0001019687-15-000577.txt : 20150213 0001019687-15-000577.hdr.sgml : 20150213 20150213141323 ACCESSION NUMBER: 0001019687-15-000577 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 11 CONFORMED PERIOD OF REPORT: 20141231 FILED AS OF DATE: 20150213 DATE AS OF CHANGE: 20150213 FILER: COMPANY DATA: COMPANY CONFORMED NAME: American Sands Energy Corp. CENTRAL INDEX KEY: 0001432001 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 870405708 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-53167 FILM NUMBER: 15612631 BUSINESS ADDRESS: STREET 1: 201 S. MAIN ST. STREET 2: SUITE 1800 CITY: SALT LAKE CITY STATE: UT ZIP: 84111 BUSINESS PHONE: 801-277-7888 MAIL ADDRESS: STREET 1: 201 S. MAIN ST. STREET 2: SUITE 1800 CITY: SALT LAKE CITY STATE: UT ZIP: 84111 FORMER COMPANY: FORMER CONFORMED NAME: Millstream Ventures, Inc. DATE OF NAME CHANGE: 20080409 10-Q 1 amse_10q-123114.htm FORM 10-Q

 

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

  S

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2014

 

 

  £

TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT

For the transition period from ____________ to ____________

  

 

Commission File Number 000-53167

 

American sands energy Corp.
(Exact name of registrant as specified  in its charter)

 

Delaware 87-0405708
(State or other jurisdiction of incorporation or organization) (IRS Employer Identification No.)

 

201 S. Main St.
Suite 1800
Salt Lake City, UT  84111
(Address of principal executive offices)

 

(801) 536-6140
(Registrant’s telephone number, including area code)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed under Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes ¨   No x

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes x   No ¨

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large Accelerated Filer ¨ Accelerated Filer ¨
Non-Accelerated Filer ¨ (Do not check if a smaller reporting company) Smaller Reporting Company x

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ¨   No x

 

The issuer had 33,393,828 shares of common stock, $.001 par value, outstanding as of February 10, 2015.

 

 

 
 

 

TABLE OF CONTENTS

 

 

PART I. FINANCIAL INFORMATION 3
Item 1.  Financial Statements 3
Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations 16
Item 3.  Quantitative and Qualitative Disclosures About Market Risk 21
Item 4.  Controls and Procedures 21
   
PART II.  OTHER INFORMATION 22
Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds 22
Item 4.  Mine Safety Disclosures 22
Item 6.  Exhibits 22
SIGNATURES 23

 

 

 

 

2
 

 

PART I. FINANCIAL INFORMATION

 

American Sands Energy Corp.

Condensed Consolidated Balance Sheets (Unaudited)

 

   December 31,   March 31, 
   2014   2014 
Assets          
Current assets:          
Cash  $912,513   $2,006,007 
Prepaid and other current assets   110,988    255,498 
           
Total current assets   1,023,501    2,261,505 
           
Property and equipment, net       518 
           
Other assets   202,840    38,200 
           
Total assets  $1,226,341   $2,300,223 
           
Liabilities and Stockholders' Equity          
Current liabilities:          
Accounts payable  $206,014   $177,799 
Accrued expenses   93,562    108,370 
Note payable       2,228 
           
Total current liabilities   299,576    288,397 
           
           
Derivative liability   377,378    109,421 
           
Total liabilities   676,954    397,818 
           
Commitments and contingencies (Notes 3, 4 and 10)          
           
Stockholders' equity:          
Preferred stock, $.001 par value: 10,000,000 shares authorized; 4,750,000 shares designated as Series A preferred stock; 4,118,210 and 4,412,120 Series A preferred shares outstanding, respectively   4,118    4,412 
Common stock, $.001 par value: 200,000,000 shares authorized; 33,393,828 and 30,935,467 shares outstanding, respectively   33,394    30,935 
Additional paid-in capital   17,512,947    16,421,288 
Accumulated deficit    (17,001,072)   (14,554,230)
           
Total stockholders' equity   549,387    1,902,405 
           
Total liabilities and stockholders' equity  $1,226,341   $2,300,223 

 

 

See the accompanying notes to condensed consolidated financial statements.

 

3
 

 

American Sands Energy Corp.

Condensed Consolidated Statements of Operations (Unaudited)

 

   For the Three Months Ended    For the Nine Months Ended 
   December 31, 2014   December 31, 2013   December 31, 2014   December 31, 2013 
                 
Revenues  $   $   $   $ 
                     
Operating expenses:                    
 General and administrative   346,736    315,085    1,478,107    1,144,314 
 Research and development   134,452    325,096    472,126    374,138 
 Mineral lease   69,220    53,134    207,660    159,405 
                     
Total operating expenses   550,408    693,315    2,157,893    1,677,857 
                     
Loss from operations   (550,408)   (693,315)   (2,157,893)   (1,677,857)
                     
Other (income) expense:                    
                     
 (Gain) loss on derivative   74,996    (13,698)   264,202    (13,698)
 (Gain) loss on extinguishment of debt   (1,700)   209,360    (1,700)   209,360 
 Interest expense       84,224        374,370 
                     
Total other (income) expense   73,296    279,886    262,502    570,032 
                     
Loss before provision for income taxes   (623,704)   (973,201)   (2,420,395)   (2,247,889)
Provision for income taxes   (406)   (100)   (506)   (400)
                     
Net loss   (624,110)   (973,301)   (2,420,901)   (2,248,289)
                     
Less: cumulative preferred stock dividends   (106,137)       (276,214)    
                     
Net loss attributable to common stockholders   (730,247)  $(973,301)  $(2,697,115)  $(2,248,289)
                     
Net loss per common share - basic and diluted  $(0.02)  $(0.03)  $(0.08)  $(0.08)
                     
Weighted average common shares outstanding - basic and diluted   33,153,840    29,863,547    32,188,545    29,387,348 

 

 

See the accompanying notes to condensed consolidated financial statements.

 

4
 

American Sands Energy Corp.

Condensed Consolidated Statement of Stockholders’ Equity (Unaudited)

For the Nine Months Ended December 31, 2014

 

   Series A preferred   Common stock   Additional       Total 
                   paid-in   Accumulated   stockholders' 
   Shares   Amount   Shares   Amount   capital   deficit   equity 
Balance as of March 31, 2014   4,412,120   $4,412    30,935,467   $30,935   $16,421,288   $(14,554,230)  $1,902,405 
                                    
Stock-based compensation                   614,304        614,304 
                                    
Proceeds from issuance of preferred stock units at $1.40 per unit   250,000    250            349,750        350,000 
                                    
Warrants exercised for cash at $0.50 per share           50,143    50    24,950        25,000 
                                    
Warrants exercised for cash at $0.45 per share           17,857    18    8,017        8,035 
                                    
Series A preferred stock offering costs                   (9,001)       (9,001)
                                    
Conversion of preferred stock to common stock   (543,910)   (544)   2,175,641    2,176    (1,632)        
                                    
Preferred stock dividends paid with common stock           44,720    45    25,896    (25,941)    
                                    
Common stock issued for accounts payable           170,000    170    83,130        83,300 
                                    
Derivative relating to preferred stock down-round protection rights                   (3,755)       (3,755)
                                    
Net loss                       (2,420,901)   (2,420,901)
                                    
Balance as of December 31, 2014   4,118,210   $4,118    33,393,828   $33,394   $17,512,947   $(17,001,072)  $549,387 

 

See the accompanying notes to condensed consolidated financial statements.

 

5
 

 

American Sands Energy Corp.

Condensed Consolidated Statements of Cash Flows (Unaudited)

 

   For the Nine Months Ended 
   December 31, 2014   December 31, 2013 
Cash flows from operating activities:          
Net loss  $(2,420,901)  $(2,248,289)
Adjustments to reconcile net loss to net cash used in operating activities:                
Depreciation   518    251 
(Gain) loss on extinguishment of debt   (1,700)   209,360 
Loss (gain) on derivative liability   264,202    (13,698)
Accretion of debt discount       264,024 
Straight-line of mineral lease payable       (14,640)
Stock offering costs       227,143 
Stock-based compensation expense   614,304    299,561 
Warrants issued for research and development       201,250 
Stock issued for services       10,500 
(Increase) decrease in operating assets:          
Receivables       207,046 
Prepaid and other current assets   144,510    (195,860)
Related-party receivable       22,324 
Increase (decrease) in operating liabilities:          
Accounts payable   113,215    77,022 
Accrued expenses   (14,808)   (124,269)
Accrued interest on convertible debt and note payable       109,997 
Net cash used in operating activities   (1,300,660)   (968,278)
Cash flows from investing activities:          
Mine permitting costs   (164,640)    
Net cash used in investing activities   (164,640)    
Cash flows from financing activities:          
Proceeds from issuance of preferred stock units, net   340,999    1,079,838 
Proceeds from exercise of warrants   33,035     
Principal and interest payments on notes payable   (2,228)   (11,183)
Proceeds from issuance of notes payable       19,610 
Proceeds from issuance of convertible notes payable       53,000 
Proceeds from issuance of related-party notes payable       150,000 
Net cash provided by financing activities   371,806    1,291,265 
Net increase (decrease) in cash   (1,093,494)   322,987 
Cash, beginning of the period   2,006,007    59,981 
Cash, end of the period  $912,513   $382,968 
           
Supplemental disclosures of cash flow information:          
Interest paid  $     
Income taxes paid  $1,309   $200 
           
Supplemental disclosures of non-cash investing and financing activities:                
Accounts payable obligations settled with common stock  $85,000   $ 
Preferred stock dividends paid with common stock  $25,941   $ 
Embedded derivative resulting from issuance of preferred stock units  $3,755   $ 
Conversion of preferred stock to common stock  $2,176   $ 
Conversion of convertible note payable to preferred stock units   $   $ 1,906,677
Related-party convertible note payable exchanged for warrants  $   $1,462,651 
Warrants issued to satisfy payroll liabilities  $   $1,049,350 
Conversion of related-party notes payable to common stock  $   $227,319 
Common stock issued for stock offering costs  $   $131,250 
Conversion of related-party convertible note payable to preferred stock units   $   $ 131,100  

 

See the accompanying notes to condensed consolidated financial statements.

 

6
 

 

American Sands Energy Corp.

Notes to Condensed Consolidated Financial Statements (Unaudited)

 

Note 1 - Description of Business and Nature of Operations

 

American Sands Energy Corp. (“AMSE” or the “Company”) is a pre-production oil company with oil sands resources located near Sunnyside, Utah that has not commenced planned principal operations. The Company’s activities since inception have consisted principally of acquiring lease rights, raising capital, performing research and development activities with regard to its oil sands extraction technology, obtaining the required permits necessary to mine the oil sands, and developing the plans to construct a refining facility. The Company’s activities are subject to significant risks and uncertainties including failing to secure the additional funding required to commercialize the Company’s technology.

 

The Company intends to mine the oil sands ore using conventional mining techniques and use a proprietary solvent to extract oil from the oil sands ore. The proprietary water-free process produces high quality bitumen, recovers nearly 100% of the solvent, requires no tailings ponds, and its only by-product is reclamation ready sand. Since inception, the Company has been engaged in the business of acquiring and developing oil sands assets and technologies used to separate the oil contained in oil sands. The Company anticipates that its primary operations will include the mining of oil sands, the separation of oil products therefrom and the sale of oil and oil by-products.

 

The Company has acquired rights to approximately 1,760 acres of prime oil sands deposits in the Sunnyside area of Utah through its mineral leases as more fully described in Note 4 to the condensed consolidated financial statements.

 

Effective January 24, 2012, the Company entered into a License, Development and Engineering Agreement with Universal Oil Recovery Corp. and SRS International (the “License Agreement”) whereby the Company was granted an exclusive non-transferable license to use certain technology in its proposed business to extract bitumen from oil sands. The territory covered by the agreement includes the State of Utah and any other geographic location in which a future designated project is commenced by or through the Company. In conjunction with the License Agreement, the Company terminated its operating agreement with Bleeding Rock. On November 18, 2013, the Company entered into an Amended and Restated License, Development and Engineering Agreement (“Amendment”) with Universal Oil Recovery LLC (“UOR”). The Amendment amends and restates the License Agreement. Pursuant to the terms of the Amendment, the previous royalties of 75% on projects outside of Utah and the minimum royalty of $1,000,000 per year on such agreements have been eliminated. Pursuant to the Amendment, the Company will now pay royalties on projects outside of Utah of 15% of the net fees (net of all costs other than general and administrative expenses) collected by the Company on any license of the technology. In addition, the $25,000 per month management fee is eliminated until a permanent financing is closed (minimum of $25,000,000), at which time the payment will be reinstated. In consideration of the amendment, the Company issued to UOR, 575,000 warrants to purchase common stock of the Company for $0.01 per share, exercisable for ten years (see Note 8). The term of the License Agreement is 20 years and thereafter so long as production of products using the technology is commercially and economically feasible.

 

Note 2 – Significant Accounting Policies

 

These financial statements have been prepared by the Company in accordance with U.S. generally accepted accounting principles (“US GAAP”) for interim financial information, as well as the instructions to Form 10-Q. Accordingly, they do not include all of the information and notes required by US GAAP for complete financial statements. In the opinion of the Company’s management, all adjustments (consisting solely of normal recurring adjustments) considered necessary for a fair presentation of the interim financial statements have been included.

 

The preparation of financial statements in conformity with US GAAP requires management to make judgments, estimates, and assumptions that could affect the reported amounts of assets and liabilities as of the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ significantly from those estimates.

 

a) Principles of Consolidation

 

The condensed consolidated financial statements include the consolidated operations of American Sands Energy Corp. and its wholly owned subsidiary Green River Resources Inc. (“GRI”). All significant intercompany balances and transactions have been eliminated in consolidation.

 

7
 

 

American Sands Energy Corp.

Notes to Condensed Consolidated Financial Statements (Unaudited)

 

b) Mineral Leases

 

In certain cases, the Company capitalizes costs related to investments in mineral lease interests. Such costs include mineral lease acquisition costs. Costs are deferred until such time as the extent of proved developed reserves has been determined and mineral lease interests are either developed, the property sold or the mineral lease rights are allowed to lapse. To date, all exploration and lease costs have been expensed.

 

c) Research and Development

 

The Company continues to develop additional technology related to its proprietary bitumen extraction process. To date, the Company has expensed costs associated with developing its technology as research and development costs. For the nine months ended December 31, 2014 and 2013, the Company incurred costs of $472,126 and $374,138, respectively, for research and development of its technologies.

 

d) Stock-based Compensation

 

The Company uses the Black-Scholes option-pricing model to determine the fair value of stock options and warrants granted. For employee stock options, the Company records the grant-date fair value as expense over the period in which it is earned, typically the vesting period. For consultants, the fair value of the stock-based award is recorded as expense over the term of the service period, and unvested amounts are revalued using the Black-Scholes model at each reporting period. For warrants issued to lenders, the Company records the grant-date fair value of the warrants, and any resulting beneficial conversion feature for convertible debt, as a debt discount. The discount is then amortized over the term of the convertible debt as non-cash interest expense.

 

e) Net Loss Per Common Share

 

Basic earnings or loss per common share is computed on the basis of the weighted average number of shares outstanding during the periods. Diluted earnings or loss per common share is calculated on the basis of the weighted average number of common shares outstanding during the period plus the effect of dilutive common share equivalents during the period. Common share equivalents include preferred stock, outstanding stock options and warrants and convertible debt instruments. For periods in which a net loss is reported, common share equivalents are excluded because they are antidilutive. Therefore, basic loss per common share is the same as diluted loss per common share for the three and nine months ended December 31, 2014 and 2013. As of December 31, 2014 and 2013, the Company had cumulative, undeclared, dividends that had not been accrued related to its preferred stock of $323,617 and $0, respectively. For the three months ended December 31, 2014 and 2013, the Company had accrued preferred stock dividends of $106,137 and $0, respectively, which were added to net loss in the consolidated statements of operations in order to calculate net loss per common share attributable to common stockholders. For the nine months ended December 31, 2014 and 2013, the Company had accrued preferred stock dividends of $276,214 and $0, respectively, which were added to net loss in the consolidated statements of operations in order to calculate net loss per common share attributable to common stockholders.

 

f) Recent Accounting Pronouncements

 

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) that are adopted by the Company as of the specified effective date.  If not discussed, management believes that the impact of recently issued standards, which are not yet effective, will not have a material impact on the Company’s financial statements upon adoption.

 

In June 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-10, Development Stage Entities. The amendments in ASU 2014-10 remove the definition of a development stage entity from Topic 915, Development Stage Entities, thereby removing the distinction between development stage entities and other reporting entities from US GAAP. In addition, the amendments eliminate the requirements for development stage entities to (1) present inception-to-date information in the statements of operations, cash flows, and stockholders’ equity, (2) label the financial statements as those of a development stage entity, (3) disclose a description of the development stage activities in which the entity is engaged, and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage. The amendments also clarify that the guidance in Topic 275, Risks and Uncertainties, is applicable to entities that have not commenced planned principal operations. ASU 2014-10 is effective for annual reporting periods beginning after December 15, 2014, and interim periods therein, but early adoption is permitted.

 

8
 

 

American Sands Energy Corp.

Notes to Condensed Consolidated Financial Statements (Unaudited)

 

The Company adopted ASU 2014-10 effective April 1, 2014. As a result, the Company has removed inception-to-date information in the Company’s statements of operations, cash flows, and stockholders’ equity.

 

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers. The amendments in ASU 2014-09 affect any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (e.g., insurance contracts or lease contracts). ASU 2014-09 will supersede the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance, and creates a Topic 606, Revenue from Contracts with Customers.

 

The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps:

 

Step 1: Identify the contract(s) with a customer.

Step 2: Identify the performance obligations in the contract.

Step 3: Determine the transaction price.

Step 4: Allocate the transaction price to the performance obligations in the contract.

Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.

 

ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. Until the Company begins to recognize revenue, its financial statements will not be affected by the adoption of ASU 2014-09.

 

Note 3 – Going Concern

 

The Company’s financial statements have been prepared using the going concern assumption which contemplates the realization of assets and the liquidation of liabilities in the ordinary course of business. The Company has incurred substantial losses from operations and has negative cash flows from operating activities, which raise substantial doubt about the Company’s ability to continue as a going concern. The Company sustained a net loss for the nine months ended December 31, 2014 of $2,420,901 and has an accumulated deficit of $17,001,072 as of December 31, 2014. In addition, the Company estimates it will require approximately $150,000,000 in capital to commence principal operations.

 

The Company intends to continue its research and development efforts, but does not have any revenues in order to finance these activities internally. As a result, the Company intends to seek financing to fund its operations.

 

The Company has been able to meet its short-term needs primarily through loans from third parties, private placements of equity and debt securities, and deferring certain payment obligations to related parties. The Company raised net proceeds of approximately $4,000,000 from the sale of Series A preferred stock units and has $912,513 of cash on hand as of December 31, 2014.  The Company plans to obtain additional financing through the sale of equity or debt securities in order to finance operations until it can generate positive cash flows from operating activities. The equity private placements are expected to provide the needed funds for continued operations and further research and development of the Company’s proprietary oil sands refining methods. There is no assurance that the Company will be able to obtain the additional financing that it needs to develop its technology and alleviate doubt about its ability to continue as a going concern. If the Company is able to obtain sufficient additional financing proceeds, the Company cannot be certain that this additional financing will be available on acceptable terms. To the extent the Company raises additional funds by issuing equity securities, the Company’s stockholders may experience significant dilution. Any debt financing, if available, may involve restrictive covenants that impact the Company’s ability to conduct business. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Note 4 – Mineral Leases

 

During 2005, the Company acquired three oil sands mineral leases: (1) an undivided 40% interest in a 1,120-acre parcel, (2) an undivided 20% interest in the same 1,120-acre parcel, and (3) an undivided 16.666% interest in a 640-acre parcel. These leases are located in Carbon County, Utah. Effective September 5, 2014, the first lease was extended through December 31, 2020 and, effective September 26, 2014, the lease terms on the second and third leases were extended through December 31, 2019. The minimum annual lease payments on the leases are $268,915.

 

9
 

 

American Sands Energy Corp.

Notes to Condensed Consolidated Financial Statements (Unaudited)

 

In 2009, a fourth lease was entered into with William G. Gibbs, a relative of the Chief Executive Officer of the Company, for an additional undivided 5% interest in the 640-acre parcel (for a total 21.666% undivided interest in the 640-acre parcel). This lease is located in Carbon County, Utah, adjacent to the 1,120-acre parcel. This lease has a 6-year life with a minimum yearly lease payment of $7,965 and, pursuant to an Addendum dated September 28, 2014, is scheduled to terminate by December 31, 2020, if the property has not reached commercial production.

 

The Company’s interest in these leases is conditioned upon the payments of royalties, minimum yearly investment in development, tax payments, and other obligations to the owners of the leases. Two of the four leases are conditioned upon reaching the production stage by December 31, 2020, while one of the other leases requires production by December 31, 2019. If the Company does not attain average productivity of at least 500 barrels per day (“bbl/d”) by these dates, the interest in these leases may be terminated. 

 

Upon commencement of operations, each lease requires a production royalty of 10% of the market value of the minerals sold, net of applicable costs and expenses. The Company has the right, but not the obligation, to pool or unitize the leases, such that the ore mined is allocated between, and the royalties paid, on their proportionate interests. If not pooled, the owners will be paid royalties only to the extent the oil sands ore is mined on their respective properties. Through December 31, 2014, no production royalties were accrued or paid because production on these properties had not commenced. After three consecutive calendar years of production on the 1,120-acre parcel, the production royalty on the 1,120-acre parcel shall be the greater of the 10% royalty or $1,000,000 annually. Once production begins, all rents paid count towards the Company’s production royalty commitments.

 

Future minimum lease payments are as follows for the years ending:

 

September 30,    
2015  $276,880 
2016   276,880 
2017   276,880 
2018   276,880 
2019   276,880 
2020   7,965 
      
Total future minimum lease payments  $1,392,365 

 

Note 5 – Derivative Liability

 

In connection with the Company issuing its Series A preferred stock units described in Note 6, the Company recorded a derivative liability related to down-round protection provided to the preferred stockholders in the event that the Company sells its common stock at a price below $0.35 per share. With the assistance of a third-party valuation specialist, the Company valued the derivative liability based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below:

 

Level 1   Quoted prices in active markets that are accessible at the measurement date for assets or liabilities.
Level 2   Other inputs that are observable directly or indirectly, such as quoted prices for similar assets and liabilities or market corroborated inputs.
Level 3   Unobservable inputs that are used when little or no market data is available, which require the Company to develop its own assumptions about how market participants would value the assets or liabilities.

 

Determining which category an asset or liability falls within the hierarchy requires significant judgment. The Company evaluates its hierarchy disclosure each quarter. Assets and liabilities measured at fair value on a recurring basis as of December 31, 2014 and March 31, 2014 are summarized as follows:

 

   Fair Value as of December 31, 2014 
   Level 1   Level 2   Level 3   Total 
Liabilities                    
Embedded derivative  $   $   $377,378   $377,378 

 

10
 

 

American Sands Energy Corp.

Notes to Condensed Consolidated Financial Statements (Unaudited)

 

    Fair Value as of March 31, 2014  
    Level 1     Level 2     Level 3     Total  
Liabilities                                
Embedded derivative   $     $     $ 109,421     $ 109,421  

 

The following table presents the fair value reconciliation of Level 3 liabilities measured at fair value on a recurring basis for the nine months ended December 31, 2014:

   

   Fair Value Measurements Using Significant Unobservable Inputs 
   (Level 3) 
   Embedded Derivative 
Beginning balance, March 31, 2014  $109,421 
Issuances:     
Embedded derivatives issued in conjunction with Series A preferred stock units   3,755 
Total losses included in earnings   264,202 
Ending balance, December 31, 2014  $377,378 

 

Given the nature of the derivative liability, the carrying amounts of $377,378 and $109,421 reported in the accompanying condensed consolidated balance sheets as of December 31, 2014 and March 31, 2014, respectively, were derived from Level 3 inputs and represent management’s best estimate of fair value.

 

Key assumptions used in the valuation of the embedded derivatives using a Monte Carlo analysis methodology are as follows:

 

   December 31,   March 31, 
   2014   2014 
Threshold barrier  $0.35   $0.35 
Average price below $0.35 per share  $0.11   $0.22 
Probability of offer below $0.35 per share   3%    3% 
Preferred share conversion price  $1.40   $1.40 
Conversion ratio   12.73    6.36 

 

Note 6 – Preferred Stock

 

In October 2013, the Company initiated a preferred stock unit offering to raise up to $2,000,000 with an option to increase the offering by an additional $500,000 based on market conditions and investor interest. On March 20, 2014, the board of directors authorized an increase in the preferred stock unit raise from $2,500,000 to $6,650,000. Each unit of the offering sells for $1.40 and entitles the holder to receive one share of Series A Preferred Stock (the “Series A Stock”) along with one warrant to purchase a share of the Company’s common stock at $0.45 and one warrant to purchase the Company’s common stock at $0.70 per share (hereafter, referred to as “Series A preferred stock units”).

 

Series A preferred stockholders are entitled to receive dividends of 6% and have a liquidation preference equal to $1.40 per share for each outstanding share of Series A Stock (as adjusted for stock splits, stock dividends and recapitalizations) plus an amount equal to declared but unpaid dividends thereon. As of December 31, 2014 and March 31, 2014, the liquidation preference for the Series A Stock was $5,765,494 and $6,176,968, respectively.

 

 

11
 

American Sands Energy Corp.

Notes to Condensed Consolidated Financial Statements (Unaudited)

 

Holders of Series A Stock have the right at any time after the date of issuance to convert their Series A Stock to common stock based on a ratio determined by dividing $1.40 by the Conversion Price in effect at the time for such shares. The Conversion Price is the lower of $0.35 per share or the lowest price that any additional shares of common stock were issued after the initial purchase date. Common shares issued in transactions such as granting of employee incentive options pursuant to the Company’s 2011 Long-Term Incentive Plan, shares issued in certain financings, and shares issued to acquire technology or assets do not reduce the Conversion Price. The Series A Stock automatically converts upon the Company completing a financing transaction of $10,000,000 or more.

 

The offering was closed for new commitments on March 31, 2014. As of December 31, 2014, the Company had issued a total of 4,662,120 Series A preferred stock units. The Company received net cash proceeds of $3,701,615 from selling 2,846,054 Series A preferred stock units and issued an additional 1,532,382 Series A preferred stock units in connection with conversions of convertible debt and accrued interest totaling $1,925,647 and conversions of related-party debt and accrued interest of $131,101. The Company used a portion of the proceeds to complete required test drilling at its Sunnyside, Utah site location in connection with its project permitting process and for general corporate purposes.

 

During the nine months ended December 31, 2014, 543,910 shares of Series A Stock were converted into 2,175,641 shares of common stock and, as of December 31, 2014, there were 4,118,210 shares of Series A Stock outstanding.

 

Note 7 – Common Stock

 

During the nine months ended December 31, 2014, 543,910 shares of Series A Stock were converted into 2,175,641 shares of the Company’s common stock. The Company issued an additional 44,720 shares of common stock to settle cumulative dividends for the shares of Series A Stock that were converted.

 

On November 30, 2014, the Company issued 170,000 shares of common stock to LIFE Power & Fuels LLC in lieu of amounts owed under the LIFE Management Services Agreement, which contract was terminated simultaneous with the issuance of common shares.

 

Note 8 – Warrants

 

The Company has issued various classes of warrants as described below:

 

a)Convertible Debt Warrants

 

Prior to the fiscal year ended March 31, 2014, the Company issued convertible notes and warrants in a private placement that were exchanged as of March 31, 2014 for Series A preferred stock units, except for 174,485 warrants. During the nine months ended December 31, 2014, 50,143 of these warrants were exercised at $0.50 per common share and the remaining 124,342 warrants expired.

 

b)Private Placement Warrants

 

In connection with the Company’s private placement of common stock initiated in 2012, the Company granted warrants to the stock purchasers. These warrants give the holders the right to purchase shares of the Company’s common stock at $1.15 per share for a 2-year period. In March 2014, the Company issued 121,259 3-year warrants to purchase shares of the Company’s common stock at $1.15 per share to certain of the expiring warrant holders. As of December 31, 2014, all 121,259 of the newly issued private placement warrants were outstanding. Also, as of December 31, 2014, all the initial warrants issued in the private placement had expired.

 

12
 

 

American Sands Energy Corp.

Notes to Condensed Consolidated Financial Statements (Unaudited)

 

c)Debt Exchange Warrants

 

On September 30, 2013, the Company issued warrants to purchase 3,260,000 shares of common stock of the Company in settlement of a related-party convertible note payable. On September 30, 2013, the Company issued warrants to purchase 2,260,000 shares of common stock of the Company in settlement of an outstanding payroll obligation owed to the Company’s CEO in the amount of $1,049,350. The warrants give the holders the right to purchase the Company’s common stock at $0.01 per share for a 10-year period. The fair value of the warrants issued in satisfaction of these liabilities was calculated using the Black-Scholes pricing model. Based on the fair value calculation, the amount of the related-party convertible note payable and the amount of the outstanding payroll obligation exceeded the fair value of the warrants issued in satisfaction of these obligations.

 

Due to the related-party nature of the transaction, the Company did not record a gain on forgiveness of debt, but instead recorded the transaction as an equity transaction. As of December 31, 2014, all of the 5,520,000 warrants described above remained outstanding.

 

d)Series A Preferred Stock Warrants

 

In connection with the Company’s offering of its Series A preferred stock units (see Note 6) through December 31, 2014, the Company issued 4,447,835 warrants to purchase the Company’s common stock at $0.45 and 4,447,835 warrants to purchase the Company’s common stock at $0.70 per share. The warrants have a 5-year term and a cashless exercise provision. As of December 31, 2014, there were 4,429,978 warrants at $0.45 outstanding and 4,447,835 warrants at $0.70 outstanding.

 

The Company issued 214,285 of Series A preferred stock units for research and development expenses. The issuance included the Company issuing 214,285 warrants to purchase the Company’s common stock at $0.45 and 214,285 warrants to purchase the Company’s common stock at $0.70 per share. As of December 31, 2014, all of these warrants remained outstanding.

 

e)Broker Warrants

 

In connection with the Company’s offering of its Series A preferred stock units, the Company issued 675,292 warrants to purchase the Company’s common stock at $0.35 per share for a 5-year period. The warrants were issued to brokers associated with the Series A transactions. All of these warrants remained outstanding as of December 31, 2014.

 

f)Other Common Stock Warrants

 

In connection with the amended License Agreement described in Note 1, the Company issued 575,000 warrants to purchase common stock of the Company at $0.01 per share. All of these warrants remained outstanding as of December 31, 2014.

 

Note 9 – Long-Term Incentive Plan

 

In April 2011, the Company adopted the 2011 Long-Term Incentive Plan (the “2011 Plan”) which provides for the issuance of up to 7,000,000 shares of the Company’s common stock. During the nine months ended December 31, 2014, the Company issued 1,400,000 options under the 2011 Plan. The weighted average grant-date fair value of options granted during the nine months ended December 31, 2014 was $0.66.

  

The summary of option activity for the nine months ended December 31, 2014 is presented below:

 

   Number of Shares   Weighted Average Exercise Price   Weighted Average Remaining Life (years) 
Balance as of March 31, 2014   4,522,500   $0.47    3.95 
Granted   1,400,000    0.74    4.31 
Exercised            
Canceled            
Expired            
                
Balance as of December 31, 2014   5,922,500    0.53    3.46 

 

13
 

 

American Sands Energy Corp.

Notes to Condensed Consolidated Financial Statements (Unaudited)

 

Outstanding and exercisable options presented by price range as of December 31, 2014 are as follows:

 

   Options Outstanding   Options Exercisable 
       Weighted             
       Average   Weighted       Weighted 
   Number of   Remaining   Average   Number of   Average 
Exercise  Options   Life   Exercise   Options   Exercise 
Price  Outstanding   (Years)   Price   Exercisable   Price 
$0.25   50,000    2.13   $0.25    37,500   $0.25 
0.35   860,000    3.58    0.35    347,080    0.35 
0.40   3,087,500    3.25    0.40    3,087,500    0.40 
0.50   75,000    1.71    0.50    56,250    0.50 
0.65   875,000    4.64    0.65    291,667    0.65 
0.72   325,000    4.44    0.72    108,333    0.72 
1.15   650,000    2.36    1.15    500,000    1.15 
                          
$0.25-$1.15   5,922,500    3.46    0.53    4,428,330    0.50 

 

The estimated fair value of the Company’s stock options, less expected forfeitures, is amortized over the options’ vesting period on a straight-line basis. The Company recognized $614,304 and $299,561 of equity-based compensation expense during the nine months ended December 31, 2014 and 2013, respectively.

 

As of December 31, 2014, there was $497,758 of total unrecognized compensation cost with a weighted-average vesting period of approximately 14 months.

 

The intrinsic values of outstanding and vested stock options were as follows:

 

   December 31, 
   2014   2013 
Intrinsic value - options outstanding  $32,300   $170,425 
Intrinsic value - options exercisable   15,288    124,891 
Intrinsic value - options exercised        

 

Note 10 – Commitments

 

Effective January 1, 2013, the Company modified its employment contract with its Chief Executive Officer (CEO). Pursuant to the terms of the modification, the CEO’s salary was reduced from $400,000 per year to $276,000 per year. Upon completion of a $10,000,000 or more capital raise, the CEO’s salary will increase to $400,000. On September 30, 2013, the CEO’s unpaid salary from inception through 2011 totaling $1,049,350 was exchanged for 2,260,000 warrants to purchase the Company’s common stock for $0.01 per share. The term of the employment agreement is in effect through December 31, 2015. On November 7, 2013, the board of directors voted that, the CEO’s outstanding salary would convert into common stock at $0.35 per share. On March 31, 2014, all of the CEO’s past wages totaling $184,000 were converted into 525,715 shares of the Company’s common stock. As of December 31, 2014 and 2013, the total accrued commitment for the CEO’s past wages was $0 and $241,213, respectively.

 

14
 

 

 

American Sands Energy Corp.

Notes to Condensed Consolidated Financial Statements (Unaudited)

 

The Company entered into a new employment agreement with its Chief Operating Officer on June 1, 2014. Under the terms of the new agreement, the Chief Operating Officer is entitled to $245,000 in annual compensation until such time as the Company completes a capital raise of at least $20,000,000 at which time, the annual compensation will increase to $300,000.

 

The consulting agreement dated October 1, 2011, between the Company and C14 Strategies (“C-14”) (the “Consulting Agreement”), an entity controlled by the former President, provides for C-14 to provide assistance with respect to strategic objectives of the Company. As amended, the Consulting Agreement calls for C-14 to receive monthly compensation of $2,000 for such services.

 

Effective January 1, 2013, the Company modified the Chief Financial Officer’s (“CFO”) employment agreement. Under the terms of the agreement the CFO’s annual salary is $175,000. On November 7, 2013, the board of directors voted that the CFO’s outstanding salary would convert into common stock at $0.35 per share.

 

On November 30, 2014, the Company issued 170,000 shares of common stock to LIFE Power & Fuels LLC in lieu of accounts payable owed under the LIFE Management Services Agreement, which contract was terminated simultaneous with the issuance of common shares.

 

Note 11 – Subsequent Events

 

On January 20, 2015, the Company entered into a one-year agreement with an investment banking firm to assist the Company with raising additional capital. In accordance with the agreement, the investment banking firm will receive $25,000 per quarter for advisory services and will receive agreed upon percentages for any proceeds raised.

 

 

15
 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

The following discussion and analysis should be read in conjunction with the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section and the audited consolidated financial statements and related notes thereto included in our Annual Report on Form 10-K for the year ended March 31, 2014, and with the unaudited condensed consolidated financial statements and related notes thereto presented in this Quarterly Report on Form 10-Q.

 

Forward-Looking Statements

 

The statements contained herein that are not historical facts are forward-looking statements that represent management’s beliefs and assumptions based on currently available information. Forward-looking statements include the information concerning our current and future operations, business strategies, need for financing, competitive position, ability to retain and recruit personnel, and the effects of competition. Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words “believes,” “intends,” “may,” “should,” “anticipates,” “expects,” “could,” “plans,” or comparable terminology or by discussions of strategy or trends. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we cannot give any assurances that these expectations will prove to be correct. Such statements by their nature involve risks and uncertainties that could significantly affect expected results, and actual future results could differ materially from those described in such forward-looking statements.

 

Among the factors that could cause actual future results to differ materially are the risks and uncertainties discussed in this report. While it is not possible to identify all factors, we continue to face many risks and uncertainties including, but not limited to, our ability to secure adequate funding or to secure funding on favorable terms, scaling up facilities based on pilot plant testing, the cyclicality of the oil industry, global economic and political conditions, global productive capacity, customer inventory levels, changes in product pricing, changes in product costing, competitive technology positions and operating interruptions (including, but not limited to, labor disputes, leaks, fires, explosions, unscheduled downtime, transportation interruptions, war and terrorist activities). Mining operations are subject to a variety of existing laws and regulations relating to exploration and development, permitting procedures, safety precautions, property reclamation, employee health and safety, air and water quality standards, pollution and other environmental protection controls, all of which are subject to change and are becoming more stringent and costly to comply with. Should one or more of these risks materialize (or the consequences of such a development worsen), or should the underlying assumptions prove incorrect, actual results could differ materially from those expected. We disclaim any intention or obligation to update publicly or revise such statements whether as a result of new information, future events or otherwise.

 

Overview

 

American Sands Energy Corp. (“AMSE” or “the Company”) is a pre-production oil company with oil sands resources located near Sunnyside, Utah. We expect to mine the oil sands ore using conventional mining techniques and use a licensed proprietary solvent and process to extract oil from the oil sands ore. Our water-free process produces high quality heavy oil or bitumen, recovers nearly 100% of the solvent, requires no tailings ponds, and its only by-product is reclamation ready sand. Since the project’s inception, we have been engaged in the business of acquiring and developing oil sands assets and technologies used to separate the oil contained in oil sands. The Company anticipates that its primary operations will include the mining of oil sands, the separation of oil products therefrom and the sale of oil and oil by-products.

 

We have obtained a license for a hydrocarbon extraction process that separates oil and other hydrocarbons from sand, shale, dirt and other substances, without leaving behind toxins or other contaminants. We are currently developing our first project on certain hydrocarbon and mineral leases which cover approximately 1,760 acres near Sunnyside, Utah (the “Sunnyside Project”). On March 6, 2014, we filed an application for a Large Mine Plan with the Utah Department of Oil, Gas & Mining, which, if granted, will allow the Company to move forward with development of operations on the Sunnyside Project. The application covers the construction and operation of the mine, extraction facilities and related infrastructure. In accordance with the standards contained in Rule 4-10(a) of the SEC’s Regulation S-X, these leases contain no proven reserves of oil or gas. However, we have obtained an independent Resource Audit and Classification report dated May 29, 2009, from a major international geology and mining consulting firm describing the quantity and quality of the bitumen resource estimated to be located on our leases.

 

To date, we have acquired extensive bitumen resources, have successfully operated a pilot plant using our process technology on oil sands ore from our bitumen resources and have submitted applications for mining, environmental and other permits required to build a commercial plant (the “Commercial Facility”). Additional work to be completed as part of the project development phase includes:

 

16
 

 

  1. Final mine planning and civil engineering for the Sunnyside Project.
  2. Acquisition of additional property in areas of interest in order to block-up properties into logical and economical mining units.
  3. Determination of technical and economic parameters for the commercial scale use of the process, including engineering.
  4. Receipt of federal and state regulatory agency approval for the Commercial Facility.

 

Contemporaneously with the pursuit of the permitting of the project, we expect to finalize engineering and equipment for a plant that will process up to 10,000 tons of oil sand ore per day and produce up to 9,000 barrels per day (“bbl/d”) of bitumen. We have retained a leading North American engineering firm, FLSmidth USA, Inc., to complete an engineering and feasibility study with respect to a commercial plant that will produce up to 9,000 bbl/d of bitumen. We also retained an engineering firm to demonstrate the technology through a pilot plant. The pilot test runs were successful, removing in excess of 99% of the bitumen from the sand and leaving less than two parts per million (“ppm”) of solvent in the sand. This means that the sand is suitable to be put back into the environment without tailing ponds or other environmental restrictions. Based on additional findings from the recent pilot tests and recommendations from our mining engineers, we are moving forward with an initial Commercial Facility capable of producing up to 9,000 bbl/d of bitumen. We have also engaged an environmental engineering and consulting firm to help us obtain the necessary mine and environmental permits to operate a large mine. On March 6, 2014, we filed a Notice of Intent to Commence Large Mine Operations (“Mine Permit”) with the Utah Department of Oil, Gas and Mining (“DOGM”). Based on the information from our consultants, we believe that additional financing of approximately $150,000,000 will be required to procure and install the necessary equipment to begin operations of a plant that we believe will produce up to approximately 9,000 bbl/d of bitumen.

 

We have performed lab and pilot plant tests on oil sands from the Utah Green River Formation in which the Sunnyside Project is located to prove the viability of the technology and to understand several key elements in the process. Initial pilot plant test runs were conducted in 2006-2007. We hired AMEC BDR to witness the initial pilot plant tests and to manage the lab work and review the results. In addition to the initial pilot test, we have run pilot tests on a new system, designed by SRS Engineering International. In connection with those tests, we ran oil sands from Utah and Africa to acquire additional information on the efficiency of the solvent in removing the bitumen from the sand, the recovery of solvent from the bitumen and sand, and the overall efficiency and energy use of the system. The results are summarized as follows:

 

  · Virtually all of the bitumen was separated from the sand, leaving the sand “oil” free.

 

  · The compositional characteristics of the bitumen were not altered by the process; therefore, management believes the bitumen will be suitable for upgrading and refining to saleable products by conventional refining technology.

 

  · The sand product contained less than 2 ppm of solvent residue, presents no environmental liability, and can be used for reclamation or sold.

 

  · Solvent losses to the bitumen product were minimal. Consequently, because the solvent is recycled with minimal loss in a closed loop system, make-up solvent costs should be minimal.

 

  · The composition and properties of the solvent recovered through the process were not altered by the process; therefore, the solvent can be recycled in the process without further conditioning or processing.

 

Based on the pilot test results and recommendations from our engineering consultants, we have evaluated the feasibility and costs of scaling the process into a plant that will initially process up to 9,000 bbl/d of bitumen, with possible future expansion of facilities, subject to market conditions, accessible resources, and the availability of financing on terms acceptable to us.

 

Our pilot test also confirms lab tests that our process works on oil sands from other locations in the world. This may allow us to use our process in other locations around the world where other “oil wet” oil sands are located.

 

We anticipate initially that our entire estimated output of 9,000 bbl/d of bitumen could be delivered to refineries located in the Salt Lake City area via truck, with one to two refiners as our customer(s). If we develop new facilities with a view to expanding production, we will evaluate supplying product to multiple refineries and more distant locations via rail, based on price and transportation costs.

 

17
 

 

Business Developments

 

During the quarter ended June 30, 2014, we continued testing our pilot facility. We ran oil sands ore from our site at Sunnyside and ore from other locations in the Green River formation. The results continue to be satisfactory and to validate our technology.

 

We have submitted a Notice of Intention to Commence Large Mining Operations (“NOI”) on March 5, 2014 to the Utah Division of Oil, Gas & Mining (“DOGM”). In October, we submitted an updated NOI to DOGM. We received comments from DOGM with respect to our NOI on April 16, 2014 and refiled the NOI in October 2014, in response to those comments.

 

In November 2014, we received our completed feasibility studies for the processing plant, from FLSmidth USA, Inc., and for the mine from Mine Engineers, Inc.

 

Critical Accounting Policies and Estimates

 

The selection and application of accounting policies is an important process that has developed as our business activities have evolved. Accounting rules generally do not involve a selection among alternatives, but involve an implementation and interpretation of existing rules, and the use of judgment, to the specific set of circumstances existing in our business. Discussed below are the accounting policies that we believe are critical to our financial statements due to the degree of uncertainty regarding the estimates or assumptions involved and the magnitude of the asset, liability, or expense being reported. See Notes 2 and 3 to our unaudited condensed consolidated financial statements included in this Form 10-Q for a discussion of those policies.

 

Going Concern - The Company’s financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the ordinary course of business. The Company has no revenues, has incurred substantial losses from operations, and has negative cash flows from operating activities, which raise substantial doubt about the Company’s ability to continue as a going concern. The Company sustained a net loss for the quarter ended December 31, 2014 of $624,110 and has an accumulated deficit of $17,001,072 as of December 31, 2014. The Company estimates it will require approximately $150,000,000 to fund capital expenditures to commence principal operations.

 

Since inception of the development stage, the Company has not generated any revenue and its financial position is not sufficient to fund its planned business objective for an extended period of time. The Company is dependent on the sale of equity or debt securities in the next twelve months in order to obtain the requisite capital to continue to pursue its business objectives. If the Company is not able to obtain additional capital through the sale of equity or debt securities, it will not be able to commence production.

 

Mineral Leases – Due to the uncertainty regarding the recoverability of costs to acquire, maintain, and develop mineral leases, all costs to date to acquire, maintain, and develop mineral leases have been expensed as incurred.

 

Stock-Based Compensation – The Company uses the Black-Scholes option-pricing model to determine the fair value of stock options and warrants granted. For employee stock options, the Company records the grant-date fair value as expense over the period in which it is earned, typically the vesting period. For consultants, the fair value of the stock-based award is recorded as expense over the term of the service period, and unvested amounts are revalued using the Black-Scholes model at each reporting period. For warrants issued to lenders, the Company records the grant-date fair value of the warrants and any resulting beneficial conversion feature for convertible debt, as a debt discount. The discount is then amortized over the estimated life of the warrant as non-cash interest expense.

 

Results of Operations

 

Three Months Ended December 31, 2014 compared to December 31, 2013

 

During the three months ended December 31, 2014, the Company incurred a net loss of $624,110 compared to a net loss of $973,301 for the three months ended December 31, 2013. During the three months ended December 31, 2014, operating expenses were $550,408, which represents a 21.7% decrease, compared to the three months ended December 31, 2013 when we incurred operating expenses of $693,315. General and administrative expenses increased by 10.0% to $346,736 during the three months ended December 31, 2014 from $315,085 during the three months ended December 31, 2013. Non-cash stock compensation expense increased by $28,233 from $63,207 for the three months ended December 31, 2013 to $91,439 for the three months ended December 31, 2014. Expenses for professional fees increased by $10,789 from $36,047 for the three months ended December 31, 2013 to $46,836 for the three months ended December 31, 2014 primarily due to increased legal costs. Overall, general and administrative expenses in the current period are higher because of increased costs for stock-based compensation and higher professional fees. Once the Company is permitted and funded, going forward, the Company believes that the obligations placed upon it as a result of growth coupled with its reporting requirements under SEC rules and regulations will result in operating expenses increasing.

 

18
 

 

During the three months ended December 31, 2014, the Company incurred $134,452 of research and development expenses compared to $325,096 for the three months ended December 31, 2013. Research and development expenses incurred are for payroll costs, engineering, equipment costs and test well drilling costs incurred to assist the Company with further developing its mining assets. Through December 31, 2014, the Company has capitalized direct costs incurred for it to complete its applications for the permits needed to move forward with the project. During the three months ended December 31, 2014, engineering costs were $229,013 lower than they were during the three months ending December 31, 2013. The Company was heavily involved in completing its applications for the permits needed to move forward with development of its tar sand assets in the prior year. During the three months ending December 31, 2014, the Company was waiting for governmental response to its applications so costs were much lower. Costs for drilling a test well totaled $78,057 for the three months ended December 31, 2013 compared to $0 for the three months ended December 31, 2014. In addition, the Company has incurred expenses to develop a pilot test unit to further develop and prove the viability of the Company’s proprietary technology to separate the bitumen from the sand. Costs associated with the Company’s pilot test unit were $28,816 higher for the three months ended December 31, 2014 as compared to the three months ended December 31, 2013. During the three months ending December 31, 2013, the Company incurred non-cash costs of $43,000 related to common  stock granted to one of its consultants.

 

Interest expense decreased to $0 for the three months ended December 31, 2014 as compared to $84,224 for the three months ended December 31, 2013.

 

During the three months ended December 31, 2013, the Company incurred a loss of $209,360 related to extinguishment of debt compared to a gain of $1,700 for the three months ended December 31, 2014. The Company incurred a loss of $74,996 from a derivative liability that is associated with down-round protection on the conversion rate to common stock for its holders of Series A preferred stock for the three months ended December 31, 2014. The Company generated a gain of $13,698 for the three months ended December 31, 2013.

 

Nine Months Ended December 31, 2014 compared to December 31, 2013

 

During the nine months ended December 31, 2014, the Company incurred a net loss of $2,420,901 compared to a net loss of $2,248,289 for the nine months ended December 31, 2013. During the nine months ended December 31, 2014, our operating expenses were $2,157,893 which represented a 28.6% increase, compared to operating expenses of $1,677,857 for the nine months ended December 31, 2013. Operating expenses included research and development costs of $472,126 for the nine months ended December 31, 2014 compared to $374,138 for the nine months ended December 31, 2013. These costs related to the Company developing its technology and mining plans.  General and administrative expenses increased to $1,478,107 for the nine months ended December 31, 2014 from $1,144,314 for the nine months ended December 31, 2013.

 

General and administrative expenses increased to $1,478,107 for the nine months ended December 31, 2014 from $1,144,314 for the nine months ended December 31, 2013. Non-cash stock compensation expense increased by $366,385 from $247,918 for the nine months ended December 31, 2013 to $614,304 for the nine months ended December 31, 2014. Professional fees, travel expenses, and public company expenses increased by $176,144 from $171,624 for the nine months ended December 31, 2013 to $347,768 for the nine months ended December 31, 2014. These increases were partially offset by a $224,473 decrease in financing fees for the nine months ended December 31, 2014 as compared to the nine months ended December 31, 2013.

 

Current year operating expenses included research and development costs of $472,126 for the nine months ended December 31, 2014 compared to $374,138 for the nine months ended December 31, 2013. These costs related to the Company developing its technology and mining plans as well as hiring a full-time Chief Operating Officer that had previously been providing services to the Company as a consultant on part-time basis.

 

Interest expense decreased to $0 for the nine months ended December 31, 2014 as compared to $374,370 for the nine months ended December 31, 2013.

 

During the nine months ended December 31, 2013, the Company incurred a loss of $209,360 related to extinguishment of debt compared to a gain of $1,700 for the nine months ended December 31, 2014. The Company incurred a loss of $264,202 from a derivative liability that is associated with down-round protection on the conversion rate to common for its holders of Series A preferred stock for the nine months ended December 31, 2014. The Company generated a gain of $13,698 for the three months ended December 31, 2013.

 

19
 

 

Liquidity and Capital Resources

 

As of December 31, 2014, the Company had cash of $912,513 and working capital of $723,925. As of December 31, 2014, the Company had total liabilities of $676,954. Approximately $377,378 of the Company’s liabilities are non-cash as they relate to the derivative associated with the Company’s Series A preferred stock. As of December 31, 2014, the Company’s total assets were $1,226,341 consisting of cash, prepaid and other current assets, and other assets.

 

The Company has established a resource position, a working knowledge of the process technology and an initial list of environmental and other permits required to build a commercial plant. Additional work to be completed as part of the project development phase includes:

 

  1. Final mine planning and civil engineering for the Sunnyside Project.
  2. Acquisition of additional property in areas of interest in order to block-up properties into logical and economical mining units.
  3. Determination of technical and economic parameters for the commercial scale use of the process, including engineering.
  4. Completion of environmental and permitting work for the commercial facility.
  5. Receipt of federal and state regulatory agency approval for the commercial facility.

 

The Company requires additional funding to complete these items. This funding is expected to be raised through a private or public offering of common stock. Upon completion of the financing, the Company will be in a position to initiate items 1 through 5 above. Further financing of approximately $150,000,000 will be required to open the mine and procure and install the necessary equipment to begin operations of a plant that the Company believes will produce approximately 9,000 bbl/d per day of bitumen. During the quarter ended December 31, 2014, a significantly higher market supply of crude oil led to a dramatic fall in oil price, and we expect volatility in the market will likely continue in the foreseeable future. This drop in price has caused a drop in investment in oil and gas projects in response, which we believe will negatively impact oil production capacity and will delay supply additions. As a consequence of a reduction of investment in oil development, our effort to raise capital to advance our business plan will likely be adversely affected because the dollars available for investment are fewer and because our projected operating results at substantially lower oil prices are not appealing to investors.  Although management believes that the price of oil will recover to a price that supports the profitable operations of the Company in accordance with its current business plan and projections, we cannot predict when this will occur or when we might obtain additional capital to advance our business objectives. 

 

During the quarter ended December 31, 2014, a significantly higher market supply of crude oil led to a dramatic fall in oil price. This has caused a drop in investment in oil and gas projects in response. This decline in investment will impact oil production capacity and will delay supply additions. This drop in investment could also have an impact on the Company’s ability to raise capital. Although management believes that the price of oil will recover to a price that supports the profitable operations of the Company in accordance with its current business plan and projections, there can be no assurance that, given these recent events, the Company will be able to obtain financing.

 

Management anticipates that the Company will be dependent, for the near future, on raising additional capital to fund operating expenses and anticipated growth. The report of the Company’s independent registered public accounting firm for the year ended March 31, 2014, expressed substantial doubt about the Company’s ability to continue as a going concern. The Company’s operating losses have been funded through the issuance of equity securities and borrowings. The Company will need additional funding in the future in order to continue its business operations. While the Company continually looks for additional financing sources, in the current economic environment, the procurement of outside funding is extremely difficult and there can be no assurance that such financing will be available, or, if available, that such financing will be at a price that will be acceptable to the Company. Failure to generate sufficient revenue or raise additional capital would have an adverse impact on the Company’s ability to achieve its longer-term business objectives, and would adversely affect its ability to continue operating as a going concern.

 

Off-Balance Sheet Arrangements

 

During the three months ended December 31, 2014, we did not engage in any off-balance sheet transactions.

 

20
 

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

As a smaller reporting company, we have elected not to provide the disclosures required by this item.

 

Item 4. Controls and Procedures

 

Disclosure Controls and Procedures

 

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this report were effective in ensuring that information required to be disclosed by us in reports that we file or submit under the Exchange Act (i) is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and (ii) is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

 

It should be noted that any system of controls, however well designed and operated, can provide only reasonable and not absolute assurance that the objectives of the system will be met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events. Because of these and other inherent limitations of control systems, there is only reasonable assurance that our controls will succeed in achieving their stated goals under all potential future conditions.

 

Changes in Internal Control over Financial Reporting

 

There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the quarter ended December 31, 2014 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

 

 

 

21
 

 

PART II. OTHER INFORMATION

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

During the three months ended December 31, 2014, 136,089 shares of Series A preferred stock were converted into 544,356 shares of the Company’s common stock. The Company issued an additional 15,911 shares of common stock to settle cumulative dividends for the Series A shares that were converted.

 

On November 30, 2014, the Company issued 170,000 shares of common stock to LIFE Power & Fuels LLC in lieu of amounts owed under the LIFE Management Services Agreement, which contract was terminated simultaneous with the issuance of common shares.

 

Each of the transactions described above was entered into in reliance on Section 3(a)(9) or Section 4(a)(2) of the Securities Act of 1933, as amended.

 

Item 4. Mine Safety Disclosures

 

There are no reportable events required pursuant to this item.

 

Item 6. Exhibits

 

The following exhibits are furnished with this report:

 

31.1* Rule 13a-14(a) Certification by Principal Executive Officer
31.2* Rule 13a-14(a) Certification by Principal Financial Officer
32.1* Section 1350 Certification of Principal Executive Officer
32.2* Section 1350 Certification of Principal Financial Officer
101.INS* XBRL Instance Document
101.SCH* XBRL Taxonomy Extension Schema Document
101.CAL* XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF* XBRL Taxonomy Extension Definition Linkbase Document
101.LAB* XBRL Taxonomy Extension Label Linkbase Document
101.PRE* XBRL Taxonomy Extension Presentation Linkbase Document

 

*    Furnished with this Form 10-Q

 

 

22
 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

  American Sands Energy Corp.  
       
Date: February 13, 2015 By: /s/ William C. Gibbs  
    William C. Gibbs, Chief Executive Officer  
    (Principal Executive Officer)  
       

 

Date: February 13, 2015 By: /s/ Daniel F. Carlson  
    Daniel F. Carlson, Chief Financial Officer  
    (Principal Financial Officer)  

 

 

 

 

 

23

 

EX-31.1 2 amse_10q-ex3101.htm CERTIFICATION

EXHIBIT 31.1

 

Certification

 

I, William C. Gibbs, certify that:

 

1.     I have reviewed this Form 10-Q quarterly report of American Sands Energy Corp. for the quarter ended December 31, 2014;

 

2.     Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.     Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.     The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:

 

(a)     Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b)     Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c)     Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d)     Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.     The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

(a)     All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

(b)     Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: February 13, 2015

 

/s/ William C. Gibbs                                        

William C. Gibbs, Chief Executive Officer

(Principal Executive Officer)

EX-31.2 3 amse_10q-ex3102.htm CERTIFICATION

EXHIBIT 31.2

 

Certification

 

I, Daniel F. Carlson, certify that:

 

1.     I have reviewed this Form 10-Q quarterly report of American Sands Energy Corp. for the quarter ended December 31, 2014;

 

2.     Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.     Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.     The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:

 

(a)     Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b)     Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c)     Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d)     Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.     The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

(a)     All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

(b)     Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: February 13, 2015

  

/s/ Daniel F. Carlson                                       

Daniel F. Carlson, Chief Financial Officer

(Principal Financial Officer)

EX-32.1 4 amse_10q-ex3201.htm CERTIFICATION

EXHIBIT 32.1

 

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

 

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

 

In connection with the quarterly report of American Sands Energy Corp. (the “Company”) on Form 10-Q for the quarter ended December 31, 2014, as filed with the Securities and Exchange Commission (the “Report”), the undersigned principal executive officer of the Company, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

 

  (1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

  (2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Date: February 13, 2015

 

 

 

/s/ William C. Gibbs                                        

William C. Gibbs, Chief Executive Officer

(Principal Executive Officer)

EX-32.2 5 amse_10q-ex3202.htm CERTIFICATION

EXHIBIT 32.2

 

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

 

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

 

In connection with the quarterly report of American Sands Energy Corp. (the “Company”) on Form 10-Q for the quarter ended December 31, 2014, as filed with the Securities and Exchange Commission (the “Report”), the undersigned principal financial officer of the Company, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

 

  (1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

  (2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Date: February 13, 2015

 

 

 

/s/ Daniel F. Carlson                                       

Daniel F. Carlson, Chief Financial Officer

(Principal Financial Officer)

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(&#147;AMSE&#148; or the &#147;Company&#148;) is a pre-production oil company with oil sands resources located near Sunnyside, Utah that has not commenced planned principal operations. The Company&#146;s activities since inception have consisted principally of acquiring lease rights, raising capital, performing research and development activities with regard to its oil sands extraction technology, obtaining the required permits necessary to mine the oil sands, and developing the plans to construct a refining facility. 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9. Long-Term Incentive (Details-Intrinsic value) (Options [Member], USD $)
9 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Options [Member]
   
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124,891us-gaap_SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsExercisableIntrinsicValue1
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5. Derivative Liability (Details - Liabilities at Fair Value) (USD $)
Dec. 31, 2014
Mar. 31, 2014
Embedded derivative $ 377,378us-gaap_EmbeddedDerivativeFairValueOfEmbeddedDerivativeLiability $ 109,421us-gaap_EmbeddedDerivativeFairValueOfEmbeddedDerivativeLiability
Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member]    
Embedded derivative 0us-gaap_EmbeddedDerivativeFairValueOfEmbeddedDerivativeLiability
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Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member]    
Embedded derivative 0us-gaap_EmbeddedDerivativeFairValueOfEmbeddedDerivativeLiability
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Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member]    
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3. Going Concern
9 Months Ended
Dec. 31, 2014
Risks and Uncertainties [Abstract]  
Going Concern

The Company’s financial statements have been prepared using the going concern assumption which contemplates the realization of assets and the liquidation of liabilities in the ordinary course of business. The Company has incurred substantial losses from operations and has negative cash flows from operating activities, which raise substantial doubt about the Company’s ability to continue as a going concern. The Company sustained a net loss for the nine months ended December 31, 2014 of $2,420,901 and has an accumulated deficit of $17,001,072 as of December 31, 2014. In addition, the Company estimates it will require approximately $150,000,000 in capital to commence principal operations.

 

The Company intends to continue its research and development efforts, but does not have any revenues in order to finance these activities internally. As a result, the Company intends to seek financing to fund its operations.

 

The Company has been able to meet its short-term needs primarily through loans from third parties, private placements of equity and debt securities, and deferring certain payment obligations to related parties.  The Company raised net proceeds of approximately $4,000,000 from the sale of Series A preferred stock units and has $912,513 of cash on hand as of December 31, 2014.  The Company plans to obtain additional financing through the sale of equity or debt securities in order to finance operations until it can generate positive cash flows from operating activities. The equity private placements are expected to provide the needed funds for continued operations and further research and development of the Company’s proprietary oil sands refining methods. There is no assurance that the Company will be able to obtain the additional financing that it needs to develop its technology and alleviate doubt about its ability to continue as a going concern. If the Company is able to obtain sufficient additional financing proceeds, the Company cannot be certain that this additional financing will be available on acceptable terms. To the extent the Company raises additional funds by issuing equity securities, the Company’s stockholders may experience significant dilution. Any debt financing, if available, may involve restrictive covenants that impact the Company’s ability to conduct business. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

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M(&-L87-S/3-$'0^)FYB'0^)FYB'0^/'-P86X^/"]S<&%N/CPO=&0^#0H@("`@("`\+W1R/@T* M("`@("`@/'1R(&-L87-S/3-$65A7,\65A65A7,\'0O:F%V87-C3X- M"B`@("`\=&%B;&4@8VQA&5R8VES96%B;&4\+W1D/@T*("`@("`@("`\=&0@8VQA65A&5R8VES92!065A M'0^/'-P86X^/"]S M<&%N/CPO=&0^#0H@("`@("`\+W1R/@T*("`@("`@/'1R(&-L87-S/3-$&5R8VES96%B;&4@=V5I9VAT960@879E&5R M8VES92!P65A65A'0^/'-P86X^/"]S<&%N/CPO=&0^#0H@("`@("`\+W1R/@T*("`@("`@ M/'1R(&-L87-S/3-$&5R8VES96%B;&4\+W1D/@T*("`@("`@("`\=&0@8VQA&5R8VES96%B;&4@=V5I9VAT960@ M879E&5R8VES92!P65A7,\&5R8VES M92!P'0^-"!Y96%R7,\&5R8VES92!P'0^,B!Y96%R&5R8VES92!0&5R8VES96%B;&4\+W1D/@T*("`@("`@("`\=&0@8VQA'0^,R!Y96%R3X-"CPO:'1M;#X-"@T*+2TM+2TM/5].97AT4&%R=%\R M-S$W.#$P8E]D93%C7S1F96)?.#AB,%\V9F8Y-V)B-3,S-&$-"D-O;G1E;G0M M3&]C871I;VXZ(&9I;&4Z+R\O0SHO,C'0O:'1M;#L@8VAA3X-"CPO:'1M;#X-"@T*+2TM+2TM/5].97AT4&%R=%\R-S$W.#$P8E]D93%C M7S1F96)?.#AB,%\V9F8Y-V)B-3,S-&$-"D-O;G1E;G0M3&]C871I;VXZ(&9I M;&4Z+R\O0SHO,C'0O M:'1M;#L@8VAA2UB87-E9"!C;VUP96YS M871I;VX@97AP96YS93PO=&0^#0H@("`@("`@(#QT9"!C;&%S'0^/'-P86X^/"]S<&%N/CPO=&0^#0H@ M("`@("`@(#QT9"!C;&%S'0^/'-P86X^/"]S<&%N/CPO=&0^#0H@ M("`@("`\+W1R/@T*("`@("`@/'1R(&-L87-S/3-$2UB M87-E9"!C;VUP96YS871I;VX@97AP96YS93PO=&0^#0H@("`@("`@(#QT9"!C M;&%S'0^/'-P M86X^/"]S<&%N/CPO=&0^#0H@("`@("`\+W1R/@T*("`@("`@/'1R(&-L87-S M/3-$'0O M:F%V87-C3X-"B`@("`\ M=&%B;&4@8VQA3X-"CPO:'1M;#X-"@T*+2TM+2TM/5].97AT4&%R=%\R-S$W M.#$P8E]D93%C7S1F96)?.#AB,%\V9F8Y-V)B-3,S-&$-"D-O;G1E;G0M3&]C M871I;VXZ(&9I;&4Z+R\O0SHO,C&UL#0I#;VYT96YT+51R M86YS9F5R+45N8V]D:6YG.B!Q=6]T960M<')I;G1A8FQE#0I#;VYT96YT+51Y M<&4Z('1E>'0O:'1M;#L@8VAA&UL M;G,Z;STS1")U XML 18 R29.htm IDEA: XBRL DOCUMENT v2.4.1.9
7. Common Stock (Details Narrative)
9 Months Ended
Dec. 31, 2014
Stock issued for termination of contract, shares issued 170,000AMSE_StockIssuedForTerminationOfContractSharesIssued
Common Stock [Member]  
Preferred stock converted into common stock, common stock issued 2,175,641us-gaap_ConversionOfStockSharesIssued1
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_CommonStockMember
Series A Preferred Stock [Member]  
Preferred stock converted into common stock, common stock issued (543,910)us-gaap_ConversionOfStockSharesIssued1
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_SeriesAPreferredStockMember
XML 19 R28.htm IDEA: XBRL DOCUMENT v2.4.1.9
6. Preferred Stock (Details Narrative) (USD $)
9 Months Ended
Dec. 31, 2014
Mar. 31, 2014
Series A Preferred Stock [Member]    
Liquidation preference $ 5,765,494us-gaap_PreferredStockLiquidationPreferenceValue
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_SeriesAPreferredStockMember
$ 6,176,968us-gaap_PreferredStockLiquidationPreferenceValue
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_SeriesAPreferredStockMember
Preferred stock converted into common stock, shares issued (543,910)us-gaap_ConversionOfStockSharesIssued1
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_SeriesAPreferredStockMember
 
Preferred Stock Series A outstanding 4,118,210us-gaap_PreferredStockSharesOutstanding
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_SeriesAPreferredStockMember
4,412,120us-gaap_PreferredStockSharesOutstanding
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_SeriesAPreferredStockMember
Common Stock [Member]    
Preferred stock converted into common stock, shares issued 2,175,641us-gaap_ConversionOfStockSharesIssued1
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_CommonStockMember
 
Series A Preferred Stock [Member]    
Preferred Series A stock units issued 4,662,120AMSE_PreferredSeriesStockUnitsIssued
/ us-gaap_ShareholdersEquityClassAxis
= us-gaap_SeriesAPreferredStockMember
 
Proceeds from sale of preferred stock, net 3,701,615us-gaap_ProceedsFromIssuanceOrSaleOfEquity
/ us-gaap_ShareholdersEquityClassAxis
= us-gaap_SeriesAPreferredStockMember
 
Preferred stock units sold 2,846,054AMSE_PreferredStockUnitsSold
/ us-gaap_ShareholdersEquityClassAxis
= us-gaap_SeriesAPreferredStockMember
 
Preferred stock issued in connection with conversions of convertible debt and accrued interest, shares issued 1,532,382AMSE_PreferredStockIssuedInConnectionWithConversionsOfConvertibleDebtAndAccruedInterestSharesIssued
/ us-gaap_ShareholdersEquityClassAxis
= us-gaap_SeriesAPreferredStockMember
 
Preferred stock issued in connection with conversions of convertible debt and accrued interest, value 1,925,647AMSE_PreferredStockIssuedInConnectionWithConversionsOfConvertibleDebtAndAccruedInterestValue
/ us-gaap_ShareholdersEquityClassAxis
= us-gaap_SeriesAPreferredStockMember
 
Preferred stock issued in connection with conversions of convertible debt and accrued interest - related party, value $ 131,101AMSE_PreferredStockIssuedInConnectionWithConversionsOfConvertibleDebtAndAccruedInterestRelatedPartyValue
/ us-gaap_ShareholdersEquityClassAxis
= us-gaap_SeriesAPreferredStockMember
 
Preferred stock converted into common stock, shares converted 543,910us-gaap_ConversionOfStockSharesConverted1
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XML 20 R30.htm IDEA: XBRL DOCUMENT v2.4.1.9
8. Warrants (Details Narrative) (USD $)
9 Months Ended
Dec. 31, 2014
Convertible Debt Warrants [Member]  
Warrants exercised 50,143AMSE_WarrantsExercised
/ us-gaap_ClassOfWarrantOrRightAxis
= AMSE_ConvertibleDebtWarrantsMember
Warrants expired 124,342AMSE_WarrantsExpired
/ us-gaap_ClassOfWarrantOrRightAxis
= AMSE_ConvertibleDebtWarrantsMember
Exercise price per share $ 0.50us-gaap_ClassOfWarrantOrRightExercisePriceOfWarrantsOrRights1
/ us-gaap_ClassOfWarrantOrRightAxis
= AMSE_ConvertibleDebtWarrantsMember
Private Placement Warrants [Member]  
Warrants issued 121,259AMSE_WarrantsIssued
/ us-gaap_ClassOfWarrantOrRightAxis
= AMSE_PrivatePlacementWarrantsMember
Exercise price per share $ 1.15us-gaap_ClassOfWarrantOrRightExercisePriceOfWarrantsOrRights1
/ us-gaap_ClassOfWarrantOrRightAxis
= AMSE_PrivatePlacementWarrantsMember
Warrants outstanding 121,259us-gaap_ClassOfWarrantOrRightOutstanding
/ us-gaap_ClassOfWarrantOrRightAxis
= AMSE_PrivatePlacementWarrantsMember
Debt Exchange Warrants [Member]  
Warrants outstanding 5,520,000us-gaap_ClassOfWarrantOrRightOutstanding
/ us-gaap_ClassOfWarrantOrRightAxis
= AMSE_DebtExchangeWarrantsMember
Series A Preferred Stock [Member] | Warrants $0.45 [Member]  
Warrants issued 4,447,835AMSE_WarrantsIssued
/ us-gaap_ClassOfWarrantOrRightAxis
= us-gaap_SeriesAPreferredStockMember
/ us-gaap_ShareBasedCompensationSharesAuthorizedUnderStockOptionPlansByExercisePriceRangeAxis
= AMSE_WarrantAMember
Warrants exercised 4,447,835AMSE_WarrantsExercised
/ us-gaap_ClassOfWarrantOrRightAxis
= us-gaap_SeriesAPreferredStockMember
/ us-gaap_ShareBasedCompensationSharesAuthorizedUnderStockOptionPlansByExercisePriceRangeAxis
= AMSE_WarrantAMember
Exercise price per share $ 0.45us-gaap_ClassOfWarrantOrRightExercisePriceOfWarrantsOrRights1
/ us-gaap_ClassOfWarrantOrRightAxis
= us-gaap_SeriesAPreferredStockMember
/ us-gaap_ShareBasedCompensationSharesAuthorizedUnderStockOptionPlansByExercisePriceRangeAxis
= AMSE_WarrantAMember
Warrants outstanding 4,429,978us-gaap_ClassOfWarrantOrRightOutstanding
/ us-gaap_ClassOfWarrantOrRightAxis
= us-gaap_SeriesAPreferredStockMember
/ us-gaap_ShareBasedCompensationSharesAuthorizedUnderStockOptionPlansByExercisePriceRangeAxis
= AMSE_WarrantAMember
Series A Preferred Stock [Member] | Warrants $0.70 [Member]  
Warrants issued 4,447,835AMSE_WarrantsIssued
/ us-gaap_ClassOfWarrantOrRightAxis
= us-gaap_SeriesAPreferredStockMember
/ us-gaap_ShareBasedCompensationSharesAuthorizedUnderStockOptionPlansByExercisePriceRangeAxis
= AMSE_WarrantBMember
Exercise price per share $ 0.70us-gaap_ClassOfWarrantOrRightExercisePriceOfWarrantsOrRights1
/ us-gaap_ClassOfWarrantOrRightAxis
= us-gaap_SeriesAPreferredStockMember
/ us-gaap_ShareBasedCompensationSharesAuthorizedUnderStockOptionPlansByExercisePriceRangeAxis
= AMSE_WarrantBMember
Warrants outstanding 4,447,835us-gaap_ClassOfWarrantOrRightOutstanding
/ us-gaap_ClassOfWarrantOrRightAxis
= us-gaap_SeriesAPreferredStockMember
/ us-gaap_ShareBasedCompensationSharesAuthorizedUnderStockOptionPlansByExercisePriceRangeAxis
= AMSE_WarrantBMember
Series A Preferred Stock [Member] | Warrants $0.70 [Member] | Research and development [Member]  
Warrants issued 214,285AMSE_WarrantsIssued
/ us-gaap_ClassOfWarrantOrRightAxis
= us-gaap_SeriesAPreferredStockMember
/ us-gaap_DerivativeByNatureAxis
= AMSE_ResearchAndDevelopmentMember
/ us-gaap_ShareBasedCompensationSharesAuthorizedUnderStockOptionPlansByExercisePriceRangeAxis
= AMSE_WarrantBMember
Exercise price per share $ 0.70us-gaap_ClassOfWarrantOrRightExercisePriceOfWarrantsOrRights1
/ us-gaap_ClassOfWarrantOrRightAxis
= us-gaap_SeriesAPreferredStockMember
/ us-gaap_DerivativeByNatureAxis
= AMSE_ResearchAndDevelopmentMember
/ us-gaap_ShareBasedCompensationSharesAuthorizedUnderStockOptionPlansByExercisePriceRangeAxis
= AMSE_WarrantBMember
Warrants outstanding 214,285us-gaap_ClassOfWarrantOrRightOutstanding
/ us-gaap_ClassOfWarrantOrRightAxis
= us-gaap_SeriesAPreferredStockMember
/ us-gaap_DerivativeByNatureAxis
= AMSE_ResearchAndDevelopmentMember
/ us-gaap_ShareBasedCompensationSharesAuthorizedUnderStockOptionPlansByExercisePriceRangeAxis
= AMSE_WarrantBMember
Series A Preferred Stock Warrants [Member] | Warrants $0.45 [Member] | Research and development [Member]  
Warrants issued 214,285AMSE_WarrantsIssued
/ us-gaap_ClassOfWarrantOrRightAxis
= AMSE_SeriesAPreferredStockWarrantsMember
/ us-gaap_DerivativeByNatureAxis
= AMSE_ResearchAndDevelopmentMember
/ us-gaap_ShareBasedCompensationSharesAuthorizedUnderStockOptionPlansByExercisePriceRangeAxis
= AMSE_WarrantAMember
Exercise price per share $ 0.45us-gaap_ClassOfWarrantOrRightExercisePriceOfWarrantsOrRights1
/ us-gaap_ClassOfWarrantOrRightAxis
= AMSE_SeriesAPreferredStockWarrantsMember
/ us-gaap_DerivativeByNatureAxis
= AMSE_ResearchAndDevelopmentMember
/ us-gaap_ShareBasedCompensationSharesAuthorizedUnderStockOptionPlansByExercisePriceRangeAxis
= AMSE_WarrantAMember
Warrants outstanding 214,285us-gaap_ClassOfWarrantOrRightOutstanding
/ us-gaap_ClassOfWarrantOrRightAxis
= AMSE_SeriesAPreferredStockWarrantsMember
/ us-gaap_DerivativeByNatureAxis
= AMSE_ResearchAndDevelopmentMember
/ us-gaap_ShareBasedCompensationSharesAuthorizedUnderStockOptionPlansByExercisePriceRangeAxis
= AMSE_WarrantAMember
Broker Warrants [Member]  
Warrants issued 675,292AMSE_WarrantsIssued
/ us-gaap_ClassOfWarrantOrRightAxis
= AMSE_BrokerWarrantsMember
Exercise price per share $ 0.35us-gaap_ClassOfWarrantOrRightExercisePriceOfWarrantsOrRights1
/ us-gaap_ClassOfWarrantOrRightAxis
= AMSE_BrokerWarrantsMember
Warrants outstanding 675,292us-gaap_ClassOfWarrantOrRightOutstanding
/ us-gaap_ClassOfWarrantOrRightAxis
= AMSE_BrokerWarrantsMember
Other Common Stock Warrants [Member]  
Warrants issued 575,000AMSE_WarrantsIssued
/ us-gaap_ClassOfWarrantOrRightAxis
= AMSE_OtherCommonStockWarrantsMember
Exercise price per share $ 0.01us-gaap_ClassOfWarrantOrRightExercisePriceOfWarrantsOrRights1
/ us-gaap_ClassOfWarrantOrRightAxis
= AMSE_OtherCommonStockWarrantsMember
Warrants outstanding 575,000us-gaap_ClassOfWarrantOrRightOutstanding
/ us-gaap_ClassOfWarrantOrRightAxis
= AMSE_OtherCommonStockWarrantsMember
XML 21 R31.htm IDEA: XBRL DOCUMENT v2.4.1.9
9. Long-Term Incentive Plan (Details-Options Outstanding) (Options [Member], USD $)
9 Months Ended
Dec. 31, 2014
Options [Member]
 
Number of Shares  
Stock option beginning balance 4,522,500us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber
/ us-gaap_AwardTypeAxis
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Stock option granted 1,400,000us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriodGross
/ us-gaap_AwardTypeAxis
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Stock option exercised 0us-gaap_StockIssuedDuringPeriodSharesStockOptionsExercised
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Stock option canceled 0us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsForfeituresInPeriod
/ us-gaap_AwardTypeAxis
= us-gaap_StockOptionMember
Stock option expired 0us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsExpirationsInPeriod
/ us-gaap_AwardTypeAxis
= us-gaap_StockOptionMember
Stock option ending balance 5,922,500us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber
/ us-gaap_AwardTypeAxis
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Weighted Average Exercise Price  
Weighted average exercise price beginning balance $ 0.47us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice
/ us-gaap_AwardTypeAxis
= us-gaap_StockOptionMember
Weighted average exercise price granted $ 0.74us-gaap_ShareBasedCompensationArrangementsByShareBasedPaymentAwardOptionsGrantsInPeriodWeightedAverageExercisePrice
/ us-gaap_AwardTypeAxis
= us-gaap_StockOptionMember
Weighted average exercise price exercised   
Weighted average exercise price canceled   
Weighted average exercise price expired   
Weighted average exercise price ending balance $ 0.53us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice
/ us-gaap_AwardTypeAxis
= us-gaap_StockOptionMember
Weighted Average Remaining Life  
Weighted average remaining life (years) beginning balance 3 years 11 months 12 days
Weighted average remaining life (years) options granted 4 years 3 months 22 days
Weighted average remaining life (years) ending balance 3 years 5 months 16 days
XML 22 R8.htm IDEA: XBRL DOCUMENT v2.4.1.9
2. Significant Accounting Policies
9 Months Ended
Dec. 31, 2014
Accounting Policies [Abstract]  
Significant Accounting Policies

These financial statements have been prepared by the Company in accordance with U.S. generally accepted accounting principles (“US GAAP”) for interim financial information, as well as the instructions to Form 10-Q. Accordingly, they do not include all of the information and notes required by US GAAP for complete financial statements. In the opinion of the Company’s management, all adjustments (consisting solely of normal recurring adjustments) considered necessary for a fair presentation of the interim financial statements have been included.

 

The preparation of financial statements in conformity with US GAAP requires management to make judgments, estimates, and assumptions that could affect the reported amounts of assets and liabilities as of the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ significantly from those estimates.

 

a) Principles of Consolidation

 

The condensed consolidated financial statements include the consolidated operations of American Sands Energy Corp. and its wholly owned subsidiary Green River Resources Inc. (“GRI”). All significant intercompany balances and transactions have been eliminated in consolidation.

 

b) Mineral Leases

 

In certain cases, the Company capitalizes costs related to investments in mineral lease interests. Such costs include mineral lease acquisition costs. Costs are deferred until such time as the extent of proved developed reserves has been determined and mineral lease interests are either developed, the property sold or the mineral lease rights are allowed to lapse. To date, all exploration and lease costs have been expensed.

 

c) Research and Development

 

The Company continues to develop additional technology related to its proprietary bitumen extraction process. To date, the Company has expensed costs associated with developing its technology as research and development costs. For the nine months ended December 31, 2014 and 2013, the Company incurred costs of $472,126 and $374,138, respectively, for research and development of its technologies.

 

d) Stock-based Compensation

 

The Company uses the Black-Scholes option-pricing model to determine the fair value of stock options and warrants granted. For employee stock options, the Company records the grant-date fair value as expense over the period in which it is earned, typically the vesting period. For consultants, the fair value of the stock-based award is recorded as expense over the term of the service period, and unvested amounts are revalued using the Black-Scholes model at each reporting period. For warrants issued to lenders, the Company records the grant-date fair value of the warrants, and any resulting beneficial conversion feature for convertible debt, as a debt discount. The discount is then amortized over the term of the convertible debt as non-cash interest expense.

 

e) Net Loss Per Common Share

 

Basic earnings or loss per common share is computed on the basis of the weighted average number of shares outstanding during the periods. Diluted earnings or loss per common share is calculated on the basis of the weighted average number of common shares outstanding during the period plus the effect of dilutive common share equivalents during the period. Common share equivalents include preferred stock, outstanding stock options and warrants and convertible debt instruments. For periods in which a net loss is reported, common share equivalents are excluded because they are antidilutive. Therefore, basic loss per common share is the same as diluted loss per common share for the three and nine months ended December 31, 2014 and 2013. As of December 31, 2014 and 2013, the Company had cumulative, undeclared, dividends that had not been accrued related to its preferred stock of $323,617 and $0, respectively. For the three months ended December 31, 2014 and 2013, the Company had accrued preferred stock dividends of $106,137 and $0, respectively, which were added to net loss in the consolidated statements of operations in order to calculate net loss per common share attributable to common stockholders. For the nine months ended December 31, 2014 and 2013, the Company had accrued preferred stock dividends of $276,214 and $0, respectively, which were added to net loss in the consolidated statements of operations in order to calculate net loss per common share attributable to common stockholders.

 

f) Recent Accounting Pronouncements

 

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) that are adopted by the Company as of the specified effective date.  If not discussed, management believes that the impact of recently issued standards, which are not yet effective, will not have a material impact on the Company’s financial statements upon adoption.

 

In June 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-10, Development Stage Entities. The amendments in ASU 2014-10 remove the definition of a development stage entity from Topic 915, Development Stage Entities, thereby removing the distinction between development stage entities and other reporting entities from US GAAP. In addition, the amendments eliminate the requirements for development stage entities to (1) present inception-to-date information in the statements of operations, cash flows, and stockholders’ equity, (2) label the financial statements as those of a development stage entity, (3) disclose a description of the development stage activities in which the entity is engaged, and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage. The amendments also clarify that the guidance in Topic 275, Risks and Uncertainties, is applicable to entities that have not commenced planned principal operations. ASU 2014-10 is effective for annual reporting periods beginning after December 15, 2014, and interim periods therein, but early adoption is permitted.

  

The Company adopted ASU 2014-10 effective April 1, 2014. As a result, the Company has removed inception-to-date information in the Company’s statements of operations, cash flows, and stockholders’ equity.

 

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers. The amendments in ASU 2014-09 affect any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (e.g., insurance contracts or lease contracts). ASU 2014-09 will supersede the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance, and creates a Topic 606, Revenue from Contracts with Customers.

 

The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps:

 

Step 1: Identify the contract(s) with a customer.

Step 2: Identify the performance obligations in the contract.

Step 3: Determine the transaction price.

Step 4: Allocate the transaction price to the performance obligations in the contract.

Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.

 

ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. Until the Company begins to recognize revenue, its financial statements will not be affected by the adoption of ASU 2014-09.

XML 23 R32.htm IDEA: XBRL DOCUMENT v2.4.1.9
9. Long-Term Incentive Plan (Details-Outstanding and Exercisable) (USD $)
9 Months Ended
Dec. 31, 2014
Exercise Price 0.25 [Member]  
Stock option outstanding 50,000us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber
/ us-gaap_ShareBasedCompensationSharesAuthorizedUnderStockOptionPlansByExercisePriceRangeAxis
= AMSE_ExercisePrice0.25Member
Stock option outstanding weighted average exercise price $ 0.25us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice
/ us-gaap_ShareBasedCompensationSharesAuthorizedUnderStockOptionPlansByExercisePriceRangeAxis
= AMSE_ExercisePrice0.25Member
Stock option exerciseable 37,500us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsExercisableNumber
/ us-gaap_ShareBasedCompensationSharesAuthorizedUnderStockOptionPlansByExercisePriceRangeAxis
= AMSE_ExercisePrice0.25Member
Stock option exerciseable weighted average exercise price $ 0.25us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsExercisableWeightedAverageExercisePrice
/ us-gaap_ShareBasedCompensationSharesAuthorizedUnderStockOptionPlansByExercisePriceRangeAxis
= AMSE_ExercisePrice0.25Member
Stock option outstanding weighted average remaining life (years) 2 years 1 month 17 days
Exercise Price 0.35 [Member]  
Stock option outstanding 860,000us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber
/ us-gaap_ShareBasedCompensationSharesAuthorizedUnderStockOptionPlansByExercisePriceRangeAxis
= AMSE_ExercisePrice0.35Member
Stock option outstanding weighted average exercise price $ 0.35us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice
/ us-gaap_ShareBasedCompensationSharesAuthorizedUnderStockOptionPlansByExercisePriceRangeAxis
= AMSE_ExercisePrice0.35Member
Stock option exerciseable 347,080us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsExercisableNumber
/ us-gaap_ShareBasedCompensationSharesAuthorizedUnderStockOptionPlansByExercisePriceRangeAxis
= AMSE_ExercisePrice0.35Member
Stock option exerciseable weighted average exercise price $ 0.35us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsExercisableWeightedAverageExercisePrice
/ us-gaap_ShareBasedCompensationSharesAuthorizedUnderStockOptionPlansByExercisePriceRangeAxis
= AMSE_ExercisePrice0.35Member
Stock option outstanding weighted average remaining life (years) 3 years 6 months 29 days
Exercise Price 0.40 [Member]  
Stock option outstanding 3,087,500us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber
/ us-gaap_ShareBasedCompensationSharesAuthorizedUnderStockOptionPlansByExercisePriceRangeAxis
= AMSE_ExercisePrice0.40Member
Stock option outstanding weighted average exercise price $ 0.40us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice
/ us-gaap_ShareBasedCompensationSharesAuthorizedUnderStockOptionPlansByExercisePriceRangeAxis
= AMSE_ExercisePrice0.40Member
Stock option exerciseable 3,087,500us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsExercisableNumber
/ us-gaap_ShareBasedCompensationSharesAuthorizedUnderStockOptionPlansByExercisePriceRangeAxis
= AMSE_ExercisePrice0.40Member
Stock option exerciseable weighted average exercise price $ 0.40us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsExercisableWeightedAverageExercisePrice
/ us-gaap_ShareBasedCompensationSharesAuthorizedUnderStockOptionPlansByExercisePriceRangeAxis
= AMSE_ExercisePrice0.40Member
Stock option outstanding weighted average remaining life (years) 3 years 3 months
Exercise Price 0.50 [Member]  
Stock option outstanding 75,000us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber
/ us-gaap_ShareBasedCompensationSharesAuthorizedUnderStockOptionPlansByExercisePriceRangeAxis
= AMSE_ExercisePrice0.50Member
Stock option outstanding weighted average exercise price $ 0.50us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice
/ us-gaap_ShareBasedCompensationSharesAuthorizedUnderStockOptionPlansByExercisePriceRangeAxis
= AMSE_ExercisePrice0.50Member
Stock option exerciseable 56,250us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsExercisableNumber
/ us-gaap_ShareBasedCompensationSharesAuthorizedUnderStockOptionPlansByExercisePriceRangeAxis
= AMSE_ExercisePrice0.50Member
Stock option exerciseable weighted average exercise price $ 0.50us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsExercisableWeightedAverageExercisePrice
/ us-gaap_ShareBasedCompensationSharesAuthorizedUnderStockOptionPlansByExercisePriceRangeAxis
= AMSE_ExercisePrice0.50Member
Stock option outstanding weighted average remaining life (years) 1 year 8 months 16 days
Exercise Price 0.65 [Member]  
Stock option outstanding 875,000us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber
/ us-gaap_ShareBasedCompensationSharesAuthorizedUnderStockOptionPlansByExercisePriceRangeAxis
= AMSE_ExercisePrice0.65Member
Stock option outstanding weighted average exercise price $ 0.65us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice
/ us-gaap_ShareBasedCompensationSharesAuthorizedUnderStockOptionPlansByExercisePriceRangeAxis
= AMSE_ExercisePrice0.65Member
Stock option exerciseable 291,667us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsExercisableNumber
/ us-gaap_ShareBasedCompensationSharesAuthorizedUnderStockOptionPlansByExercisePriceRangeAxis
= AMSE_ExercisePrice0.65Member
Stock option exerciseable weighted average exercise price $ 0.65us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsExercisableWeightedAverageExercisePrice
/ us-gaap_ShareBasedCompensationSharesAuthorizedUnderStockOptionPlansByExercisePriceRangeAxis
= AMSE_ExercisePrice0.65Member
Stock option outstanding weighted average remaining life (years) 4 years 7 months 20 days
Exercise Price 0.72 [Member]  
Stock option outstanding 325,000us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber
/ us-gaap_ShareBasedCompensationSharesAuthorizedUnderStockOptionPlansByExercisePriceRangeAxis
= AMSE_ExercisePrice0.72Member
Stock option outstanding weighted average exercise price $ 0.72us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice
/ us-gaap_ShareBasedCompensationSharesAuthorizedUnderStockOptionPlansByExercisePriceRangeAxis
= AMSE_ExercisePrice0.72Member
Stock option exerciseable 108,333us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsExercisableNumber
/ us-gaap_ShareBasedCompensationSharesAuthorizedUnderStockOptionPlansByExercisePriceRangeAxis
= AMSE_ExercisePrice0.72Member
Stock option exerciseable weighted average exercise price $ 0.72us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsExercisableWeightedAverageExercisePrice
/ us-gaap_ShareBasedCompensationSharesAuthorizedUnderStockOptionPlansByExercisePriceRangeAxis
= AMSE_ExercisePrice0.72Member
Stock option outstanding weighted average remaining life (years) 4 years 5 months 8 days
Exercise Price 1.15 [Member]  
Stock option outstanding 650,000us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber
/ us-gaap_ShareBasedCompensationSharesAuthorizedUnderStockOptionPlansByExercisePriceRangeAxis
= AMSE_ExercisePrice1.15Member
Stock option outstanding weighted average exercise price $ 1.15us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice
/ us-gaap_ShareBasedCompensationSharesAuthorizedUnderStockOptionPlansByExercisePriceRangeAxis
= AMSE_ExercisePrice1.15Member
Stock option exerciseable 500,000us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsExercisableNumber
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= AMSE_ExercisePrice1.15Member
Stock option exerciseable weighted average exercise price $ 1.15us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsExercisableWeightedAverageExercisePrice
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= AMSE_ExercisePrice1.15Member
Stock option outstanding weighted average remaining life (years) 2 years 4 months 10 days
Exercise Price 0.25-1.15 [Member]  
Stock option outstanding 5,922,500us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber
/ us-gaap_ShareBasedCompensationSharesAuthorizedUnderStockOptionPlansByExercisePriceRangeAxis
= AMSE_ExercisePrice0.251.15Member
Stock option outstanding weighted average exercise price $ 0.53us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice
/ us-gaap_ShareBasedCompensationSharesAuthorizedUnderStockOptionPlansByExercisePriceRangeAxis
= AMSE_ExercisePrice0.251.15Member
Stock option exerciseable 4,428,330us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsExercisableNumber
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= AMSE_ExercisePrice0.251.15Member
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Stock option outstanding weighted average remaining life (years) 3 years 5 months 16 days
XML 24 R2.htm IDEA: XBRL DOCUMENT v2.4.1.9
Condensed Consolidated Balance Sheets (USD $)
Dec. 31, 2014
Mar. 31, 2014
Current assets:    
Cash $ 912,513us-gaap_Cash $ 2,006,007us-gaap_Cash
Prepaid and other current assets 110,988us-gaap_PrepaidExpenseAndOtherAssets 255,498us-gaap_PrepaidExpenseAndOtherAssets
Total current assets 1,023,501us-gaap_AssetsCurrent 2,261,505us-gaap_AssetsCurrent
Property and equipment, net 0us-gaap_PropertyPlantAndEquipmentNet 518us-gaap_PropertyPlantAndEquipmentNet
Other assets 202,840us-gaap_OtherAssetsNoncurrent 38,200us-gaap_OtherAssetsNoncurrent
Total assets 1,226,341us-gaap_Assets 2,300,223us-gaap_Assets
Current liabilities:    
Accounts payable 206,014us-gaap_AccountsPayableCurrent 177,799us-gaap_AccountsPayableCurrent
Accrued expenses 93,562us-gaap_AccruedLiabilitiesCurrent 108,370us-gaap_AccruedLiabilitiesCurrent
Note payable 0us-gaap_NotesPayableCurrent 2,228us-gaap_NotesPayableCurrent
Total current liabilities 299,576us-gaap_LiabilitiesCurrent 288,397us-gaap_LiabilitiesCurrent
Derivative liability 377,378us-gaap_DerivativeLiabilitiesCurrent 109,421us-gaap_DerivativeLiabilitiesCurrent
Total liabilities 676,954us-gaap_Liabilities 397,818us-gaap_Liabilities
Commitments and contingencies (Notes 3, 4 and 10)      
Stockholders' equity:    
Common stock, $.001 par value: 200,000,000 shares authorized; 33,393,828 and 30,935,467 shares outstanding, respectively 33,394us-gaap_CommonStockValue 30,935us-gaap_CommonStockValue
Additional paid-in capital 17,512,947us-gaap_AdditionalPaidInCapital 16,421,288us-gaap_AdditionalPaidInCapital
Accumulated deficit (17,001,072)us-gaap_RetainedEarningsAccumulatedDeficit (14,554,230)us-gaap_RetainedEarningsAccumulatedDeficit
Total stockholders' equity 549,387us-gaap_StockholdersEquity 1,902,405us-gaap_StockholdersEquity
Total liabilities and stockholders' equity 1,226,341us-gaap_LiabilitiesAndStockholdersEquity 2,300,223us-gaap_LiabilitiesAndStockholdersEquity
Series A Preferred Stock [Member]    
Stockholders' equity:    
Preferred stock, $.001 par value, 10,000,000 shares authorized; 4,750,000 shares designated as Series A preferred stock; 4,118,210 and 4,412,120 Series A preferred shares outstanding, respectively 4,118us-gaap_PreferredStockValue
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4,412us-gaap_PreferredStockValue
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$ 4,412us-gaap_StockholdersEquity
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Condensed Consolidated Statements of Cash Flows (USD $)
9 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Cash flows from operating activities:    
Net loss $ (2,420,901)us-gaap_NetIncomeLoss $ (2,248,289)us-gaap_NetIncomeLoss
Adjustments to reconcile net loss to net cash used in operating activities:    
Depreciation 518us-gaap_Depreciation 251us-gaap_Depreciation
(Gain) loss on extinguishment of debt (1,700)us-gaap_GainsLossesOnExtinguishmentOfDebt 209,360us-gaap_GainsLossesOnExtinguishmentOfDebt
Loss (gain) on derivative liability 264,202us-gaap_GainLossOnDerivativeInstrumentsNetPretax (13,698)us-gaap_GainLossOnDerivativeInstrumentsNetPretax
Accretion of debt discount 0us-gaap_AmortizationOfDebtDiscountPremium 264,024us-gaap_AmortizationOfDebtDiscountPremium
Straight-line of mineral lease payable 0AMSE_StraightlineOfMineralLeasePayable (14,640)AMSE_StraightlineOfMineralLeasePayable
Stock offering costs 0us-gaap_PaymentsOfStockIssuanceCosts 227,143us-gaap_PaymentsOfStockIssuanceCosts
Stock-based compensation expense 614,304us-gaap_ShareBasedCompensation 299,561us-gaap_ShareBasedCompensation
Warrants issued for research and development 0AMSE_WarrantsIssuedForResearchAndDevelopment 201,250AMSE_WarrantsIssuedForResearchAndDevelopment
Stock issued for services 0us-gaap_IssuanceOfStockAndWarrantsForServicesOrClaims 10,500us-gaap_IssuanceOfStockAndWarrantsForServicesOrClaims
(Increase) decrease in operating assets:    
Receivables 0us-gaap_IncreaseDecreaseInReceivables 207,046us-gaap_IncreaseDecreaseInReceivables
Prepaid and other current assets 144,510us-gaap_IncreaseDecreaseInPrepaidDeferredExpenseAndOtherAssets (195,860)us-gaap_IncreaseDecreaseInPrepaidDeferredExpenseAndOtherAssets
Related-party receivable 0us-gaap_IncreaseDecreaseInDueFromRelatedParties 22,324us-gaap_IncreaseDecreaseInDueFromRelatedParties
Increase (decrease) in operating liabilities:    
Accounts payable 113,215us-gaap_IncreaseDecreaseInAccountsPayable 77,022us-gaap_IncreaseDecreaseInAccountsPayable
Accrued expenses (14,808)us-gaap_IncreaseDecreaseInAccruedLiabilities (124,269)us-gaap_IncreaseDecreaseInAccruedLiabilities
Accrued interest on convertible debt and note payable 0us-gaap_DebtInstrumentIncreaseAccruedInterest 109,997us-gaap_DebtInstrumentIncreaseAccruedInterest
Net cash used in operating activities (1,300,660)us-gaap_NetCashProvidedByUsedInOperatingActivitiesContinuingOperations (968,278)us-gaap_NetCashProvidedByUsedInOperatingActivitiesContinuingOperations
Cash flows from investing activities:    
Mine permitting costs (164,640)us-gaap_PaymentsToAcquireMineralRights 0us-gaap_PaymentsToAcquireMineralRights
Net cash used in investing activities (164,640)us-gaap_NetCashProvidedByUsedInInvestingActivitiesContinuingOperations 0us-gaap_NetCashProvidedByUsedInInvestingActivitiesContinuingOperations
Cash flows from financing activities:    
Proceeds from issuance of preferred stock units, net 340,999us-gaap_ProceedsFromIssuanceOfPreferredStockAndPreferenceStock 1,079,838us-gaap_ProceedsFromIssuanceOfPreferredStockAndPreferenceStock
Proceeds from exercise of warrants 33,035us-gaap_ProceedsFromWarrantExercises 0us-gaap_ProceedsFromWarrantExercises
Principal and interest payments on notes payable (2,228)us-gaap_RepaymentsOfNotesPayable (11,183)us-gaap_RepaymentsOfNotesPayable
Proceeds from issuance of notes payable 0us-gaap_ProceedsFromNotesPayable 19,610us-gaap_ProceedsFromNotesPayable
Proceeds from issuance of convertible notes payable 0us-gaap_ProceedsFromConvertibleDebt 53,000us-gaap_ProceedsFromConvertibleDebt
Proceeds from issuance of related-party notes payable 0us-gaap_ProceedsFromRelatedPartyDebt 150,000us-gaap_ProceedsFromRelatedPartyDebt
Net cash provided by financing activities 371,806us-gaap_NetCashProvidedByUsedInFinancingActivitiesContinuingOperations 1,291,265us-gaap_NetCashProvidedByUsedInFinancingActivitiesContinuingOperations
Net increase (decrease) in cash (1,093,494)us-gaap_CashPeriodIncreaseDecrease 322,987us-gaap_CashPeriodIncreaseDecrease
Cash, beginning of the period 2,006,007us-gaap_Cash 59,981us-gaap_Cash
Cash, end of the period 912,513us-gaap_Cash 382,968us-gaap_Cash
Supplemental disclosures of cash flow information:    
Interest paid 0us-gaap_InterestPaid 0us-gaap_InterestPaid
Income taxes paid 1,309us-gaap_IncomeTaxesPaid 200us-gaap_IncomeTaxesPaid
Supplemental disclosures of non-cash investing and financing activities:    
Accounts payable obligations settled with common stock 85,000AMSE_AccountsPayableObligationsSettledWithCommonStock 0AMSE_AccountsPayableObligationsSettledWithCommonStock
Preferred stock dividends paid with common stock 25,941AMSE_PreferredStockDividendsPaidWithCommonStock 0AMSE_PreferredStockDividendsPaidWithCommonStock
Embedded derivative resulting from issuance of preferred stock units 3,755AMSE_EmbeddedDerivativeResultingFromIssuanceOfPreferredStockUnits 0AMSE_EmbeddedDerivativeResultingFromIssuanceOfPreferredStockUnits
Conversion of preferred stock to common stock 2,176AMSE_ConversionOfPreferredStockToCommonStock 0AMSE_ConversionOfPreferredStockToCommonStock
Conversion of convertible note payable to preferred stock units 0AMSE_ConversionOfConvertibleNotePayableToPreferredStockUnits 1,906,677AMSE_ConversionOfConvertibleNotePayableToPreferredStockUnits
Related-party convertible note payable exchanged for warrants 0AMSE_RelatedPartyConvertibleNotePayableExchangedForWarrants 1,462,651AMSE_RelatedPartyConvertibleNotePayableExchangedForWarrants
Warrants issued to satisfy payroll liabilities 0AMSE_WarrantsIssuedToSatisfyPayrollLiabilities 1,049,350AMSE_WarrantsIssuedToSatisfyPayrollLiabilities
Conversion of related-party notes payable to common stock 0AMSE_ConversionOfRelatedpartyNotesPayableToCommonStock 227,319AMSE_ConversionOfRelatedpartyNotesPayableToCommonStock
Common stock issued for stock offering costs 0AMSE_CommonStockIssuedForStockOfferingCosts 131,250AMSE_CommonStockIssuedForStockOfferingCosts
Conversion of related-party convertible note payable to preferred stock units $ 0AMSE_ConversionOfRelatedpartyConvertibleNotePayableToPreferredStockUnits $ 131,100AMSE_ConversionOfRelatedpartyConvertibleNotePayableToPreferredStockUnits
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10. Commitments (Details Narrative) (USD $)
Dec. 31, 2014
Dec. 31, 2013
Commitments and Contingencies Disclosure [Abstract]    
Accrued commitment $ 0us-gaap_ContractualObligation $ 241,213us-gaap_ContractualObligation
XML 28 R22.htm IDEA: XBRL DOCUMENT v2.4.1.9
2. Significant Accounting Policies (Details Narraive) (USD $)
3 Months Ended 9 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2014
Dec. 31, 2013
Accounting Policies [Abstract]        
Research and development expenses $ 134,452us-gaap_ResearchAndDevelopmentExpense $ 325,096us-gaap_ResearchAndDevelopmentExpense $ 472,126us-gaap_ResearchAndDevelopmentExpense $ 374,138us-gaap_ResearchAndDevelopmentExpense
Cumulative undeclared dividends not accrued 323,617us-gaap_DividendsPayableCurrentAndNoncurrent 0us-gaap_DividendsPayableCurrentAndNoncurrent 323,617us-gaap_DividendsPayableCurrentAndNoncurrent 0us-gaap_DividendsPayableCurrentAndNoncurrent
Preferred stock dividends $ 106,137us-gaap_DividendsPreferredStock $ 0us-gaap_DividendsPreferredStock $ 276,214us-gaap_DividendsPreferredStock  
XML 29 R24.htm IDEA: XBRL DOCUMENT v2.4.1.9
4. Mineral Leases (Details) (USD $)
Dec. 31, 2014
Extractive Industries [Abstract]  
2015 $ 276,880us-gaap_OperatingLeasesFutureMinimumPaymentsDueCurrent
2016 276,880us-gaap_OperatingLeasesFutureMinimumPaymentsDueInTwoYears
2017 276,880us-gaap_OperatingLeasesFutureMinimumPaymentsDueInThreeYears
2018 276,880us-gaap_OperatingLeasesFutureMinimumPaymentsDueInFourYears
2019 276,880us-gaap_OperatingLeasesFutureMinimumPaymentsDueInFiveYears
2020 7,965us-gaap_OperatingLeasesFutureMinimumPaymentsDueThereafter
Total future minimum lease payments $ 1,392,365us-gaap_OperatingLeasesFutureMinimumPaymentsDue
XML 30 Show.js IDEA: XBRL DOCUMENT /** * Rivet Software Inc. * * @copyright Copyright (c) 2006-2011 Rivet Software, Inc. All rights reserved. * Version 2.4.0.3 * */ var Show = {}; Show.LastAR = null, Show.hideAR = function(){ Show.LastAR.style.display = 'none'; }; Show.showAR = function ( link, id, win ){ if( Show.LastAR ){ Show.hideAR(); } var ref = link; do { ref = ref.nextSibling; } while (ref && ref.nodeName != 'TABLE'); if (!ref || ref.nodeName != 'TABLE') { var tmp = win ? win.document.getElementById(id) : document.getElementById(id); if( tmp ){ ref = tmp.cloneNode(true); ref.id = ''; link.parentNode.appendChild(ref); } } if( ref ){ ref.style.display = 'block'; Show.LastAR = ref; } }; Show.toggleNext = function( link ){ var ref = link; do{ ref = ref.nextSibling; }while( ref.nodeName != 'DIV' ); if( ref.style && ref.style.display && ref.style.display == 'none' ){ ref.style.display = 'block'; if( link.textContent ){ link.textContent = link.textContent.replace( '+', '-' ); }else{ link.innerText = link.innerText.replace( '+', '-' ); } }else{ ref.style.display = 'none'; if( link.textContent ){ link.textContent = link.textContent.replace( '-', '+' ); }else{ link.innerText = link.innerText.replace( '-', '+' ); } } }; XML 31 R7.htm IDEA: XBRL DOCUMENT v2.4.1.9
1. Description of Business and Nature of Operations
9 Months Ended
Dec. 31, 2014
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Description of Business and Nature of Operations

American Sands Energy Corp. (“AMSE” or the “Company”) is a pre-production oil company with oil sands resources located near Sunnyside, Utah that has not commenced planned principal operations. The Company’s activities since inception have consisted principally of acquiring lease rights, raising capital, performing research and development activities with regard to its oil sands extraction technology, obtaining the required permits necessary to mine the oil sands, and developing the plans to construct a refining facility. The Company’s activities are subject to significant risks and uncertainties including failing to secure the additional funding required to commercialize the Company’s technology.

 

The Company intends to mine the oil sands ore using conventional mining techniques and use a proprietary solvent to extract oil from the oil sands ore. The proprietary water-free process produces high quality bitumen, recovers nearly 100% of the solvent, requires no tailings ponds, and its only by-product is reclamation ready sand. Since inception, the Company has been engaged in the business of acquiring and developing oil sands assets and technologies used to separate the oil contained in oil sands. The Company anticipates that its primary operations will include the mining of oil sands, the separation of oil products therefrom and the sale of oil and oil by-products.

 

The Company has acquired rights to approximately 1,760 acres of prime oil sands deposits in the Sunnyside area of Utah through its mineral leases as more fully described in Note 4 to the condensed consolidated financial statements.

 

Effective January 24, 2012, the Company entered into a License, Development and Engineering Agreement with Universal Oil Recovery Corp. and SRS International (the “License Agreement”) whereby the Company was granted an exclusive non-transferable license to use certain technology in its proposed business to extract bitumen from oil sands. The territory covered by the agreement includes the State of Utah and any other geographic location in which a future designated project is commenced by or through the Company. In conjunction with the License Agreement, the Company terminated its operating agreement with Bleeding Rock. On November 18, 2013, the Company entered into an Amended and Restated License, Development and Engineering Agreement (“Amendment”) with Universal Oil Recovery LLC (“UOR”). The Amendment amends and restates the License Agreement. Pursuant to the terms of the Amendment, the previous royalties of 75% on projects outside of Utah and the minimum royalty of $1,000,000 per year on such agreements have been eliminated. Pursuant to the Amendment, the Company will now pay royalties on projects outside of Utah of 15% of the net fees (net of all costs other than general and administrative expenses) collected by the Company on any license of the technology. In addition, the $25,000 per month management fee is eliminated until a permanent financing is closed (minimum of $25,000,000), at which time the payment will be reinstated. In consideration of the amendment, the Company issued to UOR, 575,000 warrants to purchase common stock of the Company for $0.01 per share, exercisable for ten years (see Note 8). The term of the License Agreement is 20 years and thereafter so long as production of products using the technology is commercially and economically feasible.

XML 32 R3.htm IDEA: XBRL DOCUMENT v2.4.1.9
Condensed Consolidated Balance Sheets (Parenthetical) (USD $)
Dec. 31, 2014
Mar. 31, 2014
Stockholders' deficit:    
Preferred stock, par value $ 0.001us-gaap_PreferredStockParOrStatedValuePerShare $ 0.001us-gaap_PreferredStockParOrStatedValuePerShare
Preferred stock, shares authorized 10,000,000us-gaap_PreferredStockSharesAuthorized 10,000,000us-gaap_PreferredStockSharesAuthorized
Common stock, par value (in Dollars per share) $ 0.001us-gaap_CommonStockParOrStatedValuePerShare $ 0.001us-gaap_CommonStockParOrStatedValuePerShare
Common stock, shares authorized 200,000,000us-gaap_CommonStockSharesAuthorized 200,000,000us-gaap_CommonStockSharesAuthorized
Common stock, shares issued 33,393,828us-gaap_CommonStockSharesIssued 30,935,467us-gaap_CommonStockSharesIssued
Common stock, shares outstanding 33,393,828us-gaap_CommonStockSharesOutstanding 30,935,467us-gaap_CommonStockSharesOutstanding
Series A Preferred Stock [Member]    
Stockholders' deficit:    
Preferred stock, par value $ 0.001us-gaap_PreferredStockParOrStatedValuePerShare
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_SeriesAPreferredStockMember
$ 0.001us-gaap_PreferredStockParOrStatedValuePerShare
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_SeriesAPreferredStockMember
Preferred stock, shares authorized 4,750,000us-gaap_PreferredStockSharesAuthorized
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_SeriesAPreferredStockMember
4,750,000us-gaap_PreferredStockSharesAuthorized
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_SeriesAPreferredStockMember
Preferred stock, shares issued 4,118,210us-gaap_PreferredStockSharesIssued
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_SeriesAPreferredStockMember
4,412,120us-gaap_PreferredStockSharesIssued
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_SeriesAPreferredStockMember
Preferred stock, shares outstanding 4,118,210us-gaap_PreferredStockSharesOutstanding
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_SeriesAPreferredStockMember
4,412,120us-gaap_PreferredStockSharesOutstanding
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_SeriesAPreferredStockMember
XML 33 R17.htm IDEA: XBRL DOCUMENT v2.4.1.9
11. Subsequent Events
9 Months Ended
Dec. 31, 2014
Commitments and Contingencies Disclosure [Abstract]  
Subsequent Events

On January 20, 2015, the Company entered into a one-year agreement with an investment banking firm to assist the Company with raising additional capital. In accordance with the agreement, the investment banking firm will receive $25,000 per quarter for advisory services and will receive agreed upon percentages for any proceeds raised.

XML 34 R1.htm IDEA: XBRL DOCUMENT v2.4.1.9
Document and Entity Information
9 Months Ended
Dec. 31, 2014
Feb. 05, 2015
Document And Entity Information    
Entity Registrant Name American Sands Energy Corp.  
Entity Central Index Key 0001432001  
Document Type 10-Q  
Document Period End Date Dec. 31, 2014  
Amendment Flag false  
Current Fiscal Year End Date --03-31  
Is Entity a Well-known Seasoned Issuer? No  
Is Entity a Voluntary Filer? No  
Is Entity's Reporting Status Current? Yes  
Entity Filer Category Smaller Reporting Company  
Entity Common Stock, Shares Outstanding   33,393,828dei_EntityCommonStockSharesOutstanding
Document Fiscal Period Focus Q3  
Document Fiscal Year Focus 2015  
XML 35 R18.htm IDEA: XBRL DOCUMENT v2.4.1.9
2. Significant Accounting Policies (Policies)
9 Months Ended
Dec. 31, 2014
Accounting Policies [Abstract]  
Principles of Consolidation

a) Principles of Consolidation

 

The condensed consolidated financial statements include the consolidated operations of American Sands Energy Corp. and its wholly owned subsidiary Green River Resources Inc. (“GRI”). All significant intercompany balances and transactions have been eliminated in consolidation.

Mineral Leases

b) Mineral Leases

 

In certain cases, the Company capitalizes costs related to investments in mineral lease interests. Such costs include mineral lease acquisition costs. Costs are deferred until such time as the extent of proved developed reserves has been determined and mineral lease interests are either developed, the property sold or the mineral lease rights are allowed to lapse. To date, all exploration and lease costs have been expensed.

Research and Development

c) Research and Development

 

The Company continues to develop additional technology related to its proprietary bitumen extraction process. To date, the Company has expensed costs associated with developing its technology as research and development costs. For the nine months ended December 31, 2014 and 2013, the Company incurred costs of $472,126 and $374,138, respectively, for research and development of its technologies.

Stock-based Compensation

d) Stock-based Compensation

 

The Company uses the Black-Scholes option-pricing model to determine the fair value of stock options and warrants granted. For employee stock options, the Company records the grant-date fair value as expense over the period in which it is earned, typically the vesting period. For consultants, the fair value of the stock-based award is recorded as expense over the term of the service period, and unvested amounts are revalued using the Black-Scholes model at each reporting period. For warrants issued to lenders, the Company records the grant-date fair value of the warrants, and any resulting beneficial conversion feature for convertible debt, as a debt discount. The discount is then amortized over the term of the convertible debt as non-cash interest expense.

Net Loss Per Common Share

e) Net Loss Per Common Share

 

Basic earnings or loss per common share is computed on the basis of the weighted average number of shares outstanding during the periods. Diluted earnings or loss per common share is calculated on the basis of the weighted average number of common shares outstanding during the period plus the effect of dilutive common share equivalents during the period. Common share equivalents include preferred stock, outstanding stock options and warrants and convertible debt instruments. For periods in which a net loss is reported, common share equivalents are excluded because they are antidilutive. Therefore, basic loss per common share is the same as diluted loss per common share for the three and nine months ended December 31, 2014 and 2013. As of December 31, 2014 and 2013, the Company had cumulative, undeclared, dividends that had not been accrued related to its preferred stock of $323,617 and $0, respectively. For the three months ended December 31, 2014 and 2013, the Company had accrued preferred stock dividends of $106,137 and $0, respectively, which were added to net loss in the consolidated statements of operations in order to calculate net loss per common share attributable to common stockholders. For the nine months ended December 31, 2014 and 2013, the Company had accrued preferred stock dividends of $276,214 and $0, respectively, which were added to net loss in the consolidated statements of operations in order to calculate net loss per common share attributable to common stockholders.

Recent Accounting Pronouncements

f) Recent Accounting Pronouncements

 

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) that are adopted by the Company as of the specified effective date.  If not discussed, management believes that the impact of recently issued standards, which are not yet effective, will not have a material impact on the Company’s financial statements upon adoption.

 

In June 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-10, Development Stage Entities. The amendments in ASU 2014-10 remove the definition of a development stage entity from Topic 915, Development Stage Entities, thereby removing the distinction between development stage entities and other reporting entities from US GAAP. In addition, the amendments eliminate the requirements for development stage entities to (1) present inception-to-date information in the statements of operations, cash flows, and stockholders’ equity, (2) label the financial statements as those of a development stage entity, (3) disclose a description of the development stage activities in which the entity is engaged, and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage. The amendments also clarify that the guidance in Topic 275, Risks and Uncertainties, is applicable to entities that have not commenced planned principal operations. ASU 2014-10 is effective for annual reporting periods beginning after December 15, 2014, and interim periods therein, but early adoption is permitted.

 

The Company adopted ASU 2014-10 effective April 1, 2014. As a result, the Company has removed inception-to-date information in the Company’s statements of operations, cash flows, and stockholders’ equity.

 

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers. The amendments in ASU 2014-09 affect any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (e.g., insurance contracts or lease contracts). ASU 2014-09 will supersede the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance, and creates a Topic 606, Revenue from Contracts with Customers.

 

The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps:

 

Step 1: Identify the contract(s) with a customer.

Step 2: Identify the performance obligations in the contract.

Step 3: Determine the transaction price.

Step 4: Allocate the transaction price to the performance obligations in the contract.

Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.

 

ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. Until the Company begins to recognize revenue, its financial statements will not be affected by the adoption of ASU 2014-09.

XML 36 R4.htm IDEA: XBRL DOCUMENT v2.4.1.9
Condensed Consolidated Statements of Operations (USD $)
3 Months Ended 9 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2014
Dec. 31, 2013
Income Statement [Abstract]        
Revenues $ 0us-gaap_Revenues $ 0us-gaap_Revenues $ 0us-gaap_Revenues $ 0us-gaap_Revenues
Operating expenses:        
General and administrative 346,736us-gaap_GeneralAndAdministrativeExpense 315,085us-gaap_GeneralAndAdministrativeExpense 1,478,107us-gaap_GeneralAndAdministrativeExpense 1,144,314us-gaap_GeneralAndAdministrativeExpense
Research and development 134,452us-gaap_ResearchAndDevelopmentExpense 325,096us-gaap_ResearchAndDevelopmentExpense 472,126us-gaap_ResearchAndDevelopmentExpense 374,138us-gaap_ResearchAndDevelopmentExpense
Mineral lease 69,220us-gaap_LeaseOperatingExpense 53,134us-gaap_LeaseOperatingExpense 207,660us-gaap_LeaseOperatingExpense 159,405us-gaap_LeaseOperatingExpense
Total operating expenses 550,408us-gaap_OperatingExpenses 693,315us-gaap_OperatingExpenses 2,157,893us-gaap_OperatingExpenses 1,677,857us-gaap_OperatingExpenses
Loss from operations (550,408)us-gaap_OperatingIncomeLoss (693,315)us-gaap_OperatingIncomeLoss (2,157,893)us-gaap_OperatingIncomeLoss (1,677,857)us-gaap_OperatingIncomeLoss
Other (income) expense:        
(Gain) loss on derivative 74,996us-gaap_GainLossOnDerivativeInstrumentsNetPretax (13,698)us-gaap_GainLossOnDerivativeInstrumentsNetPretax 264,202us-gaap_GainLossOnDerivativeInstrumentsNetPretax (13,698)us-gaap_GainLossOnDerivativeInstrumentsNetPretax
(Gain) loss on extinguishment of debt (1,700)us-gaap_GainsLossesOnExtinguishmentOfDebt 209,360us-gaap_GainsLossesOnExtinguishmentOfDebt (1,700)us-gaap_GainsLossesOnExtinguishmentOfDebt 209,360us-gaap_GainsLossesOnExtinguishmentOfDebt
Interest expense 0us-gaap_InterestExpense 84,224us-gaap_InterestExpense 0us-gaap_InterestExpense 374,370us-gaap_InterestExpense
Total other (income) expense 73,296us-gaap_OtherNonoperatingExpense 279,886us-gaap_OtherNonoperatingExpense 262,502us-gaap_OtherNonoperatingExpense 570,032us-gaap_OtherNonoperatingExpense
Loss before provision for income taxes (623,704)us-gaap_IncomeLossFromContinuingOperationsBeforeIncomeTaxesMinorityInterestAndIncomeLossFromEquityMethodInvestments (973,201)us-gaap_IncomeLossFromContinuingOperationsBeforeIncomeTaxesMinorityInterestAndIncomeLossFromEquityMethodInvestments (2,420,395)us-gaap_IncomeLossFromContinuingOperationsBeforeIncomeTaxesMinorityInterestAndIncomeLossFromEquityMethodInvestments (2,247,889)us-gaap_IncomeLossFromContinuingOperationsBeforeIncomeTaxesMinorityInterestAndIncomeLossFromEquityMethodInvestments
Provision for income taxes (406)us-gaap_IncomeTaxExpenseBenefit (100)us-gaap_IncomeTaxExpenseBenefit (506)us-gaap_IncomeTaxExpenseBenefit (400)us-gaap_IncomeTaxExpenseBenefit
Net loss (624,110)us-gaap_NetIncomeLoss (973,301)us-gaap_NetIncomeLoss (2,420,901)us-gaap_NetIncomeLoss (2,248,289)us-gaap_NetIncomeLoss
Less: cumulative preferred stock dividends (106,137)us-gaap_DividendsPreferredStock 0us-gaap_DividendsPreferredStock (276,214)us-gaap_DividendsPreferredStock  
Net loss attributable to common stockholders $ (730,247)us-gaap_NetIncomeLossAvailableToCommonStockholdersBasic $ (973,301)us-gaap_NetIncomeLossAvailableToCommonStockholdersBasic $ (2,697,115)us-gaap_NetIncomeLossAvailableToCommonStockholdersBasic $ (2,248,289)us-gaap_NetIncomeLossAvailableToCommonStockholdersBasic
Net loss per common share - basic and diluted $ (0.02)us-gaap_EarningsPerShareBasicAndDiluted $ (0.03)us-gaap_EarningsPerShareBasicAndDiluted $ (0.08)us-gaap_EarningsPerShareBasicAndDiluted $ (0.08)us-gaap_EarningsPerShareBasicAndDiluted
Weighted average common shares outstanding - basic and diluted 33,153,840us-gaap_WeightedAverageNumberOfSharesOutstandingBasic 29,863,547us-gaap_WeightedAverageNumberOfSharesOutstandingBasic 32,188,545us-gaap_WeightedAverageNumberOfSharesOutstandingBasic 29,387,348us-gaap_WeightedAverageNumberOfSharesOutstandingBasic
XML 37 R12.htm IDEA: XBRL DOCUMENT v2.4.1.9
6. Preferred Stock
9 Months Ended
Dec. 31, 2014
Preferred Stock, Including Additional Paid in Capital [Abstract]  
Preferred Stock

In October 2013, the Company initiated a preferred stock unit offering to raise up to $2,000,000 with an option to increase the offering by an additional $500,000 based on market conditions and investor interest. On March 20, 2014, the board of directors authorized an increase in the preferred stock unit raise from $2,500,000 to $6,650,000. Each unit of the offering sells for $1.40 and entitles the holder to receive one share of Series A Preferred Stock (the “Series A Stock”) along with one warrant to purchase a share of the Company’s common stock at $0.45 and one warrant to purchase the Company’s common stock at $0.70 per share (hereafter, referred to as “Series A preferred stock units”).

 

Series A preferred stockholders are entitled to receive dividends of 6% and have a liquidation preference equal to $1.40 per share for each outstanding share of Series A Stock (as adjusted for stock splits, stock dividends and recapitalizations) plus an amount equal to declared but unpaid dividends thereon. As of December 31, 2014 and March 31, 2014, the liquidation preference for the Series A Stock was $5,765,494 and $6,176,968, respectively.

 

Holders of Series A Stock have the right at any time after the date of issuance to convert their Series A Stock to common stock based on a ratio determined by dividing $1.40 by the Conversion Price in effect at the time for such shares. The Conversion Price is the lower of $0.35 per share or the lowest price that any additional shares of common stock were issued after the initial purchase date. Common shares issued in transactions such as granting of employee incentive options pursuant to the Company’s 2011 Long-Term Incentive Plan, shares issued in certain financings, and shares issued to acquire technology or assets do not reduce the Conversion Price. The Series A Stock automatically converts upon the Company completing a financing transaction of $10,000,000 or more.

 

The offering was closed for new commitments on March 31, 2014. As of December 31, 2014, the Company had issued a total of 4,662,120 Series A preferred stock units. The Company received net cash proceeds of $3,701,615 from selling 2,846,054 Series A preferred stock units and issued an additional 1,532,382 Series A preferred stock units in connection with conversions of convertible debt and accrued interest totaling $1,925,647 and conversions of related-party debt and accrued interest of $131,101. The Company used a portion of the proceeds to complete required test drilling at its Sunnyside, Utah site location in connection with its project permitting process and for general corporate purposes.

 

During the nine months ended December 31, 2014, 543,910 shares of Series A Stock were converted into 2,175,641 shares of common stock and, as of December 31, 2014, there were 4,118,210 shares of Series A Stock outstanding.

XML 38 R11.htm IDEA: XBRL DOCUMENT v2.4.1.9
5. Derivative Liability
9 Months Ended
Dec. 31, 2014
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Liability

In connection with the Company issuing its Series A preferred stock units described in Note 6, the Company recorded a derivative liability related to down-round protection provided to the preferred stockholders in the event that the Company sells its common stock at a price below $0.35 per share. With the assistance of a third-party valuation specialist, the Company valued the derivative liability based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below:

 

Level 1   Quoted prices in active markets that are accessible at the measurement date for assets or liabilities.
Level 2   Other inputs that are observable directly or indirectly, such as quoted prices for similar assets and liabilities or market corroborated inputs.
Level 3   Unobservable inputs that are used when little or no market data is available, which require the Company to develop its own assumptions about how market participants would value the assets or liabilities.

 

Determining which category an asset or liability falls within the hierarchy requires significant judgment. The Company evaluates its hierarchy disclosure each quarter. Assets and liabilities measured at fair value on a recurring basis as of December 31, 2014 and March 31, 2014 are summarized as follows:

 

   Fair Value as of December 31, 2014 
   Level 1   Level 2   Level 3   Total 
Liabilities                    
Embedded derivative  $   $   $377,378   $377,378 

  

    Fair Value as of March 31, 2014  
    Level 1     Level 2     Level 3     Total  
Liabilities                                
Embedded derivative   $     $     $ 109,421     $ 109,421  

 

The following table presents the fair value reconciliation of Level 3 liabilities measured at fair value on a recurring basis for the nine months ended December 31, 2014:

   

   Fair Value Measurements Using Significant Unobservable Inputs 
   (Level 3) 
   Embedded Derivative 
Beginning balance, March 31, 2014  $109,421 
Issuances:     
Embedded derivatives issued in conjunction with Series A preferred stock units   3,755 
Total losses included in earnings   264,202 
Ending balance, December 31, 2014  $377,378 

 

Given the nature of the derivative liability, the carrying amounts of $377,378 and $109,421 reported in the accompanying condensed consolidated balance sheets as of December 31, 2014 and March 31, 2014, respectively, were derived from Level 3 inputs and represent management’s best estimate of fair value.

 

Key assumptions used in the valuation of the embedded derivatives using a Monte Carlo analysis methodology are as follows:

 

   December 31,   March 31, 
   2014   2014 
Threshold barrier  $0.35   $0.35 
Average price below $0.35 per share  $0.11   $0.22 
Probability of offer below $0.35 per share   3%    3% 
Preferred share conversion price  $1.40   $1.40 
Conversion ratio   12.73    6.36 

 

XML 39 R23.htm IDEA: XBRL DOCUMENT v2.4.1.9
3. Going Concern (Details Narrative) (USD $)
3 Months Ended 9 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2014
Dec. 31, 2013
Mar. 31, 2014
Mar. 31, 2013
Risks and Uncertainties [Abstract]            
Net loss $ (624,110)us-gaap_NetIncomeLoss $ (973,301)us-gaap_NetIncomeLoss $ (2,420,901)us-gaap_NetIncomeLoss $ (2,248,289)us-gaap_NetIncomeLoss    
Accumulated deficit (17,001,072)us-gaap_RetainedEarningsAccumulatedDeficit   (17,001,072)us-gaap_RetainedEarningsAccumulatedDeficit   (14,554,230)us-gaap_RetainedEarningsAccumulatedDeficit  
Capital required to continue business 150,000,000us-gaap_MinimumNetCapitalRequired1   150,000,000us-gaap_MinimumNetCapitalRequired1      
Approximate proceeds from sale of preferred stock     4,000,000AMSE_ApproximateProceedsFromSaleOfPreferredStock      
Cash on hand $ 912,513us-gaap_Cash $ 382,968us-gaap_Cash $ 912,513us-gaap_Cash $ 382,968us-gaap_Cash $ 2,006,007us-gaap_Cash $ 59,981us-gaap_Cash
XML 40 R19.htm IDEA: XBRL DOCUMENT v2.4.1.9
4. Mineral Leases (Tables)
9 Months Ended
Dec. 31, 2014
Extractive Industries [Abstract]  
Future minimum lease payments
September 30,    
2015  $276,880 
2016   276,880 
2017   276,880 
2018   276,880 
2019   276,880 
2020   7,965 
      
Total future minimum lease payments  $1,392,365 
XML 41 R15.htm IDEA: XBRL DOCUMENT v2.4.1.9
9. Long-Term Incentive Plan
9 Months Ended
Dec. 31, 2014
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Long-Term Incentive Plan

In April 2011, the Company adopted the 2011 Long-Term Incentive Plan (the “2011 Plan”) which provides for the issuance of up to 7,000,000 shares of the Company’s common stock. During the nine months ended December 31, 2014, the Company issued 1,400,000 options under the 2011 Plan. The weighted average grant-date fair value of options granted during the nine months ended December 31, 2014 was $0.66.

  

The summary of option activity for the nine months ended December 31, 2014 is presented below:

 

   Number of Shares   Weighted Average Exercise Price   Weighted Average Remaining Life (years) 
Balance as of March 31, 2014   4,522,500   $0.47    3.95 
Granted   1,400,000    0.74    4.31 
Exercised            
Canceled            
Expired            
                
Balance as of December 31, 2014   5,922,500    0.53    3.46 

 

Outstanding and exercisable options presented by price range as of December 31, 2014 are as follows:

 

   Options Outstanding   Options Exercisable 
       Weighted             
       Average   Weighted       Weighted 
   Number of   Remaining   Average   Number of   Average 
Exercise  Options   Life   Exercise   Options   Exercise 
Price  Outstanding   (Years)   Price   Exercisable   Price 
$0.25   50,000    2.13   $0.25    37,500   $0.25 
0.35   860,000    3.58    0.35    347,080    0.35 
0.40   3,087,500    3.25    0.40    3,087,500    0.40 
0.50   75,000    1.71    0.50    56,250    0.50 
0.65   875,000    4.64    0.65    291,667    0.65 
0.72   325,000    4.44    0.72    108,333    0.72 
1.15   650,000    2.36    1.15    500,000    1.15 
                          
$0.25-$1.15   5,922,500    3.46    0.53    4,428,330    0.50 

 

The estimated fair value of the Company’s stock options, less expected forfeitures, is amortized over the options’ vesting period on a straight-line basis. The Company recognized $614,304 and $299,561 of equity-based compensation expense during the nine months ended December 31, 2014 and 2013, respectively.

 

As of December 31, 2014, there was $497,758 of total unrecognized compensation cost with a weighted-average vesting period of approximately 14 months.

 

The intrinsic values of outstanding and vested stock options were as follows:

 

   December 31, 
   2014   2013 
Intrinsic value - options outstanding  $32,300   $170,425 
Intrinsic value - options exercisable   15,288    124,891 
Intrinsic value - options exercised        

 

XML 42 R13.htm IDEA: XBRL DOCUMENT v2.4.1.9
7. Common Stock
9 Months Ended
Dec. 31, 2014
Equity [Abstract]  
Common Stock

During the nine months ended December 31, 2014, 543,910 shares of Series A Stock were converted into 2,175,641 shares of the Company’s common stock. The Company issued an additional 44,720 shares of common stock to settle cumulative dividends for the shares of Series A Stock that were converted.

 

On November 30, 2014, the Company issued 170,000 shares of common stock to LIFE Power & Fuels LLC in lieu of amounts owed under the LIFE Management Services Agreement, which contract was terminated simultaneous with the issuance of common shares.

XML 43 R14.htm IDEA: XBRL DOCUMENT v2.4.1.9
8. Warrants
9 Months Ended
Dec. 31, 2014
Warrants and Rights Note Disclosure [Abstract]  
Warrants

The Company has issued various classes of warrants as described below:

 

a)Convertible Debt Warrants

 

Prior to the fiscal year ended March 31, 2014, the Company issued convertible notes and warrants in a private placement that were exchanged as of March 31, 2014 for Series A preferred stock units, except for 174,485 warrants. During the nine months ended December 31, 2014, 50,143 of these warrants were exercised at $0.50 per common share and the remaining 124,342 warrants expired.

 

b)Private Placement Warrants

 

In connection with the Company’s private placement of common stock initiated in 2012, the Company granted warrants to the stock purchasers. These warrants give the holders the right to purchase shares of the Company’s common stock at $1.15 per share for a 2-year period. In March 2014, the Company issued 121,259 3-year warrants to purchase shares of the Company’s common stock at $1.15 per share to certain of the expiring warrant holders. As of December 31, 2014, all 121,259 of the newly issued private placement warrants were outstanding. Also, as of December 31, 2014, all the initial warrants issued in the private placement had expired.

 

c)Debt Exchange Warrants

 

On September 30, 2013, the Company issued warrants to purchase 3,260,000 shares of common stock of the Company in settlement of a related-party convertible note payable. On September 30, 2013, the Company issued warrants to purchase 2,260,000 shares of common stock of the Company in settlement of an outstanding payroll obligation owed to the Company’s CEO in the amount of $1,049,350. The warrants give the holders the right to purchase the Company’s common stock at $0.01 per share for a 10-year period. The fair value of the warrants issued in satisfaction of these liabilities was calculated using the Black-Scholes pricing model. Based on the fair value calculation, the amount of the related-party convertible note payable and the amount of the outstanding payroll obligation exceeded the fair value of the warrants issued in satisfaction of these obligations.

 

Due to the related-party nature of the transaction, the Company did not record a gain on forgiveness of debt, but instead recorded the transaction as an equity transaction. As of December 31, 2014, all of the 5,520,000 warrants described above remained outstanding.

 

d)Series A Preferred Stock Warrants

 

In connection with the Company’s offering of its Series A preferred stock units (see Note 6) through December 31, 2014, the Company issued 4,447,835 warrants to purchase the Company’s common stock at $0.45 and 4,447,835 warrants to purchase the Company’s common stock at $0.70 per share. The warrants have a 5-year term and a cashless exercise provision. As of December 31, 2014, there were 4,429,978 warrants at $0.45 outstanding and 4,447,835 warrants at $0.70 outstanding.

 

The Company issued 214,285 of Series A preferred stock units for research and development expenses. The issuance included the Company issuing 214,285 warrants to purchase the Company’s common stock at $0.45 and 214,285 warrants to purchase the Company’s common stock at $0.70 per share. As of December 31, 2014, all of these warrants remained outstanding.

 

e)Broker Warrants

 

In connection with the Company’s offering of its Series A preferred stock units, the Company issued 675,292 warrants to purchase the Company’s common stock at $0.35 per share for a 5-year period. The warrants were issued to brokers associated with the Series A transactions. All of these warrants remained outstanding as of December 31, 2014.

 

f)Other Common Stock Warrants

 

In connection with the amended License Agreement described in Note 1, the Company issued 575,000 warrants to purchase common stock of the Company at $0.01 per share. All of these warrants remained outstanding as of December 31, 2014.

XML 44 R16.htm IDEA: XBRL DOCUMENT v2.4.1.9
10. Commitments
9 Months Ended
Dec. 31, 2014
Commitments and Contingencies Disclosure [Abstract]  
Commitments

Effective January 1, 2013, the Company modified its employment contract with its Chief Executive Officer (CEO). Pursuant to the terms of the modification, the CEO’s salary was reduced from $400,000 per year to $276,000 per year. Upon completion of a $10,000,000 or more capital raise, the CEO’s salary will increase to $400,000. On September 30, 2013, the CEO’s unpaid salary from inception through 2011 totaling $1,049,350 was exchanged for 2,260,000 warrants to purchase the Company’s common stock for $0.01 per share. The term of the employment agreement is in effect through December 31, 2015. On November 7, 2013, the board of directors voted that, the CEO’s outstanding salary would convert into common stock at $0.35 per share. On March 31, 2014, all of the CEO’s past wages totaling $184,000 were converted into 525,715 shares of the Company’s common stock. As of December 31, 2014 and 2013, the total accrued commitment for the CEO’s past wages was $0 and $241,213, respectively.

 

The Company entered into a new employment agreement with its Chief Operating Officer on June 1, 2014. Under the terms of the new agreement, the Chief Operating Officer is entitled to $245,000 in annual compensation until such time as the Company completes a capital raise of at least $20,000,000 at which time, the annual compensation will increase to $300,000.

 

The consulting agreement dated October 1, 2011, between the Company and C14 Strategies (“C-14”) (the “Consulting Agreement”), an entity controlled by the former President, provides for C-14 to provide assistance with respect to strategic objectives of the Company. As amended, the Consulting Agreement calls for C-14 to receive monthly compensation of $2,000 for such services.

 

Effective January 1, 2013, the Company modified the Chief Financial Officer’s (“CFO”) employment agreement. Under the terms of the agreement the CFO’s annual salary is $175,000. On November 7, 2013, the board of directors voted that the CFO’s outstanding salary would convert into common stock at $0.35 per share.

 

On November 30, 2014, the Company issued 170,000 shares of common stock to LIFE Power & Fuels LLC in lieu of accounts payable owed under the LIFE Management Services Agreement, which contract was terminated simultaneous with the issuance of common shares.

XML 45 R34.htm IDEA: XBRL DOCUMENT v2.4.1.9
9. Long-Term Incentive Plan (Details Narrative) (USD $)
9 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Equity-based compensation expense $ 614,304us-gaap_ShareBasedCompensation $ 299,561us-gaap_ShareBasedCompensation
2011 Plan [Member]    
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Weighted average grant-date fair value $ 0.66us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsVestedAndExpectedToVestExercisableWeightedAverageExercisePrice
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Unrecognized compensation cost $ 497,758us-gaap_EmployeeServiceShareBasedCompensationNonvestedAwardsTotalCompensationCostNotYetRecognizedStockOptions
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Weighted average vesting period 1 year 2 months  
XML 46 R21.htm IDEA: XBRL DOCUMENT v2.4.1.9
9. Long-Term Incentive Plan (Tables)
9 Months Ended
Dec. 31, 2014
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Summary of option activity
   Number of Shares   Weighted Average Exercise Price   Weighted Average Remaining Life (years) 
Balance as of March 31, 2014   4,522,500   $0.47    3.95 
Granted   1,400,000    0.74    4.31 
Exercised            
Canceled            
Expired            
                
Balance as of December 31, 2014   5,922,500    0.53    3.46 
Outstanding and exercisable options presented by price range
   Options Outstanding   Options Exercisable 
       Weighted             
       Average   Weighted       Weighted 
   Number of   Remaining   Average   Number of   Average 
Exercise  Options   Life   Exercise   Options   Exercise 
Price  Outstanding   (Years)   Price   Exercisable   Price 
$0.25   50,000    2.13   $0.25    37,500   $0.25 
0.35   860,000    3.58    0.35    347,080    0.35 
0.40   3,087,500    3.25    0.40    3,087,500    0.40 
0.50   75,000    1.71    0.50    56,250    0.50 
0.65   875,000    4.64    0.65    291,667    0.65 
0.72   325,000    4.44    0.72    108,333    0.72 
1.15   650,000    2.36    1.15    500,000    1.15 
                          
$0.25-$1.15   5,922,500    3.46    0.53    4,428,330    0.50 
Intrinsic value of outstanding and vested stock options
   December 31, 
   2014   2013 
Intrinsic value - options outstanding  $32,300   $170,425 
Intrinsic value - options exercisable   15,288    124,891 
Intrinsic value - options exercised        
XML 47 R26.htm IDEA: XBRL DOCUMENT v2.4.1.9
5. Derivative Liability (Details - Fair Value Reconciliation) (USD $)
9 Months Ended
Dec. 31, 2014
Mar. 31, 2014
Beginning balance   $ 109,421us-gaap_EmbeddedDerivativeFairValueOfEmbeddedDerivativeLiability
Ending balance 377,378us-gaap_EmbeddedDerivativeFairValueOfEmbeddedDerivativeLiability 109,421us-gaap_EmbeddedDerivativeFairValueOfEmbeddedDerivativeLiability
Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member]    
Beginning balance 109,421us-gaap_EmbeddedDerivativeFairValueOfEmbeddedDerivativeLiability
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Embedded derivatives issued 3,755us-gaap_FairValueNetDerivativeAssetLiabilityMeasuredOnRecurringBasisUnobservableInputsReconciliationIssues
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Losses included in earnings 264,202us-gaap_EmbeddedDerivativeLossOnEmbeddedDerivative
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Ending balance $ 377,378us-gaap_EmbeddedDerivativeFairValueOfEmbeddedDerivativeLiability
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XML 48 R5.htm IDEA: XBRL DOCUMENT v2.4.1.9
Condensed Consolidated Statement of Stockholders' Deficit (USD $)
Series A Preferred Stock [Member]
Common Stock [Member]
Additional Paid-In Capital [Member]
Accumulated deficit [Member]
Total
Beginning Balance, Amount at Mar. 31, 2014 $ 4,412us-gaap_StockholdersEquity
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$ 1,902,405us-gaap_StockholdersEquity
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4. Mineral Leases
9 Months Ended
Dec. 31, 2014
Extractive Industries [Abstract]  
Mineral Leases

During 2005, the Company acquired three oil sands mineral leases: (1) an undivided 40% interest in a 1,120-acre parcel, (2) an undivided 20% interest in the same 1,120-acre parcel, and (3) an undivided 16.666% interest in a 640-acre parcel. These leases are located in Carbon County, Utah. Effective September 5, 2014, the first lease was extended through December 31, 2020 and, effective September 26, 2014, the lease terms on the second and third leases were extended through December 31, 2019. The minimum annual lease payments on the leases are $268,915.

 

In 2009, a fourth lease was entered into with William G. Gibbs, a relative of the Chief Executive Officer of the Company, for an additional undivided 5% interest in the 640-acre parcel (for a total 21.666% undivided interest in the 640-acre parcel). This lease is located in Carbon County, Utah, adjacent to the 1,120-acre parcel. This lease has a 6-year life with a minimum yearly lease payment of $7,965 and, pursuant to an Addendum dated September 28, 2014, is scheduled to terminate by December 31, 2020, if the property has not reached commercial production.

 

The Company’s interest in these leases is conditioned upon the payments of royalties, minimum yearly investment in development, tax payments, and other obligations to the owners of the leases. Two of the four leases are conditioned upon reaching the production stage by December 31, 2020, while one of the other leases requires production by December 31, 2019. If the Company does not attain average productivity of at least 500 barrels per day (“bbl/d”) by these dates, the interest in these leases may be terminated. 

 

Upon commencement of operations, each lease requires a production royalty of 10% of the market value of the minerals sold, net of applicable costs and expenses. The Company has the right, but not the obligation, to pool or unitize the leases, such that the ore mined is allocated between, and the royalties paid, on their proportionate interests. If not pooled, the owners will be paid royalties only to the extent the oil sands ore is mined on their respective properties. Through December 31, 2014, no production royalties were accrued or paid because production on these properties had not commenced. After three consecutive calendar years of production on the 1,120-acre parcel, the production royalty on the 1,120-acre parcel shall be the greater of the 10% royalty or $1,000,000 annually. Once production begins, all rents paid count towards the Company’s production royalty commitments.

 

Future minimum lease payments are as follows for the years ending:

 

September 30,    
2015  $276,880 
2016   276,880 
2017   276,880 
2018   276,880 
2019   276,880 
2020   7,965 
      
Total future minimum lease payments  $1,392,365 

 

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5. Derivative Liability (Details - Assumptions) (Embedded Derivative Financial Instruments [Member], Monte Carlo [Member], USD $)
9 Months Ended 12 Months Ended
Dec. 31, 2014
Mar. 31, 2014
Embedded Derivative Financial Instruments [Member] | Monte Carlo [Member]
   
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5. Derivative Liability (Tables)
9 Months Ended
Dec. 31, 2014
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Assets and liabilities measured at fair value

   Fair Value as of December 31, 2014 
   Level 1   Level 2   Level 3   Total 
Liabilities                    
Embedded derivative  $   $   $377,378   $377,378 

  

    Fair Value as of March 31, 2014  
    Level 1     Level 2     Level 3     Total  
Liabilities                                
Embedded derivative   $     $     $ 109,421     $ 109,421  

 

Level 3 fair value reconciliation
   Fair Value Measurements Using Significant Unobservable Inputs 
   (Level 3) 
   Embedded Derivative 
Beginning balance, March 31, 2014  $109,421 
Issuances:     
Embedded derivatives issued in conjunction with Series A preferred stock units   3,755 
Total losses included in earnings   264,202 
Ending balance, December 31, 2014  $377,378 
Fair value assumptions
   December 31,   March 31, 
   2014   2014 
Threshold barrier  $0.35   $0.35 
Average price below $0.35 per share  $0.11   $0.22 
Probability of offer below $0.35 per share   3%    3% 
Preferred share conversion price  $1.40   $1.40 
Conversion ratio   12.73    6.36