineral rights | $ | $ 3,684 | $ 24 | |
Mineral reserves estimated price per pound | $ / shares | $ 0.92 | ||
Percentage of metallurgical recovery | 96.00% | ||
Percentage of mine loss | 5.00% | ||
Percentage of unplanned mining dilution | 10.00% | ||
Balmat Holdings Corporation [Member] | |||
Area of land | 51,428 | ||
Balmat Holdings Corporation [Member] | Addition Acres Of Leased [Member] | |||
Area of land | 4,774 | ||
Balmat Acquisition [Member] | |||
Area of land | 2,699 | ||
Acquired mineral reserves | $ | $ 3,165 |
Mineral Rights - Schedule of Pr
Mineral Rights - Schedule of Provon and Probable Reserves (Details) | Dec. 31, 2015lb |
Extractive Industries [Abstract] | |
Tons Proven | 152,000 |
Percentage of Zinc Proven | 9.00% |
Tons Probable | 434,000 |
Percentage of Zinc Probable | 9.20% |
Tons Total | 585,000 |
Percentage of Zinc total | 9.20% |
Property, Plant and Equipment41
Property, Plant and Equipment (Details Narrative) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Nov. 02, 2015USD ($)a | |
Depreciation expense | $ 260 | $ 13 | |
Balmat Acquisition [Member] | |||
Acres of surface rights | a | 2,699 | ||
Fair value of property at acquisition | $ 1,855 |
Property, Plant and Equipment -
Property, Plant and Equipment - Schedule of Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Property, plant and equipment Gross | $ 24,820 | $ 66 |
Property, plant and equipment Accumulated Depreciation | 268 | 8 |
Property, plant and equipment Net Book Value | 24,552 | 58 |
Building [Member] | ||
Property, plant and equipment Gross | 892 | $ 43 |
Property, plant and equipment Accumulated Depreciation | 16 | |
Property, plant and equipment Net Book Value | 876 | $ 43 |
Machinery and Equipment [Member] | ||
Property, plant and equipment Gross | 18,911 | 18 |
Property, plant and equipment Accumulated Depreciation | 231 | 6 |
Property, plant and equipment Net Book Value | 18,680 | $ 12 |
Mobile Equipment [Member] | ||
Property, plant and equipment Gross | 4,984 | |
Property, plant and equipment Accumulated Depreciation | 16 | |
Property, plant and equipment Net Book Value | 4,967 | |
Office Furniture & Equipment [Member] | ||
Property, plant and equipment Gross | 33 | $ 5 |
Property, plant and equipment Accumulated Depreciation | 4 | 2 |
Property, plant and equipment Net Book Value | $ 28 | $ 3 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Nov. 10, 2015 | Oct. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | May. 15, 2015 | Mar. 01, 2015 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Feb. 02, 2015 |
Debt converted amount | $ 391 | |||||||||
Shares issued Price per share | $ 1.10 | $ 0.001 | ||||||||
Number of preferred stock shares issued during the period | 437,500 | 1,550,000 | 3,600,000 | |||||||
Joseph Marchal [Member] | ||||||||||
Loan from related party | $ 254 | |||||||||
Loan bearing interest rate | 12.00% | |||||||||
Loan payable | $ 260 | |||||||||
Proceeds from related party | $ 270 | |||||||||
Paid expenses | 62 | |||||||||
Cash payment of principal | 195 | |||||||||
Cash payment of interest amount | 32 | |||||||||
Debt converted amount | 141 | |||||||||
Debt remaining converted amounts loaned | 250 | |||||||||
Purchase of convertible notes | 275 | |||||||||
Joseph Marchal [Member] | Convertible Notes Payable [Member] | ||||||||||
Cash payment of principal | 275 | |||||||||
Cash payment of interest amount | 4 | |||||||||
Edward Brogan [Member] | ||||||||||
Cash payment of principal | 600 | |||||||||
Cash payment of interest amount | $ 10 | |||||||||
Purchase of convertible notes | $ 600 | |||||||||
Purchase of worth of units | $ 750 | $ 250 | ||||||||
Donald Sutherland [Member] | ||||||||||
Purchase of worth of units | $ 200 | |||||||||
Mark Osterberg [Member] | Employment Agreement [Member] | ||||||||||
Number of common stock shares issued as a one time signing bonus | 50,000 | |||||||||
Shares issued Price per share | $ 1.20 | |||||||||
Related Parties [Member] | ||||||||||
Shares issued Price per share | $ 1.10 | |||||||||
Number of preferred stock shares issued during the period | 2,150,000 | |||||||||
Summit Capital USA, Inc [Member] | ||||||||||
Number of preferred stock shares issued during the period | 500,000 | |||||||||
Summit Capital USA, Inc [Member] | Series B Preferred Stock [Member] | ||||||||||
Number of preferred stock shares issued during the period | 5,000 | |||||||||
Cancellation amount | $ 28 | |||||||||
Fees due | $ 55 | |||||||||
Debt maturity date | Aug. 31, 2015 |
Related Party Transactions - Sc
Related Party Transactions - Schedule of Related Party Transactions (Details) - shares | Nov. 10, 2015 | May. 15, 2015 | Dec. 31, 2015 |
Number of Shares Issued | 437,500 | 1,550,000 | 3,600,000 |
Joseph Marchal, CEO and Executive Chairman [Member] | |||
Date of Issuance | May 15, 2015 | ||
Number of Shares Issued | 500,000 | ||
Edward Brogan, Director [Member] | |||
Date of Issuance | May 15, 2015 | ||
Number of Shares Issued | 250,000 | ||
Donna Moore, Controller and CAO [Member] | |||
Date of Issuance | May 15, 2015 | ||
Number of Shares Issued | 50,000 | ||
Doug MacLellan, Director [Member] | |||
Date of Issuance | May 15, 2015 | ||
Number of Shares Issued | 50,000 | ||
Donald Sutherland, Director [Member] | |||
Date of Issuance | May 15, 2015 | ||
Number of Shares Issued | 50,000 | ||
Mark Osterberg, President and COO [Member] | |||
Date of Issuance | May 15, 2015 | ||
Number of Shares Issued | 50,000 | ||
Summit Capital USA, Inc [Member] | |||
Date of Issuance | May 15, 2015 | ||
Number of Shares Issued | 500,000 | ||
Joseph Marchal, CEO and Executive Chairman One [Member] | |||
Date of Issuance | Oct. 1, 2015 | ||
Number of Shares Issued | 1,000,000 | ||
Edward Brogan, Director One [Member] | |||
Date of Issuance | Oct. 1, 2015 | ||
Number of Shares Issued | 1,000,000 | ||
Donna Moore, Controller and CAO One [Member] | |||
Date of Issuance | Oct. 1, 2015 | ||
Number of Shares Issued | 50,000 | ||
Doug MacLellan, Director One [Member] | |||
Date of Issuance | Oct. 1, 2015 | ||
Number of Shares Issued | 50,000 | ||
Donald Sutherland, Director One [Member] | |||
Date of Issuance | Oct. 1, 2015 | ||
Number of Shares Issued | 50,000 |
Debt (Details Narrative)
Debt (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Nov. 10, 2015 | Nov. 02, 2015 | Aug. 13, 2013 | Jun. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Feb. 02, 2015 |
Repayments of debt | $ 13 | ||||||
Remaining liability recorded as Stipulated Agreement Liability, Related Party | $ 79 | $ 79 | |||||
Paid loan | $ 195 | ||||||
Number of common stock shares issued | 310,000 | ||||||
Shares issued price per share | $ 1.10 | $ 0.001 | |||||
Fair value of purchase price obligation | $ 12,431 | ||||||
Purchase price obligation | 500 | ||||||
Amount Due Agreed To Be Paid On or Before August 15, 2013 [Member] | |||||||
Amount Due, periodic payment | $ 11 | ||||||
Amount Due Agreed To Be Paid On or Before September 15, 2013 [Member] | |||||||
Amount Due, periodic payment | 11 | ||||||
Amount Due Agreed To Be Paid On or Before October 15, 2013 [Member] | |||||||
Amount Due, periodic payment | 11 | ||||||
First Day Of The Month Following The Date [Member] | |||||||
Amount Due, periodic payment | 15 | ||||||
Equity funding | 3,000,000 | ||||||
Michael Christiansen [Member] | |||||||
Amount due relating to promissory note, accrued compensation and out-of-pocket expenses incurred | $ 123 | ||||||
Balmat Acquisition [Member] | |||||||
Amount Due, periodic payment | $ 750 | ||||||
Repayments of debt | 100 | ||||||
Promissory note issued | $ 850 | ||||||
Debt interest rate | 8.00% | ||||||
Proceeds from issuance of note payable | $ 6,000 | ||||||
Accrued interest | 11 | ||||||
Balmat Acquisition One [Member] | |||||||
Amount Due, periodic payment | 40 | ||||||
Repayments of debt | 50 | ||||||
Promissory note issued | $ 540 | ||||||
Debt interest rate | 8.00% | ||||||
Accrued interest | 6 | ||||||
Paid loan | $ 100 | ||||||
CEO and Executive Chairman [Member] | |||||||
Promissory note issued | $ 10 | ||||||
Debt interest rate | 10.00% | 24.50% | |||||
Accrued interest | $ 14 | ||||||
Number of shares sold during the period | 87.5 | ||||||
Debt maturity date | Oct. 31, 2016 | ||||||
Debt conversion price per share | $ 1 | ||||||
Number of common stock shares issued | 5,000 | 437,500 | |||||
Warrants to purchase of common stock | 5,000 | 437,500 | |||||
Warrants exercise price per share | $ 2 | ||||||
Notes issued | $ 875 | ||||||
Fair value of common stock shares issuance | 437,500 | ||||||
Fair value of common stock issuance | $ 127 | ||||||
Shares issued price per share | $ 0.29 | ||||||
Fair value of warrants | $ 21 | ||||||
Fair value of market price per share | $ 0.29 | ||||||
Fair value of exercise price | $ 1 | ||||||
Fair value of term | 2 years | ||||||
Fair value of volatility rate | 70.00% | ||||||
Fair value of risk-free rate | 0.75% | ||||||
Fair value of dividends | 0.00% | ||||||
Debt discount | $ 875 | $ 126 | |||||
Accretion of note discount | $ 21 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Provision of income taxes | $ 0 | $ 0 |
Net federal operating loss carryforwards | $ 16,348 | |
Marginal tax rate | 39.00% | |
Total deferred tax asset | $ 6,375 | 573 |
Total deferred tax liability | $ 4,798 | 14 |
Decrease in deferred tax liability | $ 5,288 | |
Statutory tax rates | 39.00% | |
Federal return due date | Sep. 15, 2016 | |
Federal [Member] | ||
Net federal operating loss carryforwards | $ 16,348 | |
Net federal operating loss carry forward expiration date | expire in 2031 |
Income Taxes - Schedule of Prov
Income Taxes - Schedule of Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | ||
Current taxes | ||
Deferred Tax Benefit | $ (5,288) | $ (180) |
Benefits of Operating Loss Carryforwards | 5,288 | 180 |
Actual provision | $ 0 | $ 0 |
Income Taxes - Components of De
Income Taxes - Components of Deferred Income Taxes (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Income Tax Disclosure [Abstract] | ||
Deferred tax assets current | ||
Deferred tax assets noncurrent | ||
Deferred tax assets net operating losses | $ 6,375 | $ 573 |
Total deferred tax assets | $ 6,375 | $ 573 |
Deferred tax liabilities current | ||
Deferred tax liabilities noncurrent | $ (4,798) | $ (14) |
Deferred tax liabilities valuation allowance | $ (1,577) | $ (559) |
Net deferred taxes |
Income Taxes - Net Federal Oper
Income Taxes - Net Federal Operating Loss Carry Forward (Details) $ in Thousands | Dec. 31, 2015USD ($) |
Operating Losses | $ 16,348 |
2031 [Member] | |
Operating Losses | 67 |
2032 [Member] | |
Operating Losses | 225 |
2033 [Member] | |
Operating Losses | 1,815 |
2034 [Member] | |
Operating Losses | 681 |
2035 [Member] | |
Operating Losses | $ 13,560 |
Income Taxes - Actual Income Ta
Income Taxes - Actual Income Tax Provision for Continuing Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | ||
Expected provision (based on statutory rate) | $ (2,612) | $ (1,621) |
Increase in valuation allowance | 5,288 | 180 |
Non-deductible expenses | (2,676) | 1,441 |
Actual provision | $ 0 | $ 0 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) $ in Thousands | Feb. 02, 2015 | Sep. 22, 2014 | Dec. 31, 2015 |
Percentage of royalty payments rate | 4.00% | ||
Cancellation of common stock, shares | 910,000 | 25,000,000 | |
Money damages awarded | $ 23,495 | ||
Mr. Stanford [Member] | |||
Cancellation of common stock, shares | 910,000 |
Shareholders' Equity (Details N
Shareholders' Equity (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Dec. 22, 2015 | Nov. 10, 2015 | Nov. 02, 2015 | Oct. 31, 2015 | Oct. 28, 2015 | Sep. 30, 2015 | Sep. 30, 2015 | Jul. 28, 2015 | Jul. 13, 2015 | May. 15, 2015 | Mar. 17, 2015 | Mar. 01, 2015 | Feb. 02, 2015 | Sep. 22, 2014 | Jul. 28, 2015 | Jun. 30, 2015 | Nov. 30, 2013 | Jun. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 |
Cancellation of common stock, shares | 910,000 | 25,000,000 | ||||||||||||||||||
Stock issued per share | $ 0.001 | $ 1.10 | ||||||||||||||||||
Issuance of unregistered common stock, shares | 32,000 | |||||||||||||||||||
Shares issued for services, shares | 437,500 | 1,550,000 | 3,600,000 | |||||||||||||||||
Common stock issued to related party services, value | $ 220 | $ 455 | ||||||||||||||||||
Common stock exercise price per share | $ 1.10 | $ 0.50 | ||||||||||||||||||
Common stock issued during the period shares | 310,000 | |||||||||||||||||||
Common stock issued during the period value | $ 105 | |||||||||||||||||||
Issuance of warrants to purchase of units | 110,000 | |||||||||||||||||||
Preferred stock par value | $ 0.001 | $ 0.001 | ||||||||||||||||||
Number of additional units sold | 55 | |||||||||||||||||||
Number of stock options, granted | 250,000 | |||||||||||||||||||
Stock compensation expense | $ 213 | $ 0 | ||||||||||||||||||
Aggregate intrinsic value | $ 40 | |||||||||||||||||||
Intrinsic value of outstanding and exercisable stock options per share value | $ .66 | |||||||||||||||||||
Warrant [Member] | ||||||||||||||||||||
Proceeds form offering | $ 234 | |||||||||||||||||||
Series C Preferred Stock [Member] | ||||||||||||||||||||
Stock issued per share | $ .50 | $ .50 | ||||||||||||||||||
Shares issued for services, shares | 3,130,000 | |||||||||||||||||||
Common stock issued to related party services, value | $ 1,315 | |||||||||||||||||||
Common stock exercise price per share | $ 0.50 | |||||||||||||||||||
Related party note payable cancellation | $ 250 | |||||||||||||||||||
Proceeds form offering | $ 1,565 | |||||||||||||||||||
Designation authorized issuance of preferred stock | 5,000,000 | 5,000,000 | ||||||||||||||||||
Preferred stock par value | $ 0.001 | $ 0.001 | ||||||||||||||||||
Percentage of beneficially own excess | 4.99% | 4.99% | ||||||||||||||||||
Number of additional units sold | 500 | |||||||||||||||||||
Series B Preferred Stock [Member] | ||||||||||||||||||||
Shares issued for services, shares | 5,000 | |||||||||||||||||||
Proceeds form funds received | $ 550 | |||||||||||||||||||
Common stock exercise price per share | $ 1.50 | $ 1.10 | ||||||||||||||||||
Preferred stock par value | $ 0.001 | $ 0.001 | ||||||||||||||||||
Percentage of beneficially own excess | 4.99% | 4.99% | ||||||||||||||||||
Common stock converted to preferred stock | 500,000 | |||||||||||||||||||
Increased value of units sold in offering | $ 93 | |||||||||||||||||||
Series B Preferred Stock [Member] | Maximum [Member] | ||||||||||||||||||||
Common stock issued during the period shares | 100,000 | |||||||||||||||||||
Series A Preferred Stock [Member] | ||||||||||||||||||||
Common stock exercise price per share | $ .75 | |||||||||||||||||||
Increased value of units sold in offering | $ 123 | |||||||||||||||||||
Balmat Acquisition [Member] | ||||||||||||||||||||
Shares issued for services, shares | 10,000,000 | |||||||||||||||||||
Common stock exercise price per share | $ .29 | |||||||||||||||||||
Unit Offering [Member] | ||||||||||||||||||||
Shares issued for services, shares | 110,000 | |||||||||||||||||||
Proceeds form funds received | $ 55 | |||||||||||||||||||
Common stock exercise price per share | $ 1 | |||||||||||||||||||
Aggregate number of shares issued | 2,280,000 | |||||||||||||||||||
Closing of offering number of units | 3,130 | 1,000 | 1,000 | |||||||||||||||||
Closing of offering price per unit | $ 1,565 | $ 1 | $ 1 | |||||||||||||||||
Aggregate offering amount | $ 1,000 | $ 1,000 | ||||||||||||||||||
Number of additional units sold | 250 | |||||||||||||||||||
Value of additional units sold | $ 250 | |||||||||||||||||||
Increased value of units sold in offering | $ 1,250 | |||||||||||||||||||
Number of share per unit | 2,000 | |||||||||||||||||||
Common stock price per share after exceeding the consecutive trading days | $ 3 | |||||||||||||||||||
Number of units elected to sell to unrelated party | 110 | |||||||||||||||||||
Value of units sold to unrelated party | $ 110 | |||||||||||||||||||
Note interest rate percentage | 5.00% | 5.00% | ||||||||||||||||||
Units Sold To Accredited Investors [Member] | ||||||||||||||||||||
Number of additional units sold | 141 | |||||||||||||||||||
Value of additional units sold | $ 141 | |||||||||||||||||||
Unit Offering To Unrelated Party One [Member] | ||||||||||||||||||||
Number of additional units sold | 55 | |||||||||||||||||||
Value of additional units sold | $ 55 | |||||||||||||||||||
Unit Offering To Unrelated Party Two [Member] | ||||||||||||||||||||
Number of additional units sold | 55 | |||||||||||||||||||
Value of additional units sold | $ 110 | |||||||||||||||||||
Investor [Member] | ||||||||||||||||||||
Issuance of common stock in exchange for payment of mutual release of claim, shares | 114,000 | |||||||||||||||||||
Issuance of common stock in exchange for payment of mutual release of claim | $ 21 | |||||||||||||||||||
Related Parties [Member] | ||||||||||||||||||||
Stock issued per share | $ 1.10 | |||||||||||||||||||
Shares issued for services, shares | 2,150,000 | |||||||||||||||||||
Common stock exercise price per share | $ 1.10 | |||||||||||||||||||
Unrelated Parties [Member] | ||||||||||||||||||||
Shares issued for services, shares | 100,000 | |||||||||||||||||||
Common stock exercise price per share | $ 1.10 | |||||||||||||||||||
Unrelated Parties One [Member] | Balmat Acquisition [Member] | ||||||||||||||||||||
Shares issued for services, shares | 50,000 | 500,000 | ||||||||||||||||||
Common stock exercise price per share | $ 0.29 | $ 0.29 | ||||||||||||||||||
Two Related Parites [Member] | Unit Offering [Member] | ||||||||||||||||||||
Proceeds form offering | $ 875 | |||||||||||||||||||
Chief Executive Officer [Member] | ||||||||||||||||||||
Number of additional units sold | 55 | |||||||||||||||||||
Value of additional units sold | $ 55 | |||||||||||||||||||
Employment Agreement [Member] | ||||||||||||||||||||
Common stock exercise price per share | $ 0.50 | |||||||||||||||||||
Number of stock options, granted | 250,000 | |||||||||||||||||||
Stock option vested shares | 50,000 | |||||||||||||||||||
Stock option vested remaining shares | 50,000 | |||||||||||||||||||
Expected maturity year | 2 years 8 months 12 days | |||||||||||||||||||
Expected risk free rate | 0.896% | |||||||||||||||||||
Expected volatility | 88.83% | |||||||||||||||||||
Employment Agreement [Member] | Mark Osterberg [Member] | ||||||||||||||||||||
Stock issued per share | $ 1.20 | |||||||||||||||||||
Issuance of common stock to employment agreement, shares | 50,000 |
Shareholders' Equity - Summary
Shareholders' Equity - Summary of Stock Options (Details) - $ / shares | May. 15, 2015 | Dec. 31, 2015 | Dec. 31, 2014 |
Equity [Abstract] | |||
Number of Stock Options Outstanding Beginning Balance | |||
Number of Stock Options, Granted | 250,000 | ||
Number of Stock Options, Exercised | |||
Number of Stock Options, Cancelled | |||
Number of Stock Options Outstanding Ending Balance | 250,000 | ||
Number of Stock Options exercisable | 250,000 | ||
Weighted Average Exercise Price Options Outstanding Beginning Balance | $ 0.85 | ||
Weighted Average Exercise Price Options Granted | $ 1.10 | $ 0.50 | |
Weighted Average Exercise Price Options Exercised | |||
Weighted Average Exercise Price Options Cancelled | |||
Weighted Average Exercise Price Options Outstanding Ending Balance | $ 0.50 | $ 0.85 | |
Weighted Average Exercise Price Options exercisable | $ 0.50 |
Shareholders' Equity - Schedule
Shareholders' Equity - Schedule of Company Issued Warrants Common Shares (Details) - Warrant [Member] | 12 Months Ended |
Dec. 31, 2015$ / sharesshares | |
Total Warrants | 9,197,500 |
June 30, 2015 Offering [Member] | |
Total Warrants | 2,500,000 |
Exercise Price | $ / shares | $ 1 |
Expiration date | Jun. 30, 2018 |
October 31, 2015 Offering - Series A Warrants [Member] | |
Total Warrants | 3,130,000 |
Exercise Price | $ / shares | $ .75 |
Expiration date | Oct. 31, 2017 |
October 31, 2015 Offering - Series B Warrants [Member] | |
Total Warrants | 3,130,000 |
Exercise Price | $ / shares | $ 1.50 |
Expiration date | Oct. 31, 2018 |
November 10, 2015 Offering [Member] | |
Total Warrants | 437,500 |
Exercise Price | $ / shares | $ 2 |
Expiration date | Nov. 10, 2018 |
Shareholders' Equity - Schedu55
Shareholders' Equity - Schedule of Warrants Exercise Price and Exercise Period (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Minimum [Member] | |
Expected term in years | 1 year |
Maximum [Member] | |
Expected term in years | 28 years |
Warrant [Member] | |
Expected dividend yield | 0.00% |
Estimated forfeiture rate | 0.00% |
Warrant [Member] | Minimum [Member] | |
Risk-free interest rate | 0.75% |
Expected volatility | 70.00% |
Expected term in years | 2 years |
Warrant [Member] | Maximum [Member] | |
Risk-free interest rate | 0.896% |
Expected volatility | 88.83% |
Expected term in years | 3 years |
Shareholders_ Equity - Schedule
Shareholders’ Equity - Schedule of Warrants Activity (Details) - Warrant [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Number of Stock Warrants Outstanding Beginning Balance | ||
Number of Stock Warrants, Granted | 9,197,500 | |
Number of Stock Warrants, Exercised | ||
Number of Stock Warrants, Cancelled | ||
Number of Stock Warrants Outstanding Ending Balance | 9,197,500 | |
Weighted Average Exercise Price Warrants Outstanding Beginning Balance | ||
Weighted Average Exercise Price Warrants Granted | $ 1.13 | |
Weighted Average Exercise Price Warrants Exercised | ||
Weighted Average Exercise Price Warrants Cancelled | ||
Weighted Average Exercise Price Warrants Outstanding Ending Balance | $ 1.13 |
Quarterly Financial Informati57
Quarterly Financial Information (Unaudited) - Schedule of Quarterly Financial Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Quarterly Financial Information Disclosure [Abstract] | ||||||||||
Total Revenue | ||||||||||
Net Loss | $ (2,727) | $ (1,752) | $ (1,776) | $ (441) | $ (2,618) | $ (433) | $ (364) | $ (742) | $ (6,696) | $ (4,157) |
Basic Loss Per Share | $ (0.08) | $ (0.08) | $ (0.10) | $ (0.03) | $ (0.17) | $ (0.01) | $ (0.01) | $ (0.02) | $ (0.30) | $ (0.12) |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Mar. 17, 2016 | Feb. 24, 2016 | Jan. 01, 2016 | Nov. 10, 2015 | May. 15, 2015 | Dec. 31, 2015 | Feb. 02, 2015 |
Shares issued for services, shares | 437,500 | 1,550,000 | 3,600,000 | ||||
Stock issued per share | $ 1.10 | $ 0.001 | |||||
Subsequent Event [Member] | |||||||
Shares issued for services, shares | 150,000 | 200,000 | |||||
Stock issued per share | $ 0.51 | $ .66 | |||||
Bridge loan | $ 500 | ||||||
Bearing interest rate | 2.25% | ||||||
Proceeds received after fee | $ 492 |