Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 14, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | ATHENA SILVER CORP | |
Entity Central Index Key | 0001304409 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 36,532,320 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2019 | |
Entity Small Business | true | |
Entity Emerging Growth | true | |
Entity ExTransition Period | false | |
Entity Interactive data | Yes | |
Entity File Number | 000-51808 | |
Entity Incorporation State Code | DE |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Current Assets | ||
Cash | $ 233 | $ 3,991 |
Prepaid expenses | 3,000 | 0 |
Total current assets | 3,233 | 3,991 |
Mineral rights and properties - unproven, net of impairment of $1,948,999 | 185,290 | 185,290 |
Total assets | 188,523 | 189,281 |
Current liabilities: | ||
Accounts payable | 34,132 | 27,656 |
Accrued liabilities - related parties | 69,000 | 72,500 |
Accrued lease option liability | 20,000 | 0 |
Accrued interest | 15,836 | 12,871 |
Accrued interest - related parties | 528,288 | 448,918 |
Advances payable - related party | 35,500 | 25,000 |
Deed amendment liability - short-term portion | 10,000 | 10,000 |
Derivative liabilities | 0 | 14,730 |
Convertible note payable | 51,270 | 51,270 |
Convertible credit facility - related party | 2,169,620 | 2,059,620 |
Total current liabilities | 2,933,646 | 2,722,565 |
Deed amendment liability | 90,000 | 100,000 |
Total liabilities | 3,023,646 | 2,822,565 |
Commitments and contingencies | ||
Stockholders' deficit: | ||
Preferred stock, $.0001 par value, 5,000,000 shares authorized, none outstanding | 0 | 0 |
Common stock - $0.0001 par value; 100,000,000 shares authorized, 36,532,320 issued and outstanding | 3,653 | 3,653 |
Additional paid-in capital | 6,618,495 | 6,618,495 |
Accumulated deficit | (9,457,271) | (9,255,432) |
Total stockholders' deficit | (2,835,123) | (2,633,284) |
Total liabilities and stockholders' deficit | $ 188,523 | $ 189,281 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Impairment of mineral rights and properties | $ 1,948,999 | $ 1,948,999 |
Preferred stock, par value | $ .0001 | $ .0001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ .0001 | $ .0001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares outstanding | 36,532,320 | 36,532,320 |
Common stock, shares issued | 36,532,320 | 36,532,320 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Operating expenses: | ||||
Exploration costs | $ 0 | $ 0 | $ 40,000 | $ 20,825 |
General and administrative expenses | 26,184 | 39,257 | 94,234 | 119,381 |
Total operating expenses | 26,184 | 39,257 | 134,234 | 140,206 |
Operating loss | (26,184) | (39,257) | (134,234) | (140,206) |
Other income (expense): | ||||
Interest expense | (28,185) | (26,420) | (82,335) | (76,913) |
Change in fair value of derivative liabilities | 0 | 7,630 | 0 | 27,070 |
Total other income (expense) | (28,185) | (18,790) | (82,335) | (49,843) |
Net loss | $ (54,369) | $ (58,047) | $ (216,569) | $ (190,049) |
Basic and diluted net loss per common share | $ 0 | $ 0 | $ (0.01) | $ (0.01) |
Basic and diluted weighted-average common shares outstanding | 36,532,320 | 36,532,320 | 36,532,320 | 36,369,133 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Deficit - USD ($) | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Beginning balance, shares at Dec. 31, 2017 | 36,202,320 | |||
Beginning balance, value at Dec. 31, 2017 | $ 3,620 | $ 6,602,028 | $ (8,967,170) | $ (2,361,522) |
Conversion of accrued director fees, shares | 330,000 | |||
Conversion of accrued director fees, value | $ 33 | 16,467 | 16,500 | |
Net loss | (190,049) | (190,049) | ||
Ending balance, shares at Sep. 30, 2018 | 36,532,320 | |||
Ending balance, value at Sep. 30, 2018 | $ 3,653 | 6,618,495 | (9,157,219) | (2,535,071) |
Beginning balance, shares at Jun. 30, 2018 | 36,532,320 | |||
Beginning balance, value at Jun. 30, 2018 | $ 3,653 | 6,618,495 | (9,099,172) | (2,477,024) |
Conversion of accrued director fees, value | 16,500 | |||
Net loss | (58,047) | (58,047) | ||
Ending balance, shares at Sep. 30, 2018 | 36,532,320 | |||
Ending balance, value at Sep. 30, 2018 | $ 3,653 | 6,618,495 | (9,157,219) | (2,535,071) |
Beginning balance, shares at Dec. 31, 2018 | 36,532,320 | |||
Beginning balance, value at Dec. 31, 2018 | $ 3,653 | 6,618,495 | (9,255,432) | (2,633,284) |
Cumulative adjustment upon adoption of ASU 2017-11 at Sep. 30, 2019 | 14,730 | 14,730 | ||
Net loss | (216,569) | (216,569) | ||
Ending balance, shares at Sep. 30, 2019 | 36,532,320 | |||
Ending balance, value at Sep. 30, 2019 | $ 3,653 | 6,618,495 | (9,457,271) | (2,835,123) |
Beginning balance, shares at Jun. 30, 2019 | 36,532,320 | |||
Beginning balance, value at Jun. 30, 2019 | $ 3,653 | 6,618,495 | (9,402,902) | (2,780,754) |
Cumulative adjustment upon adoption of ASU 2017-11 at Sep. 30, 2019 | 14,730 | 14,730 | ||
Net loss | (54,369) | (54,369) | ||
Ending balance, shares at Sep. 30, 2019 | 36,532,320 | |||
Ending balance, value at Sep. 30, 2019 | $ 3,653 | $ 6,618,495 | $ (9,457,271) | $ (2,835,123) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash flows from operating activities: | ||
Net loss | $ (216,569) | $ (190,049) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Change in fair value of derivative liabilities | 0 | (27,070) |
Changes in operating assets and liabilities: | ||
Prepaid expenses | (3,000) | (2,500) |
Accounts payable | 6,476 | 27,823 |
Accrued interest - related parties | 79,370 | 73,683 |
Accrued liabilities and other liabilities | 19,465 | 19,791 |
Net cash used in operating activities | (114,258) | (98,322) |
Cash flows from investing activities: | ||
Additions of mineral rights | 0 | (20,825) |
Net cash used in investing activities | 0 | (20,825) |
Cash flows from financing activities: | ||
Proceeds from advances from related parties | 26,850 | 12,350 |
Payments on advances from related parties | (16,350) | (7,250) |
Borrowings from credit facility and notes payable - related parties | 110,000 | 141,500 |
Payment on deed amendment liability | (10,000) | (10,000) |
Payments on note payable - related party | 0 | (17,509) |
Net cash provided by financing activities | 110,500 | 119,091 |
Net decrease in cash | (3,758) | (56) |
Cash at beginning of period | 3,991 | 664 |
Cash at end of period | 233 | 608 |
Supplemental disclosure of cash flow information | ||
Cash paid for interest | 0 | 440 |
Cash paid for income taxes | 0 | 0 |
Supplemental disclosure of non-cash financing activities | ||
Conversion of accrued director fees to common stock | 0 | 16,500 |
Supplemental disclosure of non-cash transaction | ||
Cumulative adjustment upon adoption of ASU 2017-11 | $ 14,730 | $ 0 |
1. Organization, Basis of Prese
1. Organization, Basis of Presentation, Liquidity and Going Concern | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Basis of Presentation, Liquidity and Going Concern | Note 1 – Organization, Basis of Presentation, Liquidity and Going Concern Nature of Operations Athena Silver Corporation (“we,” “our,” “us,” or “Athena”) is engaged in the acquisition and exploration of mineral resources. We were incorporated in Delaware on December 23, 2003, and began our mining operations in 2010. In December 2009, we formed and organized a new wholly-owned subsidiary, Athena Minerals, Inc. (“Athena Minerals”) which owns and operates our mining interests. Since its formation, we have acquired various properties and rights and are currently determining whether those rights and properties could sustain profitable mining operations. We have not presently determined whether our mineral properties contain mineral reserves that are economically recoverable. Our primary focus going forward will be to continue our evaluation of our properties, and the possible acquisition of additional mineral rights and additional exploration, development and permitting activities. Our mineral lease payments, permitting applications and exploration and development efforts will require additional capital. Further information regarding our mining properties and rights are discussed below in Note 2 – Mineral Rights and Properties. Basis of Presentation We prepared these interim consolidated financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”). The accompanying unaudited interim consolidated financial statements have been prepared in accordance with GAAP for interim financial information and in accordance with Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In our opinion, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine-month periods ended September 30, 2019 are not necessarily indicative of the results for the full year. While we believe that the disclosures presented herein are adequate and not misleading, these interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the footnotes thereto contained in our Annual Report on Form 10-K for the year ended December 31, 2018. Recent Accounting Pronouncements On July 13, 2017, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features and II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Non-controlling Interests with a Scope Exception. Part I applies to financial instruments such as warrants, convertible debt or convertible preferred stock that contain down round features. Part II replaces the indefinite deferral for certain mandatorily redeemable non-controlling interests and mandatorily redeemable financial instruments of nonpublic entities contained within Accounting Standards Codification (ASC) Topic 480 In February 2016, the FASB issued Accounting Standards Update No. 2016-02, “Leases (Topic 842)” (“ASU 2016-02”). ASU 2016-02 will require lessees to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. Under ASU 2016-02, a lessee will be required to recognize assets and liabilities for leases with terms of more than 12 months. Lessor accounting remains substantially similar to current GAAP. In addition, disclosures of leasing activities are to be expanded to include qualitative along with specific quantitative information. ASU 2016-02 is effective in fiscal years beginning after December 15, 2018 (with early adoption permitted). ASU 2016-02 mandates a modified retrospective transition method. The Company has adopted this standard effective January 1, 2019. Since we have no leases in scope, the adoption did not have an impact on our financial statements. Liquidity and Going Concern Our interim consolidated financial statements have been prepared on a going concern basis, which assumes that we will be able to meet our obligations and continue our operations during the next fiscal year. Asset realization values may be significantly different from carrying values as shown in our consolidated financial statements and do not give effect to adjustments that would be necessary to the carrying values of assets and liabilities should we be unable to continue as a going concern. At September 30, 2019, we had not yet achieved profitable operations and we have accumulated losses of $9,457,271 since our inception. We expect to incur further losses in the development of our business, all of which raise substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern depends on our ability to generate future profits and/or to obtain the necessary financing to meet our obligations arising from normal business operations when they come due. Effective September 30, 2019, we amended our credit agreement with Mr. John Gibbs, a related party, to increase the borrowing limit under the convertible credit facility to $2,400,000 and extended the maturity date to December 31, 2019. We anticipate that additional funding will be in the form of additional loans from officers, directors or significant shareholders, or equity financing from the sale of our common stock. Currently, there are no arrangements in place for additional equity funding or new loans. |
2. Mineral Rights and Propertie
2. Mineral Rights and Properties, net | 9 Months Ended |
Sep. 30, 2019 | |
Extractive Industries [Abstract] | |
Mineral Rights and Properties, net | Note 2 – Mineral Rights and Properties, net Our mineral rights and mineral properties consist of: September 30, 2019 December 31, 2018 Mineral and other properties $ 185,290 $ 185,290 Mineral rights - Langtry project – – Mineral rights and properties - unproven, net $ 185,290 $ 185,290 Mineral and Other Properties On August 8, 2016, we purchased 33+/- acres of land (“Section 16 Property”) for $28,582, net of $18 of title fees, located in San Bernardino County, California. The property is located in the Calico Mining District in the SE ¼ of the SE ¼ of Section 16; T 10 North, R 1 East. The State of California patented this land to a private party in 1935 and reserved in favor of the State one-sixteenth of all coal, oil, gas and other mineral deposits contained in the land. In 2014, we purchased 160 acres of land (“Castle Rock”), located in the eastern Calico Mining District, San Bernardino County, California. The parcel is the SE quarter of Section 25, Township 10 North, Range 1 East and is mostly surrounded by public lands. It was purchased for $21,023 in a property tax auction conducted on behalf of the County. The eastern part of the Calico Mining District is best known for industrial minerals and is not known to have any precious metal deposits. In 2012, we purchased 661 acres of land (“Section 13 Property”) in fee simple for $135,685 cash, located in San Bernardino County, California, that was sold in a property tax auction conducted on behalf of the County. The parcel is all of Section 13 located in Township 7 North, Range 4 East, San Bernardino Base & Meridian. The Section 13 property is near the Lava Beds Mining District and has evidence of historic mining. It is adjacent to both the Silver Cliffs and Silver Bell historic mines. The property is located in the same regional geologic area known as the Western Mojave Block that includes our flagship Langtry Project. The property is approximately 28 miles southeast of our Langtry Project. Mineral Rights In 2010, we entered into a 20 year Mining Lease with Option to Purchase (the “Langtry Lease” or the “Lease”) granting us the exclusive right to explore, develop and conduct mining operations on a group of 20 patented mining claims consisting of approximately 413 acres that comprise our Langtry Property. Effective November 28, 2012, December 19, 2013 and January 21, 2015, we executed Amendments No. 1, 2 and 3, respectively, to the Langtry Lease modifying certain terms. Effective March 10, 2016, we executed and delivered a new Lease/Purchase Option (“Lease/Option”) covering our flagship Langtry Property located in the Calico Mining District, San Bernardino County, California. The Lease/Option also includes two unpatented mining claims in the Calico Mining District known as the Lilly #10 and Quad Deuce XIII (the “Langtry Unpatented Claims”), which we have previously owned and agreed to transfer to the Lessor subject to the Lease/Option. The new Lease/Option supersedes all prior agreements. The following is a summary of the highlights of the new Lease/Option, which is qualified in its entirety by the provisions of the Lease/Option dated March 10, 2016: The Lease/Option has a term of 20 years, and grants an exclusive right to explore, develop and purchase the Langtry property. Lease payments under the new agreement are a nominal $1 per year, payable in advance. This amount was paid in March 2016. The lease requires us to also maintain the option to purchase in good standing as described below. Option payments: in order to maintain the option to purchase, we are required to pay option payments (“Option Payments”) as follows: $40,000 year 1; the greater of $40,000 or the spot price of 2,500 ounces of silver in years 2 through 5; the greater of $50,000 or the spot price of 2,500 ounces of silver in years 6 through 10; the greater of $75,000 or the spot price of 3,750 ounces of silver in years 11 through 15; and the greater of $100,000 or the spot price of 5,000 ounces of silver in years 16 through 20. 50% of all Option Payments are credited against the purchase price should the Company exercise the purchase option. The annual payments are due on March 15 th In March 2018, we made the required year 3 payment totaling $41,650. 50% of the payment, or $20,825 was capitalized as mining rights as the amount is applicable to the option purchase price. The remaining $20,825 was expensed as lease option costs and included in exploration costs. In March 2019, the trustee overseeing this lease/option contract agreed to split the payment due on March 15, 2019 into two parts, with $20,000 due in March 2019, and the other $20,000 due in September 2019. The March payment was paid as scheduled. During September 2019, the trustee agreed to split the $20,000 payment originally due in September 2019, into two $10,000 payments due on October 15, 2019 and November 15, 2019. The payment due on October 15, 2019 was paid as agreed. As of September 30, 2019 the $20,000 obligation is included on the consolidated balance sheet as an Accrued lease option liability. Option Purchase Price: We have the option to purchase fee title to the Langtry Property for the full 20-year term of the Lease/Option. The purchase price is: • Years 1 through 3 (3-15-2016 to 3-15-2019): $5,000,000 • Years 4 through 5 (3-15-2019 to 3-15-2021): the greater of $5,000,000 or the spot price of 250,000 troy ounces of silver, plus payment of the deferred rent of $130,000; • Years 6 through 10 (3-15-2021 to 3-15-26): the greater of $7,500,000 or the spot price of 375,000 troy ounces of silver, plus payment of the deferred rent of $130,000; • Years 11 through 20 (3-15-2026 to 3-15-2036): the greater of $10,000,000 or the spot price of 500,000 troy ounces of silver, plus payment of the deferred rent of $130,000. During the lease term, and provided the purchase option has not been exercised, the lessor is entitled to receive a 2% NSR on silver production and a 3% to 5% royalty on other mineral production and certain other revenue streams; After exercise of the purchase option, the lessor will not receive royalties on silver or other precious metals production but will receive a 5% royalty on barite production and other revenue streams. Deferred rent of $130,000 under the prior lease shall be payable upon exercise of the purchase option or upon Athena entering into a joint venture or other arrangement to develop the Langtry prospect. If we are in breach of the Lease/Option, the Lessor will have the option to terminate the Lease by giving us 30 days’ written notice. The Lease also provides us with the right to terminate the Lease without penalty on March 15th of each year during the Lease term by giving the lessor 30 days’ written notice of termination on or before February 13th of each year. The Langtry Property is also subject to a net smelter royalty in favor of Mobil Exploration and Producing North America Inc. from the sale of concentrates, precipitates or metals produced from ores mined from the royalty acreage. The agreement dated April 30, 1987 granted a base net smelter royalty of 3% plus an additional incremental 2% royalty on net smelter proceeds from silver sales above $10.00 per troy ounce plus an additional incremental 2% royalty on net smelter proceeds from silver sales above $15.00 per troy ounce. On May 28, 2015 we executed an amendment to the deed underlying the Langtry Lease to cap at 2% the net smelter royalty that would be due to Mobil Exploration and Producing North America Inc. (“Mobil”) from any future sales of concentrates, precipitates or metals produced from ores mined from the royalty acreage. In consideration for the amendment, we agreed to pay an amendment fee of $150,000, with $10,000 due at the time of the agreement and the balance payable $10,000 each June 1 st During the term of the Lease, Athena Minerals has the exclusive right to develop and conduct mining operations on the Langtry Property. Future option payments and/or exploration and development of this property will require new equity and/or debt capital. On September 28, 2015, at the request of the Company and its advisors, the San Bernardino County Land Use Services Department (the “Department”) issued and recorded a Certificate of Land Use Compliance for Vested Land Use in which the Department formally determined that the Langtry property had the legally established right for mineral resource development activity (the “Vested Right”). The Vested Right is subject to certain conditions set forth in the Certificate and runs with the Langtry property in perpetuity. In August 2015 the Company acquired by deed conveyance 15 unpatented mining claims in the Calico Mining District in San Bernardino, California from a third party for $10,000. The claims are contiguous to our existing unpatented and patented claims known as the Langtry Property. All commitments and obligations under our prior 2010 Lease and the 2016 Lease/Option to Purchase have been fulfilled to date. Future option payments and/or exploration and development of this property may require new equity and/or debt capital. In addition, as of September 30, 2019 all regulatory obligations due or accrued regarding our mineral rights had been paid, and all our claims remain in good standing. Impairment of Mineral Rights During 2017 the Company evaluated its mineral rights and properties. As a result of the evaluation, the Company recognized an impairment loss of $1,885,816 associated with the Langtry project as of December 31, 2017. The impairment analysis and conclusion was a result of the continuing low silver prices that negatively affect the economic viability of the project. As such, the Company impaired at 100% all capitalized lease and maintenance payments made prior to the Lease Option agreement of March 10, 2016, as well as the deed amendment fee of $150,000 that provides for a royalty cap upon any future production activities. During 2018, the Company again evaluated its mineral rights and properties for impairment and determined that due to the continued low silver prices, as well as the Company’s limited access to capital for further development of the Langtry project, additional impairment of those remaining mineral rights assets totaling $63,183 was recorded at December 31, 2018. |
3. Adoption of ASU 2017-11
3. Adoption of ASU 2017-11 | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Changes and Error Corrections [Abstract] | |
Adoption of ASU 2017-11 | Note 3 – Adoption of ASU 2017-11 The Company changed its method of accounting for its convertible note through the adoption of ASU 2017-11 on January 1, 2019 on a modified retrospective basis. Accordingly, the outstanding derivative liability of $14,730 associated with a convertible note payable was eliminated as an adjustment to the beginning accumulated deficit. The following table provides a reconciliation of the derivative liability and accumulated deficit upon adoption on January 1 2019: Derivative Accumulated Balance January 1, 2019 (before adoption of ASU 2017-11) $ 14,730 $ (9,255,432 ) Reclassified derivative liability and cumulative effect of adoption (14,730 ) 14,730 Balance January 1, 2019 (after adoption of ASU 2017-11) $ – $ (9,240,702 ) |
4. Fair Value of Financial Inst
4. Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Note 4 – Fair Value of Financial Instruments Financial assets and liabilities recorded at fair value in our consolidated balance sheets are categorized based upon a fair value hierarchy established by GAAP, which prioritizes the inputs used to measure fair value into the following levels: Level 1 – Quoted market prices in active markets for identical assets or liabilities at the measurement date. Level 2 – Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable and can be corroborated by observable market data. Level 3 – Inputs reflecting management’s best estimates and assumptions of what market participants would use in pricing assets or liabilities at the measurement date. The inputs are unobservable in the market and significant to the valuation of the instruments. A financial instrument's categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Financial assets and liabilities measured at fair value on a recurring basis are summarized below: Carrying Value at December 31, Fair Value Measurement at December 31, 2018 2018 Level 1 Level 2 Level 3 Derivative liability – Convertible note payable $ 14,730 $ – $ – $ 14,730 The carrying values of cash and cash equivalents, accounts payable, accrued liabilities and other short-term debt, approximate their fair value because of the short-term nature of these financial instruments. |
5. Convertible Note Payable
5. Convertible Note Payable | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Convertible Note Payable | Note 5 – Convertible Note Payable Effective April 1, 2015, the Company executed a convertible promissory note (the “Note”) in the principal amount of $51,270 in favor of Clifford Neuman, the Company’s legal counsel, representing accrued and unpaid fees for past legal services. The Note is unsecured and accrues interest at the rate of 6% per annum, compounded quarterly, and is due on demand. The principal and accrued interest due under the Note may be converted, at the option of the holder, into shares of the Company’s common stock at a conversion price of $0.0735 per share, which represented the market price of the Company’s common stock on the date the Note was made. The conversion price is subject to adjustment in the event the Company sells shares of common stock or common stock equivalent at a price below the conversion price. The Note contains certain anti-dilution provisions that would reduce the conversion price should the Company issue common stock equivalents at a price less than the Note conversion price. Accordingly, prior to the prospective adoption of ASU 2017-11 on January 1, 2019, the conversion features of the Note were considered a discount to the Note. However, since the Note is payable upon demand by the note holder, the value of the discount is considered interest expense at the time of its inception. The Note was evaluated quarterly, and upon any quarterly valuations in which the value of the conversion option changed we recognized a gain or loss due to a decrease or increase in the fair value of the derivative liability, respectively. As discussed in Note 3, the Company adopted ASU 2017-11 on January 1, 2019, which resulted in the elimination of the derivative liability of $14,730 at December 31, 2018 as a cumulative adjustment to accumulated deficit. Accrued interest totaled $15,836 and $12,871 at September 30, 2019 and December 31, 2018, respectively, and is included in Accrued interest on the accompanying consolidated balance sheets. |
6. Convertible Credit Facility
6. Convertible Credit Facility - Related Party | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Convertible Credit Facility - Related Party | Note 6 – Convertible Credit Facility – Related Party Effective July 18, 2012, we entered into a Credit Agreement with Mr. Gibbs, a significant shareholder, providing us with an unsecured credit facility in the maximum amount of $1,000,000. The aggregate principal amount borrowed, together with interest at the rate of 5% per annum, is convertible, at the option of the lender, into common shares at a conversion price of $0.50 per share. Since its inception we have amended the credit agreement several times to either increase the borrowing limit and/or extend the maturity date. Effective September 30, 2019, we amended our credit agreement with Mr. Gibbs to increase the borrowing limit under the convertible credit facility to $2,400,000 and extended the maturity date to December 31, 2019. All other provisions remained unchanged. The modification was not considered substantial. The Company evaluated the convertible line of credit for derivative and beneficial feature conversion and concluded that there is no beneficial conversion since the conversion price at inception was greater than the market value of shares that would be issued upon conversion. Likewise, derivative accounting did not apply to the embedded conversion option. The credit facility also contains customary representations and warranties (including those relating to organization and authorization, compliance with laws, payment of taxes and other obligations, absence of defaults, material agreements and litigation) and customary events of default (including those relating to monetary defaults, covenant defaults, cross defaults and bankruptcy events). Total principal amounts owed under the credit facility notes payable were $2,169,620 and $2,059,620 at September 30, 2019 and December 31, 2018, respectively. Borrowings under our convertible note payable to Mr. Gibbs were $110,000 and $141,500 for the nine months ended September 30, 2019 and 2018, respectively, and were generally used to pay certain mining lease obligations as well as other operating expenses. No principal or interest payments have made to Mr. Gibbs since the inception of the convertible credit facility. As of September 30, 2019 there remained $230,380 of credit available for future borrowings. Total accrued interest on the notes payable to Mr. Gibbs was $528,288 and $448,918 at September 30, 2019 and December 31, 2018, respectively, and are included in Accrued interest - related parties on the accompanying consolidated balance sheets. Interest Expense – Related Parties Total related party interest expense was $27,156 and $25,453 for the three months ended September 30, 2019 and 2018, respectively. Total related party interest expense was $79,370 and $74,123 for the nine months ended September 30, 2019 and 2018, respectively. |
7. Commitments and Contingencie
7. Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 7– Commitments and Contingencies We are subject to various commitments and contingencies under the Langtry Lease/Option to Purchase as discussed in Note 2 – Mining Rights and Properties. |
8. Share-based Compensation
8. Share-based Compensation | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Share-based Compensation | Note 8 – Share-based Compensation 2004 Equity Incentive Plan All options previously issued under the 2004 Equity Incentive Plan as well as options issued outside the Plan expired unexercised in April 2018. No share based compensation expense was recorded for either the three or nine-months ended September 30, 2019 or 2018. |
9. Related Party Transactions
9. Related Party Transactions | 9 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 9 – Related Party Transactions Conflicts of Interests Magellan Gold Corporation (“Magellan”) is a company under common control. Mr. Power is a significant shareholder and director of both Athena and Magellan. Mr. Gibbs is a significant shareholder and creditor (see Note 6 – Credit Agreement and Notes Payable – Related Parties), in both Athena and Magellan. Athena and Magellan are both involved in the business of acquisition and exploration of mineral resources. Silver Saddle Resources, LLC (“Silver Saddle”) is also a company under common control. Mr. Power and Mr. Gibbs are the owners and managing members of Silver Saddle. Athena and Silver Saddle are both involved in the business of acquisition and exploration of mineral resources. There exists no arrangement or understanding with respect to the resolution of future conflicts of interest. The existence of common ownership and common management could result in significantly different operating results or financial position from those that could have resulted had Athena, Magellan and Silver Saddle been autonomous. Management Fees – Related Parties The Company is subject to a month-to-month management agreement with Mr. Power requiring a monthly payment of $2,500 as consideration for the day-to-day management of Athena. For each of the three and nine-months ended September 30, 2019 and 2018, a total of $7,500 and $22,500, respectively, was recorded as management fees and are included in general and administrative expenses in the accompanying consolidated statements of operations. At September 30, 2019 and December 31, 2018, $69,000 and $72,500, respectively, of management fees due to Mr. Power had not been paid and are included in accrued liabilities – related parties on the accompanying consolidated balance sheets. Accrued Interest - Related Parties At September 30, 2019 and December 31, 2018, Accrued interest - related parties includes accrued interest payable to Mr. Gibbs in the amounts of $528,288 and $448,918, respectively, representing unpaid interest on the convertible credit facility. Advances Payable - Related Parties Mr. Power has on occasion advanced the Company funds generally utilized for day-to-day operating requirements. These advances are non-interest bearing and are generally repaid as cash becomes available. During the nine months ended September 30, 2019, Mr. Power made short-term advances to the Company totaling $26,850 and was repaid $16,350 during the period. At September 30, 2019 and December 31, 2018 a total of $35,500 and $25,000 of advances were outstanding and included in Advances payable – related party on the accompanying consolidated balance sheets. During the nine months ended September 30, 2018, Mr. Power had made short-term advances to the Company totaling $12,350 and was repaid $7,250 during the period. The Company also utilizes credit cards owned by Mr. Power to pay various obligations when an online payment is required, the availability of cash is limited, or the timing of the payments is considered critical. As of September 30, 2019, a total of $5,584 of Company charges was owed to Mr. Power and is included in Accounts payable on the Company’s consolidated balance sheet. |
10. Subsequent Events
10. Subsequent Events | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 10 – Subsequent Events Subsequent to September 30, 2019 Mr. Gibbs has advanced $10,000 under the credit facility. |
1. Organization, Basis of Pre_2
1. Organization, Basis of Presentation, Liquidity and Going Concern (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations | Nature of Operations Athena Silver Corporation (“we,” “our,” “us,” or “Athena”) is engaged in the acquisition and exploration of mineral resources. We were incorporated in Delaware on December 23, 2003, and began our mining operations in 2010. In December 2009, we formed and organized a new wholly-owned subsidiary, Athena Minerals, Inc. (“Athena Minerals”) which owns and operates our mining interests. Since its formation, we have acquired various properties and rights and are currently determining whether those rights and properties could sustain profitable mining operations. We have not presently determined whether our mineral properties contain mineral reserves that are economically recoverable. Our primary focus going forward will be to continue our evaluation of our properties, and the possible acquisition of additional mineral rights and additional exploration, development and permitting activities. Our mineral lease payments, permitting applications and exploration and development efforts will require additional capital. Further information regarding our mining properties and rights are discussed below in Note 2 – Mineral Rights and Properties. |
Basis of Presentation | Basis of Presentation We prepared these interim consolidated financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”). The accompanying unaudited interim consolidated financial statements have been prepared in accordance with GAAP for interim financial information and in accordance with Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In our opinion, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine-month periods ended September 30, 2019 are not necessarily indicative of the results for the full year. While we believe that the disclosures presented herein are adequate and not misleading, these interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the footnotes thereto contained in our Annual Report on Form 10-K for the year ended December 31, 2018. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements On July 13, 2017, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features and II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Non-controlling Interests with a Scope Exception. Part I applies to financial instruments such as warrants, convertible debt or convertible preferred stock that contain down round features. Part II replaces the indefinite deferral for certain mandatorily redeemable non-controlling interests and mandatorily redeemable financial instruments of nonpublic entities contained within Accounting Standards Codification (ASC) Topic 480 In February 2016, the FASB issued Accounting Standards Update No. 2016-02, “Leases (Topic 842)” (“ASU 2016-02”). ASU 2016-02 will require lessees to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. Under ASU 2016-02, a lessee will be required to recognize assets and liabilities for leases with terms of more than 12 months. Lessor accounting remains substantially similar to current GAAP. In addition, disclosures of leasing activities are to be expanded to include qualitative along with specific quantitative information. ASU 2016-02 is effective in fiscal years beginning after December 15, 2018 (with early adoption permitted). ASU 2016-02 mandates a modified retrospective transition method. The Company has adopted this standard effective January 1, 2019. Since we have no leases in scope, the adoption did not have an impact on our financial statements. |
Liquidity and Going Concern | Liquidity and Going Concern Our interim consolidated financial statements have been prepared on a going concern basis, which assumes that we will be able to meet our obligations and continue our operations during the next fiscal year. Asset realization values may be significantly different from carrying values as shown in our consolidated financial statements and do not give effect to adjustments that would be necessary to the carrying values of assets and liabilities should we be unable to continue as a going concern. At September 30, 2019, we had not yet achieved profitable operations and we have accumulated losses of $9,457,271 since our inception. We expect to incur further losses in the development of our business, all of which raise substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern depends on our ability to generate future profits and/or to obtain the necessary financing to meet our obligations arising from normal business operations when they come due. Effective September 30, 2019, we amended our credit agreement with Mr. John Gibbs, a related party, to increase the borrowing limit under the convertible credit facility to $2,400,000 and extended the maturity date to December 31, 2019. We anticipate that additional funding will be in the form of additional loans from officers, directors or significant shareholders, or equity financing from the sale of our common stock. Currently, there are no arrangements in place for additional equity funding or new loans. |
2. Mineral Rights and Propert_2
2. Mineral Rights and Properties, net (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Extractive Industries [Abstract] | |
Mineral rights and properties | September 30, 2019 December 31, 2018 Mineral and other properties $ 185,290 $ 185,290 Mineral rights - Langtry project – – Mineral rights and properties - unproven, net $ 185,290 $ 185,290 |
3. Adoption of ASU 2017-11 (Tab
3. Adoption of ASU 2017-11 (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Changes and Error Corrections [Abstract] | |
Reconciliation after adoption of ASU 2017-11 | Derivative Accumulated Balance January 1, 2019 (before adoption of ASU 2017-11) $ 14,730 $ (9,255,432 ) Reclassified derivative liability and cumulative effect of adoption (14,730 ) 14,730 Balance January 1, 2019 (after adoption of ASU 2017-11) $ – $ (9,240,702 ) |
4. Fair Value of Financial In_2
4. Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value assets and liabilities on a recurring basis | Carrying Value at December 31, Fair Value Measurement at December 31, 2018 2018 Level 1 Level 2 Level 3 Derivative liability – Convertible note payable $ 14,730 $ – $ – $ 14,730 |
1. Organization, Basis of Pre_3
1. Organization, Basis of Presentation, Liquidity and Going Concern (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accumulated deficit | $ (9,457,271) | $ (9,255,432) |
Line of credit maximum borrowing capacity | $ 2,400,000 | |
Credit line expiration date | Dec. 31, 2019 |
2. Mineral Rights and Propert_3
2. Mineral Rights and Properties, net (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Extractive Industries [Abstract] | ||
Mineral and other properties | $ 185,290 | $ 185,290 |
Mineral rights - Langtry project | 0 | 0 |
Mineral rights and properties - unproven, net | $ 185,290 | $ 185,290 |
2. Mineral Rights and Propert_4
2. Mineral Rights and Properties, net (Details Narrative) | 3 Months Ended | 12 Months Ended | |||||||
Mar. 31, 2019USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Sep. 30, 2019USD ($) | Aug. 08, 2016USD ($)a | Jun. 30, 2014USD ($)a | Jun. 30, 2012USD ($)a | Jun. 30, 2010aInteger | |
Mineral and other properties | $ 185,290 | $ 185,290 | |||||||
Mineral rights | 0 | 0 | |||||||
Langtry Lease [Member] | |||||||||
Acres owned | a | 413 | ||||||||
Patented mining claims | Integer | 20 | ||||||||
Lease term | 20 years | ||||||||
Impairment of mineral property | $ 63,183 | $ 1,885,816 | |||||||
Langtry Lease [Member] | Lease Payment [Member] | |||||||||
Lease payment | $ 20,825 | $ 41,650 | |||||||
Operating lease liability | $ 20,825 | ||||||||
Langtry Lease [Member] | Lease Payment [Member] | Exploration Costs [Member] | |||||||||
Lease payment | 20,825 | ||||||||
Langtry Lease [Member] | Lease Payment [Member] | Mineral Rights and Properties [Member] | |||||||||
Lease payment | $ 20,825 | ||||||||
Section 16 Property [Member] | |||||||||
Mineral and other properties | $ 28,582 | ||||||||
Acres owned | a | 33 | ||||||||
Castle Rock [Member] | |||||||||
Mineral and other properties | $ 21,023 | ||||||||
Acres owned | a | 160 | ||||||||
Section 13 Property [Member] | |||||||||
Mineral and other properties | $ 135,685 | ||||||||
Acres owned | a | 661 |
3. Adoption of ASU 2017-11 (Det
3. Adoption of ASU 2017-11 (Details) - USD ($) | Sep. 30, 2019 | Jan. 02, 2019 | Dec. 31, 2018 |
Accumulated deficit | $ (9,457,271) | $ (9,255,432) | |
Reclassified derivative liabiltity and cumulative effect | $ 14,730 | ||
Accounting Standards Update 2017-11 [Member] | |||
Derivative liability | $ 0 | 14,730 | |
Accumulated deficit | $ (9,240,702) | (9,255,432) | |
Accounting Standards Update 2017-11 [Member] | Derivative Liability [Member] | |||
Reclassified derivative liabiltity and cumulative effect | (14,730) | ||
Accounting Standards Update 2017-11 [Member] | Accumulated Deficit [Member] | |||
Reclassified derivative liabiltity and cumulative effect | $ 14,730 |
4. Fair Value of Financial In_3
4. Fair Value of Financial Instruments (Details - Fair Value) - Fair Value Measurements Recurring [Member] - Convertible Notes Payable [Member] | Dec. 31, 2018USD ($) |
Derivative liabilty - Convertible note payable | $ 14,730 |
Fair Value Inputs Level 1 [Member] | |
Derivative liabilty - Convertible note payable | 0 |
Fair Value Inputs Level 2 [Member] | |
Derivative liabilty - Convertible note payable | 0 |
Fair Value Inputs Level 3 [Member] | |
Derivative liabilty - Convertible note payable | $ 14,730 |
5. Convertible Note Payable (De
5. Convertible Note Payable (Details Narrative) - Convertible Notes Payable [Member] - Clifford Neuman [Member] - USD ($) | 3 Months Ended | ||
Apr. 01, 2015 | Sep. 30, 2019 | Dec. 31, 2018 | |
Debt issuance date | Apr. 1, 2015 | ||
Debt face amount | $ 51,270 | ||
Debt stated interest rate | 6.00% | ||
Accrued interest | $ 15,836 | $ 12,871 |
6. Convertible Credit Facilit_2
6. Convertible Credit Facility - Related Party (Details Narrative) - USD ($) | 3 Months Ended | 7 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Jul. 18, 2012 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Line of credit maximum borrowing capacity | $ 2,400,000 | $ 2,400,000 | ||||
Line of credit expiration date | Dec. 31, 2019 | |||||
Proceeds from line of credit | $ 110,000 | $ 141,500 | ||||
Accrued interest - related parties | 528,288 | 528,288 | $ 448,918 | |||
Interest expense - related parties | 25,453 | $ 27,156 | 79,370 | 74,123 | ||
Gibbs Credit Agreement [Member] | ||||||
Line of credit issuance date | Jul. 18, 2012 | |||||
Line of credit maximum borrowing capacity | 2,150,000 | $ 2,150,000 | $ 1,000,000 | 2,150,000 | 2,150,000 | |
Line of credit interest rate | 5.00% | |||||
Line of credit expiration date | Dec. 31, 2019 | |||||
Line of credit amount outstanding | 2,169,620 | 2,169,620 | $ 2,059,620 | |||
Proceeds from line of credit | 110,000 | $ 141,500 | ||||
Line of credit remaining amount available | 230,380 | 230,380 | ||||
Accrued interest - related parties | $ 528,288 | $ 528,288 | $ 448,918 |
8. Share-based Compensation (De
8. Share-based Compensation (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Share-based Payment Arrangement [Abstract] | ||
Share based compensation | $ 0 | $ 0 |
9. Related Party Transactions (
9. Related Party Transactions (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Accrued liabilities - related parties | $ 69,000 | $ 69,000 | $ 72,500 | ||
Accounts payable | 34,132 | 34,132 | 27,656 | ||
Proceeds from related party | 26,850 | $ 12,350 | |||
Repayment to related party | 16,350 | 7,250 | |||
Accrued interest - related parties | 528,288 | 528,288 | 448,918 | ||
Advances payable - related party | 35,500 | 35,500 | 25,000 | ||
Power [Member] | |||||
Management fees | 7,500 | $ 7,500 | 22,500 | 22,500 | |
Accrued liabilities - related parties | 69,000 | 69,000 | 72,500 | ||
Accounts payable | 5,584 | 5,584 | |||
Proceeds from related party | 26,850 | 12,350 | |||
Repayment to related party | 16,350 | $ 7,250 | |||
Advances payable - related party | 35,500 | 35,500 | 25,000 | ||
Gibbs [Member] | |||||
Accrued interest - related parties | $ 528,288 | $ 528,288 | $ 448,918 |