0001683168-20-002648.txt : 20200812 0001683168-20-002648.hdr.sgml : 20200812 20200812164906 ACCESSION NUMBER: 0001683168-20-002648 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 49 CONFORMED PERIOD OF REPORT: 20200630 FILED AS OF DATE: 20200812 DATE AS OF CHANGE: 20200812 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PATRIOT GOLD CORP CENTRAL INDEX KEY: 0001080448 STANDARD INDUSTRIAL CLASSIFICATION: GOLD & SILVER ORES [1040] IRS NUMBER: 860947048 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-32919 FILM NUMBER: 201095985 BUSINESS ADDRESS: STREET 1: 3651 LINDELL ROAD SUITE D165 CITY: LAS VEGAS STATE: NV ZIP: 89103 BUSINESS PHONE: 702-456-9565 MAIL ADDRESS: STREET 1: 3651 LINDELL ROAD SUITE D165 CITY: LAS VEGAS STATE: NV ZIP: 89103 FORMER COMPANY: FORMER CONFORMED NAME: NORTHERN OSTRICH CORP DATE OF NAME CHANGE: 20010612 10-Q 1 patgold_10q-063020.htm FORM 10-Q

Table of Contents

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10-Q

 

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934

 

For the Quarterly Period Ended June 30, 2020

OR

[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934

 

For the transition period from _____________ to _____________

Commission file number 000-32919

 

PATRIOT GOLD CORP.

(Exact name of registrant as specified in its charter)

 

3651 Lindell Road, Suite D165

Las Vegas, Nevada 89103

(Address of principal executive offices) (Zip Code)

 

(702) 456-9565

(Registrant's telephone number, including area code)

 

________________________________________________________

(Former name, former address and former fiscal year, if changed since last report)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class Trading Symbol(s) Name of each exchange on which registered
N/A N/A N/A

 

Securities registered pursuant to Section 12(g) of the Exchange Act:

Common Stock, $0.001 par value

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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. [X] Yes   [_] No

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files).     [X] Yes [_] No

 

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

 

  Large accelerated filer  o Accelerated filer  o
  Non-accelerated filer  x Smaller reporting company  x
  Emerging growth company  o  

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [_]

 

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

 

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 74,280,354 shares of common stock, $0.001 par value, issued and outstanding as of August 5, 2020.

 

 

 

   

 

 

TABLE OF CONTENTS

 

PART I –   FINANCIAL INFORMATION   1
         
Item 1.   Financial Statements   2
         
    Consolidated Balance Sheets as of June 30, 2020 (Unaudited) and December 31, 2019   2
         
    Consolidated Statements of Operations (Unaudited) for the three and six months ended June 30, 2020 and 2019 (Unaudited)   3
         
    Consolidated Statements of Stockholders’ Equity (Unaudited) for the three and six months ended June 30, 2020 and 2019 (Unaudited)   4
         
    Consolidated Statements of Cash Flows for the six months ended June 30, 2020   6
         
    Condensed Notes to (Unaudited) Financial Statements   7
         
Item 2.   Management’s Discussion and Analysis of Financial Condition and Results of Operations   20
         
Item 3.   Quantitative and Qualitative Disclosures about Market Risk   23
         
Item 4.   Controls and Procedures   24
         
PART II-   OTHER INFORMATION   25
         
Item 1.   Legal Proceedings   25
         
 Item 1A.   Risk Factors (not applicable)   25
         
Item 2.   Unregistered Sales of Equity Securities and Use of Proceeds   25
         
Item 3.   Defaults Upon Senior Securities   25
         
Item 4.   Mine Safety Disclosures   25
         
Item 5.   Other Information   25
         
Item 6.   Exhibits   26
         
Signatures       27

 

 

 

 i 

 

 

PART I

 

FINANCIAL INFORMATION

 

 

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

 

THIS QUARTERLY REPORT ON FORM 10-Q, INCLUDING EXHIBITS HERETO, CONTAIN FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1933, AS AMENDED, AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. THESE FORWARD-LOOKING STATEMENTS ARE TYPICALLY IDENTIFIED BY THE WORDS “ANTICIPATES,” “BELIEVES,” “EXPECTS,” “INTENDS,” “FORECASTS,” “PLANS,” “ESTIMATES,” “MAY,” “FUTURE,” “STRATEGY,” OR WORDS OF SIMILAR MEANING. VARIOUS FACTORS COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED IN THE FORWARD-LOOKING STATEMENTS, INCLUDING THOSE DESCRIBED IN “RISK FACTORS” IN OUR ANNUAL REPORT ON FORM 10-K. WE ASSUME NO OBLIGATIONS TO UPDATE THESE FORWARD-LOOKING STATEMENTS TO REFLECT NEW INFORMATION, ACTUAL RESULTS, CHANGES IN ASSUMPTIONS, OR CHANGES IN OTHER FACTORS, EXCEPT AS REQUIRED BY LAW.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 1 

 

 

Item 1. Financial Statements

 

PATRIOT GOLD CORP.

CONSOLIDATED BALANCE SHEETS

(unaudited)

 

   June 30,
2020
  

December 31,

2019

 
ASSETS          
Current assets:          
Cash  $507,253   $228,250 
Marketable securities   126,252    158,282 
Royalties receivables   794,076    487,060 
Prepaid expenses   108,000    149,000 
Total current assets   1,535,581    1,022,592 
           
Noncurrent assets:          
Royalty interest – related party (see Note 4)   300,000    300,000 
Total long-term assets   300,000    300,000 
           
Total assets  $1,835,581   $1,322,592 
           
LIABILITIES AND STOCKHOLDERS' EQUITY          
Current liabilities:          
Accounts payable and accrued liabilities  $45,531   $18,706 
Accounts payable and accrued liabilities – related parties   229,923    210,618 
Total current liabilities   275,454    229,324 
           
Commitments and contingencies         
           
Stockholders' equity:          
Preferred stock, par value $.001; 6,500,000 shares authorized; no shares issued at June 30, 2020 and December 31, 2019, respectively         
Series A Preferred stock, par value $.001; 13,500,000 shares authorized; 290,000 shares issued at June 30, 2020 and December 31, 2019, respectively   290    290 
Common stock, par value $.001; 400,000,000 shares authorized; 74,280,354 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively   74,280    74,280 
Treasury stock (100,000 shares)   (9,093)   (9,093)
Additional paid-in capital   29,161,187    29,161,187 
Accumulated other comprehensive income   (16,361)   (16,361)
Accumulated deficit   (27,650,176)   (28,117,035)
Total stockholders' equity   1,560,127    1,093,268 
           
Total liabilities and stockholders' equity  $1,835,581   $1,322,592 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

 

 2 

 

 

PATRIOT GOLD CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

 

   

For the Three Months Ended

June 30,

   

For the Six Months Ended

June 30,

 
    2020     2019     2020     2019  
                         
Revenues   $ 541,402     $ 280,671     $ 929,780     $ 537,337  
                                 
Expenses:                                
Mineral costs     23,434       12,219       107,432       37,227  
Consulting expense     73,544       102,231       137,885       170,650  
Stock based compensation     -       125,202       -       125,202  
Directors Fees     52,500       52,500       105,000       105,000  
General and administrative     36,390       54,452       80,512       83,001  
Total operating expense     185,868       346,604       430,829       521,080  
                                 
Net income (loss) from operations     355,534       (65,933 )     498,951       16,257  
                                 
Other income (expense):                                
Unrealized holding gain (loss) on marketable securities     46,251       (15,107 )     (26,604 )     (35,762 )
Currency exchange     2,423       (1,476 )     (6,509 )     1,875  
Realized loss on sale of marketable securities     -       -       -       (1,894 )
Other miscellaneous income     1,021       27       1,021       53  
Total other income (expense)     49,695       (16,556 )     (32,092 )     (35,728 )
                                 
Net income (loss)   $ 405,229     $ (82,489 )   $ 466,859     $ (19,471 )
                                 
Earnings per share, basic and diluted:                                
Income (loss) per common share - basic   $ 0.01     $ (0.00 )   $ 0.01     $ (0.00 )
Income (loss) per common share - diluted   $ 0.01     $ (0.00 )   $ 0.01     $ (0.00 )
                                 
Weighted average shares outstanding - basic     74,280,354       72,014,222       74,280,354       65,256,857  
Weighted average shares outstanding - diluted     74,280,354       72,063,512       74,280,354       65,306,147  

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

 

 3 

 

 

PATRIOT GOLD CORP.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(unaudited)

 

   Preferred Stock  

Series A

Preferred Stock

   Common Stock   Treasury   Additional Paid-In   Accumulated Other Comprehensive   Retained     
   Shares   Par Value   Shares   Par Value   Shares   Par Value   Stock   Capital   Income   Deficit   Total 
For the 3 months ended June 30, 2019                                    
Balance March 31, 2019      $    290,000   $290    58,428,854   $58,429   $(9,093)  $28,817,778   $(16,361)  $(28,293,681)  $557,362 
                                                        
Exercise of Warrants                   8,000,000    8,000        697,000            705,000 
                                                        
Issuance of restricted common stock                   7,851,500    7,851        306,209            314,060 
                                                        
Vesting of stock options                               21,142            21,142 
                                                        
Net income                                       (82,489)   (82,489)
                                                        
Balance June 30, 2019      $    290,000   $290    74,280,354   $74,280   $(9,093)  $29,842,129   $(16,361)  $(28,376,170)  $1,515,075 

 

For the 6 months ended June 30, 2019                                              
Balance December 31, 2018      $    290,000   $290    58,408,854   $58,409   $(9,093)  $28,815,798   $(16,361)  $(28,356,699)  $492,344 
                                                        
Exercise of Warrants                   8,000,000    8,000        697,000            705,000 
                                                        
Exercise of Options                   20,000    20        1,980            2,000 
                                                        
Issuance of restricted common stock                   7,851,500    7,851        306,209            314,060 
                                                        
Vesting of stock options                               21,142            21,142 
                                                        
Net income                                       (19,471)   (19,471)
                                                        
Balance June 30, 2019      $    290,000   $290    74,280,354   $74,280   $(9,093)  $29,842,129   $(16,361)  $(28,376,170)  $1,515,075 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

 

 4 

 

 

PATRIOT GOLD CORP.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (continued)

(unaudited)

 

   Preferred Stock  

Series A

Preferred Stock

   Common Stock   Treasury   Additional Paid-In   Accumulated Other Comprehensive   Retained     
   Shares   Par Value   Shares   Par Value   Shares   Par Value   Stock   Capital   Income   Deficit   Total 
                                                        
For the 3 months ended June 30, 2020                                              
Balance March 31, 2020      $    290,000   $290    74,280,354   $74,280   $(9,093)  $29,161,187   $(16,361)  $(28,055,405)  $1,154,898 
                                                        
Net income                                       405,229    405,229 
                                                        
Balance June 30, 2020      $    290,000   $290    74,280,354   $74,280   $(9,093)  $29,161,187   $(16,361)  $(27,650,176)  $1,560,127 

 

For the 6 months ended June 30, 2020                                              
Balance December 31, 2019      $    290,000   $290    74,280,354   $74,280   $(9,093)  $29,161,187   $(16,361)  $(28,117,035)  $1,093,268 
                                                        
Net income                                       466,859    466,859 
                                                        
Balance June 30, 2020      $    290,000   $290    74,280,354   $74,280   $(9,093)  $29,161,187   $(16,361)  $(27,650,176)  $1,560,127 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 5 

 

 

PATRIOT GOLD CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

 

   For the Six Months Ended June 30, 
   2020   2019 
         
Net Income (Loss)  $466,859   $(19,471)
Adjustments to reconcile net income (loss) to net cash used in operating activities:          
Compensation expense of stock options       21,142 
Restricted Common stock issued for services       174,059 
Fair value adjustment for marketable securities   32,030    32,568 
Change in operating assets and liabilities:          
Royalties receivables   (307,016)   (36,042)
Prepaid expenses   41,000    (29,000)
Accounts payable and accrued liabilities   26,824    (92,943)
Accounts payable and accrued liabilities – related parties   19,306    118,530 
Net cash flows provided by operating activities   279,003    168,843 
           
Cash flows from investing activities:          
Purchase of royalty interest – related party       (190,000)
Proceeds from the sale of marketable securities       20,833 
Purchase of marketable securities        
Net cash flows used in investing activities       (169,167)
           
Cash flows from financing activities:          
Proceeds from exercise of stock options       2,000 
Net cash flows provided by financing activities       2,000 
           
Net increase in cash   279,003    1,676 
Cash, beginning of period   228,250    115,753 
Cash, end of period  $507,253   $117,429 
           
Supplemental disclosure of cash paid for:          
Interest  $   $ 
Income taxes  $   $ 
           
Non-cash financing activities:          
Exercise of warrants in exchange for note receivable  $   $705,000 
Issuance of restricted stock for prepaid director fees  $   $210,000 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

 

 6 

 

 

PATRIOT GOLD CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2020

Unaudited

 

NOTE 1 - NATURE OF BUSINESS AND OPERATIONS

 

Patriot Gold Corp. (“Company”) was incorporated in the State of Nevada on November 30, 1998. The Company is engaged in natural resource exploration and acquiring, exploring, and developing natural resource properties. Currently the Company is undertaking exploration and development programs in Nevada.

 

The Company’s common stock trades on the Canadian Securities Exchange under the symbol PGOL, and also on the Over-The-Counter (“OTCQB”) market under the symbol PGOL.

 

On May 23, 2017, the Company caused the incorporation of its wholly owned subsidiary, Patriot Gold Canada Corp (“Patriot Canada”), under the laws of British Columbia, Canada.

 

On April 16, 2010, the Company caused the incorporation of its wholly owned subsidiary, Provex Resources, Inc., (“Provex”) under the laws of Nevada. Effective May 7, 2018, Provex’s name was changed to Goldbase, Inc. (“Goldbase”).

  

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Goldbase and Patriot Canada. Collectively, they are referred to herein as “the Company”. Inter-company accounts and transactions have been eliminated.

 

Management’s Estimates and Assumptions

 

The preparation of the consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management believes that all applicable estimates and adjustments are appropriate. Actual results could differ from those estimates.

 

Going Concern

 

Management believes they will have sufficient funds to support their business based on the following: (a) revenues derived from the Moss royalty, given the Moss Mine is now in production; (b) the Company’s marketable securities are relatively liquid; (c) the Company believes it can raise additional funds if needed to support our business plan, although there can be no assurance that the Company can raise any additional funds, or if it can, that such funds will be on terms acceptable to the Company.

 

Exploration and Development Costs

 

Mineral exploration costs and payments related to the acquisition of the mineral rights are expensed as incurred. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs incurred to acquire and develop such property will be capitalized. Such costs will be amortized using the units-of-production method over the estimated life of the probable reserve. No costs have been capitalized through June 30, 2020.

 

 

 

 7 

 

 

Cash and Cash Equivalents and Concentration of Credit Risk

 

The Company considers all investment instruments purchased with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes. The Company has no cash equivalents as of June 30, 2020 and December 31, 2019. Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash deposits. Accounts at banks in the United States are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000, while accounts at banks in Canada are insured by the Canada Deposit Insurance Corporation (“CDIC”) up to $100,000. At June 30, 2020 and December 31, 2019, the Company had $202,636 and $0 in excess of the FDIC and CDIC insured limits, respectively.

 

Marketable Securities

 

Investment securities are classified in one of three categories: held to maturity, available for sale, or trading. Management determines the appropriate classification of securities at the time of purchase. Investment securities are classified as held to maturity when the Company has the positive intent and ability to hold the securities to maturity. As of June 30, 2020, and December 31, 2019, the Company has no investments in held to maturity securities. 

 

Investment securities that are bought and held principally for the purpose of selling them in the near term are classified as trading securities and reported at fair value, with unrealized gains and losses included in earnings.

 

Investment securities that are not considered to be held to maturity or trading are classified as available for sale. This type of investment is stated at fair value with unrealized gains and losses, net of tax, reported in a separate component of shareholders’ equity (“accumulated other comprehensive income”). Gains and losses from sales of investments classified as available for sale are determined using the specific identification method. As of June 30, 2020, and December 31, 2019, the Company has no investments classified as available for sale.

 

The Company’s short-term marketable securities classified as trading securities are comprised of Northern Vertex Mining Corp. and Strata Power Corporation (“Strata”) stock. The Company acquired the Northern Vertex stock on May 26, 2016 as part of the Moss Mine sale. The Company purchased Strata common stock through multiple private placement offerings as an investment in lithium mining extraction technologies (see Note 9).

 

Royalties Receivables

 

Royalties Receivables consist of amounts due from Golden Vertex related to the net smelter return royalty on the Moss Mine in Arizona (see Note 4). An allowance for uncollectible receivables is based on historical collection trends and write-off history. As of June 30, 2020, and December 31, 2019, there was no allowance recorded.

 

Foreign Currency Translation

 

The Company’s functional currency and reporting currency is the U.S. dollar. Monetary items denominated in foreign currency are translated to U.S. dollars at exchange rates in effect at the balance sheet date and non-monetary items are translated at rates in effect when the assets were acquired, or obligations incurred. Revenue and expenses are translated at rates in effect at the time of the transactions. Foreign exchange gains and losses are included in the consolidated statements of operations.

 

Concentration of Credit Risk

 

The Company has no off-balance-sheet concentrations of credit risk such as foreign exchange contracts, options contracts or other foreign hedging arrangements. The Company maintains the majority of its cash balances with two financial institutions in the form of demand deposits.

 

 

 

 8 

 

 

Income/Loss per Share

 

Basic earnings per share is computed by dividing the net income by the weighted average number of shares outstanding during the period. Diluted earnings per share is computed by dividing net income by the weighted-average number of common shares plus dilutive potential common shares outstanding during the period.

 

The following is a reconciliation of the number of shares used in the calculation of basic earnings per share and diluted earnings per share:

 

    For the period ended June 30,  
    2020     2019  
Numerator:            
Net income (loss) available to common stockholders   $ 466,859     $ (19,471 )
                 
Denominator:                
Weighted-average shares, basic     74,280,354       65,256,857  
Effect of dilutive shares:                
Incremental shares from the assumed exercise of dilutive stock warrants     -       49,290  
Weighted-average shares diluted     74,280,354       65,306,147  
                 
Net income (loss) per common share, basic   $ 0.01     $ (0.00 )
Net income (loss) per common share, diluted   $ 0.01     $ (0.00 )

 

The following were excluded from the computation of diluted shares outstanding as they would have had an anti-dilutive impact on the Company’s loss from continuing operations and loss from discontinued operations. In periods where the Company has a net loss, all dilutive securities are excluded.

 

   For the period ended June 30, 
   2020   2019 
Common stock equivalents:          
Stock options   7,465,000    7,465,000 
Stock warrants   11,660,000    11,460,000 
Total   19,125,000    18,925,000 

 

Comprehensive Income

 

Comprehensive income consists of net income and other gains and losses affecting shareholders’ equity that, under generally accepted accounting principles, are excluded from net income. For the Company, such items consist primarily of foreign currency translation gains and losses.

 

Accumulated other comprehensive income at June 30, 2020 and December 31, 2019, consists of foreign currency adjustments related to the Company changing its functional currency from Canadian to U.S. dollar in 2003.

 

 

 

 9 

 

 

Stock Options

 

The Company measures all employee stock-based compensation awards using a fair value method on the date of grant and recognizes such expense in its consolidated financial statements over the requisite service period. The Company uses the Black-Scholes pricing model to determine the fair value of stock-based compensation awards on the date of grant. The Black-Scholes pricing model requires management to make assumptions regarding option lives, expected volatility, and risk-free interest rates.

 

The Company accounts for non-employee stock-based awards in accordance with the Accounting Standards Update (ASU) 2018-07, Compensation—Stock Compensation (Topic 718): Under the new standard, the Company will value all equity classified awards at their grant-date under ASC718 and no options were required to be revalued at adoption.

 

The Company uses the Black-Scholes pricing model to determine the fair value of stock-based compensation awards. The Black-Scholes pricing model requires management to make assumptions regarding option lives, expected volatility, and risk-free interest rates.

 

Stock-based Compensation

 

We account for equity-based transactions with nonemployees awards in accordance with the Accounting Standards Update (ASU) 2018-07, Compensation—Stock Compensation (Topic 718): ASU 2018-07 establishes that equity-based payment transactions with nonemployees shall be measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The fair value of common stock issued for payments to nonemployees is measured at the market price on the date of grant. The fair value of equity instruments, other than common stock, is estimated using the Black-Scholes option valuation model. In general, we recognize the fair value of the equity instruments issued as deferred stock compensation and amortize the cost over the term of the contract.

 

We account for employee stock-based compensation in accordance with the guidance of FASB ASC Topic 718, Compensation—Stock Compensation, which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values. The fair value of the equity instrument is charged directly to compensation expense and credited to additional paid-in capital over the period during which services are rendered.

  

The Company has granted Restricted Common Stock, where the Restricted Common Stock is restricted for a period of three years following the date of grant. During the three-year period the recipient may not sell or otherwise dispose of the shares. The Company has applied a discount for illiquidity to the price of the Company’s stock when determining the amount of expense to be recorded for the Restricted Common Stock issuance. The discount for illiquidity for the Restricted Common Stock was estimated on the date of grant by taking the average close price of the freely traded common shares for the period in which the services were provided, and applying an illiquidity discount of 10% for each multiple that the total Restricted Common Stock is of the average daily volume for the period, to a maximum of 50%.

 

Fair Value of Financial Instruments

 

The carrying value of the Company's financial instruments, including prepaids, accounts payable and accrued liabilities, at June 30, 2020 and December 31, 2019 approximates their fair values due to the short-term nature of these financial instruments. Management is of the opinion that the Company is not exposed to significant interest or credit risks arising from these financial instruments. The Company carries other company’s equity instruments at fair value as required by U.S. GAAP, which are valued using level 1 inputs under the fair value hierarchy.

 

In general, investments with original maturities of greater than 90 days and remaining maturities of less than one year are classified as short-term investments. Investments with maturities beyond one year may also be classified as short-term based on their highly liquid nature and can be sold to fund current operations.

 

 

 

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Fair Value Hierarchy

 

Fair value is defined within the accounting rules as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The rules established a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. As presented in the tables below, this hierarchy consists of three broad levels:

 

Level 1. Quoted prices in active markets for identical assets or liabilities.

 

Level 2. Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets with insufficient volume or infrequent transactions (less active markets), or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated with observable market data for substantially the full term of the assets or liabilities. Level 2 inputs also include non-binding market consensus prices that can be corroborated with observable market data, as well as quoted prices that were adjusted for security-specific restrictions.

 

Level 3. Unobservable inputs to the valuation methodology are significant to the measurement of the fair value of assets or liabilities. These Level 3 inputs also include non-binding market consensus prices or non-binding broker quotes that we were unable to corroborate with observable market data.

 

Assets measured at fair value on a recurring basis by level within the fair value hierarchy are as follows:

 

     Fair Value Measurement at    Fair Value Measurement at
     June 30, 2020    December 31, 2019
     Using
Level 1
   Total     Using
Level 1
   Total 
Assets:                      
Marketable securities  $ 126,252    $126,252   $ 158,282    $158,282 

 

Revenue Recognition

 

On June 1, 2018, the Company adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“ASC 606”), which provides a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The Company receives a royalty from Golden Vertex of 3% of net smelter returns (see Note 3) and recognizes revenue at the time minerals are produced and sold at the Moss Mine. The Company’s revenue recognition policy standards include the following elements under ASU 606:

 

  1. Identify the contract with the customer. The contract with Golden Vertex is documented in the Purchase and Sale Agreement dated 5/12/16 and the Royalty Deed dated 5/25/16.

 

  2. Identify the performance obligations in the contract. The performance obligation in the contract required Patriot to relinquish its 30% interest in the Moss Mine. The Company conveyed all of its right, title and interest in those certain patented and unpatented lode mining claims situated in the Oatman Mining District, Mohave County, Arizona together with all extralateral and other associated rights, water rights, tenements, hereditaments and appurtenances belonging or appertaining thereto, and all rights-of-way, easements, rights of access and ingress to and egress from the claims appurtenant thereto, and in which the Company had any interest.

 

  3. Determine the transaction price. The transaction price was C$1,500,000 plus 3% of the Net Smelter Returns on the future production of the Moss Mine. See Note 3 for definition of Net Smelter Returns.

 

 

 

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  4. Allocate the transaction price to the performance obligations in the contract. The Company only has one performance obligation, the transfer of the rights to the Moss Mine, which has already been fulfilled.

  

  5. Recognize revenue when (or as) the entity satisfies a performance obligation. The C$1,500,000 was recognized as a sale of the mining rights in 2016, resulting in a gain from the disposition of the property. The 3% net smelter returns royalty will be recognized as revenue in the period that Golden Vertex produces and sells minerals from the Moss Mine, which began in March 2018. The royalties that have been received to date have been highly variable, as the amounts are dependent upon the monthly production, the demand of the buyers, the spot price of gold and silver, the costs associated with refining and transporting the product, etc. As such, management has determined that the revenue recognition shall be treated as variable consideration as defined in ASC 606. Variable consideration should only be recognized to the extent that it is probable that a significant reversal of revenue will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Given the fact that royalties to date have been highly variable with a great degree of uncertainty, and any attempts to estimate future revenue would likely result in a significant reversal of revenue, royalty revenue will be recognized when payments and settlement statements are received from Golden Vertex, in the period for which the sales were made by Golden Vertex. It is at that time that any uncertainty related to royalty payments is resolved. The Company applied ASC 606 using the modified retrospective method applied to contracts not yet completed as of the date of adoption.

 

Related Party Transactions

 

A related party is generally defined as (i) any person who holds 10% or more of the Company’s securities and their immediate families, (ii) the Company’s management, (iii) an entity or person who directly or indirectly controls, is controlled by or is under common control with the Company, or (iv) anyone who can significantly influence the financial and operating decisions of the Company. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties.

  

Income Taxes

 

The Company follows ASC 740-10-30, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the fiscal year in which the differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Statements of Income in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized.

 

The Company adopted ASC 740-10-25 (“ASC 740-10-25”) with regard to uncertainty of income tax positions. ASC 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under ASC 740-10-25, we may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. ASC 740-10-25 also provides guidance on derecognition, classification, interest and penalties on income taxes, and accounting in interim periods and requires increased disclosures. We had no material adjustments to our liabilities for unrecognized income tax benefits according to the provisions of ASC 740-10-25.

 

New Accounting Pronouncements

 

In June 2016, the FASB issued ASU 2016-13, “Measurement of Credit Losses on Financial Instruments.” The pronouncement revises the methodology for measuring credit losses on financial instruments and the timing of when such losses are recorded. The guidance is effective for the Company beginning in the first quarter of fiscal year 2023 with early adoption permitted. The Company is currently evaluating the potential impact of this guidance on it consolidated financial statements.

 

 

 

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The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

 

NOTE 3 - MINERAL PROPERTIES

 

Bruner and Vernal Properties

 

On May 28, 2010 the Company entered into an exclusive right and option agreement with Canamex Resources Corp. (“Canamex”) whereby Canamex could earn a 70% (or up to 75% if a bankable feasibility study is performed) undivided interest in the Bruner, and Bruner Expansion properties, herein after collectively referred to as the “Bruner Properties”. Upon the completion of the terms of the Agreement by Canamex, and upon earning its initial interest, the parties agreed to negotiate a definitive joint venture agreement in good faith to supersede the agreement.

 

During the first half of 2016, it was determined by the Company that Canamex had successfully earned a 70% interest in the Bruner Property according to the terms of the Bruner Option Agreement.

  

On April 25, 2017, the Company and Canamex Resources Corp. entered into a purchase and sale agreement (“Bruner Purchase and Sale Agreement”) whereby Canamex Resources purchased Patriot Gold's 30% working interest in the Bruner gold/silver mine for US$1,000,000 cash. The Company retains a two percent net smelter return (“NSR”) royalty on the Bruner properties including any claims acquired within a two-mile area of interest around the existing claims. Additionally, Canamex has the option to buy-down half of the NSR royalty retained by Patriot for US$5 million any time during a five-year period following closing of the purchase and sale agreement. 

 

As of June 30, 2020, the Company has incurred approximately $89,616 of accumulated option and exploration expenses on the Vernal property.

 

During the six months ended June 30, 2020 and 2019, the Company incurred no exploration expenses on the Vernal property, respectively.

 

Moss Mine Property

 

On March 4, 2004 the Company signed a Letter Agreement (the “Agreement”) that earned it a 100% interest in a number of patented and unpatented mining claims known as the Moss Mine property located in the Oatman Mining District of Mohave county Arizona by paying MinQuest Inc. a one-time fee of $50,000. This $50,000 fee was paid on July 7, 2004. Subject to the terms and conditions of the Agreement, MinQuest would retain a 3% NSR on any and all production derived from the unpatented mining claims listed under the Agreement and on public lands within 1 mile of MinQuest, Inc.’s outside perimeter of the present claim boundary; a 1.0% NSR on patented claims with no other royalty within the property; and a 0.5% overriding NSR on all production within the property derived from patented claims with other royalty interests.

 

On February 28, 2011, the Company entered into an Exploration and Option to Enter Joint Venture Agreement (the “Moss Agreement”), with Idaho State Gold Company, LLC, (“ISGC”) whereby the Company granted the option and right to earn a vested seventy percent (70%) interest in the property and the right and option to form a joint venture for the management and ownership of the properties called the Moss Mine, Mohave County, Arizona. Pursuant to the Moss Agreement, ISGC paid US $500,000 upon execution, and agreed to spend an aggregate total of US $8 million on exploration and related expenditures over the next five years and subsequent to exercise the earn-in, ISGC and Patriot Gold would form a 70/30 joint venture. Under this agreement financing of future work on the property would be on a proportional basis under the direction of a management committee with voting rights proportional to ownership percentage. Either party could be diluted on the basis of a standard formula if it did not contribute to the planned programs. If either party was diluted below 10 percent, their interest would convert to a three percent NSR (net smelter return) royalty. An existing 3-3.5 percent NSR existed on the Moss Mine Property.

 

 

 

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In March 2011, ISGC transferred its rights to the Exploration and Option Agreement dated February 28, 2011, to Northern Vertex Mining Corp. (“Northern Vertex”).

 

On January 21, 2016, an arbitrator ruled that Northern Vertex met the required expenditures, successfully carried out pilot production, and produced a feasibility study thereby fulfilling the Exploration and Option Agreement terms entitling them to have earned an undivided 70% interest in the Moss Mine.

 

On May 12, 2016, the Company entered into a material definitive Agreement for Purchase and Sale of Mining Claims and Escrow Instructions (the “Purchase and Sale Agreement”) with Golden Vertex Corp., an Arizona corporation (“Golden Vertex,” a wholly-owned Subsidiary of Northern Vertex) whereby Golden Vertex agreed to purchase the Company’s remaining 30% working interest in the Moss Mine for $1,155,600 (C$1,500,000) plus a 3% net smelter return royalty. Specifically, the Company conveyed all of its right, title and interest in those certain patented and unpatented lode mining claims situated in the Oatman Mining District, Mohave County, Arizona together with all extralateral and other associated rights, water rights, tenements, hereditaments and appurtenances belonging or appertaining thereto, and all rights-of-way, easements, rights of access and ingress to and egress from the claims appurtenant thereto and in which the Company had any interest. The purchase price consisted of $924,479 (C$1,200,000) in cash payable at closing and the remaining $231,120 (C$300,000) was paid by the issuance of Northern Vertex common shares to the Company valued at $0.26 (C$0.35) (857,140 shares), issued pursuant to the terms and provisions of an investment agreement entered between the Company and Northern Vertex contemporaneous to the Purchase and Sale Agreement. The investment agreement prohibited the resale of the shares during the four-month period following the date of issuance and thereafter, the Company agreed to not sell the shares in an amount exceeding 100,000 shares per month.

 

Windy Peak Property

 

The Windy Peak Property, (“Windy Peak”) consists of 114 unpatented mineral claims covering approximately 2,337 acres, 3 miles NNE of the Bell Mountain and 7 miles east of the Fairview mining district in southwest Nevada.

 

As of June 30, 2020, the company has incurred approximately $782,707 of exploration expenses on the Windy Peak Property, and $95,498 and $37,047 were spent for the six months ended June 30, 2020 and 2019, respectively.

 

Rainbow Mountain Property

 

In the fall of 2018, after conducting initial reconnaissance of the Rainbow Mountain, the Company acquired the Rainbow Mountain Property (“Rainbow Mountain”). This early-stage exploration project was secured through staking and filing the associated paperwork and fees with the BLM and County.

 

The Rainbow Mountain gold project consists of 81 unpatented lode claims totaling approximately 1,620 contiguous acres, located approximately 23 km southeast of Fallon, in the state of Nevada. Access to the project area is by paved highway, followed by a short stretch of gravel road.

 

Annual maintenance fees paid to the BLM and recording fees must be paid to the respective county on or before September 1 of each year to keep the claims in good standing, provided the filings are kept current these claims can be kept in perpetuity. As of June 30, 2020, the company has incurred approximately $92,874 of fees and exploration expenses on the Rainbow Mountain Property, and $11,934 and $180 were spent for the six months ended June 30, 2020 and 2019, respectively.

 

 

 

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NOTE 4 – ROYALTY INTERESTS

 

Pursuant to the Purchase and Sale Agreement with Golden Vertex, the Company has a 3% net smelter return royalty on the Moss Mine in Arizona. For the six months ended June 30, 2020 and 2019, the Company earned royalties of $929,780 and $537,337, respectively. As of June 30, 2020 and December 31, 2019, the Company had Royalties Receivables of $794,076 and $487,060, respectively.

 

Pursuant to the Bruner Purchase and Sale Agreement with Canamex Resources, the Company has a 2% net smelter return royalty on the Bruner Gold/Silver mine in Nevada. As of June 30, 2020, no royalties have yet been earned.

 

In March 2019, the Company purchased a Vanadium Oxide royalty interest from a related party. In exchange for a non-refundable payment of $300,000, the Company will receive royalties based on the gross production of Vanadium Oxide (“Vanadium”) from a bitumen deposit covering 19 oil sands leases in Alberta. For each barrel of bitumen produced from the specified oil sands until March 21, 2039, or upon termination of mining, whichever is earlier, the Company will be paid a royalty equal to 25 grams of Vanadium per barrel of bitumen produced, multiplied by the price of Vanadium Pentoxide 98% min in-warehouse Rotterdam published on the last business day of the month in which the gross production of bitumen occurred. As of June 30, 2019, $220,000 has been paid, and the remaining $80,000 was paid in installments through December 31, 2019. As of June 30, 2020, no royalties have yet been earned.

  

NOTE 5 - STOCK OPTIONS

 

The Company’s Board of Directors adopted the 2019 Stock Option Plan (the “2019 Plan”) in July 2019, the 2014 Stock Option Plan (the “2014 Plan”) in June 2014, the 2012 Stock Option Plan (the “2012 Plan”) in July 2012 and the 2005 Stock Option Plan (the “2005 Plan”) in November 2005. The combined compensation costs charged against those plans was $0 and $21,142 for the six months ended June 30, 2020 and 2019, respectively.

 

The 2019 Plan, the 2014 Plan, the 2012 Plan and the 2005 Plan reserve and make available for grant common stock shares of up to 9,500,000, 5,000,000, 3,900,000 and 2,000,000, respectively. In November 2015, the 2005 Stock Option Plan expired so that no share may be granted pursuant to this Plan. No option can be granted under the plans 10 years after the plan inception date.

 

Options granted to officers or employees under the plans may be incentive stock options or non-qualified stock options. Options granted to directors, consultants, and independent contracts are limited to non-qualified stock options.

  

The plans are administered by the Board of Directors or a committee designated by the Board of Directors. Subject to specified limitations, the Board of Directors or the Committee has full authority to grant options and establish the terms and conditions for vesting and exercise thereof. However, the aggregate fair market value (determined at the time the option is granted) of the shares with respect to which incentive stock options are exercisable for the first time by an optionee during any calendar year cannot exceed $100,000.

 

Options granted pursuant to the plans are exercisable no later than ten years after the date of grant. The exercise price per share of common stock for options granted shall be determined by the Board of Directors or the designated committee, except for incentive stock options granted to a holder of ten percent or more of Patriot's common stock, for whom the exercise price per share will not be less than 110% of the fair market value.

 

As of June 30, 2020, there were 9,500,000, 535,000 and 2,680,000 shares available for grant under the 2019 Plan, 2014 Plan and 2012 Stock Option Plan, respectively.

 

 

 

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Stock Option Activity

 

The fair value of each stock option is estimated at the date of grant using the Black-Scholes option pricing model. No options were granted since 2018. Assumptions regarding volatility, expected term, dividend yield and risk-free interest rate are required for the Black-Scholes model. The volatility assumption is based on the Company’s historical experience. The risk-free interest rate is based on a U.S. treasury note with a maturity similar to the option award’s expected life. The expected life represents the average period of time that options granted are expected to be outstanding.

 

The following table summarizes stock option activity and related information for the period ended June 30, 2020:

 

   Number of
Stock Options
Outstanding
   Weighted
Average
Exercise
Price
   Weighted
Average
Remaining
Contractual
Life (Years)
   Aggregate
Intrinsic
Value
 
Balance December 31, 2018   7,485,000   $0.10    7.48    0.00 
Option granted                  
Options cancelled / expired                  
Options exercised   (20,000)   0.10           
Balance December 31, 2019   7,465,000   $0.10    6.48    0.00 
Option granted                  
Options cancelled / expired                  
Options exercised                  
Balance June 30, 2020   7,465,000   $0.10    5.99    0.00 
                     
Exercisable at June 30, 2020   7,465,000   $0.10    5.99    0.00 

  

The following table summarized information pertaining to unvested stock options for the period ended June 30, 2020:

 

   Shares   Weighted
Average
Grant Date
Fair Value
 
Unvested at December 31, 2018   350,000   $0.113 
Granted        
Vested   (350,000)   0.113 
Exercised / forfeited        
Unvested at December 31, 2019        
Granted        
Vested        
Exercised / forfeited        
Unvested at June 30, 2020      $ 

  

The Company issues new stock when options are exercised.

 

 

 

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NOTE 6 - COMMON STOCK

 

The Company may issue up to 400,000,000 shares of $.001 par value common stock. As of June 30, 2020, the Company had 74,280,354 of common shares outstanding. Some of these outstanding shares were granted as payment for services provided to the Company and are restricted. The restricted common stock is restricted for a period of three years following the date of grant. During the three-year period the recipient may not sell or otherwise dispose of the shares. The Company has applied a discount for illiquidity to the price of the Company’s stock when determining the amount of expense to be recorded for the Restricted Common Stock issuance. The discount for illiquidity for the Restricted Common Stock was estimated on the date of grant by taking the average close price of the freely traded common shares for the period in which the services were provided, and applying an illiquidity discount of 10% for each multiple that the total Restricted Common Stock is of the average daily volume for the period, to a maximum of 50%. 

 

NOTE 7 - WARRANTS

 

The following table summarizes warrant activity during the period ended June 30, 2020. All outstanding warrants were exercisable during this period.

 

   Number of
Warrants
   Weighted Average
Exercise Price
 
Outstanding December 31, 2018   32,446,957   $0.09 
Issued        
Canceled / exercised   (8,000,000)   0.09 
Expired   (12,786,957)   0.06 
Outstanding December 31, 2019   11,660,000   $0.12 
Issued        
Canceled / exercised        
Expired        
Outstanding June 30, 2020   11,660,000   $0.12 

 

In April 2019, warrants for 8,000,000 shares were exercised in exchange for a note receivable for $705,000. As a result of this transaction, the shareholder is now considered a beneficial owner (see Note 9 – Related Party Transactions). The note is non-interest bearing and can be repaid at any time with 15 days advance notice to the Company. As this note remains outstanding as of June 30, 2020, in accordance with ASC 505-10-45-2, it has been reclassified as a reduction of Additional Paid-In Capital. 

 

The following tables summarizes outstanding warrants as of June 30, 2020 all of which are exercisable:

 

      Warrants Outstanding and Exercisable  
Range of Exercise Prices       Number of
Warrants
      Weighted
Avg Exercise
Price
      Remaining Contractual Life (years)  
$0.05 - $0.08       2,340,000       $0.08       0.36  
$0.09 - $0.14       6,320,000       $0.11       3.79  
$0.15 - $0.21       3,000,000       $0.16       5.22  
                           
Total Outstanding June 30, 2020       11,660,000                  

 

 

 

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NOTE 8 - PREFERRED STOCK

 

As of June 30, 2020, there are 290,000 shares of Series A preferred stock outstanding, owned by a related party. The holders of the Series A Preferred stock shall be entitled to receive non-cumulative dividends in preference to the declaration or payments of dividends on the Common Stock. In the event of liquidation of the Company, the holders of the Series A Preferred Stock shall receive any accrued and unpaid dividends before distribution or payments to the holders of the Common Stock. Series A Preferred Stock carries the same right to vote and act as Common stock, except that it carries super-voting rights entitling it to One Hundred (100) votes per share.

 

NOTE 9 - RELATED PARTY TRANSACTIONS

 

For the six months ended June 30, 2019, Mr. Zachary Black, a Board Member, received 250,000 shares of restricted common stock, in lieu of cash, for services provided to the Company. The Restricted Common Stock is restricted for a period of three years following the date of grant. The shares were valued at $0.04 for total non-cash expense of $10,000. Mr. Black provides geological consulting services to the Company pursuant to a consulting agreement. For the six months ended June 30, 2020 and 2019, Mr. Black was paid fees in the amount of $14,370 and $9,044, respectively.

 

For the six months ended June 30, 2019, Mr. Robert Coale, Chairman of the Board, received 250,000 shares of restricted common stock, in lieu of cash, for services provided to the Company. The Restricted Common Stock is restricted for a period of three years following the date of grant. The shares were valued at $0.04 for total non-cash expense of $10,000. Mr. Coale provides geological consulting services to the Company pursuant to a consulting agreement. For the six months ended June 30, 2020 and 2019, Mr. Coale was paid no consulting fees.

 

For the six months ended June 30, 2019, Mr. Trevor Newton, President, Chief Financial Officer, Secretary, Treasurer and Director of the Company, received 2,101,500 shares of restricted common stock, in lieu of cash, for services provided to the Company. The Restricted Common Stock is restricted for a period of three years following the date of grant. The shares were valued at $0.04 for total non-cash expense of $84,060. Mr. Newton provides consulting services to the Company pursuant to a consulting agreement. For the six months ended June 30, 2020 and 2019, Mr. Newton was paid fees in the amount of $106,737 and $91,384, respectively.

 

Prior to 2019, Board Members were not paid directors’ fees. However, in an effort to keep expenses down and avoid hiring additional staff, Board Members have become more active in the provision of services as the Company has become more active in developing its projects, vetting new properties, and managing its corporate affairs. Based on the recommendation from legal counsel, and pursuant to a resolution adopted by the Board, each director is now paid fees of $70,000 per calendar year. Each director term is three years. As of June 30, 2020, the fees for Mr. Coale and Mr. Black for 2019 and the first six months of 2020 totaling $105,000 each, are reflected in Accounts Payable and Accrued Liabilities – Related Parties. In lieu of cash, Mr. Newton opted to receive his director fees in restricted shares of the Company, totaling 5,250,000 shares. The shares were valued at $0.04 for total non-cash expense of $35,000 for the six months ended June 30, 2020 and 2019, respectively, recorded as Directors Fees Expense, and the fees for the remainder of calendar year 2020 and calendar year 2021 are recorded as Prepaid Expenses, in the amount of $105,000. The Company recognizes these consulting fees as general and administrative expenses in the Consolidated Statements of Operations.

  

As discussed in Note 7 above, in April 2019, an unrelated third party exercised warrants for 8,000,000 shares in exchange for a note receivable for $705,000. As a result of this transaction, the owner of the stock is now a related party. The note is non-interest bearing and can be repaid at any time with 15 days advance notice to the Company. As this note remains outstanding as of December 31, 2019, in accordance with ASC 505-10-45-2, it has been reclassified as a reduction of Additional Paid-In Capital. In addition, this shareholder provides consulting services to the company including claims administration of the Moss Mine royalties. For the six months ended June 30, 2020 and 2019, consulting fees were paid in the amount of $5,895 and $50,000, respectively.

 

The Company owns 2,760,260 shares of common stock of Strata Power Corporation (“Strata”), acquired through a series of private placements, as an investment in lithium mining extraction technologies. The purchase was accounted for as a marketable security in available for sale securities. Strata is a related party through Trevor Newton, who is President and a member the Board of Directors of both Patriot and Strata. Management has considered the guidance that is used to evaluate whether the Company has significant influence over Strata and has determined that no such significant influence exists.

 

 

 

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NOTE 10 - SUBSEQUENT EVENTS

 

In accordance with SFAS 165 (ASC 855-10) management has performed an evaluation of subsequent events through the date that the financial statements were available to be issued and has determined that it does not have any material subsequent events to disclose in these financial statements, other than the following:

 

On March 11, 2020, the World Health Organization (WHO) notified the public of the existence of a global health pandemic relating to the COVID-19 virus, and subsequently on March 13, 2020, President Trump declared that the pandemic was a national emergency. Regarding the COVID-19 virus and the economic impacts associated with it, the Company is unable at this time to determine what, if any, effect it will have on the operations or revenues of the Company.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

Forward-Looking Statements

 

This Quarterly Report on Form 10-Q contains forward-looking information. Forward-looking information includes statements relating to future actions, prospective products, future performance or results of current or anticipated products, sales and marketing efforts, costs and expenses, interest rates, outcome of contingencies, financial condition, results of operations, liquidity, business strategies, cost savings, objectives of management of Patriot Gold Corp. (hereinafter referred to as the “Company,” “Patriot Gold” or “we”) and other matters. Forward-looking information may be included in this Annual Report on Form 10-K or may be incorporated by reference from other documents filed with the Securities and Exchange Commission (the “SEC”) by the Company. One can find many of these statements by looking for words including, for example, “believes,” “expects,” “anticipates,” “estimates” or similar expressions in this Annual Report on Form 10-K or in documents incorporated by reference in this Annual Report on Form 10-K. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information or future events.

 

The Company has based the forward-looking statements relating to the Company’s operations on management’s current expectations, estimates and projections about the Company and the industry in which it operates. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that we cannot predict. In particular, we have based many of these forward-looking statements on assumptions about future events that may prove to be inaccurate. Accordingly, the Company’s actual results may differ materially from those contemplated by these forward-looking statements. Any differences could result from a variety of factors, including, but not limited to general economic and business conditions, competition, and other factors.

 

General Overview

 

As a natural resource exploration company, our focus is to acquire, explore and develop natural resource properties which may host mineral reserves which may be economical to extract commercially. With this in mind, we have identified and secured interests in mining claims with respect to properties in Nevada. Current cash on hand plus anticipated royalty revenue is sufficient to fund planned operations for FY 2020 after payment of accounts payable outstanding at June 30, 2020. Our officers and directors and advisors, attorneys and consultants will continue to be utilized to support all operations.

 

Results of Operations

 

Comparison of the Three and Six Months Ended June 30, 2020 to the Three and Six Months Ended June 30, 2019

 

During the three months ended June 30, 2020 and 2019, we had revenues of $541,402 and $280,671, respectively, resulting from the Moss Mine royalty. During the six months ended June 30, 2020 and 2019, we had revenues of $929,780 and $537,337, respectively. We are currently exploring and developing our properties and are actively reviewing new projects.

 

Net profit for the three months ended June 30, 2020 was $405,229 compared to net loss of $82,489 for the three months ended June 30, 2019. Net profit for the six months ended June 30, 2020 was $466,859 compared to net loss of $19,471 for the six months ended June 30, 2019.The change in profitability is primarily due to the $392,443 of additional royalty revenue received from the Moss Mine, compared to the prior year. In addition, there was an approximate $70,000 increase in mineral and exploration expenses due to additional exploration expenses at the Windy Peak property. This was offset by an approximate $33,000 decrease of consulting expense due to a decline in claims administration consulting and $9,000 decrease in the unrealized holding loss on marketable securities. In addition, there has been no stock based compensation thus far in 2020, causing a $125,000 decrease in stock based compensation expense.

 

 

 

 20 

 

 

For the three months ended June 30, 2020 and 2019, mineral and exploration expenses were $23,434 and $12,219, respectively. For the six months ended June 30, 2020 and 2019, mineral and exploration expenses were $107,432 and $37,227, respectively. The increase in 2020 is primarily due to drilling and consulting expenditures on the Windy Peak project.

 

For the three and six months ended June 30, 2020 and 2019, stock based compensation expense was $0 and $125,202, respectively.

 

For the three months ended June 30, 2020 and 2019, general and administrative expenses were $36,390 and $54,452, respectively.

 

For the six months ended June 30, 2020 and 2019, general and administrative expenses were $80,512 and $83,001, respectively.

 

For the three months ended June 30, 2020 and 2019, other income (expenses) were $49,695 and ($16,556), respectively. For the six months ended June 30, 2020 and 2019, other income (expenses) were ($32,092) and ($35,728), respectively. The change in other income/expense is due to an approximate $9,000 decrease in unrealized holding losses on marketable securities.

 

Liquidity and Capital Resources

 

We had total assets of $1,835,581 at June 30, 2020 consisting primarily of $507,253 of cash, $126,252 of marketable securities, $794,076 of royalty receivables, $108,000 of prepaid expenses, and a $300,000 royalty interest. We had total liabilities of $275,454 at June 30, 2020, consisting primarily of accounts payable and accrued expenses.

 

We anticipate that we will incur the following during the year ended December 31, 2020:

 

  · $1,000,000 for operating expenses, including exploration, working capital and general, legal, accounting and administrative expenses associated with reporting requirements under the Securities Exchange Act of 1934 and compliance with Canadian regulatory authorities.

 

Cash provided by operations was $279,003 and $168,843 for the six months ended June 30, 2020 and 2019, respectively. The $110,160 increase in cash provided by operations was primarily due to the increase in the change of royalty receivables of approximately $271,000, the decrease of approximately $174,000 of restricted common stock issued for services and the increase in the change of accounts payable and accrued liabilities of approximately $120,000.

 

Investing activities for the six months ended June 30, 2020 and 2019 used cash of $0 and $169,167, respectively. Cash used in 2019 related to the purchase of a royalty interest for Vanadium Oxide, offset by cash received from the sale of marketable securities.

 

Financing activities during the six months ended June 30, 2020 and 2019 generated cash of $0 and $2,000, respectively. During the six months ended June 30, 2019, we generated cash of $2,000 from the exercise of stock options.

 

Management estimates that the Company will not need additional funding for the next twelve months.

 

We currently have no agreements, arrangements or understandings with any person to obtain funds through bank loans, lines of credit or any other sources.

 

 

 

 21 

 

 

Off Balance Sheet Arrangements

 

We have no off-balance sheet arrangements.

 

Critical Accounting Policies

 

Use of Estimates

 

The preparation of the consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management believes that all applicable estimates and adjustments are appropriate. Actual results could differ from those estimates.

 

Revenue Recognition

 

On June 1, 2018, the Company adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“ASC 606”), which provides a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The Company receives a royalty from Golden Vertex of 3% of net smelter returns (see Note 3) and recognizes revenue at the time minerals are produced and sold at the Moss Mine. The Company’s revenue recognition policy standards include the following elements under ASU 606:

 

  1. Identify the contract with the customer. The contract with Golden Vertex is documented in the Purchase and Sale Agreement dated 5/12/16 and the Royalty Deed dated 5/25/16.

 

  2. Identify the performance obligations in the contract. The performance obligation in the contract required Patriot to relinquish its 30% interest in the Moss Mine. The Company conveyed all of its right, title and interest in those certain patented and unpatented lode mining claims situated in the Oatman Mining District, Mohave County, Arizona together with all extralateral and other associated rights, water rights, tenements, hereditaments and appurtenances belonging or appertaining thereto, and all rights-of-way, easements, rights of access and ingress to and egress from the claims appurtenant thereto, and in which the Company had any interest.

 

  3. Determine the transaction price. The transaction price was C$1,500,000 plus 3% of the Net Smelter Returns on the future production of the Moss Mine. See Note 3 for definition of Net Smelter Returns.

 

  4. Allocate the transaction price to the performance obligations in the contract. The Company only has one performance obligation, the transfer of the rights to the Moss Mine, which has already been fulfilled.

  

  5. Recognize revenue when (or as) the entity satisfies a performance obligation. The C$1,500,000 was recognized as a sale of the mining rights in 2016, resulting in a gain from the disposition of the property. The 3% net smelter returns royalty will be recognized as revenue in the period that Golden Vertex produces and sells minerals from the Moss Mine, which began in March 2018. The royalties that have been received to date have been highly variable, as the amounts are dependent upon the monthly production, the demand of the buyers, the spot price of gold and silver, the costs associated with refining and transporting the product, etc. As such, management has determined that the revenue recognition shall be treated as variable consideration as defined in ASC 606. Variable consideration should only be recognized to the extent that it is probable that a significant reversal of revenue will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Given the fact that royalties to date have been highly variable with a great degree of uncertainty, and any attempts to estimate future revenue would likely result in a significant reversal of revenue, royalty revenue will be recognized when payments and settlement statements are received from Golden Vertex, in the period for which the sales were made by Golden Vertex. It is at that time that any uncertainty related to royalty payments is resolved. The Company applied ASC 606 using the modified retrospective method applied to contracts not yet completed as of the date of adoption.

 

 

 

 22 

 

 

Mineral Property Acquisition and Exploration Costs

 

Mineral exploration costs and payments related to the acquisition of the mineral rights are expensed as incurred. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs incurred to acquire and develop such property will be capitalized. Such costs will be amortized using the units-of-production method over the estimated life of the probable reserve. No costs have been capitalized through June 30, 2020.

 

Deferred Taxes

 

The Company follows ASC 740-10-30, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the fiscal year in which the differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Statements of Income in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized.

 

Stock-Based Compensation

 

We account for equity-based transactions with nonemployees awards in accordance with the Accounting Standards Update (ASU) 2018-07, Compensation—Stock Compensation (Topic 718): ASU 2018-07 establishes that equity-based payment transactions with nonemployees shall be measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The fair value of common stock issued for payments to nonemployees is measured at the market price on the date of grant. The fair value of equity instruments, other than common stock, is estimated using the Black-Scholes option valuation model. In general, we recognize the fair value of the equity instruments issued as deferred stock compensation and amortize the cost over the term of the contract.

 

We account for employee stock-based compensation in accordance with the guidance of FASB ASC Topic 718, Compensation—Stock Compensation, which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values. The fair value of the equity instrument is charged directly to compensation expense and credited to additional paid-in capital over the period during which services are rendered.

  

The Company has granted Restricted Common Stock, where the Restricted Common Stock is restricted for a period of three years following the date of grant. During the three-year period the recipient may not sell or otherwise dispose of the shares. The Company has applied a discount for illiquidity to the price of the Company’s stock when determining the amount of expense to be recorded for the Restricted Common Stock issuance. The discount for illiquidity for the Restricted Common Stock was estimated on the date of grant by taking the average close price of the freely traded common shares for the period in which the services were provided, and applying an illiquidity discount of 10% for each multiple that the total Restricted Common Stock is of the average daily volume for the period, to a maximum of 50%.

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and, as such, are not required to provide the information under this Item.

 

 

 

 23 

 

 

Item 4. Controls and Procedures

 

Evaluation of disclosure controls and procedures

 

Under the supervision and with the participation of our management, including our principal executive, we conducted an evaluation of the effectiveness of the design and operations of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of June 30, 2020. Based on this evaluation, the Company’s Chief Executive Officer, who also serves as its Principal Financial Officer, concluded that our disclosure controls and procedures were effective.

 

Changes in internal controls

 

During the quarter covered by this report, there has been no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 24 

 

 

PART II

 

OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

None  

 

ITEM 1A. RISK FACTORS

 

N/A

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

N/A

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

None

 

ITEM 4. MINE SAFETY DISCLOSURES

 

The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Act”) and Item 104 of Regulation S-K require certain mine safety disclosures to be made by companies that operate mines regulated under the Federal Mine Safety and Health Act of 1977. However, the requirements of the Act and Item 104 of Regulation S-K do not apply as the Company does not engage in mining activities. Therefore, the Company is not required to make such disclosures.

 

ITEM 5. OTHER INFORMATION

 

None

 

 

 

 25 

 

 

ITEM 6. EXHIBITS

 

 

 

INDEX TO EXHIBITS

 

Exhibit

No.

  Description
     
31.1   Certification of Principal Executive Officer and Principal Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act.
     
32.1   Certification of Principal Executive Officer and Principal Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 26 

 

 

SIGNATURES

 

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

 

 

Dated: August 12, 2020

 

PATRIOT GOLD CORP.

 

By:   /s/ Trevor Newton

       Trevor Newton

       Chief Executive Officer and President

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 27 

 

EX-31.1 2 patgold_3101.htm CERTIFICATION OF CHIEF FINANCIAL OFFICER

EXHIBIT 31.1

 

Certification of Chief Financial Officer

and Chief Executive Officer Pursuant to  

Section 302 of the Sarbanes-Oxley Act of 2002-Rule 13a-14(a)/15d –14(a)

 

I, Trevor Newton, certify that:

 

1.        I have reviewed this quarterly report on Form 10-Q of Patriot Gold Corp.;

 

2.        Based on my knowledge, this quarterly 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 quarterly 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.        I am 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 my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me 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.        I have disclosed, based on my 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.

 

Dated: August 12, 2020

 

By: /s/ Trevor Newton                   

Trevor Newton

Chief Executive Officer, President, Treasurer and Secretary (Principal Executive Officer and Principal Financial Officer)      

 

 

EX-32.1 3 patgold_3201.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

 

Section 1350 Certification

 

In connection with the Quarterly Report of Patriot Gold Corp. (the “Company”) on Form 10-Q for the fiscal quarter ended June 30, 2020, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Trevor Newton, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 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 (15 U.S.C 78m(a) or 78o(d)); and

 

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

 

 

Dated: August 12, 2020

 

By: /s/ Trevor Newton                       
  Trevor Newton  
 

Chief Executive Officer,

President, Treasurer and Secretary

(Principal Executive Officer and Principal Financial Officer)

 

 

 

 

 

 

 

 

 

 

 

 

 

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Document and Entity Information - shares
6 Months Ended
Jun. 30, 2020
Aug. 05, 2020
Cover [Abstract]    
Entity Registrant Name PATRIOT GOLD CORP  
Document Type 10-Q  
Document Period End Date Jun. 30, 2020  
Amendment Flag false  
Entity Central Index Key 0001080448  
Current Fiscal Year End Date --12-31  
Entity Common Stock, Shares Outstanding   74,280,354
Entity Filer Category Non-accelerated Filer  
Entity Current Reporting Status Yes  
Document Fiscal Year Focus 2020  
Document Fiscal Period Focus Q2  
Entity Shell Company false  
Entity Small Business true  
Entity Emerging Growth false  
Entity Interactive Data Current Yes  
Entity File Number 000-32919  
Entity Incorporation State NV  
XML 11 R2.htm IDEA: XBRL DOCUMENT v3.20.2
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($)
Jun. 30, 2020
Dec. 31, 2019
Current assets    
Cash $ 507,253 $ 228,250
Marketable securities 126,252 158,282
Royalty receivables 794,076 487,060
Prepaid expenses 108,000 149,000
Total current assets 1,535,581 1,022,592
Long-term assets:    
Royalty interest - related party (see Note 4) 300,000 300,000
Total long-term assets 300,000 300,000
Total assets 1,835,581 1,322,592
Current liabilities    
Accounts payable and accrued liabilities 45,531 18,706
Accounts payable and accrued liabilities - related parties 229,923 210,618
Total current liabilities 275,454 229,324
Commitments and contingencies
Stockholders' equity:    
Common stock, par value $.001; 400,000,000 shares authorized; 74,280,354 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively 74,280 74,280
Treasury stock (100,000 shares) (9,093) (9,093)
Additional paid in capital 29,161,187 29,161,187
Accumulated other comprehensive income (16,361) (16,361)
Accumulated deficit (27,650,176) (28,117,035)
Total stockholders' equity 1,560,127 1,093,268
Total liabilities and stockholders' equity 1,835,581 1,322,592
Preferred Stock [Member]    
Stockholders' equity:    
Preferred stock, par value $.001; 6,500,000 shares authorized; no shares issued at June 30, 2020 and December 31, 2019, respectively; Series A Preferred stock, par value $.001; 13,500,000 shares authorized; 290,000 shares issued at June 30, 2020 and December 31, 2019, respectively 0 0
Preferred Stock Series A [Member]    
Stockholders' equity:    
Preferred stock, par value $.001; 6,500,000 shares authorized; no shares issued at June 30, 2020 and December 31, 2019, respectively; Series A Preferred stock, par value $.001; 13,500,000 shares authorized; 290,000 shares issued at June 30, 2020 and December 31, 2019, respectively $ 290 $ 290
XML 12 R3.htm IDEA: XBRL DOCUMENT v3.20.2
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares
Jun. 30, 2020
Dec. 31, 2019
Common Stock, par or stated value $ 0.001 $ 0.001
Common Stock, shares authorized 400,000,000 400,000,000
Common Stock, shares issued 74,280,354 74,280,354
Common Stock, shares outstanding 74,280,354 74,280,354
Preferred Stock [Member]    
Preferred Stock, par or stated value $ 0.001 $ 0.001
Preferred Stock, shares authorized 6,500,000 6,500,000
Preferred Stock, shares issued 0 0
Preferred Stock Series A [Member]    
Preferred Stock, par or stated value $ 0.001 $ 0.001
Preferred Stock, shares authorized 13,500,000 13,500,000
Preferred Stock, shares issued 290,000 290,000
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CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Income Statement [Abstract]        
Revenues $ 541,402 $ 280,671 $ 929,780 $ 537,337
Expenses        
Mineral costs 23,434 12,219 107,432 37,227
Consulting expense 73,544 102,231 137,885 170,650
Stock based compensation 0 125,202 0 125,202
Directors Fees 52,500 52,500 105,000 105,000
General and administrative 36,390 54,452 80,512 83,001
Total operating expense 185,868 346,604 430,829 521,080
Net income (loss) from operations 355,534 (65,933) 498,951 16,257
Other income (expense)        
Unrealized holding gain (loss) on marketable securities 46,251 (15,107) (26,604) (35,762)
Currency exchange 2,423 (1,476) (6,509) 1,875
Realized loss on sale of marketable securities 0 0 0 (1,894)
Other miscellaneous income 1,021 27 1,021 53
Total other income (expense) 49,695 (16,556) (32,092) (35,728)
Net income (loss) $ 405,229 $ (82,489) $ 466,859 $ (19,471)
Earnings per share - basic and diluted        
Income (loss) per common share - basic $ 0.01 $ (0.00) $ 0.01 $ (0.00)
Income (loss) per common share - diluted $ 0.01 $ (0.00) $ 0.01 $ (0.00)
Weighted average shares outstanding - basic 74,280,354 72,014,222 74,280,354 65,256,857
Weighted average shares outstanding - diluted 74,280,354 72,063,512 74,280,354 65,306,147
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CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY (Unaudited) - USD ($)
Preferred Stock
Series A Preferred Stock
Common Stock
Treasury Stock
Additional Paid-In Capital
Accumulated Other Comprehensive Income
Retained Deficit
Total
Beginning balance, shares at Dec. 31, 2018 290,000 58,408,854          
Beginning balance, value at Dec. 31, 2018 $ 290 $ 58,409 $ (9,093) $ 28,815,798 $ (16,361) $ (28,356,699) $ 492,344
Exercise of warrants, shares 8,000,000          
Exercise of warrants, value $ 8,000 697,000 705,000
Exercise of options, shares 20,000          
Exercise of options, value $ 20 1,980 2,000
Issuance of restricted common stock, shares 7,851,500          
Issuance of restricted common stock, value $ 7,851 306,209 314,060
Vesting of stock options 21,142 21,142
Net income (19,471) (19,471)
Ending balance, shares at Jun. 30, 2019 290,000 74,280,354          
Ending balance, value at Jun. 30, 2019 $ 290 $ 74,280 (9,093) 29,842,129 (16,361) (28,376,170) 1,515,075
Beginning balance, shares at Dec. 31, 2018 290,000 58,408,854          
Beginning balance, value at Dec. 31, 2018 $ 290 $ 58,409 (9,093) 28,815,798 (16,361) (28,356,699) 492,344
Ending balance, shares at Dec. 31, 2019 290,000 74,280,354          
Ending balance, value at Dec. 31, 2019 $ 290 $ 74,280 (9,093) 29,161,187 (16,361) (28,117,035) 1,093,268
Beginning balance, shares at Mar. 31, 2019 290,000 58,428,854          
Beginning balance, value at Mar. 31, 2019 $ 290 $ 58,429 (9,093) 28,817,778 (16,361) (28,293,681) 557,362
Exercise of warrants, shares 8,000,000          
Exercise of warrants, value $ 8,000 697,000 705,000
Issuance of restricted common stock, shares 7,851,500          
Issuance of restricted common stock, value $ 7,851 306,209 314,060
Vesting of stock options 21,142 21,142
Net income (82,489) (82,489)
Ending balance, shares at Jun. 30, 2019 290,000 74,280,354          
Ending balance, value at Jun. 30, 2019 $ 290 $ 74,280 (9,093) 29,842,129 (16,361) (28,376,170) 1,515,075
Beginning balance, shares at Dec. 31, 2019 290,000 74,280,354          
Beginning balance, value at Dec. 31, 2019 $ 290 $ 74,280 (9,093) 29,161,187 (16,361) (28,117,035) 1,093,268
Net income 466,859 466,859
Ending balance, shares at Jun. 30, 2020 290,000 74,280,354          
Ending balance, value at Jun. 30, 2020 $ 290 $ 74,280 (9,093) 29,161,187 (16,361) (27,650,176) 1,560,127
Beginning balance, shares at Mar. 31, 2020 290,000 74,280,354          
Beginning balance, value at Mar. 31, 2020 $ 290 $ 74,280 (9,093) 29,161,187 (16,361) (28,055,405) 1,154,898
Net income 405,229 405,229
Ending balance, shares at Jun. 30, 2020 290,000 74,280,354          
Ending balance, value at Jun. 30, 2020 $ 290 $ 74,280 $ (9,093) $ 29,161,187 $ (16,361) $ (27,650,176) $ 1,560,127
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CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)
6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Statement of Cash Flows [Abstract]    
Net Income (Loss) $ 466,859 $ (19,471)
Adjustments to reconcile net income (loss) to net cash used in operating activities:    
Compensation expense of stock options 0 21,142
Restricted Common stock issued for services 0 174,059
Fair value adjustment for marketable securities 32,030 32,568
Change in operating assets and liabilities:    
Royalties receivables (307,016) (36,042)
Prepaid expenses 41,000 (29,000)
Accounts payable and accrued liabilities 26,824 (92,943)
Accounts payable and accrued liabilities - related parties 19,306 118,530
Net cash flows provided by operating activities 279,003 168,843
CASH FLOWS FROM INVESTING ACTIVITIES    
Purchase of royalty interest - related party 0 (190,000)
Proceeds from the sale of marketable securities 0 20,833
Purchase of marketable securities 0 0
Net cash flows used in investing activities 0 (169,167)
CASH FLOWS FROM FINANCING ACTIVITIES    
Proceeds from exercise of stock options 0 2,000
Net cash flows from financing activities 0 2,000
Net increase in cash 279,003 1,676
Cash, beginning of period 228,250 115,753
Cash, end of period 507,253 117,429
SUPPLEMENTAL DISCLOSURE OF CASH PAID FOR:    
Interest 0 0
Income taxes 0 0
Non-cash financing activities:    
Exercise of warrants in exchange for note receivable 0 705,000
Issuance of restricted stock for prepaid director fees $ 0 $ 210,000
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1. NATURE OF BUSINESS AND OPERATIONS
6 Months Ended
Jun. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
NATURE OF BUSINESS AND OPERATIONS

NOTE 1 - NATURE OF BUSINESS AND OPERATIONS

 

Patriot Gold Corp. (“Company”) was incorporated in the State of Nevada on November 30, 1998. The Company is engaged in natural resource exploration and acquiring, exploring, and developing natural resource properties. Currently the Company is undertaking exploration and development programs in Nevada.

 

The Company’s common stock trades on the Canadian Securities Exchange under the symbol PGOL, and also on the Over-The-Counter (“OTCQB”) market under the symbol PGOL.

 

On May 23, 2017, the Company caused the incorporation of its wholly owned subsidiary, Patriot Gold Canada Corp (“Patriot Canada”), under the laws of British Columbia, Canada.

 

On April 16, 2010, the Company caused the incorporation of its wholly owned subsidiary, Provex Resources, Inc., (“Provex”) under the laws of Nevada. Effective May 7, 2018, Provex’s name was changed to Goldbase, Inc. (“Goldbase”).

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2. SIGNIFICANT ACCOUNTING POLICIES
6 Months Ended
Jun. 30, 2020
Accounting Policies [Abstract]  
SIGNIFICANT ACCOUNTING POLICIES

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Goldbase and Patriot Canada. Collectively, they are referred to herein as “the Company”. Inter-company accounts and transactions have been eliminated.

 

Management’s Estimates and Assumptions

 

The preparation of the consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management believes that all applicable estimates and adjustments are appropriate. Actual results could differ from those estimates.

 

Going Concern

 

Management believes they will have sufficient funds to support their business based on the following: (a) revenues derived from the Moss royalty, given the Moss Mine is now in production; (b) the Company’s marketable securities are relatively liquid; (c) the Company believes it can raise additional funds if needed to support our business plan, although there can be no assurance that the Company can raise any additional funds, or if it can, that such funds will be on terms acceptable to the Company.

 

Exploration and Development Costs

 

Mineral exploration costs and payments related to the acquisition of the mineral rights are expensed as incurred. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs incurred to acquire and develop such property will be capitalized. Such costs will be amortized using the units-of-production method over the estimated life of the probable reserve. No costs have been capitalized through June 30, 2020.

 

Cash and Cash Equivalents and Concentration of Credit Risk

 

The Company considers all investment instruments purchased with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes. The Company has no cash equivalents as of June 30, 2020 and December 31, 2019. Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash deposits. Accounts at banks in the United States are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000, while accounts at banks in Canada are insured by the Canada Deposit Insurance Corporation (“CDIC”) up to $100,000. At June 30, 2020 and December 31, 2019, the Company had $202,636 and $0 in excess of the FDIC and CDIC insured limits, respectively.

 

Marketable Securities

 

Investment securities are classified in one of three categories: held to maturity, available for sale, or trading. Management determines the appropriate classification of securities at the time of purchase. Investment securities are classified as held to maturity when the Company has the positive intent and ability to hold the securities to maturity. As of June 30, 2020, and December 31, 2019, the Company has no investments in held to maturity securities. 

 

Investment securities that are bought and held principally for the purpose of selling them in the near term are classified as trading securities and reported at fair value, with unrealized gains and losses included in earnings.

 

Investment securities that are not considered to be held to maturity or trading are classified as available for sale. This type of investment is stated at fair value with unrealized gains and losses, net of tax, reported in a separate component of shareholders’ equity (“accumulated other comprehensive income”). Gains and losses from sales of investments classified as available for sale are determined using the specific identification method. As of June 30, 2020, and December 31, 2019, the Company has no investments classified as available for sale.

 

The Company’s short-term marketable securities classified as trading securities are comprised of Northern Vertex Mining Corp. and Strata Power Corporation (“Strata”) stock. The Company acquired the Northern Vertex stock on May 26, 2016 as part of the Moss Mine sale. The Company purchased Strata common stock through multiple private placement offerings as an investment in lithium mining extraction technologies (see Note 9).

 

Royalties Receivables

 

Royalties Receivables consist of amounts due from Golden Vertex related to the net smelter return royalty on the Moss Mine in Arizona (see Note 4). An allowance for uncollectible receivables is based on historical collection trends and write-off history. As of June 30, 2020, and December 31, 2019, there was no allowance recorded.

 

Foreign Currency Translation

 

The Company’s functional currency and reporting currency is the U.S. dollar. Monetary items denominated in foreign currency are translated to U.S. dollars at exchange rates in effect at the balance sheet date and non-monetary items are translated at rates in effect when the assets were acquired, or obligations incurred. Revenue and expenses are translated at rates in effect at the time of the transactions. Foreign exchange gains and losses are included in the consolidated statements of operations.

 

Concentration of Credit Risk

 

The Company has no off-balance-sheet concentrations of credit risk such as foreign exchange contracts, options contracts or other foreign hedging arrangements. The Company maintains the majority of its cash balances with two financial institutions in the form of demand deposits.

  

Income/Loss per Share

 

Basic earnings per share is computed by dividing the net income by the weighted average number of shares outstanding during the period. Diluted earnings per share is computed by dividing net income by the weighted-average number of common shares plus dilutive potential common shares outstanding during the period.

 

The following is a reconciliation of the number of shares used in the calculation of basic earnings per share and diluted earnings per share:

 

    For the period ended June 30,  
    2020     2019  
Numerator:            
Net income (loss) available to common stockholders   $ 466,859     $ (19,471 )
                 
Denominator:                
Weighted-average shares, basic     74,280,354       65,256,857  
Effect of dilutive shares:                
Incremental shares from the assumed exercise of dilutive stock warrants     -       49,290  
Weighted-average shares diluted     74,280,354       65,306,147  
                 
Net income (loss) per common share, basic   $ 0.01     $ (0.00 )
Net income (loss) per common share, diluted   $ 0.01     $ (0.00 )

 

The following were excluded from the computation of diluted shares outstanding as they would have had an anti-dilutive impact on the Company’s loss from continuing operations and loss from discontinued operations. In periods where the Company has a net loss, all dilutive securities are excluded.

 

    For the period ended June 30,  
    2020     2019  
Common stock equivalents:                
Stock options     7,465,000       7,465,000  
Stock warrants     11,660,000       11,460,000  
Total     19,125,000       18,925,000  

 

Comprehensive Income

 

Comprehensive income consists of net income and other gains and losses affecting shareholders’ equity that, under generally accepted accounting principles, are excluded from net income. For the Company, such items consist primarily of foreign currency translation gains and losses.

 

Accumulated other comprehensive income at June 30, 2020 and December 31, 2019, consists of foreign currency adjustments related to the Company changing its functional currency from Canadian to U.S. dollar in 2003.

  

Stock Options

 

The Company measures all employee stock-based compensation awards using a fair value method on the date of grant and recognizes such expense in its consolidated financial statements over the requisite service period. The Company uses the Black-Scholes pricing model to determine the fair value of stock-based compensation awards on the date of grant. The Black-Scholes pricing model requires management to make assumptions regarding option lives, expected volatility, and risk-free interest rates.

 

The Company accounts for non-employee stock-based awards in accordance with the Accounting Standards Update (ASU) 2018-07, Compensation—Stock Compensation (Topic 718): Under the new standard, the Company will value all equity classified awards at their grant-date under ASC718 and no options were required to be revalued at adoption.

 

The Company uses the Black-Scholes pricing model to determine the fair value of stock-based compensation awards. The Black-Scholes pricing model requires management to make assumptions regarding option lives, expected volatility, and risk-free interest rates.

 

Stock-based Compensation

 

We account for equity-based transactions with nonemployees awards in accordance with the Accounting Standards Update (ASU) 2018-07, Compensation—Stock Compensation (Topic 718): ASU 2018-07 establishes that equity-based payment transactions with nonemployees shall be measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The fair value of common stock issued for payments to nonemployees is measured at the market price on the date of grant. The fair value of equity instruments, other than common stock, is estimated using the Black-Scholes option valuation model. In general, we recognize the fair value of the equity instruments issued as deferred stock compensation and amortize the cost over the term of the contract.

 

We account for employee stock-based compensation in accordance with the guidance of FASB ASC Topic 718, Compensation—Stock Compensation, which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values. The fair value of the equity instrument is charged directly to compensation expense and credited to additional paid-in capital over the period during which services are rendered.

  

The Company has granted Restricted Common Stock, where the Restricted Common Stock is restricted for a period of three years following the date of grant. During the three-year period the recipient may not sell or otherwise dispose of the shares. The Company has applied a discount for illiquidity to the price of the Company’s stock when determining the amount of expense to be recorded for the Restricted Common Stock issuance. The discount for illiquidity for the Restricted Common Stock was estimated on the date of grant by taking the average close price of the freely traded common shares for the period in which the services were provided, and applying an illiquidity discount of 10% for each multiple that the total Restricted Common Stock is of the average daily volume for the period, to a maximum of 50%.

 

Fair Value of Financial Instruments

 

The carrying value of the Company's financial instruments, including prepaids, accounts payable and accrued liabilities, at June 30, 2020 and December 31, 2019 approximates their fair values due to the short-term nature of these financial instruments. Management is of the opinion that the Company is not exposed to significant interest or credit risks arising from these financial instruments. The Company carries other company’s equity instruments at fair value as required by U.S. GAAP, which are valued using level 1 inputs under the fair value hierarchy.

 

In general, investments with original maturities of greater than 90 days and remaining maturities of less than one year are classified as short-term investments. Investments with maturities beyond one year may also be classified as short-term based on their highly liquid nature and can be sold to fund current operations.

  

Fair Value Hierarchy

 

Fair value is defined within the accounting rules as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The rules established a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. As presented in the tables below, this hierarchy consists of three broad levels:

 

Level 1. Quoted prices in active markets for identical assets or liabilities.

 

Level 2. Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets with insufficient volume or infrequent transactions (less active markets), or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated with observable market data for substantially the full term of the assets or liabilities. Level 2 inputs also include non-binding market consensus prices that can be corroborated with observable market data, as well as quoted prices that were adjusted for security-specific restrictions.

 

Level 3. Unobservable inputs to the valuation methodology are significant to the measurement of the fair value of assets or liabilities. These Level 3 inputs also include non-binding market consensus prices or non-binding broker quotes that we were unable to corroborate with observable market data.

 

Assets measured at fair value on a recurring basis by level within the fair value hierarchy are as follows:

 

      Fair Value Measurement at     Fair Value Measurement at
      June 30, 2020     December 31, 2019
      Using
Level 1
    Total       Using
Level 1
    Total  
Assets:                            
Marketable securities   $ 126,252     $ 126,252     $ 158,282     $ 158,282  
                                 

 

Revenue Recognition

 

On June 1, 2018, the Company adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“ASC 606”), which provides a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The Company receives a royalty from Golden Vertex of 3% of net smelter returns (see Note 3) and recognizes revenue at the time minerals are produced and sold at the Moss Mine. The Company’s revenue recognition policy standards include the following elements under ASU 606:

 

  1. Identify the contract with the customer. The contract with Golden Vertex is documented in the Purchase and Sale Agreement dated 5/12/16 and the Royalty Deed dated 5/25/16.

 

  2. Identify the performance obligations in the contract. The performance obligation in the contract required Patriot to relinquish its 30% interest in the Moss Mine. The Company conveyed all of its right, title and interest in those certain patented and unpatented lode mining claims situated in the Oatman Mining District, Mohave County, Arizona together with all extralateral and other associated rights, water rights, tenements, hereditaments and appurtenances belonging or appertaining thereto, and all rights-of-way, easements, rights of access and ingress to and egress from the claims appurtenant thereto, and in which the Company had any interest.

 

  3. Determine the transaction price. The transaction price was C$1,500,000 plus 3% of the Net Smelter Returns on the future production of the Moss Mine. See Note 3 for definition of Net Smelter Returns.

 

  4. Allocate the transaction price to the performance obligations in the contract. The Company only has one performance obligation, the transfer of the rights to the Moss Mine, which has already been fulfilled.

  

  5. Recognize revenue when (or as) the entity satisfies a performance obligation. The C$1,500,000 was recognized as a sale of the mining rights in 2016, resulting in a gain from the disposition of the property. The 3% net smelter returns royalty will be recognized as revenue in the period that Golden Vertex produces and sells minerals from the Moss Mine, which began in March 2018. The royalties that have been received to date have been highly variable, as the amounts are dependent upon the monthly production, the demand of the buyers, the spot price of gold and silver, the costs associated with refining and transporting the product, etc. As such, management has determined that the revenue recognition shall be treated as variable consideration as defined in ASC 606. Variable consideration should only be recognized to the extent that it is probable that a significant reversal of revenue will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Given the fact that royalties to date have been highly variable with a great degree of uncertainty, and any attempts to estimate future revenue would likely result in a significant reversal of revenue, royalty revenue will be recognized when payments and settlement statements are received from Golden Vertex, in the period for which the sales were made by Golden Vertex. It is at that time that any uncertainty related to royalty payments is resolved. The Company applied ASC 606 using the modified retrospective method applied to contracts not yet completed as of the date of adoption.

 

Related Party Transactions

 

A related party is generally defined as (i) any person who holds 10% or more of the Company’s securities and their immediate families, (ii) the Company’s management, (iii) an entity or person who directly or indirectly controls, is controlled by or is under common control with the Company, or (iv) anyone who can significantly influence the financial and operating decisions of the Company. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties.

  

Income Taxes

 

The Company follows ASC 740-10-30, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the fiscal year in which the differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Statements of Income in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized.

 

The Company adopted ASC 740-10-25 (“ASC 740-10-25”) with regard to uncertainty of income tax positions. ASC 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under ASC 740-10-25, we may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. ASC 740-10-25 also provides guidance on derecognition, classification, interest and penalties on income taxes, and accounting in interim periods and requires increased disclosures. We had no material adjustments to our liabilities for unrecognized income tax benefits according to the provisions of ASC 740-10-25.

 

New Accounting Pronouncements

 

In June 2016, the FASB issued ASU 2016-13, “Measurement of Credit Losses on Financial Instruments.” The pronouncement revises the methodology for measuring credit losses on financial instruments and the timing of when such losses are recorded. The guidance is effective for the Company beginning in the first quarter of fiscal year 2023 with early adoption permitted. The Company is currently evaluating the potential impact of this guidance on it consolidated financial statements.

  

The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

XML 18 R9.htm IDEA: XBRL DOCUMENT v3.20.2
3. MINERAL PROPERTIES
6 Months Ended
Jun. 30, 2020
Extractive Industries [Abstract]  
MINERAL PROPERTIES

NOTE 3 - MINERAL PROPERTIES

 

Bruner and Vernal Properties

 

On May 28, 2010 the Company entered into an exclusive right and option agreement with Canamex Resources Corp. (“Canamex”) whereby Canamex could earn a 70% (or up to 75% if a bankable feasibility study is performed) undivided interest in the Bruner, and Bruner Expansion properties, herein after collectively referred to as the “Bruner Properties”. Upon the completion of the terms of the Agreement by Canamex, and upon earning its initial interest, the parties agreed to negotiate a definitive joint venture agreement in good faith to supersede the agreement.

 

During the first half of 2016, it was determined by the Company that Canamex had successfully earned a 70% interest in the Bruner Property according to the terms of the Bruner Option Agreement.

  

On April 25, 2017, the Company and Canamex Resources Corp. entered into a purchase and sale agreement (“Bruner Purchase and Sale Agreement”) whereby Canamex Resources purchased Patriot Gold's 30% working interest in the Bruner gold/silver mine for US$1,000,000 cash. The Company retains a two percent net smelter return (“NSR”) royalty on the Bruner properties including any claims acquired within a two-mile area of interest around the existing claims. Additionally, Canamex has the option to buy-down half of the NSR royalty retained by Patriot for US$5 million any time during a five-year period following closing of the purchase and sale agreement. 

 

As of June 30, 2020, the Company has incurred approximately $89,616 of accumulated option and exploration expenses on the Vernal property.

 

During the six months ended June 30, 2020 and 2019, the Company incurred no exploration expenses on the Vernal property, respectively.

 

Moss Mine Property

 

On March 4, 2004 the Company signed a Letter Agreement (the “Agreement”) that earned it a 100% interest in a number of patented and unpatented mining claims known as the Moss Mine property located in the Oatman Mining District of Mohave county Arizona by paying MinQuest Inc. a one-time fee of $50,000. This $50,000 fee was paid on July 7, 2004. Subject to the terms and conditions of the Agreement, MinQuest would retain a 3% NSR on any and all production derived from the unpatented mining claims listed under the Agreement and on public lands within 1 mile of MinQuest, Inc.’s outside perimeter of the present claim boundary; a 1.0% NSR on patented claims with no other royalty within the property; and a 0.5% overriding NSR on all production within the property derived from patented claims with other royalty interests.

 

On February 28, 2011, the Company entered into an Exploration and Option to Enter Joint Venture Agreement (the “Moss Agreement”), with Idaho State Gold Company, LLC, (“ISGC”) whereby the Company granted the option and right to earn a vested seventy percent (70%) interest in the property and the right and option to form a joint venture for the management and ownership of the properties called the Moss Mine, Mohave County, Arizona. Pursuant to the Moss Agreement, ISGC paid US $500,000 upon execution, and agreed to spend an aggregate total of US $8 million on exploration and related expenditures over the next five years and subsequent to exercise the earn-in, ISGC and Patriot Gold would form a 70/30 joint venture. Under this agreement financing of future work on the property would be on a proportional basis under the direction of a management committee with voting rights proportional to ownership percentage. Either party could be diluted on the basis of a standard formula if it did not contribute to the planned programs. If either party was diluted below 10 percent, their interest would convert to a three percent NSR (net smelter return) royalty. An existing 3-3.5 percent NSR existed on the Moss Mine Property.

  

In March 2011, ISGC transferred its rights to the Exploration and Option Agreement dated February 28, 2011, to Northern Vertex Mining Corp. (“Northern Vertex”).

 

On January 21, 2016, an arbitrator ruled that Northern Vertex met the required expenditures, successfully carried out pilot production, and produced a feasibility study thereby fulfilling the Exploration and Option Agreement terms entitling them to have earned an undivided 70% interest in the Moss Mine.

 

On May 12, 2016, the Company entered into a material definitive Agreement for Purchase and Sale of Mining Claims and Escrow Instructions (the “Purchase and Sale Agreement”) with Golden Vertex Corp., an Arizona corporation (“Golden Vertex,” a wholly-owned Subsidiary of Northern Vertex) whereby Golden Vertex agreed to purchase the Company’s remaining 30% working interest in the Moss Mine for $1,155,600 (C$1,500,000) plus a 3% net smelter return royalty. Specifically, the Company conveyed all of its right, title and interest in those certain patented and unpatented lode mining claims situated in the Oatman Mining District, Mohave County, Arizona together with all extralateral and other associated rights, water rights, tenements, hereditaments and appurtenances belonging or appertaining thereto, and all rights-of-way, easements, rights of access and ingress to and egress from the claims appurtenant thereto and in which the Company had any interest. The purchase price consisted of $924,479 (C$1,200,000) in cash payable at closing and the remaining $231,120 (C$300,000) was paid by the issuance of Northern Vertex common shares to the Company valued at $0.26 (C$0.35) (857,140 shares), issued pursuant to the terms and provisions of an investment agreement entered between the Company and Northern Vertex contemporaneous to the Purchase and Sale Agreement. The investment agreement prohibited the resale of the shares during the four-month period following the date of issuance and thereafter, the Company agreed to not sell the shares in an amount exceeding 100,000 shares per month.

 

Windy Peak Property

 

The Windy Peak Property, (“Windy Peak”) consists of 114 unpatented mineral claims covering approximately 2,337 acres, 3 miles NNE of the Bell Mountain and 7 miles east of the Fairview mining district in southwest Nevada.

 

As of June 30, 2020, the company has incurred approximately $782,707 of exploration expenses on the Windy Peak Property, and $95,498 and $37,047 were spent for the six months ended June 30, 2020 and 2019, respectively.

 

Rainbow Mountain Property

 

In the fall of 2018, after conducting initial reconnaissance of the Rainbow Mountain, the Company acquired the Rainbow Mountain Property (“Rainbow Mountain”). This early-stage exploration project was secured through staking and filing the associated paperwork and fees with the BLM and County.

 

The Rainbow Mountain gold project consists of 81 unpatented lode claims totaling approximately 1,620 contiguous acres, located approximately 23 km southeast of Fallon, in the state of Nevada. Access to the project area is by paved highway, followed by a short stretch of gravel road.

 

Annual maintenance fees paid to the BLM and recording fees must be paid to the respective county on or before September 1 of each year to keep the claims in good standing, provided the filings are kept current these claims can be kept in perpetuity. As of June 30, 2020, the company has incurred approximately $92,874 of fees and exploration expenses on the Rainbow Mountain Property, and $11,934 and $180 were spent for the six months ended June 30, 2020 and 2019, respectively.

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4. ROYALTY INTERESTS
6 Months Ended
Jun. 30, 2020
Weighted average exercise price, issued  
ROYALTY INTERESTS

NOTE 4 – ROYALTY INTERESTS

 

Pursuant to the Purchase and Sale Agreement with Golden Vertex, the Company has a 3% net smelter return royalty on the Moss Mine in Arizona. For the six months ended June 30, 2020 and 2019, the Company earned royalties of $929,780 and $537,337, respectively. As of June 30, 2020 and December 31, 2019, the Company had Royalties Receivables of $794,076 and $487,060, respectively.

 

Pursuant to the Bruner Purchase and Sale Agreement with Canamex Resources, the Company has a 2% net smelter return royalty on the Bruner Gold/Silver mine in Nevada. As of June 30, 2020, no royalties have yet been earned.

 

In March 2019, the Company purchased a Vanadium Oxide royalty interest from a related party. In exchange for a non-refundable payment of $300,000, the Company will receive royalties based on the gross production of Vanadium Oxide (“Vanadium”) from a bitumen deposit covering 19 oil sands leases in Alberta. For each barrel of bitumen produced from the specified oil sands until March 21, 2039, or upon termination of mining, whichever is earlier, the Company will be paid a royalty equal to 25 grams of Vanadium per barrel of bitumen produced, multiplied by the price of Vanadium Pentoxide 98% min in-warehouse Rotterdam published on the last business day of the month in which the gross production of bitumen occurred. As of June 30, 2019, $220,000 has been paid, and the remaining $80,000 was paid in installments through December 31, 2019. As of June 30, 2020, no royalties have yet been earned.

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5. STOCK OPTIONS
6 Months Ended
Jun. 30, 2020
Share-based Payment Arrangement [Abstract]  
STOCK OPTIONS

NOTE 5 - STOCK OPTIONS

 

The Company’s Board of Directors adopted the 2019 Stock Option Plan (the “2019 Plan”) in July 2019, the 2014 Stock Option Plan (the “2014 Plan”) in June 2014, the 2012 Stock Option Plan (the “2012 Plan”) in July 2012 and the 2005 Stock Option Plan (the “2005 Plan”) in November 2005. The combined compensation costs charged against those plans was $0 and $21,142 for the six months ended June 30, 2020 and 2019, respectively.

 

The 2019 Plan, the 2014 Plan, the 2012 Plan and the 2005 Plan reserve and make available for grant common stock shares of up to 9,500,000, 5,000,000, 3,900,000 and 2,000,000, respectively. In November 2015, the 2005 Stock Option Plan expired so that no share may be granted pursuant to this Plan. No option can be granted under the plans 10 years after the plan inception date.

 

Options granted to officers or employees under the plans may be incentive stock options or non-qualified stock options. Options granted to directors, consultants, and independent contracts are limited to non-qualified stock options.

  

The plans are administered by the Board of Directors or a committee designated by the Board of Directors. Subject to specified limitations, the Board of Directors or the Committee has full authority to grant options and establish the terms and conditions for vesting and exercise thereof. However, the aggregate fair market value (determined at the time the option is granted) of the shares with respect to which incentive stock options are exercisable for the first time by an optionee during any calendar year cannot exceed $100,000.

 

Options granted pursuant to the plans are exercisable no later than ten years after the date of grant. The exercise price per share of common stock for options granted shall be determined by the Board of Directors or the designated committee, except for incentive stock options granted to a holder of ten percent or more of Patriot's common stock, for whom the exercise price per share will not be less than 110% of the fair market value.

 

As of June 30, 2020, there were 9,500,000, 535,000 and 2,680,000 shares available for grant under the 2019 Plan, 2014 Plan and 2012 Stock Option Plan, respectively.

  

Stock Option Activity

 

The fair value of each stock option is estimated at the date of grant using the Black-Scholes option pricing model. No options were granted since 2018. Assumptions regarding volatility, expected term, dividend yield and risk-free interest rate are required for the Black-Scholes model. The volatility assumption is based on the Company’s historical experience. The risk-free interest rate is based on a U.S. treasury note with a maturity similar to the option award’s expected life. The expected life represents the average period of time that options granted are expected to be outstanding.

 

The following table summarizes stock option activity and related information for the period ended June 30, 2020:

 

    Number of
Stock Options
Outstanding
    Weighted
Average
Exercise
Price
    Weighted
Average
Remaining
Contractual
Life (Years)
    Aggregate
Intrinsic
Value
 
Balance December 31, 2018     7,485,000     $ 0.10       7.48       0.00  
Option granted                            
Options cancelled / expired                            
Options exercised     (20,000 )     0.10                  
Balance December 31, 2019     7,465,000     $ 0.10       6.48       0.00  
Option granted                            
Options cancelled / expired                            
Options exercised                            
Balance June 30, 2020     7,465,000     $ 0.10       5.99       0.00  
                                 
Exercisable at June 30, 2020     7,465,000     $ 0.10       5.99       0.00  

  

The following table summarized information pertaining to unvested stock options for the period ended June 30, 2020:

 

    Shares     Weighted
Average
Grant Date
Fair Value
 
Unvested at December 31, 2018     350,000     $ 0.113  
Granted            
Vested     (350,000 )     0.113  
Exercised / forfeited            
Unvested at December 31, 2019            
Granted            
Vested            
Exercised / forfeited            
Unvested at June 30, 2020         $  

  

The Company issues new stock when options are exercised.

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6. COMMON STOCK
6 Months Ended
Jun. 30, 2020
Equity [Abstract]  
COMMON STOCK

NOTE 6 - COMMON STOCK

 

The Company may issue up to 400,000,000 shares of $.001 par value common stock. As of June 30, 2020, the Company had 74,280,354 of common shares outstanding. Some of these outstanding shares were granted as payment for services provided to the Company and are restricted. The restricted common stock is restricted for a period of three years following the date of grant. During the three-year period the recipient may not sell or otherwise dispose of the shares. The Company has applied a discount for illiquidity to the price of the Company’s stock when determining the amount of expense to be recorded for the Restricted Common Stock issuance. The discount for illiquidity for the Restricted Common Stock was estimated on the date of grant by taking the average close price of the freely traded common shares for the period in which the services were provided, and applying an illiquidity discount of 10% for each multiple that the total Restricted Common Stock is of the average daily volume for the period, to a maximum of 50%. 

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7. WARRANTS
6 Months Ended
Jun. 30, 2020
Warrants and Rights Note Disclosure [Abstract]  
WARRANTS

NOTE 7 - WARRANTS

 

The following table summarizes warrant activity during the period ended June 30, 2020. All outstanding warrants were exercisable during this period.

 

    Number of
Warrants
    Weighted Average
Exercise Price
 
Outstanding December 31, 2018     32,446,957     $ 0.09  
Issued            
Canceled / exercised     (8,000,000 )     0.09  
Expired     (12,786,957 )     0.06  
Outstanding December 31, 2019     11,660,000     $ 0.12  
Issued            
Canceled / exercised            
Expired            
Outstanding June 30, 2020     11,660,000     $ 0.12  

 

In April 2019, warrants for 8,000,000 shares were exercised in exchange for a note receivable for $705,000. As a result of this transaction, the shareholder is now considered a beneficial owner (see Note 9 – Related Party Transactions). The note is non-interest bearing and can be repaid at any time with 15 days advance notice to the Company. As this note remains outstanding as of June 30, 2020, in accordance with ASC 505-10-45-2, it has been reclassified as a reduction of Additional Paid-In Capital. 

 

The following tables summarizes outstanding warrants as of June 30, 2020 all of which are exercisable:

 

      Warrants Outstanding and Exercisable  
Range of Exercise Prices       Number of
Warrants
      Weighted
Avg Exercise
Price
      Remaining Contractual Life (years)  
$0.05 - $0.08       2,340,000       $0.08       0.36  
$0.09 - $0.14       6,320,000       $0.11       3.79  
$0.15 - $0.21       3,000,000       $0.16       5.22  
                           
Total Outstanding June 30, 2020       11,660,000                  
XML 23 R14.htm IDEA: XBRL DOCUMENT v3.20.2
8. PREFERRED STOCK
6 Months Ended
Jun. 30, 2020
Preferred Stock, Number of Shares, Par Value and Other Disclosures [Abstract]  
PREFERRED STOCK

NOTE 8 - PREFERRED STOCK

 

As of June 30, 2020, there are 290,000 shares of Series A preferred stock outstanding, owned by a related party. The holders of the Series A Preferred stock shall be entitled to receive non-cumulative dividends in preference to the declaration or payments of dividends on the Common Stock. In the event of liquidation of the Company, the holders of the Series A Preferred Stock shall receive any accrued and unpaid dividends before distribution or payments to the holders of the Common Stock. Series A Preferred Stock carries the same right to vote and act as Common stock, except that it carries super-voting rights entitling it to One Hundred (100) votes per share.

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9. RELATED PARTY TRANSACTIONS
6 Months Ended
Jun. 30, 2020
Related Party Transactions [Abstract]  
RELATED PARTY TRANSACTIONS

NOTE 9 - RELATED PARTY TRANSACTIONS

 

For the six months ended June 30, 2019, Mr. Zachary Black, a Board Member, received 250,000 shares of restricted common stock, in lieu of cash, for services provided to the Company. The Restricted Common Stock is restricted for a period of three years following the date of grant. The shares were valued at $0.04 for total non-cash expense of $10,000. Mr. Black provides geological consulting services to the Company pursuant to a consulting agreement. For the six months ended June 30, 2020 and 2019, Mr. Black was paid fees in the amount of $14,370 and $9,044, respectively.

 

For the six months ended June 30, 2019, Mr. Robert Coale, Chairman of the Board, received 250,000 shares of restricted common stock, in lieu of cash, for services provided to the Company. The Restricted Common Stock is restricted for a period of three years following the date of grant. The shares were valued at $0.04 for total non-cash expense of $10,000. Mr. Coale provides geological consulting services to the Company pursuant to a consulting agreement. For the six months ended June 30, 2020 and 2019, Mr. Coale was paid no consulting fees.

 

For the six months ended June 30, 2019, Mr. Trevor Newton, President, Chief Financial Officer, Secretary, Treasurer and Director of the Company, received 2,101,500 shares of restricted common stock, in lieu of cash, for services provided to the Company. The Restricted Common Stock is restricted for a period of three years following the date of grant. The shares were valued at $0.04 for total non-cash expense of $84,060. Mr. Newton provides consulting services to the Company pursuant to a consulting agreement. For the six months ended June 30, 2020 and 2019, Mr. Newton was paid fees in the amount of $106,737 and $91,384, respectively.

 

Prior to 2019, Board Members were not paid directors’ fees. However, in an effort to keep expenses down and avoid hiring additional staff, Board Members have become more active in the provision of services as the Company has become more active in developing its projects, vetting new properties, and managing its corporate affairs. Based on the recommendation from legal counsel, and pursuant to a resolution adopted by the Board, each director is now paid fees of $70,000 per calendar year. Each director term is three years. As of June 30, 2020, the fees for Mr. Coale and Mr. Black for 2019 and the first six months of 2020 totaling $105,000 each, are reflected in Accounts Payable and Accrued Liabilities – Related Parties. In lieu of cash, Mr. Newton opted to receive his director fees in restricted shares of the Company, totaling 5,250,000 shares. The shares were valued at $0.04 for total non-cash expense of $35,000 for the six months ended June 30, 2020 and 2019, respectively, recorded as Directors Fees Expense, and the fees for the remainder of calendar year 2020 and calendar year 2021 are recorded as Prepaid Expenses, in the amount of $105,000. The Company recognizes these consulting fees as general and administrative expenses in the Consolidated Statements of Operations.

  

As discussed in Note 7 above, in April 2019, an unrelated third party exercised warrants for 8,000,000 shares in exchange for a note receivable for $705,000. As a result of this transaction, the owner of the stock is now a related party. The note is non-interest bearing and can be repaid at any time with 15 days advance notice to the Company. As this note remains outstanding as of December 31, 2019, in accordance with ASC 505-10-45-2, it has been reclassified as a reduction of Additional Paid-In Capital. In addition, this shareholder provides consulting services to the company including claims administration of the Moss Mine royalties. For the six months ended June 30, 2020 and 2019, consulting fees were paid in the amount of $5,895 and $50,000, respectively.

 

The Company owns 2,760,260 shares of common stock of Strata Power Corporation (“Strata”), acquired through a series of private placements, as an investment in lithium mining extraction technologies. The purchase was accounted for as a marketable security in available for sale securities. Strata is a related party through Trevor Newton, who is President and a member the Board of Directors of both Patriot and Strata. Management has considered the guidance that is used to evaluate whether the Company has significant influence over Strata and has determined that no such significant influence exists.

XML 25 R16.htm IDEA: XBRL DOCUMENT v3.20.2
10. SUBSEQUENT EVENTS
6 Months Ended
Jun. 30, 2020
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS

NOTE 10 - SUBSEQUENT EVENTS

 

In accordance with SFAS 165 (ASC 855-10) management has performed an evaluation of subsequent events through the date that the financial statements were available to be issued and has determined that it does not have any material subsequent events to disclose in these financial statements, other than the following:

 

On March 11, 2020, the World Health Organization (WHO) notified the public of the existence of a global health pandemic relating to the COVID-19 virus, and subsequently on March 13, 2020, President Trump declared that the pandemic was a national emergency. Regarding the COVID-19 virus and the economic impacts associated with it, the Company is unable at this time to determine what, if any, effect it will have on the operations or revenues of the Company.

XML 26 R17.htm IDEA: XBRL DOCUMENT v3.20.2
2. SIGNIFICANT ACCOUNTING POLICIES (Policies)
6 Months Ended
Jun. 30, 2020
Accounting Policies [Abstract]  
Basis of Presentation

Basis of Presentation

 

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). These consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Goldbase and Patriot Canada. Collectively, they are referred to herein as “the Company”. Inter-company accounts and transactions have been eliminated.

Management's Estimates and Assumptions

Management’s Estimates and Assumptions

 

The preparation of the consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management believes that all applicable estimates and adjustments are appropriate. Actual results could differ from those estimates.

Going Concern

Going Concern

 

Management believes they will have sufficient funds to support their business based on the following: (a) revenues derived from the Moss royalty, given the Moss Mine is now in production; (b) the Company’s marketable securities are relatively liquid; (c) the Company believes it can raise additional funds if needed to support our business plan, although there can be no assurance that the Company can raise any additional funds, or if it can, that such funds will be on terms acceptable to the Company.

Exploration and Development Costs

Exploration and Development Costs

 

Mineral exploration costs and payments related to the acquisition of the mineral rights are expensed as incurred. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs incurred to acquire and develop such property will be capitalized. Such costs will be amortized using the units-of-production method over the estimated life of the probable reserve. No costs have been capitalized through June 30, 2020.

Cash and Cash Equivalents and Concentration of Credit Risk

Cash and Cash Equivalents

 

The Company considers all investment instruments purchased with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes. The Company has no cash equivalents as of March 31, 2020 and December 31, 2019.

Marketable Securities

Marketable Securities

 

Investment securities are classified in one of three categories: held to maturity, available for sale, or trading. Management determines the appropriate classification of securities at the time of purchase. Investment securities are classified as held to maturity when the Company has the positive intent and ability to hold the securities to maturity. As of June 30, 2020, and December 31, 2019, the Company has no investments in held to maturity securities. 

 

Investment securities that are bought and held principally for the purpose of selling them in the near term are classified as trading securities and reported at fair value, with unrealized gains and losses included in earnings.

 

Investment securities that are not considered to be held to maturity or trading are classified as available for sale. This type of investment is stated at fair value with unrealized gains and losses, net of tax, reported in a separate component of shareholders’ equity (“accumulated other comprehensive income”). Gains and losses from sales of investments classified as available for sale are determined using the specific identification method. As of June 30, 2020, and December 31, 2019, the Company has no investments classified as available for sale.

 

The Company’s short-term marketable securities classified as trading securities are comprised of Northern Vertex Mining Corp. and Strata Power Corporation (“Strata”) stock. The Company acquired the Northern Vertex stock on May 26, 2016 as part of the Moss Mine sale. The Company purchased Strata common stock through multiple private placement offerings as an investment in lithium mining extraction technologies (see Note 9).

Royalties Receivables

Royalties Receivables

 

Royalties Receivables consist of amounts due from Golden Vertex related to the net smelter return royalty on the Moss Mine in Arizona (see Note 4). An allowance for uncollectible receivables is based on historical collection trends and write-off history. As of June 30, 2020, and December 31, 2019, there was no allowance recorded.

Foreign Currency Translation

Foreign Currency Translation

 

The Company’s functional currency and reporting currency is the U.S. dollar. Monetary items denominated in foreign currency are translated to U.S. dollars at exchange rates in effect at the balance sheet date and non-monetary items are translated at rates in effect when the assets were acquired, or obligations incurred. Revenue and expenses are translated at rates in effect at the time of the transactions. Foreign exchange gains and losses are included in the consolidated statements of operations.

Concentration of Credit Risk

Concentration of Credit Risk

 

The Company has no off-balance-sheet concentrations of credit risk such as foreign exchange contracts, options contracts or other foreign hedging arrangements. The Company maintains the majority of its cash balances with two financial institutions in the form of demand deposits.

Income/Loss per Share

Income/Loss per Share

 

Basic earnings per share is computed by dividing the net income by the weighted average number of shares outstanding during the period. Diluted earnings per share is computed by dividing net income by the weighted-average number of common shares plus dilutive potential common shares outstanding during the period.

 

The following is a reconciliation of the number of shares used in the calculation of basic earnings per share and diluted earnings per share:

 

    For the period ended June 30,  
    2020     2019  
Numerator:            
Net income (loss) available to common stockholders   $ 466,859     $ (19,471 )
                 
Denominator:                
Weighted-average shares, basic     74,280,354       65,256,857  
Effect of dilutive shares:                
Incremental shares from the assumed exercise of dilutive stock warrants     -       49,290  
Weighted-average shares diluted     74,280,354       65,306,147  
                 
Net income (loss) per common share, basic   $ 0.01     $ (0.00 )
Net income (loss) per common share, diluted   $ 0.01     $ (0.00 )

 

The following were excluded from the computation of diluted shares outstanding as they would have had an anti-dilutive impact on the Company’s loss from continuing operations and loss from discontinued operations. In periods where the Company has a net loss, all dilutive securities are excluded.

 

    For the period ended June 30,  
    2020     2019  
Common stock equivalents:                
Stock options     7,465,000       7,465,000  
Stock warrants     11,660,000       11,460,000  
Total     19,125,000       18,925,000  
Comprehensive Income

Comprehensive Income

 

Comprehensive income consists of net income and other gains and losses affecting shareholders’ equity that, under generally accepted accounting principles, are excluded from net income. For the Company, such items consist primarily of foreign currency translation gains and losses.

 

Accumulated other comprehensive income at June 30, 2020 and December 31, 2019, consists of foreign currency adjustments related to the Company changing its functional currency from Canadian to U.S. dollar in 2003.

Stock Options

Stock Options

 

The Company measures all employee stock-based compensation awards using a fair value method on the date of grant and recognizes such expense in its consolidated financial statements over the requisite service period. The Company uses the Black-Scholes pricing model to determine the fair value of stock-based compensation awards on the date of grant. The Black-Scholes pricing model requires management to make assumptions regarding option lives, expected volatility, and risk-free interest rates.

 

The Company accounts for non-employee stock-based awards in accordance with the Accounting Standards Update (ASU) 2018-07, Compensation—Stock Compensation (Topic 718): Under the new standard, the Company will value all equity classified awards at their grant-date under ASC718 and no options were required to be revalued at adoption.

 

The Company uses the Black-Scholes pricing model to determine the fair value of stock-based compensation awards. The Black-Scholes pricing model requires management to make assumptions regarding option lives, expected volatility, and risk-free interest rates.

Stock-based Compensation

Stock-based Compensation

 

We account for equity-based transactions with nonemployees awards in accordance with the Accounting Standards Update (ASU) 2018-07, Compensation—Stock Compensation (Topic 718): ASU 2018-07 establishes that equity-based payment transactions with nonemployees shall be measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The fair value of common stock issued for payments to nonemployees is measured at the market price on the date of grant. The fair value of equity instruments, other than common stock, is estimated using the Black-Scholes option valuation model. In general, we recognize the fair value of the equity instruments issued as deferred stock compensation and amortize the cost over the term of the contract.

 

We account for employee stock-based compensation in accordance with the guidance of FASB ASC Topic 718, Compensation—Stock Compensation, which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values. The fair value of the equity instrument is charged directly to compensation expense and credited to additional paid-in capital over the period during which services are rendered.

  

The Company has granted Restricted Common Stock, where the Restricted Common Stock is restricted for a period of three years following the date of grant. During the three-year period the recipient may not sell or otherwise dispose of the shares. The Company has applied a discount for illiquidity to the price of the Company’s stock when determining the amount of expense to be recorded for the Restricted Common Stock issuance. The discount for illiquidity for the Restricted Common Stock was estimated on the date of grant by taking the average close price of the freely traded common shares for the period in which the services were provided, and applying an illiquidity discount of 10% for each multiple that the total Restricted Common Stock is of the average daily volume for the period, to a maximum of 50%.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

 

The carrying value of the Company's financial instruments, including prepaids, accounts payable and accrued liabilities, at June 30, 2020 and December 31, 2019 approximates their fair values due to the short-term nature of these financial instruments. Management is of the opinion that the Company is not exposed to significant interest or credit risks arising from these financial instruments. The Company carries other company’s equity instruments at fair value as required by U.S. GAAP, which are valued using level 1 inputs under the fair value hierarchy.

 

In general, investments with original maturities of greater than 90 days and remaining maturities of less than one year are classified as short-term investments. Investments with maturities beyond one year may also be classified as short-term based on their highly liquid nature and can be sold to fund current operations.

Fair Value Hierarchy

Fair Value Hierarchy

 

Fair value is defined within the accounting rules as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The rules established a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. As presented in the tables below, this hierarchy consists of three broad levels:

 

Level 1. Quoted prices in active markets for identical assets or liabilities.

 

Level 2. Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets with insufficient volume or infrequent transactions (less active markets), or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated with observable market data for substantially the full term of the assets or liabilities. Level 2 inputs also include non-binding market consensus prices that can be corroborated with observable market data, as well as quoted prices that were adjusted for security-specific restrictions.

 

Level 3. Unobservable inputs to the valuation methodology are significant to the measurement of the fair value of assets or liabilities. These Level 3 inputs also include non-binding market consensus prices or non-binding broker quotes that we were unable to corroborate with observable market data.

 

Assets measured at fair value on a recurring basis by level within the fair value hierarchy are as follows:

 

      Fair Value Measurement at     Fair Value Measurement at
      June 30, 2020     December 31, 2019
      Using
Level 1
    Total       Using
Level 1
    Total  
Assets:                            
Marketable securities   $ 126,252     $ 126,252     $ 158,282     $ 158,282  
Revenue Recognition

Revenue Recognition

 

On June 1, 2018, the Company adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“ASC 606”), which provides a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The Company receives a royalty from Golden Vertex of 3% of net smelter returns (see Note 3) and recognizes revenue at the time minerals are produced and sold at the Moss Mine. The Company’s revenue recognition policy standards include the following elements under ASU 606:

 

  1. Identify the contract with the customer. The contract with Golden Vertex is documented in the Purchase and Sale Agreement dated 5/12/16 and the Royalty Deed dated 5/25/16.

 

  2. Identify the performance obligations in the contract. The performance obligation in the contract required Patriot to relinquish its 30% interest in the Moss Mine. The Company conveyed all of its right, title and interest in those certain patented and unpatented lode mining claims situated in the Oatman Mining District, Mohave County, Arizona together with all extralateral and other associated rights, water rights, tenements, hereditaments and appurtenances belonging or appertaining thereto, and all rights-of-way, easements, rights of access and ingress to and egress from the claims appurtenant thereto, and in which the Company had any interest.

 

  3. Determine the transaction price. The transaction price was C$1,500,000 plus 3% of the Net Smelter Returns on the future production of the Moss Mine. See Note 3 for definition of Net Smelter Returns.

  

  4. Allocate the transaction price to the performance obligations in the contract. The Company only has one performance obligation, the transfer of the rights to the Moss Mine, which has already been fulfilled.

  

  5. Recognize revenue when (or as) the entity satisfies a performance obligation. The C$1,500,000 was recognized as a sale of the mining rights in 2016, resulting in a gain from the disposition of the property. The 3% net smelter returns royalty will be recognized as revenue in the period that Golden Vertex produces and sells minerals from the Moss Mine, which began in March 2018. The royalties that have been received to date have been highly variable, as the amounts are dependent upon the monthly production, the demand of the buyers, the spot price of gold and silver, the costs associated with refining and transporting the product, etc. As such, management has determined that the revenue recognition shall be treated as variable consideration as defined in ASC 606. Variable consideration should only be recognized to the extent that it is probable that a significant reversal of revenue will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Given the fact that royalties to date have been highly variable with a great degree of uncertainty, and any attempts to estimate future revenue would likely result in a significant reversal of revenue, royalty revenue will be recognized when payments and settlement statements are received from Golden Vertex, in the period for which the sales were made by Golden Vertex. It is at that time that any uncertainty related to royalty payments is resolved. The Company applied ASC 606 using the modified retrospective method applied to contracts not yet completed as of the date of adoption.
Related Party Transactions

Related Party Transactions

 

A related party is generally defined as (i) any person who holds 10% or more of the Company’s securities and their immediate families, (ii) the Company’s management, (iii) an entity or person who directly or indirectly controls, is controlled by or is under common control with the Company, or (iv) anyone who can significantly influence the financial and operating decisions of the Company. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties.

Income Taxes

Income Taxes

 

The Company follows ASC 740-10-30, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the fiscal year in which the differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Statements of Income in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized.

 

The Company adopted ASC 740-10-25 (“ASC 740-10-25”) with regard to uncertainty of income tax positions. ASC 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under ASC 740-10-25, we may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. ASC 740-10-25 also provides guidance on derecognition, classification, interest and penalties on income taxes, and accounting in interim periods and requires increased disclosures. We had no material adjustments to our liabilities for unrecognized income tax benefits according to the provisions of ASC 740-10-25.

New Accounting Pronouncements

New Accounting Pronouncements

 

In June 2016, the FASB issued ASU 2016-13, “Measurement of Credit Losses on Financial Instruments.” The pronouncement revises the methodology for measuring credit losses on financial instruments and the timing of when such losses are recorded. The guidance is effective for the Company beginning in the first quarter of fiscal year 2023 with early adoption permitted. The Company is currently evaluating the potential impact of this guidance on it consolidated financial statements.

 

The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

XML 27 R18.htm IDEA: XBRL DOCUMENT v3.20.2
2. SIGNIFICANT ACCOUNTING POLICIES (Tables)
6 Months Ended
Jun. 30, 2020
Accounting Policies [Abstract]  
Calculation of earnings per share

The following is a reconciliation of the number of shares used in the calculation of basic earnings per share and diluted earnings per share:

 

    For the period ended June 30,  
    2020     2019  
Numerator:            
Net income (loss) available to common stockholders   $ 466,859     $ (19,471 )
                 
Denominator:                
Weighted-average shares, basic     74,280,354       65,256,857  
Effect of dilutive shares:                
Incremental shares from the assumed exercise of dilutive stock warrants     -       49,290  
Weighted-average shares diluted     74,280,354       65,306,147  
                 
Net income (loss) per common share, basic   $ 0.01     $ (0.00 )
Net income (loss) per common share, diluted   $ 0.01     $ (0.00 )
Schedule of andilutive shares

In periods where the Company has a net loss, all dilutive securities are excluded.

 

    For the period ended June 30,  
    2020     2019  
Common stock equivalents:                
Stock options     7,465,000       7,465,000  
Stock warrants     11,660,000       11,460,000  
Total     19,125,000       18,925,000  
Fair Value of Marketable Securities

Assets measured at fair value on a recurring basis by level within the fair value hierarchy are as follows:

 

      Fair Value Measurement at     Fair Value Measurement at
      June 30, 2020     December 31, 2019
      Using
Level 1
    Total       Using
Level 1
    Total  
Assets:                            
Marketable securities   $ 126,252     $ 126,252     $ 158,282     $ 158,282  
XML 28 R19.htm IDEA: XBRL DOCUMENT v3.20.2
5. STOCK OPTIONS (Tables)
6 Months Ended
Jun. 30, 2020
Share-based Payment Arrangement [Abstract]  
Schedule of stock option activity

The following table summarizes stock option activity and related information for the period ended June 30, 2020:

 

    Number of
Stock Options
Outstanding
    Weighted
Average
Exercise
Price
    Weighted
Average
Remaining
Contractual
Life (Years)
    Aggregate
Intrinsic
Value
 
Balance December 31, 2018     7,485,000     $ 0.10       7.48       0.00  
Option granted                            
Options cancelled / expired                            
Options exercised     (20,000 )     0.10                  
Balance December 31, 2019     7,465,000     $ 0.10       6.48       0.00  
Option granted                            
Options cancelled / expired                            
Options exercised                            
Balance June 30, 2020     7,465,000     $ 0.10       5.99       0.00  
                                 
Exercisable at June 30, 2020     7,465,000     $ 0.10       5.99       0.00  
Schedule of unvested stock options

The following table summarized information pertaining to unvested stock options for the period ended June 30, 2020:

 

    Shares     Weighted
Average
Grant Date
Fair Value
 
Unvested at December 31, 2018     350,000     $ 0.113  
Granted            
Vested     (350,000 )     0.113  
Exercised / forfeited            
Unvested at December 31, 2019            
Granted            
Vested            
Exercised / forfeited            
Unvested at June 30, 2020         $  
XML 29 R20.htm IDEA: XBRL DOCUMENT v3.20.2
7. WARRANTS (Tables)
6 Months Ended
Jun. 30, 2020
Warrants and Rights Note Disclosure [Abstract]  
Schedule of warrant activity

The following table summarizes warrant activity during the period ended June 30, 2020. All outstanding warrants were exercisable during this period.

 

    Number of
Warrants
    Weighted Average
Exercise Price
 
Outstanding December 31, 2018     32,446,957     $ 0.09  
Issued            
Canceled / exercised     (8,000,000 )     0.09  
Expired     (12,786,957 )     0.06  
Outstanding December 31, 2019     11,660,000     $ 0.12  
Issued            
Canceled / exercised            
Expired            
Outstanding June 30, 2020     11,660,000     $ 0.12  
Warrants outstanding by exercise price

The following tables summarizes outstanding warrants as of June 30, 2020 all of which are exercisable:

 

      Warrants Outstanding and Exercisable  
Range of Exercise Prices       Number of
Warrants
      Weighted
Avg Exercise
Price
      Remaining Contractual Life (years)  
$0.05 - $0.08       2,340,000       $0.08       0.36  
$0.09 - $0.14       6,320,000       $0.11       3.79  
$0.15 - $0.21       3,000,000       $0.16       5.22  
                           
Total Outstanding June 30, 2020       11,660,000                  
XML 30 R21.htm IDEA: XBRL DOCUMENT v3.20.2
2. Significant Accounting Policies (Details - Earnings Per Share) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Numerator:        
Net income (loss) available to common stockholders $ 405,229 $ (82,489) $ 466,859 $ (19,471)
Denominator:        
Weighted-average shares, basic 74,280,354 72,014,222 74,280,354 65,256,857
Incremental shares from the assumed exercise of dilutive stock warrants     0 49,290
Weighted-average shares diluted 74,280,354 72,063,512 74,280,354 65,306,147
Net income (loss) per common share, basic $ 0.01 $ (0.00) $ 0.01 $ (0.00)
Net income (loss) per common share, diluted $ 0.01 $ (0.00) $ 0.01 $ (0.00)
XML 31 R22.htm IDEA: XBRL DOCUMENT v3.20.2
2. Significant Accounting Policies (Details - Antidilutive shares) - shares
6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Antidilutive shares 19,125,000 18,925,000
Stock Options [Member]    
Antidilutive shares 7,465,000 7,465,000
Stock Warrants [Member]    
Antidilutive shares 11,660,000 11,460,000
XML 32 R23.htm IDEA: XBRL DOCUMENT v3.20.2
2. Significant Accounting Policies (Details - Fair value) - USD ($)
Jun. 30, 2020
Dec. 31, 2019
Fair Value of Marketable Securities $ 126,252 $ 158,282
Fair Value, Inputs, Level 1 [Member] | Marketable Securiies [Member]    
Fair Value of Marketable Securities $ 126,252 $ 158,282
XML 33 R24.htm IDEA: XBRL DOCUMENT v3.20.2
2. Significant Accounting Policies (Details Narrative) - USD ($)
Jun. 30, 2020
Dec. 31, 2019
Accounting Policies [Abstract]    
Cash Equivalents $ 0 $ 0
Cash in excess of FDIC limits 202,636 0
Available for sale and held to maturity securities 0 0
Allowance for royalties receivable $ 0 $ 0
XML 34 R25.htm IDEA: XBRL DOCUMENT v3.20.2
3. Mineral Properties (Details Narrative)
6 Months Ended 10 Months Ended 22 Months Ended 200 Months Ended
Jun. 30, 2020
USD ($)
a
NumberOfClaims
Jun. 30, 2019
USD ($)
Jun. 30, 2020
USD ($)
a
NumberOfClaims
Jun. 30, 2020
USD ($)
a
NumberOfClaims
Jun. 30, 2020
USD ($)
a
NumberOfClaims
Vernal [Member]          
Accumulated exploration costs         $ 89,616
Exploration expenses $ 0 $ 0      
Windy Peak Property          
Accumulated exploration costs     $ 782,707    
Exploration expenses $ 95,498 37,047      
Unpatented mineral claims | NumberOfClaims 114   114 114 114
Total acreage | a 2,337   2,337 2,337 2,337
Rainbow Mountain Property [Member]          
Accumulated exploration costs       $ 92,874  
Exploration expenses $ 11,934 $ 180      
Unpatented mineral claims | NumberOfClaims 81   81 81 81
Total acreage | a 1,620   1,620 1,620 1,620
XML 35 R26.htm IDEA: XBRL DOCUMENT v3.20.2
4. Royalty Interests (Details Narrative) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Dec. 31, 2019
Royalty revenue $ 541,402 $ 280,671 $ 929,780 $ 537,337  
Royalty receivable 794,076   794,076   $ 487,060
Moss Gold/Silver Mine [Member]          
Royalty receivable $ 794,076   794,076   $ 487,060
Moss Gold/Silver Mine [Member] | Royalty Income [Member]          
Royalty revenue     929,780 $ 537,337  
Vanadium Oxide [Member] | Royalty Income [Member]          
Royalty revenue     $ 0    
Revenue From Rights Concentration Risk [Member] | Moss Gold/Silver Mine [Member]          
Royalty percentage     3.00%    
Revenue From Rights Concentration Risk [Member] | Bruner Gold/Silver Mine [Member]          
Royalty percentage     2.00%    
XML 36 R27.htm IDEA: XBRL DOCUMENT v3.20.2
5. Stock Options (Details - Option activity) - Stock Options [Member] - USD ($)
6 Months Ended 12 Months Ended
Jun. 30, 2020
Dec. 31, 2019
Dec. 31, 2018
Options Outstanding      
Outstanding, beginning balance 7,465,000 7,485,000  
Granted 0 0  
Expired 0 0  
Exercised 0 (20,000)  
Outstanding, ending balance 7,465,000 7,465,000  
Weighted Average Exercise Price      
Outstanding, beginning balance $ 0.10 $ 0.10  
Outstanding, ending balance $ 0.10 $ 0.10  
Weighted Average Remaining Contractual Life (Years)      
Weighted average remaining contractual life (in years) 5 years 11 months 26 days 6 years 5 months 23 days  
Weighted average remaining contractual life exercisable 5 years 11 months 26 days    
Aggregate Intrinsic Value      
Aggregate intrinsic value options outstanding $ 0   $ 0
Aggregate intrinsic value options exercisable $ 0   $ 0
XML 37 R28.htm IDEA: XBRL DOCUMENT v3.20.2
5. Stock Options (Details - Unvested options) - Unvested Stock Options [Member] - $ / shares
6 Months Ended 12 Months Ended
Jun. 30, 2020
Dec. 31, 2019
Shares unvested, beginning balance 0 350,000
Shares vested 0 (350,000)
Shares unvested, ending balance 0 0
Price per share, nonvested options, beginning balance $ 0.113
Price per share options, vested   0.113
Price per share nonvested options, outstanding
XML 38 R29.htm IDEA: XBRL DOCUMENT v3.20.2
5. Stock Options (Details Narrative) - USD ($)
6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Stock compensation expense $ 0 $ 21,142
2019 Plan [Member]    
Shares authorized under plan 9,500,000  
Shares available for grant 9,500,000  
2014 Plan [Member]    
Shares authorized under plan 5,000,000  
Shares available for grant 535,000  
2012 Plan [Member]    
Shares authorized under plan 3,900,000  
Shares available for grant 2,680,000  
2005 Plan [Member]    
Shares authorized under plan 2,000,000  
Shares available for grant 0  
XML 39 R30.htm IDEA: XBRL DOCUMENT v3.20.2
6. Common Stock (Details Narrative) - $ / shares
Jun. 30, 2020
Dec. 31, 2019
Equity [Abstract]    
Common stock authorized 400,000,000 400,000,000
Common stock par value $ 0.001 $ 0.001
Common stock outstanding 74,280,354 74,280,354
XML 40 R31.htm IDEA: XBRL DOCUMENT v3.20.2
7. Warrants (Details - Warrant activity) - Stock Warrants [Member] - $ / shares
6 Months Ended 12 Months Ended
Jun. 30, 2020
Dec. 31, 2019
Number of Warrants    
Warrants outstanding, beginning balance 11,660,000 32,446,957
Warrants issued 0 0
Warrants cancelled or exercised 0 (8,000,000)
Warrants expired 0 (12,786,957)
Warrants outstanding, ending balance 11,660,000 11,660,000
Weighted Average Exercise Price    
Weighted average exercise price, beginning $ 0.12 $ 0.09
Weighted average exercise price, cancelled/exercised   0.09
Weighted average exercise price, expired   0.06
Weighted average exercise price, ending $ 0.12 $ 0.12
XML 41 R32.htm IDEA: XBRL DOCUMENT v3.20.2
7. Warrants (Details - Warrants by exercise price) - Stock Warrants [Member] - $ / shares
6 Months Ended
Jun. 30, 2020
Dec. 31, 2019
Dec. 31, 2018
Warrants outstanding 11,660,000 11,660,000 32,446,957
Warrants exercisable, weighted average exercise price $ 0.12 $ 0.12 $ 0.09
$0.05 - $0.08 [Member]      
Warrants outstanding 2,340,000    
Warrants exercisable, weighted average exercise price $ 0.08    
Warrants exercisable, remaining contractual life 4 months 9 days    
$0.09 - $0.14 [Member]      
Warrants outstanding 6,320,000    
Warrants exercisable, weighted average exercise price $ 0.11    
Warrants exercisable, remaining contractual life 3 years 9 months 14 days    
$0.15 - $0.21 [Member]      
Warrants outstanding 3,000,000    
Warrants exercisable, weighted average exercise price $ 0.16    
Warrants exercisable, remaining contractual life 5 years 2 months 19 days    
XML 42 R33.htm IDEA: XBRL DOCUMENT v3.20.2
7. Warrants (Details Narrative) - USD ($)
4 Months Ended
Apr. 30, 2019
Jun. 30, 2020
Note receivable outstanding   $ 705,000
Warrants for Note Receivable [Member]    
Warrants exercised 8,000,000  
Note receivable issued in exchange for warrants $ 705,000  
Reclassification of note receivable $ (705,000)  
XML 43 R34.htm IDEA: XBRL DOCUMENT v3.20.2
8. Preferred Stock (Details Narrative) - Preferred Stock Series A [Member] - $ / shares
Jun. 30, 2020
Dec. 31, 2019
Preferred Stock, par or stated value $ 0.001 $ 0.001
Preferred Stock, shares authorized 13,500,000 13,500,000
Preferred Stock, shares issued 290,000 290,000
XML 44 R35.htm IDEA: XBRL DOCUMENT v3.20.2
9. Related Party Transactions (Details Narrative) - USD ($)
3 Months Ended 4 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Apr. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Dec. 31, 2019
Consulting fees $ 73,544 $ 102,231   $ 137,885 $ 170,650  
Share-based compensation 0 125,202   0 125,202  
Director fees payable 229,923     229,923   $ 210,618
Prepaid director fees 108,000     108,000   $ 149,000
Warrants for Note Receivable [Member]            
Warrants exercised     8,000,000      
Note receivable issued in exchange for warrants     $ 705,000      
Reclassification of note receivable     $ (705,000)      
Zachary Black [Member]            
Consulting fees       14,370 9,044  
Share-based compensation         $ 10,000  
Restricted common stock         250,000  
Common Stock restricted period         3 years  
Director fees payable 105,000     105,000    
Robert Coale [Member]            
Consulting fees       0 $ 0  
Share-based compensation         $ 10,000  
Restricted common stock         250,000  
Common Stock restricted period         3 years  
Director fees payable 105,000     105,000    
Trevor Newton [Member]            
Consulting fees       $ 106,737 $ 91,384  
Share-based compensation         $ 84,060  
Restricted common stock       5,250,000 2,101,500  
Common Stock restricted period         3 years  
Director fees payable 35,000 $ 35,000   $ 35,000 $ 35,000  
Prepaid director fees $ 105,000     105,000    
Shareholder [Member]            
Consulting fees       $ 5,895 $ 50,000  
Shareholder [Member] | Warrants for Note Receivable [Member]            
Warrants exercised     8,000,000      
Note receivable issued in exchange for warrants     $ 705,000      
Reclassification of note receivable     $ (705,000)      
Strata Oil and Gas [Member]            
Investment shares owned 2,760,260     2,760,260    
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