UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended
For the transition period from ____________ to ____________
Commission file number:
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Securities registered pursuant to Section 12(b) of the Act:
| Title of each Class | Trading Symbol | Name of each exchange on which registered |
| N/A | N/A | N/A |
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
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| Smaller reporting company | |
| Emerging growth company |
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On November 14, 2022, there were shares of the registrant’s common stock, $.0001 par value, outstanding.
TABLE OF CONTENTS
| Page | ||
| PART I. FINANCIAL INFORMATION | 3 | |
| Item 1. | FINANCIAL STATEMENTS | 3 |
| Balance Sheets (unaudited) | 3 | |
| Statements of Operations (unaudited) | 4 | |
| Statements of Stockholders' Equity (Deficit) (unaudited) | 5 | |
| Statements of Cash Flows (unaudited) | 6 | |
| Notes to Financial Statements (unaudited) | 7 | |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 17 |
| Item 3. | Quantitative and Qualitative Disclosures about Market Risk | 22 |
| Item 4. | Controls and Procedures | 22 |
| PART II. OTHER INFORMATION | 23 | |
| Item 1. | Legal Proceedings | 23 |
| Item 1A. | Risk Factors | 23 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 23 |
| Item 3. | Defaults Upon Senior Securities | 23 |
| Item 4. | Mine Safety Disclosures | 23 |
| Item 5. | Other Information | 23 |
| Item 6. | Exhibits | 23 |
| Signature | 24 | |
| 2 |
PART I. FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
ATHENA GOLD CORPORATION
CONSOLIDATED BALANCE SHEETS
(unaudited)
| 9/30/22 | 12/31/21 | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash | $ | $ | ||||||
| Prepaid expenses | ||||||||
| Total current assets | ||||||||
| Other assets | ||||||||
| Mineral Rights | ||||||||
| Total other assets | ||||||||
| Total assets | $ | $ | ||||||
| Liabilities and Stockholders' Equity | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | $ | ||||||
| Note payable | ||||||||
| Total current liabilities | ||||||||
| Long term liabilities | ||||||||
| Warrant liability | ||||||||
| Total long term liabilities | ||||||||
| Total liabilities | ||||||||
| Stockholders' equity | ||||||||
| Preferred stock, $ par value, shares authorized, outstanding | ||||||||
| Common stock - $ par value; shares authorized, and issued and outstanding | ||||||||
| Additional paid in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders' equity | ||||||||
| Total liabilities and stockholders' equity | $ | $ | ||||||
See accompanying notes to the unaudited financial statements.
| 3 |
ATHENA GOLD CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| 9/30/22 | 9/30/21 | 9/30/22 | 9/30/21 | |||||||||||||
| Operating expenses | ||||||||||||||||
| Exploration, evaluation and project expenses | $ | $ | $ | $ | ||||||||||||
| General and administrative expenses | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Net operating loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Revaluation of warrant liability | ( | ) | ( | ) | ||||||||||||
| Net income (loss) | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||
| Weighted average common shares outstanding – basic and diluted | ||||||||||||||||
| Earnings (loss) per common share – basic and diluted | $ | $ | ) | $ | ) | $ | ) | |||||||||
See accompanying notes to the unaudited financial statements.
| 4 |
ATHENA GOLD CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
(Unaudited)
| Additional | ||||||||||||||||||||
| Common Stock | Paid In | Accumulated | ||||||||||||||||||
| Shares | Amount | Capital | Deficit | Total | ||||||||||||||||
| December 31, 2020 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Conversion of management fees | ||||||||||||||||||||
| Stock based compensation | 0 | |||||||||||||||||||
| Private placement | ||||||||||||||||||||
| Net loss | 0 | ( | ) | ( | ) | |||||||||||||||
| March 31, 2021 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Private placement | ||||||||||||||||||||
| Warrant liability | 0 | ( | ) | ( | ) | |||||||||||||||
| Stock based compensation | 0 | |||||||||||||||||||
| Net loss | 0 | ( | ) | ( | ) | |||||||||||||||
| June 30, 2021 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Private placement | ||||||||||||||||||||
| Warrant liability | 0 | ( | ) | ( | ) | |||||||||||||||
| Stock based compensation | 0 | |||||||||||||||||||
| Net loss | 0 | ( | ) | ( | ) | |||||||||||||||
| September 30, 2021 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| December 31, 2021 | ( | ) | ||||||||||||||||||
| Stock based compensation | 0 | |||||||||||||||||||
| Net income | 0 | |||||||||||||||||||
| March 31, 2022 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Private placement | ||||||||||||||||||||
| Warrant liability | 0 | ( | ) | ( | ) | |||||||||||||||
| Common stock issued for mineral property | ||||||||||||||||||||
| Stock based compensation | 0 | |||||||||||||||||||
| Net loss | 0 | ( | ) | ( | ) | |||||||||||||||
| June 30, 2022 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Private placement | ||||||||||||||||||||
| Warrant liability | 0 | ( | ) | ( | ) | |||||||||||||||
| Stock based compensation | 0 | |||||||||||||||||||
| Net income | 0 | |||||||||||||||||||
| September 30, 2022 | $ | $ | $ | ( | ) | $ | ||||||||||||||
See accompanying notes to the unaudited financial statements.
| 5 |
ATHENA GOLD CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
| 9/30/22 | 9/30/21 | |||||||
| Cash flows from operating activities | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities | ||||||||
| Amortization of debt discount | ||||||||
| Revaluation of warrant liability | ( | ) | ||||||
| Share based compensation | ||||||||
| Change in operating assets and liabilities: | ||||||||
| Prepaid expense | ||||||||
| Accounts payable | ||||||||
| Other liabilities | ||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities | ||||||||
| Purchase of mineral properties | ( | ) | ||||||
| Net cash used in financing activities | ( | ) | ||||||
| Cash flows from financing activities | ||||||||
| Proceeds from private placement of stock | ||||||||
| Proceeds from related parties | ||||||||
| Payments to related parties | ( | ) | ||||||
| Net cash provided by financing activities | ||||||||
| Net increase in cash | ||||||||
| Cash, beginning of period | ||||||||
| Cash, end of period | $ | $ | ||||||
| Supplemental disclosure of cash flow information | ||||||||
| Cash paid for interest | $ | $ | ||||||
| Cash paid for income taxes | $ | $ | ||||||
| Noncash investing and financing activities | ||||||||
| Stock issued to payoff note payable | $ | $ | ||||||
| Common stock issued for mineral properties | $ | $ | ||||||
| Note payable for mineral property | $ | $ | ||||||
| Conversion of management fee payable | $ | $ | ||||||
| Warrant liability | $ | $ | ||||||
See accompanying notes to the unaudited financial statements.
| 6 |
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note 1 – Nature of Business and Summary of Significant Accounting Policies
Nature of Operations
Athena Gold Corporation (“we,” “our,” “us,” or “Athena”) is engaged in the acquisition and exploration of mineral resources. We were incorporated in Delaware on December 23, 2003 and began our mining operations in 2010.
In December 2009, we formed and organized a wholly-owned subsidiary, Athena Minerals, Inc. (“Athena Minerals”) which owns and operates mining interests and property in California. On December 31, 2020 we sold the subsidiary to Mr. John Gibbs, a related party, in a non-cash exchange.
The Company’s properties do not have any reserves. The Company plans to conduct exploration programs on these properties with the objective of ascertaining whether any of its properties contain economic concentrations of precious and base metals that are prospective for mining.
Basis of Presentation
We prepared these interim financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”). The accompanying unaudited interim financial statements have been prepared in accordance with GAAP for interim financial information and in accordance with Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In our opinion, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three-month periods ended March 31, 2022 are not necessarily indicative of the results for the full year. While we believe that the disclosures presented herein are adequate and not misleading, these interim consolidated financial statements should be read in conjunction with the audited financial statements and the footnotes thereto contained in our Annual Report on Form 10-K for the year ended December 31, 2021.
Reclassifications
Certain reclassifications may have been made to our prior year’s consolidated financial statements to conform to our current year presentation. These reclassifications had no effect on our previously reported results of operations or accumulated deficit.
Foreign Currency Translation
The Company is exposed to currency risk on transactions and balances in currencies other than the functional currency. The Company has not entered any contracts to manage foreign exchange risk.
The functional currency of the Company is the US dollar; therefore, the Company is exposed to currency risk from financial assets and liabilities denominated in Canadian dollars.
Recent Accounting Pronouncements
The Company is not aware of any recent accounting pronouncements expected to have a material impact on the consolidated financial statements.
| 7 |
Liquidity and Going Concern
Our financial statements have been prepared on a going concern basis, which assumes that we will be able to meet our obligations and continue our operations during the next fiscal year. Asset realization values may be significantly different from carrying values as shown in our consolidated financial statements and do not give effect to adjustments that would be necessary to the carrying values of assets and liabilities should we be unable to continue as a going concern.
At September 30, 2022, we had not yet achieved profitable operations and we have accumulated losses of approximately $11,000,000 since our inception. We expect to incur further losses in the development of our business, all of which raise substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern depends on our ability to generate future profits and/or to obtain the necessary financing to meet our obligations arising from normal business operations when they come due.
Impairment of Long-lived Assets
We continually monitor events and changes in circumstances that could indicate that our carrying amounts of long-lived assets, including mineral rights, may not be recoverable. When such events or changes in circumstances occur, we assess the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through their undiscounted expected future cash flows. If the future undiscounted cash flows are less than the carrying amount of these assets, we recognize an impairment loss based on the excess of the carrying amount over the fair value of the assets.
Notes Payable - Related Party
Related party payables are classified as current liabilities as the note holders are control persons and have the ability to control the repayment dates of the notes.
Exploration Costs
Mineral exploration costs are expensed as incurred. When it has been determined that it is economically feasible to extract minerals and the permitting process has been initiated, exploration costs incurred to further delineate and develop the property are considered pre-commercial production costs and will be capitalized and included as mine development costs in our consolidated balance sheets.
Stock-Based Compensation
Stock-based compensation is accounted for based on the requirements of the Share-Based Payment Topic of ASC 718 which requires recognition in the consolidated financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). This ASC also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award.
The estimated fair value of each stock option as of the date of grant was calculated using the Black-Scholes pricing model. The Company estimates the volatility of its common stock at the date of grant based on Company stock price history. The Company determines the expected life based on the simplified method given that its own historical share option exercise experience does not provide a reasonable basis for estimating expected term. The Company uses the risk-free interest rate on the implied yield currently available on U.S. Treasury issues with an equivalent remaining term approximately equal to the expected life of the award. The Company has never paid any cash dividends on its common stock and does not anticipate paying any cash dividends in the foreseeable future. The shares of common stock subject to the stock-based compensation plan shall consist of unissued shares, treasury shares or previously issued shares held by any subsidiary of the Company, and such number of shares of common stock are reserved for such purpose.
| 8 |
Fair Value of Financial Instruments
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair value:
Level 1 - Valuation based on quoted market prices in active markets for identical assets and liabilities.
Level 2 - Valuation based on quoted market prices for similar assets and liabilities in active markets.
Level 3 - Valuation based on unobservable inputs that are supported by little or no market activity, therefore requiring management’s best estimate of what market participants would use as fair value.
The fair value of cash, receivables and accounts payable approximates their carrying values due to their short term to maturity. The warrant liabilities are measured using level 3 inputs (Note 4).
The Company incurred a net income and net loss for the three months ended September 30, 2022 and 2021, respectively. In periods where the Company has a net income certain options and warrants are included in the computation of diluted shares outstanding, however, the options and warrants were not included in the calculation because they were “out-of-the money”. In periods where the Company has a net loss, all common stock equivalents are excluded as they would be anti-dilutive.
The Company incurred a net loss for the nine months ended September 30, 2022 and 2021, respectively. In periods where the Company has a net loss, all common stock equivalents are excluded as they would be anti-dilutive. As of September 30, 2022 there were options and warrants. As of September 30, 2021 there were options and warrants.
COVID-19 Pandemic
An occurrence of an uncontrollable event such as the COVID-19 pandemic may negatively affect our operations. The occurrence of an uncontrollable event such as the COVID-19 pandemic may negatively affect our operations. A pandemic typically results in social distancing, travel bans and quarantine, and this may limit access to our facilities, customers, management, support staff and professional advisors. These factors, in turn, may not only impact our operations, financial condition and demand for our goods and services but our overall ability to react timely to mitigate the impact of this event. Also, it may hamper our efforts to comply with our filing obligations with the Securities and Exchange Commission.
Note 2 – Mineral Rights - Excelsior Springs
Effective December 27, 2021 (“Effective Date”), the Company simultaneously executed and consummated a definitive Share Purchase Agreement (the “SPA”) with Nubian Resources, Ltd. (“Nubian”). The SPA was the result of a previously disclosed Option Agreement with Nubian dated as of December 11, 2020, as amended by First Amendment to Option Agreement dated November 10, 2021 (the “Option”). While the Option granted the Company the right to acquire up to a 100% interest in the mining claims comprising the Excelsior Springs Prospect (the “Property”) located in Esmerelda County, Nevada, the Company and Nubian agreed to restructure the transaction so that the Company purchased 100% of the issued and outstanding shares of common stock of Nubian Resources USA, Ltd (“Nubian USA”), a wholly-owned subsidiary of Nubian which held the Property. By purchasing 100% of Nubian USA, the Company effectively acquired the remaining 90% interest in the Property through the issuance of 45,000,000 shares, the Company having previously acquired a 10% interest in the Property in December 2020 with the issuance of 5,000,000 shares. The 50 million shares issued to Nubian were issued as “restricted securities” under the Securities Act of 1933, as amended (“Securities Act”).
| 9 |
The mineral property was valued at the December
31, 2021, the closing date for the SPA with a stock price of $0.13, resulting in a fair value consideration of $
Note 3 – Convertible Note Payable
Effective April 1, 2015, the Company executed
a convertible promissory note (the “Note”) in the principal amount of $
On April 24, 2020, the Company agreed to reduce
the conversion price from $0.0735 per share to $0.021 per share. All other terms of the convertible note remain unchanged, and therefore
did not change the cash flows of the note. The Company determined the transaction was considered an extinguishment because of the change
in conversion price in which no gain or loss was recorded according to ASC 470-50. However, because the conversion price was reduced below
the $0.03 market value on the date of the change, a beneficial conversion feature resulted from the price reduction in the amount of $
On November 30, 2021, the Company received a notice
of conversion of the Note with a principal balance of $
Note 4 – Common Stock and Warrants
During August and September 2022, the Company
completed the private placement of three tranches (August 12, 2022; August 31, 2022; September 14, 2022) in which we sold units.
Each unit was priced at CAD$ and consisted of one share of the Company’s common stock and one stock purchase warrant granting
the holder the right to purchase one additional share of common stock at a price of CAD$. The warrants expire 24 months from issue
date. All securities issued in connection with the offering are subject to restrictions on resale in Canada and the United States pursuant
to applicable securities laws and the policies of any applicable stock exchange. An additional
The warrants have an exercise price in Canadian dollars while the Company’s functional currency is US dollars. Therefore, in accordance with ASU 815 - Derivatives and Hedging, the warrants have a derivative liability value.
| 10 |
Tranche 1 – August 12, 2022:
The warrant liability had an initial value of
$
| Fair value assumptions – warrant liability: | 8/12/22 | 9/30/22 | ||||||
| Risk free interest rate | % | % | ||||||
| Expected term (years) | ||||||||
| Expected volatility | % | % | ||||||
Tranche 2 – August 31, 2022:
The warrant liability had an initial value of
$
| Fair value assumptions – warrant liability: | 8/31/22 | 9/30/22 | ||||||
| Risk free interest rate | % | % | ||||||
| Expected term (years) | ||||||||
| Expected volatility | % | % | ||||||
The broker warrants were evaluated for purposes
of classification between liability and equity. The broker warrants do not contain features that would require a liability classification
and are therefore considered equity. The Black Scholes pricing model was calculated in US dollars to estimate the fair value of $
| Fair value assumptions – broker warrants: | 8/31/22 | |||
| Risk free interest rate | % | |||
| Expected term (years) | ||||
| Expected volatility | % | |||
Tranche 3 – September 14, 2022:
The warrant liability had an initial value of
$
| Fair value assumptions – warrant liability: | 9/14/22 | 9/30/22 | ||||||
| Risk free interest rate | % | % | ||||||
| Expected term (years) | ||||||||
| Expected volatility | % | % | ||||||
The broker warrants were evaluated for purposes
of classification between liability and equity. The broker warrants do not contain features that would require a liability classification
and are therefore considered equity. The Black Scholes pricing model was calculated in US dollars to estimate the fair value of $
| Fair value assumptions – broker warrants: | 9/14/22 | |||
| Risk free interest rate | % | |||
| Expected term (years) | ||||
| Expected volatility | % | |||
| 11 |
On June 9, 2022, the Company entered into an Acquisition
Agreement (the “Agreement”) to purchase an undivided 100% interest in the Fortunatus and Prout patented lode mining claims
in Esmeralda County, Nevada $
| · | $ | |
| · | $ | |
| · | $ |
In April 2022 the Company completed a private
placement in which we sold units. Each unit was priced at CAD$ and consisted of one share of the Company’s common
stock and one stock purchase warrant granting the holder the right to purchase one additional share of common stock at a price of CAD$.
The warrants expire April 13, 2025. All securities issued in connection with the offering are subject to restrictions on resale in Canada
and the United States pursuant to applicable securities laws and the policies of any applicable stock exchange. An additional
The warrants have an exercise price in Canadian dollars while the Company’s functional currency is US dollars. Therefore, in accordance with ASU 815 - Derivatives and Hedging, the warrants have a derivative liability value.
In April 2022, the warrant liability had an initial
value of $
| Fair value assumptions – warrant liability: | 4/13/22 | 9/30/22 | ||||||
| Risk free interest rate | % | % | ||||||
| Expected term (years) | ||||||||
| Expected volatility | % | % | ||||||
The broker warrants were evaluated for purposes
of classification between liability and equity. The broker warrants do not contain features that would require a liability classification
and are therefore considered equity. The Black Scholes pricing model was calculated in US dollars to estimate the fair value of $
| Fair value assumptions – broker warrants: | 4/13/22 | |||
| Risk free interest rate | % | |||
| Expected term (years) | ||||
| Expected volatility | % | |||
During the twelve months ended December 31, 2021
we sold shares of common stock in private placements realizing proceeds of $
On September 30, 2021 the Company completed a
private placement in which we sold units. Each unit was priced at CAD$0.08 and consisted of one share of the Company’s
common stock and one stock purchase warrant granting the holder the right to purchase one additional share of common stock at a price
of CAD$0.15. The warrants expire
The warrants have an exercise price in Canadian dollars while the Company’s functional currency is US dollars. Therefore, in accordance with ASU 815 - Derivatives and Hedging, the warrants have a derivative liability value.
| 12 |
At December 31, 2021, the warrant liability was
valued at $
| Fair value assumptions – warrant liability: | 9/30/21 | 12/31/21 | 9/30/22 | |||||||||
| Risk free interest rate | % | % | % | |||||||||
| Expected term (years) | ||||||||||||
| Expected volatility | % | % | % | |||||||||
The Broker Warrants were evaluated for purposes
of classification between liability and equity. The Broker Warrants do not contain features that would require a liability classification
and are therefore considered equity. The Black Scholes pricing model was calculated in US dollars to estimate the fair value of $
| Fair value assumptions – broker warrants: | 9/30/21 | |||
| Risk free interest rate | % | |||
| Expected term (years) | ||||
| Expected volatility | % | |||
On May 25, 2021 the Company completed a private
placement in which we sold units. Each unit was priced at CAD$0.08 and consisted of one share of the Company’s common
stock and one stock purchase warrant granting the holder the right to purchase one additional share of common stock at a price of CAD$0.15.
The warrants expire
The warrants have an exercise price in Canadian dollars while the Company’s functional currency is US dollars. Therefore, in accordance with ASU 815 - Derivatives and Hedging, the warrants have a derivative liability value.
At December 31, 2021, the warrant liability was
valued at $
| Fair value assumptions – warrant liability: | 5/25/21 | 12/31/21 | 9/30/22 | |||||||||
| Risk free interest rate | % | % | % | |||||||||
| Expected term (years) | ||||||||||||
| Expected volatility | % | % | % | |||||||||
The Broker Warrants were evaluated for purposes
of classification between liability and equity. The Broker Warrants do not contain features that would require a liability classification
and are therefore considered equity. The Black Scholes pricing model was calculated in US dollars to estimate the fair value of $
| Fair value assumptions – broker warrants: | 5/25/21 | |||
| Risk free interest rate | % | |||
| Expected term (years) | ||||
| Expected volatility | % | |||
| 13 |
Total outstanding warrants of
| Warrants Issued | Total | ||||||
| Warrants issued | |||||||
| Broker warrants issued (1) | |||||||
| Issued date | |||||||
| Expiration date | |||||||
| Exercise price (Canadian $) | $ |
$ |
$ |
$ |
$ |
||
| Balance at December 31, 2020 | |||||||
| Exercised | |||||||
| Issued | |||||||
| Expired | |||||||
| Balance at December 31, 2021 | |||||||
| Exercised | |||||||
| Issued | |||||||
| Expired | |||||||
| Balance at September 30, 2022 | |||||||
| (1) |
During the quarter ended March 31, 2021, we sold 5,000,000 shares of common stock in private placements to six individuals at a price of $0.03 per share, realizing total proceeds of $150,000. Of the 5,000,000 shares sold, 1,750,000 shares were issued on May 28, 2021.
On January 1, 2021 Mr. John Power, the Company’s
CEO/CFO agreed to convert accrued management fees totaling $
On March 22, 2021 the Company issued a total of non-statutory stock options to four individuals, three of whom are Directors of the Company, the other an independent technical consultant that is helping design our 2021 exploration programs at Excelsior Spring. Upon vesting, each option is exercisable to purchase one share of common stock at a price of $0.09 per share. The options vest 50% upon issuance, and 25% on each of the first and second anniversaries of the grant date.
We estimated the fair value of the options using the Black-Scholes option pricing model, which includes assumptions for expected dividends, expected share price volatility, risk-free interest rate, and expected life of the options. Our expected volatility assumption is based on our historical weekly closing price of our stock over a period equivalent to the expected remaining life of the options. The total estimated fair value of the options utilized the following assumptions:
| Expected volatility | % | |
| Expected life | years | |
| Risk free interest rate | % |
| 14 |
The calculations resulted in the total fair value
of the options issued to be $
| Weighted | ||||
| Average | ||||
| Weighted | Remaining | |||
| Average | Contractual | Aggregate | ||
| Number of | Exercise | Life | Intrinsic | |
| Options | Price | (Years) | Value | |
| Balance at December 31, 2020 | $ |
0 | $0 | |
| Exercised | 0 | 0 | ||
| Issued | 0 | |||
| Canceled | 0 | 0 | ||
| Balance at December 31, 2021 | ||||
| Exercised | 0 | 0 | ||
| Issued | 0 | |||
| Canceled | 0 | 0 | 0 | |
| Balance at September 30, 2022 | 0 | |||
| Options exercisable at September 30, 2022 | 0 |
Also, on March 22, 2021 the Company agreed to issue a total of restricted stock units at a price of $0.10 per share to the independent technical consultant helping design our 2021 exploration programs at Excelsior Springs. However, the shares shall not be issued until such time the individual either provides a written request or his termination date, whichever is sooner. The shares shall have no voting rights until issued. As such, we have recorded stock-based compensation in the amount of $.
On August 24, 2022, the Company granted options pursuant to the terms of the Company’s Stock Option Plan. The Black Scholes option pricing model was used to estimate the aggregate fair value of the August 2022 options of $as stock-based compensation with the following inputs:
| Options | Exercise Price |
Expected Life |
Volatility |
Risk Free Interest Rate |
| C$ | years | % | % |
Note 6 – Commitments and Contingencies
We are subject to various commitments and contingencies.
Note 7 – Related Party Transactions
Conflicts of Interests
Magellan Gold Corporation (“Magellan”) is a company under common control. Mr. John Gibbs is a significant shareholder in both Athena and Magellan. Athena and Magellan are both involved in the business of acquisition and exploration of mineral resources.
Silver Saddle Resources, LLC (“Silver Saddle”) is also a company under common control. Mr. Power and Mr. Gibbs are the owners and managing members of Silver Saddle. Athena and Silver Saddle are both involved in the business of acquisition and exploration of mineral resources.
There exists no arrangement or understanding with respect to the resolution of future conflicts of interest. The existence of common ownership and common management could result in significantly different operating results or financial position from those that could have resulted had Athena, Magellan and Silver Saddle been autonomous.
| 15 |
Management Fees
The Company is subject to a month-to-month management
agreement with Mr. Power requiring a monthly payment of $2,500 as consideration for the day-to-day management of Athena, $
On January 1, 2021, the Company agreed to convert
the $
Note Payable
During March 2022, the Company executed two promissory
notes with John Gibbs for $
In June 2022, the Company executed a promissory
note with John Gibbs for $
Note 8 – Subsequent Events
Effective October 12, 2022, the Company has granted an aggregate of 2,250,000 stock options (the “Options”) to certain directors and officers to purchase 2,250,000 common shares (the “Option Shares”) in the capital stock of the Company pursuant to the Company’s equity incentive plan. The Options, which vest immediately, are exercisable at an exercise price of $0.06 per Option Share for a period of ten years from the date of grant. In addition, the board of directors of the Company has approved the issuance of an aggregate of 675,000 common shares in the capital stock of the Company at a deemed price per Share of $0.052 to its officers and directors. The shares were issued as of filing date.
On October 24, 2022, the Company completed the sale of an aggregate of C$40,000 of its Units at a purchase price of C$.08 per Unit for a total of 500,000 Units. Each Unit consisted of one share of Common Stock and one common stock purchase warrant exercisable for two years to purchase one additional share of Common Stock at a price of C$0.12 per share.
| 16 |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
We use the terms “Athena,” “we,” “our,” and “us” to refer to Athena Gold Corporation.
The following discussion and analysis provide information that management believes is relevant for an assessment and understanding of our results of operations and financial condition. This information should be read in conjunction with our audited consolidated financial statements which are included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, and our interim unaudited consolidated financial statements and notes thereto included with this report in Part I. Item 1.
Forward-Looking Statements
Some of the information presented in this Form 10-Q constitutes “forward-looking statements”. These forward-looking statements include, but are not limited to, statements that include terms such as “may,” “will,” “intend,” “anticipate,” “estimate,” “expect,” “continue,” “believe,” “plan,” or the like, as well as all statements that are not historical facts. Forward-looking statements are inherently subject to risks and uncertainties that could cause actual results to differ materially from current expectations. Although we believe our expectations are based on reasonable assumptions within the bounds of our knowledge of our business and operations, there can be no assurance that actual results will not differ materially from expectations.
All forward-looking statements speak only as of the date on which they are made. We undertake no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they are made.
Business Overview
Athena Gold Corporation (“we,” “our,” “us,” or “Athena”) is engaged in the acquisition and exploration of mineral resources. We were incorporated in Delaware on December 23, 2003 and began our mining operations in 2010.
In December 2009, we formed and organized a wholly-owned subsidiary, Athena Minerals, Inc. (“Athena Minerals”) which owns and operates mining interests and property in California. On December 31, 2020 we sold the subsidiary to Mr. John Gibbs, a related party, in a non-cash exchange.
The Company’s properties do not have any reserves. The Company plans to conduct exploration programs on these properties with the objective of ascertaining whether any of its properties contain economic concentrations of precious and base metals that are prospective for mining.
Results of Operations for the Three Months Ended September 30, 2022 and 2021
| Three Months Ended | ||||||||
| 9/30/22 | 9/30/21 | |||||||
| Operating expenses | ||||||||
| Exploration, evaluation and project expenses | $ | 143,287 | $ | 66,840 | ||||
| General and administrative expenses | 186,506 | 123,434 | ||||||
| Total operating expenses | 329,793 | 190,274 | ||||||
| Net operating loss | (329,793 | ) | (190,274 | ) | ||||
| Interest expense | (463 | ) | (1,096 | ) | ||||
| Revaluation of warrant liability | 854,281 | (120,226 | ) | |||||
| Net income (loss) | $ | 524,025 | $ | (311,596 | ) | |||
| 17 |
Results of Operations for the Nine Months Ended September 30, 2022 and 2021
| Nine Months Ended | ||||||||
| 9/30/22 | 9/30/21 | |||||||
| Operating expenses | ||||||||
| Exploration, evaluation and project expenses | $ | 449,350 | $ | 128,616 | ||||
| General and administrative expenses | 419,956 | 454,381 | ||||||
| Total operating expenses | 869,306 | 582,997 | ||||||
| Net operating loss | (869,306 | ) | (582,997 | ) | ||||
| Interest expense | (463 | ) | (11,203 | ) | ||||
| Revaluation of warrant liability | 822,603 | (58,133 | ) | |||||
| Net loss | $ | (47,166 | ) | $ | (652,333 | ) | ||
Operating expenses:
For the three months ending September 30, 2022, the Company increased general and administrative expenses by approximately $63,000. The increase was due to the following approximate year over year variances:
| Three months ending | 9/30/2022 | 9/30/2021 | Variance |
| Legal and other professional fees | $53,000 | $93,000 | ($40,000) |
| Share based compensation | 55,000 | 19,000 | (36,000) |
| Stock exchange fees and related expenses | 76,000 | 11,000 | 65,000 |
| Other general expenses | 2,000 | 0 | 2,000 |
| Total | $186,000 | $123,000 | $63,000 |
For the nine months ending September 30, 2022, the Company decreased general and administrative expenses by approximately $34,000. The increase was due to the following approximate year over year variances:
| Nine months ending | 9/30/2022 | 9/30/2021 | Variance |
| Legal and other professional fees | $219,000 | $261,000 | ($42,000) |
| Share based compensation | 79,000 | 136,000 | (57,000) |
| Stock exchange fees and related expenses | 109,000 | 52,000 | 57,000 |
| Other general expenses | 13,000 | 5,000 | 8,000 |
| Total | $420,000 | $454,000 | ($34,000) |
| · | Legal and other professional fees changed for the nine and three months ending September 30 compared to prior year, resulting from the listing on the Canadian Securities Exchange. | |
| · | Share based compensation was higher in 2021 with the issuance of options in March that were 50% vested on grant date with the remaining share based compensation recognized on a straight line basis for the remaining two years until the options are fully vested. Additional options were issued in August 2022 that were fully vested adding $43,456 in stock-based compensation. | |
| · | Stock exchange fees and related expenses increased in 2022 with the use of consulting fees for fund raising. | |
| · | Other general expenses are higher in 2022 with increases in travel and office expenses. |
During the three and nine months ended September 30, 2022, we incurred approximately $143,000 and $449,000, respectively of exploration costs, which were costs associated with our RC drill program on our flagship Excelsior Springs project. This is an increase from the three and nine months ended September 30, 2021 of approximately $67,000 and $129,000, respectively.
| 18 |
Other income and expense:
The revaluation of warrant liability for the three and nine months ending September 30, 2022 is based on the following warrants that were issued as part of the private placements as detailed in Note 4 to the financial statements.
| Three months ending (Warrant date) | 9/30/2022 | Q3 22 initial valuation |
6/30/2022 | Gain on revaluation |
| September 14, 2022 | $97,080 | $100,656 | $0 | $3,576 |
| August 31, 2022 | 79,609 | 139,255 | 0 | 59,646 |
| August 12, 2022 | 106,093 | 129,812 | 0 | 23,719 |
| April 2022 | 248,760 | 0 | 602,523 | 353,763 |
| September 2021 | 80,463 | 0 | 218,793 | 138,330 |
| May 2021 | 163,161 | 0 | 438,408 | 275,247 |
| Total | $775,166 | $369,723 | $1,259,724 | $854,281 |
| Nine months ending (Warrant date) | 9/30/2022 | 2022 initial valuation |
12/31/2021 | Gain (loss) on revaluation |
| September 14, 2022 | $97,080 | $100,656 | $0 | $3,576 |
| August 31, 2022 | 79,609 | 139,255 | 0 | 59,646 |
| August 12, 2022 | 106,093 | 129,812 | 0 | 23,719 |
| April 2022 | 248,760 | 203,838 | 0 | (44,922) |
| September 2021 | 80,463 | 0 | 341,145 | 260,682 |
| May 2021 | 163,161 | 0 | 683,063 | 519,902 |
| Total | $775,166 | $573,561 | $1,024,208 | $822,603 |
Liquidity and Capital Resources
Going Concern
Our consolidated financial statements have been prepared on a going concern basis, which assumes that we will be able to meet our obligations and continue our operations during the next fiscal year. Asset realization values may be significantly different from carrying values as shown in our consolidated financial statements and do not give effect to adjustments that would be necessary to the carrying values of assets and liabilities should we be unable to continue as a going concern.
At September 30, 2022, we had not yet achieved profitable operations and we have accumulated losses of approximately $11,000,000 since our inception. We expect to incur further losses in the development of our business, all of which casts substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern depends on our ability to generate future profits and/or to obtain the necessary financing to meet our obligations arising from normal business operations when they come due.
We have financed our capital requirements primarily through borrowings from related parties and equity financings. We expect to meet our future financing needs and working capital and capital expenditure requirements through additional borrowings and offerings of debt or equity securities, although there can be no assurance that our future financing efforts will be successful. The terms of future financing could be highly dilutive to existing shareholders. Currently, there are no arrangements in place for additional equity funding or new loans.
| 19 |
Liquidity
As of September 30, 2022, we had approximately $256,000 of cash and a working capital of approximately $24,000. This compares to cash on hand of approximately $73,000 and negative working capital of approximately $74,000 on December 31, 2021.
During the twelve months ended December 31, 2021, we have sold 14,358,700 shares of common stock in private placements realizing proceeds of $742,375. For the nine months ending September 30, 2022, the Company completed a private placement in which we sold 14,557,700 units. We realized total proceeds of $1,043,950 net of offering costs. We anticipate that future funding will be in the form of additional equity financing from the sale of our common stock, or loans from officers, directors or significant shareholders.
Cash Flows
A summary of our cash provided by and used in operating, investing and financing activities is as follows:
| Nine Months Ended | ||||||||
| 9/30/22 | 9/30/21 | |||||||
| Net cash used in operating activities | $ | (682,171 | ) | $ | (391,197 | ) | ||
| Net cash used in financing activities | (29,214 | ) | 0 | |||||
| Net cash provided by financing activities | 894,838 | 720,477 | ||||||
| Net increase in cash | 183,453 | 329,280 | ||||||
| Cash, beginning of period | 72,822 | 8,986 | ||||||
| Cash, end of period | $ | 256,275 | $ | 338,266 | ||||
Net cash used in operating activities:
Net cash used in operating activities was approximately $682,000 and approximately $391,000 during the nine months ended September 30, 2022 and 2021, respectively.
Cash used in operating activities during the nine months ended September 30, 2022, is primarily attributed to the change in prepaid expenses and accounts payable.
Net cash provided by financing activities:
Cash provided by financing activities during the nine months ended September 30, 2022, was approximately $895,000. The Company received proceeds from private placements in April 2022 and during the third quarter 2022.
Off Balance Sheet Arrangements:
We do not have and never had any off-balance sheet arrangements.
Recent Accounting Pronouncements
We do not expect the adoption of recently issued accounting pronouncements to have a significant impact on our results of operations, financial position or cash flow.
Critical Accounting Policies
The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates, assumptions and judgments that affect the amounts reported in our financial statements. The accounting positions described below are significantly affected by critical accounting estimates.
| 20 |
We believe that the significant estimates, assumptions and judgments used when accounting for items and matters such as capitalized mineral rights, asset valuations, recoverability of assets, asset impairments, taxes, and other provisions were reasonable, based upon information available at the time they were made. Actual results could differ from these estimates, making it possible that a change in these estimates could occur in the near term.
Foreign Currency
The Company is exposed to currency risk on transactions and balances in currencies other than the functional currency. The Company has not entered any contracts to manage foreign exchange risk. The functional currency of the Company is the US dollar; therefore, the Company is exposed to currency risk from financial assets and liabilities denominated in Canadian dollars.
Mineral Rights
We have determined that our mining rights meet the definition of mineral rights, as defined by accounting standards, and are tangible assets. As a result, our direct costs to acquire or lease mineral rights are initially capitalized as tangible assets. Mineral rights include costs associated with: leasing or acquiring patented and unpatented mining claims; leasing mining rights including lease signature bonuses, lease rental payments and advance minimum royalty payments; and options to purchase or lease mineral properties.
If we establish proven and probable reserves for a mineral property and establish that the mineral property can be economically developed, mineral rights will be amortized over the estimated useful life of the property following the commencement of commercial production or expensed if it is determined that the mineral property has no future economic value or if the property is sold or abandoned. For mineral rights in which proven and probable reserves have not yet been established, we assess the carrying values for impairment at the end of each reporting period and whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Proven and probable reserves have not been established for any mineral rights as of September 30, 2022.
Impairment of Long-lived Assets
We continually monitor events and changes in circumstances that could indicate that our carrying amounts of long-lived assets, including mineral rights, may not be recoverable. When such events or changes in circumstances occur, we assess the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through their undiscounted expected future cash flows. If the future undiscounted cash flows are less than the carrying amount of these assets, we recognize an impairment loss based on the excess of the carrying amount over the fair value of the assets.
Exploration Costs
Mineral exploration costs are expensed as incurred. When it has been determined that it is economically feasible to extract minerals and the permitting process has been initiated, exploration costs incurred to further delineate and develop the property are considered pre-commercial production costs and will be capitalized and included as mine development costs in our consolidated balance sheets.
Share-based Payments
We measure and recognize compensation expense or professional services expense for all share-based payment awards made to employees, directors and non-employee consultants based on estimated fair values. We estimate the fair value of stock options on the date of grant using the Black-Scholes-Merton option pricing model, which includes assumptions for expected dividends, expected share price volatility, risk-free interest rate, and expected life of the options. Our expected volatility assumption is based on our historical weekly closing price of our stock over a period equivalent to the expected life of the options.
We expense share-based compensation, adjusted for estimated forfeitures, using the straight-line method over the vesting term of the award for our employees and directors and over the expected service term for our non-employee consultants. We estimate forfeitures at the time of grant and revise those estimates in subsequent periods if actual forfeitures differ from our estimates. Our excess tax benefits, if any, cannot be credited to stockholders’ equity until the deduction reduces cash taxes payable; accordingly, we realized no excess tax benefits during any of the periods presented in the accompanying consolidated financial statements.
| 21 |
Income Taxes
We account for income taxes through the use of the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis, and for income tax carry-forwards. A valuation allowance is recorded to the extent that we cannot conclude that realization of deferred tax assets is more likely than not. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date.
We follow a two-step approach to recognizing and measuring tax benefits associated with uncertain tax positions taken, or expected to be taken in a tax return. The first step is to determine if, based on the technical merits, it is more likely than not that the tax position will be sustained upon examination by a taxing authority, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement with a taxing authority. We recognize interest and penalties, if any, related to uncertain tax positions in our provision for income taxes in the consolidated statements of operations. To date, we have not recognized any tax benefits from uncertain tax positions.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
ITEM 4. CONTROLS AND PROCEDURES
Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures:
Disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time period specified in the SEC's rules and forms, and that such information is accumulated and communicated to management, including the CEO and CFO, as appropriate, to allow timely decisions regarding required disclosures. Our management necessarily applied its judgment in assessing the costs and benefits of such controls and procedures, which, by their nature, can provide only reasonable assurance regarding management's control objectives.
Our management, with the participation of our CEO and CFO, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based upon this evaluation, our CEO and CFO concluded that our disclosure controls and procedures were not effective as of such date as a result of a material weakness in our internal control over financial reporting due to lack of segregation of duties, a limited corporate governance structure and insufficient formal management review processes over certain financial and accounting reports as discussed in Item 9A of our Form 10-K for the fiscal year ended December 31, 2021.
While we strive to segregate duties as much as practicable, there is an insufficient volume of transactions at this point in time to justify additional full-time staff. We believe that this is typical in many exploration stage companies. We may not be able to fully remediate the material weakness until we commence mining operations at which time, we would expect to hire more staff. We will continue to monitor and assess the costs and benefits of additional staffing.
Changes in Internal Control over Financial Reporting:
There were no changes in our internal control over financial reporting that occurred during the last fiscal quarter covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
| 22 |
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 1A. RISK FACTORS
There have been no material changes from the risk factors disclosed in Part I. Item 1A. of our Annual Report on Form 10-K for the year ended December 31, 2021.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
All sales of unregistered securities were reported on Form 8-K during the period.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS
| EXHIBIT NUMBER | DESCRIPTION | |
| 31.1 | Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) or 15d-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002* | |
| 31.2 | Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) or 15d-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002* | |
| 32 | Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002* | |
| 101.INS | Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)** | |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document** | |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document** | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document** | |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document** | |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document** | |
| 104 | Cover Page Interactive Data File (formatted in IXBRL, and included in exhibit 101).** |
| ____________________ | ||
| * | Filed herewith | |
| ** | Furnished, not filed. | |
| 23 |
SIGNATURE
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.
| ATHENA SILVER CORPORATION | ||
| Dated: November 14, 2022 | By: | /s/ John C. Power |
| John C. Power | ||
| Chief Executive Officer, President, | ||
| Secretary & Director | ||
| (Principal Executive Officer) | ||
| ATHENA SILVER CORPORATION | ||
| Dated: November 14, 2022 | By: | /s/ Tyler J. Minnick |
| Tyler J. Minnick | ||
| Chief Financial Officer | ||
| (Principal Accounting Officer) | ||
| 24 |
EXHIBIT 31.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, John C. Power, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of Athena Gold Corp.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a. | designed such disclosure controls and procedures, or caused such internal control over financial reporting to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b. | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c. | evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d. | disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a. | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
| b. | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
| Dated: November 14, 2022 | By: | /s/ John C. Power |
| John C. Power | ||
| Chief Executive Officer, President, | ||
| Secretary & Director | ||
| (Principal Executive Officer) |
EXHIBIT 31.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Tyler J. Minnick, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of Athena Gold Corp.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a. | designed such disclosure controls and procedures, or caused such internal control over financial reporting to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b. | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c. | evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d. | disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
| a. | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
| b. | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
| Dated: November 14, 2022 | By: | /s/ Tyler J. Minnick |
| Tyler J. Minnick | ||
| Chief Financial Officer | ||
| (Principal Accounting Officer) |
EXHIBIT 32
CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code), the undersigned officer of Athena Gold Corp. (the “Company”), does hereby certify, that:
The Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2022 (the “Form 10-Q”) of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.
| Dated: November 14, 2022 | By: | /s/ John C. Power |
| John C. Power | ||
| Chief Executive Officer, President, | ||
| Secretary & Director | ||
| (Principal Executive Officer) | ||
| Dated: November 14, 2022 | By: | /s/ Tyler J. Minnick |
| Tyler J. Minnick | ||
| Chief Financial Officer | ||
| (Principal Accounting Officer) | ||
CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) - $ / shares |
Sep. 30, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Statement of Financial Position [Abstract] | ||
| Preferred stock, par value | $ 0.0001 | $ 0.0001 |
| Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
| Preferred stock, shares outstanding | 0 | 0 |
| Common stock, par value | $ 0.0001 | $ 0.0001 |
| Common stock, shares authorized | 250,000,000 | 250,000,000 |
| Common stock, shares issued | 134,916,400 | 119,858,700 |
| Common stock, shares outstanding | 134,916,400 | 119,858,700 |
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) - USD ($) |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
| Operating expenses | ||||
| Exploration, evaluation and project expenses | $ 143,287 | $ 66,840 | $ 449,350 | $ 128,616 |
| General and administrative expenses | 186,506 | 123,434 | 419,956 | 454,381 |
| Total operating expenses | 329,793 | 190,274 | 869,306 | 582,997 |
| Net operating loss | (329,793) | (190,274) | (869,306) | (582,997) |
| Interest expense | (463) | (1,096) | (463) | (11,203) |
| Revaluation of warrant liability | 854,281 | (120,226) | 822,603 | (58,133) |
| Net income (loss) | $ 524,025 | $ (311,596) | $ (47,166) | $ (652,333) |
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (Parenthetical) - $ / shares |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
| Income Statement [Abstract] | ||||
| Weighted Average Number of Shares Outstanding, Basic | 129,727,349 | 68,282,320 | 124,830,919 | 63,760,729 |
| Weighted Average Number of Shares Outstanding, Diluted | 129,727,349 | 68,282,320 | 124,830,919 | 63,760,729 |
| Earnings Per Share, Basic | $ 0.00 | $ (0.00) | $ (0.00) | $ (0.01) |
| Earnings Per Share, Diluted | $ 0.00 | $ (0.00) | $ (0.00) | $ (0.01) |
Nature of Business and Summary of Significant Accounting Policies |
9 Months Ended |
|---|---|
Sep. 30, 2022 | |
| Accounting Policies [Abstract] | |
| Nature of Business and Summary of Significant Accounting Policies | Note 1 – Nature of Business and Summary of Significant Accounting Policies
Nature of Operations
Athena Gold Corporation (“we,” “our,” “us,” or “Athena”) is engaged in the acquisition and exploration of mineral resources. We were incorporated in Delaware on December 23, 2003 and began our mining operations in 2010.
In December 2009, we formed and organized a wholly-owned subsidiary, Athena Minerals, Inc. (“Athena Minerals”) which owns and operates mining interests and property in California. On December 31, 2020 we sold the subsidiary to Mr. John Gibbs, a related party, in a non-cash exchange.
The Company’s properties do not have any reserves. The Company plans to conduct exploration programs on these properties with the objective of ascertaining whether any of its properties contain economic concentrations of precious and base metals that are prospective for mining.
Basis of Presentation
We prepared these interim financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”). The accompanying unaudited interim financial statements have been prepared in accordance with GAAP for interim financial information and in accordance with Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In our opinion, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three-month periods ended March 31, 2022 are not necessarily indicative of the results for the full year. While we believe that the disclosures presented herein are adequate and not misleading, these interim consolidated financial statements should be read in conjunction with the audited financial statements and the footnotes thereto contained in our Annual Report on Form 10-K for the year ended December 31, 2021.
Reclassifications
Certain reclassifications may have been made to our prior year’s consolidated financial statements to conform to our current year presentation. These reclassifications had no effect on our previously reported results of operations or accumulated deficit.
Foreign Currency Translation
The Company is exposed to currency risk on transactions and balances in currencies other than the functional currency. The Company has not entered any contracts to manage foreign exchange risk.
The functional currency of the Company is the US dollar; therefore, the Company is exposed to currency risk from financial assets and liabilities denominated in Canadian dollars.
Recent Accounting Pronouncements
The Company is not aware of any recent accounting pronouncements expected to have a material impact on the consolidated financial statements.
Liquidity and Going Concern
Our financial statements have been prepared on a going concern basis, which assumes that we will be able to meet our obligations and continue our operations during the next fiscal year. Asset realization values may be significantly different from carrying values as shown in our consolidated financial statements and do not give effect to adjustments that would be necessary to the carrying values of assets and liabilities should we be unable to continue as a going concern.
At September 30, 2022, we had not yet achieved profitable operations and we have accumulated losses of approximately $11,000,000 since our inception. We expect to incur further losses in the development of our business, all of which raise substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern depends on our ability to generate future profits and/or to obtain the necessary financing to meet our obligations arising from normal business operations when they come due.
Impairment of Long-lived Assets
We continually monitor events and changes in circumstances that could indicate that our carrying amounts of long-lived assets, including mineral rights, may not be recoverable. When such events or changes in circumstances occur, we assess the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through their undiscounted expected future cash flows. If the future undiscounted cash flows are less than the carrying amount of these assets, we recognize an impairment loss based on the excess of the carrying amount over the fair value of the assets.
Notes Payable - Related Party
Related party payables are classified as current liabilities as the note holders are control persons and have the ability to control the repayment dates of the notes.
Exploration Costs
Mineral exploration costs are expensed as incurred. When it has been determined that it is economically feasible to extract minerals and the permitting process has been initiated, exploration costs incurred to further delineate and develop the property are considered pre-commercial production costs and will be capitalized and included as mine development costs in our consolidated balance sheets.
Stock-Based Compensation
Stock-based compensation is accounted for based on the requirements of the Share-Based Payment Topic of ASC 718 which requires recognition in the consolidated financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). This ASC also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award.
The estimated fair value of each stock option as of the date of grant was calculated using the Black-Scholes pricing model. The Company estimates the volatility of its common stock at the date of grant based on Company stock price history. The Company determines the expected life based on the simplified method given that its own historical share option exercise experience does not provide a reasonable basis for estimating expected term. The Company uses the risk-free interest rate on the implied yield currently available on U.S. Treasury issues with an equivalent remaining term approximately equal to the expected life of the award. The Company has never paid any cash dividends on its common stock and does not anticipate paying any cash dividends in the foreseeable future. The shares of common stock subject to the stock-based compensation plan shall consist of unissued shares, treasury shares or previously issued shares held by any subsidiary of the Company, and such number of shares of common stock are reserved for such purpose.
Fair Value of Financial Instruments
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair value:
Level 1 - Valuation based on quoted market prices in active markets for identical assets and liabilities.
Level 2 - Valuation based on quoted market prices for similar assets and liabilities in active markets.
Level 3 - Valuation based on unobservable inputs that are supported by little or no market activity, therefore requiring management’s best estimate of what market participants would use as fair value.
The fair value of cash, receivables and accounts payable approximates their carrying values due to their short term to maturity. The warrant liabilities are measured using level 3 inputs (Note 4).
The Company incurred a net income and net loss for the three months ended September 30, 2022 and 2021, respectively. In periods where the Company has a net income certain options and warrants are included in the computation of diluted shares outstanding, however, the options and warrants were not included in the calculation because they were “out-of-the money”. In periods where the Company has a net loss, all common stock equivalents are excluded as they would be anti-dilutive.
The Company incurred a net loss for the nine months ended September 30, 2022 and 2021, respectively. In periods where the Company has a net loss, all common stock equivalents are excluded as they would be anti-dilutive. As of September 30, 2022 there were options and warrants. As of September 30, 2021 there were options and warrants.
COVID-19 Pandemic
An occurrence of an uncontrollable event such as the COVID-19 pandemic may negatively affect our operations. The occurrence of an uncontrollable event such as the COVID-19 pandemic may negatively affect our operations. A pandemic typically results in social distancing, travel bans and quarantine, and this may limit access to our facilities, customers, management, support staff and professional advisors. These factors, in turn, may not only impact our operations, financial condition and demand for our goods and services but our overall ability to react timely to mitigate the impact of this event. Also, it may hamper our efforts to comply with our filing obligations with the Securities and Exchange Commission.
|
Mineral Rights - Excelsior Springs |
9 Months Ended |
|---|---|
Sep. 30, 2022 | |
| Mineral Rights - Excelsior Springs | |
| Mineral Rights - Excelsior Springs | Note 2 – Mineral Rights - Excelsior Springs
Effective December 27, 2021 (“Effective Date”), the Company simultaneously executed and consummated a definitive Share Purchase Agreement (the “SPA”) with Nubian Resources, Ltd. (“Nubian”). The SPA was the result of a previously disclosed Option Agreement with Nubian dated as of December 11, 2020, as amended by First Amendment to Option Agreement dated November 10, 2021 (the “Option”). While the Option granted the Company the right to acquire up to a 100% interest in the mining claims comprising the Excelsior Springs Prospect (the “Property”) located in Esmerelda County, Nevada, the Company and Nubian agreed to restructure the transaction so that the Company purchased 100% of the issued and outstanding shares of common stock of Nubian Resources USA, Ltd (“Nubian USA”), a wholly-owned subsidiary of Nubian which held the Property. By purchasing 100% of Nubian USA, the Company effectively acquired the remaining 90% interest in the Property through the issuance of 45,000,000 shares, the Company having previously acquired a 10% interest in the Property in December 2020 with the issuance of 5,000,000 shares. The 50 million shares issued to Nubian were issued as “restricted securities” under the Securities Act of 1933, as amended (“Securities Act”).
The mineral property was valued at the December 31, 2021, the closing date for the SPA with a stock price of $0.13, resulting in a fair value consideration of $5,850,000 for the shares issued. The transaction does not constitute a business combination in accordance with ASC 805, which defines a business as an integrated set of activities and assets capable of being conducted and managed for the purposes of providing a return to investors or other participants and that a business consists of inputs and processes applied to those inputs that have the ability to contribute to the creation of outputs. Management has determined that the acquired assets do not contain processes sufficient to constitute a business in accordance with ASC 805. The transaction represents the acquisition of assets in exchange for the assumption of liabilities and the issuance of share-based payments.
|
Convertible Note Payable |
9 Months Ended |
|---|---|
Sep. 30, 2022 | |
| Debt Disclosure [Abstract] | |
| Convertible Note Payable | Note 3 – Convertible Note Payable
Effective April 1, 2015, the Company executed a convertible promissory note (the “Note”) in the principal amount of $51,270 in favor of Clifford Neuman, the Company’s legal counsel, representing accrued and unpaid fees for past legal services. The Note was unsecured and accrued interest at the rate of 6% per annum, compounded quarterly, and was due on demand. The principal and accrued interest due under the Note was convertible, at the option of the holder, into shares of the Company’s common stock.
On April 24, 2020, the Company agreed to reduce the conversion price from $0.0735 per share to $0.021 per share. All other terms of the convertible note remain unchanged, and therefore did not change the cash flows of the note. The Company determined the transaction was considered an extinguishment because of the change in conversion price in which no gain or loss was recorded according to ASC 470-50. However, because the conversion price was reduced below the $0.03 market value on the date of the change, a beneficial conversion feature resulted from the price reduction in the amount of $21,973, which was accounted for as a discount to the debt and a corresponding increase in additional paid in capital. The debt discount is being amortized on a straight-line basis over one year to interest expense. A total of $7,324 was amortized to interest expense during the nine months ended September 30, 2021, no interest in 2022.
On November 30, 2021, the Company received a notice of conversion of the Note with a principal balance of $51,270 and a conversion price of $0.021. On December 3, 2021, a total of shares of Common Stock were issued. An additional shares were issued for $21,550 of accrued interest on the same Note.
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Common Stock and Warrants |
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| Common Stock and Warrants | Note 4 – Common Stock and Warrants
During August and September 2022, the Company completed the private placement of three tranches (August 12, 2022; August 31, 2022; September 14, 2022) in which we sold units. Each unit was priced at CAD$ and consisted of one share of the Company’s common stock and one stock purchase warrant granting the holder the right to purchase one additional share of common stock at a price of CAD$. The warrants expire 24 months from issue date. All securities issued in connection with the offering are subject to restrictions on resale in Canada and the United States pursuant to applicable securities laws and the policies of any applicable stock exchange. An additional 184,350 broker warrants were granted along with CAD$14,748 to brokers as a placement fee. We realized total proceeds of CAD$649,868 net of offering costs. In June 2022, the Company executed a promissory note with John Gibbs for $26,100 at 6% that is payable on demand as part payment for mineral property in escrow. In September 2022, the Company issued shares of common stock as a part of the private placement offering to settle $26,100 of notes payable and $463 of accrued interest to Mr. Gibbs.
The warrants have an exercise price in Canadian dollars while the Company’s functional currency is US dollars. Therefore, in accordance with ASU 815 - Derivatives and Hedging, the warrants have a derivative liability value.
Tranche 1 – August 12, 2022:
The warrant liability had an initial value of $129,812 based on 3,247,500 warrants issued. As of September 30, 2022, the warrant liability was valued at $106,093, resulting in a gain on revaluation of warrant liability of $23,719 based on the following assumptions:
Tranche 2 – August 31, 2022:
The warrant liability had an initial value of $139,255 based on 2,300,000 warrants issued. As of September 30, 2022, the warrant liability was valued at $79,609, resulting in a gain on revaluation of warrant liability of $59,646 based on the following assumptions:
The broker warrants were evaluated for purposes of classification between liability and equity. The broker warrants do not contain features that would require a liability classification and are therefore considered equity. The Black Scholes pricing model was calculated in US dollars to estimate the fair value of $6,312 for the 104,250 warrants issued with the following inputs:
Tranche 3 – September 14, 2022:
The warrant liability had an initial value of $100,656 based on 2,760,200 warrants issued. As of September 30, 2022, the warrant liability was valued at $97,080, resulting in a gain on revaluation of warrant liability of $3,576 based on the following assumptions:
The broker warrants were evaluated for purposes of classification between liability and equity. The broker warrants do not contain features that would require a liability classification and are therefore considered equity. The Black Scholes pricing model was calculated in US dollars to estimate the fair value of $2,921 for the 80,100 warrants issued with the following inputs:
On June 9, 2022, the Company entered into an Acquisition Agreement (the “Agreement”) to purchase an undivided 100% interest in the Fortunatus and Prout patented lode mining claims in Esmeralda County, Nevada $185,000. The Agreement was completed in July 2022 with the following terms:
In April 2022 the Company completed a private placement in which we sold units. Each unit was priced at CAD$ and consisted of one share of the Company’s common stock and one stock purchase warrant granting the holder the right to purchase one additional share of common stock at a price of CAD$. The warrants expire April 13, 2025. All securities issued in connection with the offering are subject to restrictions on resale in Canada and the United States pursuant to applicable securities laws and the policies of any applicable stock exchange. An additional 70,000 broker warrants were granted to a Canadian broker as a placement fee. We realized total proceeds of $394,082 net of offering costs. During March 2022, the Company executed two promissory notes with John Gibbs for $50,000 and $25,000 at 6% that is payable on demand. In April 2022, the Company issued shares out of shares of common stock in April 2022 at C$.08 per share as a part of the private placement offering to settle $75,000 of notes payable to Mr. Gibbs.
The warrants have an exercise price in Canadian dollars while the Company’s functional currency is US dollars. Therefore, in accordance with ASU 815 - Derivatives and Hedging, the warrants have a derivative liability value.
In April 2022, the warrant liability had an initial value of $203,838. As of September 30, 2022, the warrant liability was valued at $248,760, resulting in a loss on revaluation of warrant liability of $44,922 based on the following assumptions:
The broker warrants were evaluated for purposes of classification between liability and equity. The broker warrants do not contain features that would require a liability classification and are therefore considered equity. The Black Scholes pricing model was calculated in US dollars to estimate the fair value of $1,344 with the following inputs:
During the twelve months ended December 31, 2021 we sold shares of common stock in private placements realizing proceeds of $742,375.
On September 30, 2021 the Company completed a private placement in which we sold units. Each unit was priced at CAD$0.08 and consisted of one share of the Company’s common stock and one stock purchase warrant granting the holder the right to purchase one additional share of common stock at a price of CAD$0.15. The warrants expire May 31, 2024. All securities issued in connection with the offering are subject to restrictions on resale in Canada and the United States pursuant to applicable securities laws and the policies of any applicable stock exchange. An additional 91,000 broker warrants were granted to a Canadian broker as a placement fee. We realized total proceeds of $190,552 net of offering costs.
The warrants have an exercise price in Canadian dollars while the Company’s functional currency is US dollars. Therefore, in accordance with ASU 815 - Derivatives and Hedging, the warrants have a derivative liability value.
At December 31, 2021, the warrant liability was valued at $341,145. As of September 30, 2022, the warrant liability was valued at $80,463, resulting in a gain on revaluation of warrant liability of $260,682 based on the following assumptions:
The Broker Warrants were evaluated for purposes of classification between liability and equity. The Broker Warrants do not contain features that would require a liability classification and are therefore considered equity. The Black Scholes pricing model was calculated in US dollars to estimate the fair value of $7,472 with the following inputs:
On May 25, 2021 the Company completed a private placement in which we sold units. Each unit was priced at CAD$0.08 and consisted of one share of the Company’s common stock and one stock purchase warrant granting the holder the right to purchase one additional share of common stock at a price of CAD$0.15. The warrants expire May 31, 2024. All securities issued in connection with the offering are subject to restrictions on resale in Canada and the United States pursuant to applicable securities laws and the policies of any applicable stock exchange. An additional 173,810 broker warrants were granted to a Canadian broker as a placement fee. We realized total proceeds of $401,823 net of offering costs.
The warrants have an exercise price in Canadian dollars while the Company’s functional currency is US dollars. Therefore, in accordance with ASU 815 - Derivatives and Hedging, the warrants have a derivative liability value.
At December 31, 2021, the warrant liability was valued at $683,063. As of September 30, 2022, the warrant liability was valued at $163,161, resulting in a gain on revaluation of warrant liability of $519,902 based on the following assumptions:
The Broker Warrants were evaluated for purposes of classification between liability and equity. The Broker Warrants do not contain features that would require a liability classification and are therefore considered equity. The Black Scholes pricing model was calculated in US dollars to estimate the fair value of $12,943 with the following inputs:
Total outstanding warrants of 24,435,560 as of September 30, 2022 were as follows:
During the quarter ended March 31, 2021, we sold 5,000,000 shares of common stock in private placements to six individuals at a price of $0.03 per share, realizing total proceeds of $150,000. Of the 5,000,000 shares sold, 1,750,000 shares were issued on May 28, 2021.
On January 1, 2021 Mr. John Power, the Company’s CEO/CFO agreed to convert accrued management fees totaling $96,500. As a result, we issued shares common stock at a price of $ per share.
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Share Based Compensation |
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| Share Based Compensation |
On March 22, 2021 the Company issued a total of non-statutory stock options to four individuals, three of whom are Directors of the Company, the other an independent technical consultant that is helping design our 2021 exploration programs at Excelsior Spring. Upon vesting, each option is exercisable to purchase one share of common stock at a price of $0.09 per share. The options vest 50% upon issuance, and 25% on each of the first and second anniversaries of the grant date.
We estimated the fair value of the options using the Black-Scholes option pricing model, which includes assumptions for expected dividends, expected share price volatility, risk-free interest rate, and expected life of the options. Our expected volatility assumption is based on our historical weekly closing price of our stock over a period equivalent to the expected remaining life of the options. The total estimated fair value of the options utilized the following assumptions:
The calculations resulted in the total fair value of the options issued to be $190,202. We expense share-based compensation using the straight-line method over the vesting term of the award for our employees and directors and over the expected service term for our non-employee consultants. As such, a stock-based compensation charges totaling of $and $have been charged during the nine months ended September 30, 2022 and September 30, 2021, respectively. A summary of the stock options as of September 30, 2022 and changes during the periods are presented below:
Also, on March 22, 2021 the Company agreed to issue a total of restricted stock units at a price of $0.10 per share to the independent technical consultant helping design our 2021 exploration programs at Excelsior Springs. However, the shares shall not be issued until such time the individual either provides a written request or his termination date, whichever is sooner. The shares shall have no voting rights until issued. As such, we have recorded stock-based compensation in the amount of $.
On August 24, 2022, the Company granted options pursuant to the terms of the Company’s Stock Option Plan. The Black Scholes option pricing model was used to estimate the aggregate fair value of the August 2022 options of $as stock-based compensation with the following inputs:
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Commitments and Contingencies |
9 Months Ended |
|---|---|
Sep. 30, 2022 | |
| Commitments and Contingencies Disclosure [Abstract] | |
| Commitments and Contingencies | Note 6 – Commitments and Contingencies
We are subject to various commitments and contingencies.
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Related Party Transactions |
9 Months Ended |
|---|---|
Sep. 30, 2022 | |
| Related Party Transactions [Abstract] | |
| Related Party Transactions | Note 7 – Related Party Transactions
Conflicts of Interests
Magellan Gold Corporation (“Magellan”) is a company under common control. Mr. John Gibbs is a significant shareholder in both Athena and Magellan. Athena and Magellan are both involved in the business of acquisition and exploration of mineral resources.
Silver Saddle Resources, LLC (“Silver Saddle”) is also a company under common control. Mr. Power and Mr. Gibbs are the owners and managing members of Silver Saddle. Athena and Silver Saddle are both involved in the business of acquisition and exploration of mineral resources.
There exists no arrangement or understanding with respect to the resolution of future conflicts of interest. The existence of common ownership and common management could result in significantly different operating results or financial position from those that could have resulted had Athena, Magellan and Silver Saddle been autonomous.
Management Fees
The Company is subject to a month-to-month management agreement with Mr. Power requiring a monthly payment of $2,500 as consideration for the day-to-day management of Athena, $22,500 was recorded as management fees and are included in general and administrative expenses in the accompanying consolidated statements of operations.
On January 1, 2021, the Company agreed to convert the $96,500 balance of management fees due Mr. Power into shares of common stock at a price of $0.045 per share.
Note Payable
During March 2022, the Company executed two promissory notes with John Gibbs for $50,000 and $25,000 at 6% that is payable on demand. In April 2022, the Company issued shares out of shares of common stock in April 2022 at C$ per share as a part of the private placement offering to settle $75,000 of notes payable to Mr. Gibbs.
In June 2022, the Company executed a promissory note with John Gibbs for $26,100 at 6% that is payable on demand as part payment for mineral property in escrow. In September 2022, the Company issued shares out of shares of common stock in September 2022 at C$ per share as a part of the private placement offering to settle $26,100 of notes payable and $463 of accrued interest to Mr. Gibbs.
|
Subsequent Events |
9 Months Ended |
|---|---|
Sep. 30, 2022 | |
| Subsequent Events [Abstract] | |
| Subsequent Events | Note 8 – Subsequent Events
Effective October 12, 2022, the Company has granted an aggregate of 2,250,000 stock options (the “Options”) to certain directors and officers to purchase 2,250,000 common shares (the “Option Shares”) in the capital stock of the Company pursuant to the Company’s equity incentive plan. The Options, which vest immediately, are exercisable at an exercise price of $0.06 per Option Share for a period of ten years from the date of grant. In addition, the board of directors of the Company has approved the issuance of an aggregate of 675,000 common shares in the capital stock of the Company at a deemed price per Share of $0.052 to its officers and directors. The shares were issued as of filing date.
On October 24, 2022, the Company completed the sale of an aggregate of C$40,000 of its Units at a purchase price of C$.08 per Unit for a total of 500,000 Units. Each Unit consisted of one share of Common Stock and one common stock purchase warrant exercisable for two years to purchase one additional share of Common Stock at a price of C$0.12 per share.
|
Nature of Business and Summary of Significant Accounting Policies (Policies) |
9 Months Ended |
|---|---|
Sep. 30, 2022 | |
| Accounting Policies [Abstract] | |
| Nature of Operations | Nature of Operations
Athena Gold Corporation (“we,” “our,” “us,” or “Athena”) is engaged in the acquisition and exploration of mineral resources. We were incorporated in Delaware on December 23, 2003 and began our mining operations in 2010.
In December 2009, we formed and organized a wholly-owned subsidiary, Athena Minerals, Inc. (“Athena Minerals”) which owns and operates mining interests and property in California. On December 31, 2020 we sold the subsidiary to Mr. John Gibbs, a related party, in a non-cash exchange.
The Company’s properties do not have any reserves. The Company plans to conduct exploration programs on these properties with the objective of ascertaining whether any of its properties contain economic concentrations of precious and base metals that are prospective for mining.
|
| Basis of Presentation | Basis of Presentation
We prepared these interim financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”). The accompanying unaudited interim financial statements have been prepared in accordance with GAAP for interim financial information and in accordance with Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In our opinion, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three-month periods ended March 31, 2022 are not necessarily indicative of the results for the full year. While we believe that the disclosures presented herein are adequate and not misleading, these interim consolidated financial statements should be read in conjunction with the audited financial statements and the footnotes thereto contained in our Annual Report on Form 10-K for the year ended December 31, 2021.
|
| Reclassifications | Reclassifications
Certain reclassifications may have been made to our prior year’s consolidated financial statements to conform to our current year presentation. These reclassifications had no effect on our previously reported results of operations or accumulated deficit.
|
| Foreign Currency Translation | Foreign Currency Translation
The Company is exposed to currency risk on transactions and balances in currencies other than the functional currency. The Company has not entered any contracts to manage foreign exchange risk.
The functional currency of the Company is the US dollar; therefore, the Company is exposed to currency risk from financial assets and liabilities denominated in Canadian dollars.
|
| Recent Accounting Pronouncements | Recent Accounting Pronouncements
The Company is not aware of any recent accounting pronouncements expected to have a material impact on the consolidated financial statements.
|
| Liquidity and Going Concern | Liquidity and Going Concern
Our financial statements have been prepared on a going concern basis, which assumes that we will be able to meet our obligations and continue our operations during the next fiscal year. Asset realization values may be significantly different from carrying values as shown in our consolidated financial statements and do not give effect to adjustments that would be necessary to the carrying values of assets and liabilities should we be unable to continue as a going concern.
At September 30, 2022, we had not yet achieved profitable operations and we have accumulated losses of approximately $11,000,000 since our inception. We expect to incur further losses in the development of our business, all of which raise substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern depends on our ability to generate future profits and/or to obtain the necessary financing to meet our obligations arising from normal business operations when they come due.
|
| Impairment of Long-lived Assets | Impairment of Long-lived Assets
We continually monitor events and changes in circumstances that could indicate that our carrying amounts of long-lived assets, including mineral rights, may not be recoverable. When such events or changes in circumstances occur, we assess the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through their undiscounted expected future cash flows. If the future undiscounted cash flows are less than the carrying amount of these assets, we recognize an impairment loss based on the excess of the carrying amount over the fair value of the assets.
|
| Notes Payable - Related Party | Notes Payable - Related Party
Related party payables are classified as current liabilities as the note holders are control persons and have the ability to control the repayment dates of the notes.
|
| Exploration Costs | Exploration Costs
Mineral exploration costs are expensed as incurred. When it has been determined that it is economically feasible to extract minerals and the permitting process has been initiated, exploration costs incurred to further delineate and develop the property are considered pre-commercial production costs and will be capitalized and included as mine development costs in our consolidated balance sheets.
|
| Stock-Based Compensation | Stock-Based Compensation
Stock-based compensation is accounted for based on the requirements of the Share-Based Payment Topic of ASC 718 which requires recognition in the consolidated financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). This ASC also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award.
The estimated fair value of each stock option as of the date of grant was calculated using the Black-Scholes pricing model. The Company estimates the volatility of its common stock at the date of grant based on Company stock price history. The Company determines the expected life based on the simplified method given that its own historical share option exercise experience does not provide a reasonable basis for estimating expected term. The Company uses the risk-free interest rate on the implied yield currently available on U.S. Treasury issues with an equivalent remaining term approximately equal to the expected life of the award. The Company has never paid any cash dividends on its common stock and does not anticipate paying any cash dividends in the foreseeable future. The shares of common stock subject to the stock-based compensation plan shall consist of unissued shares, treasury shares or previously issued shares held by any subsidiary of the Company, and such number of shares of common stock are reserved for such purpose.
|
| Fair Value of Financial Instruments | Fair Value of Financial Instruments
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair value:
Level 1 - Valuation based on quoted market prices in active markets for identical assets and liabilities.
Level 2 - Valuation based on quoted market prices for similar assets and liabilities in active markets.
Level 3 - Valuation based on unobservable inputs that are supported by little or no market activity, therefore requiring management’s best estimate of what market participants would use as fair value.
The fair value of cash, receivables and accounts payable approximates their carrying values due to their short term to maturity. The warrant liabilities are measured using level 3 inputs (Note 4).
|
| Earnings (Loss) per Common Share |
The Company incurred a net income and net loss for the three months ended September 30, 2022 and 2021, respectively. In periods where the Company has a net income certain options and warrants are included in the computation of diluted shares outstanding, however, the options and warrants were not included in the calculation because they were “out-of-the money”. In periods where the Company has a net loss, all common stock equivalents are excluded as they would be anti-dilutive.
The Company incurred a net loss for the nine months ended September 30, 2022 and 2021, respectively. In periods where the Company has a net loss, all common stock equivalents are excluded as they would be anti-dilutive. As of September 30, 2022 there were options and warrants. As of September 30, 2021 there were options and warrants.
|
| COVID-19 Pandemic | COVID-19 Pandemic
An occurrence of an uncontrollable event such as the COVID-19 pandemic may negatively affect our operations. The occurrence of an uncontrollable event such as the COVID-19 pandemic may negatively affect our operations. A pandemic typically results in social distancing, travel bans and quarantine, and this may limit access to our facilities, customers, management, support staff and professional advisors. These factors, in turn, may not only impact our operations, financial condition and demand for our goods and services but our overall ability to react timely to mitigate the impact of this event. Also, it may hamper our efforts to comply with our filing obligations with the Securities and Exchange Commission.
|
Common Stock and Warrants (Tables) |
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Sep. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Offsetting Assets [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of outstanding warrants |
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| Warrant Liability [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Offsetting Assets [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of assumptions used |
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| Warrant Liability One [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Offsetting Assets [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of assumptions used |
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| Broker Warrants [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Offsetting Assets [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of assumptions used |
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| Warrant Liability Two [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Offsetting Assets [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of assumptions used |
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| Broker Warrants One [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Offsetting Assets [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of assumptions used |
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| Warrant Liability Three [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Offsetting Assets [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of assumptions used |
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| Broker Warrants Two [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Offsetting Assets [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of assumptions used |
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| Warrant Liability Four [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Offsetting Assets [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of assumptions used |
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| Broker Warrants Three [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Offsetting Assets [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of assumptions used |
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| Warrant Liability Five [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Offsetting Assets [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of assumptions used |
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| Broker Warrants Four [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Offsetting Assets [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of assumptions used |
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Share Based Compensation (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-based compensation assumptions |
|
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| Schedule of Stock Options Activity |
|
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| Equity Option [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-based compensation assumptions |
|
Nature of Business and Summary of Significant Accounting Policies (Details Narrative) - shares |
9 Months Ended | |
|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
|
| Options Held [Member] | ||
| Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
| Antidilutive shares | 2,730,000 | 2,000,000 |
| Warrant [Member] | ||
| Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
| Antidilutive shares | 24,435,560 | 9,623,510 |
Mineral Rights - Excelsior Springs (Details Narrative) - USD ($) |
3 Months Ended | ||
|---|---|---|---|
Jun. 09, 2022 |
Dec. 31, 2021 |
Jun. 30, 2022 |
|
| Restructuring Cost and Reserve [Line Items] | |||
| Shares issued for acquisition, value | $ 35,000 | $ 35,000 | |
| Nubian Resources [Member] | |||
| Restructuring Cost and Reserve [Line Items] | |||
| Shares issued for acquisition, value | $ 5,850,000 | ||
| Stock Issued During Period, Shares, Acquisitions | 45,000,000 |
Convertible Note Payable (Details Narrative) - USD ($) |
9 Months Ended | |||||
|---|---|---|---|---|---|---|
Dec. 03, 2021 |
Nov. 30, 2021 |
Apr. 24, 2020 |
Sep. 30, 2022 |
Sep. 30, 2021 |
Apr. 01, 2015 |
|
| Debt Instrument [Line Items] | ||||||
| Debt discount amortized to interest epense | $ 0 | $ 7,324 | ||||
| Clifford Neuman [Member] | Convertible Notes Payable [Member] | ||||||
| Debt Instrument [Line Items] | ||||||
| Debt face amount | $ 51,270 | |||||
| Debt stated interest rate | 6.00% | |||||
| Beneficial conversion feature | $ 21,973 | |||||
| Debt discount amortized to interest epense | $ 0 | |||||
| Debt Conversion, Converted Instrument, Amount | $ 51,270 | |||||
| Debt Instrument, Convertible, Conversion Price | $ 0.021 | |||||
| Debt Conversion, Converted Instrument, Shares Issued | 2,441,476 | |||||
| Accrued interest converted, shares issued | 1,026,204 | |||||
| Accrued interest converted, amount converted | $ 21,550 | |||||
Common Stock and Warrants (Details - Fair value assumptions) |
1 Months Ended | 9 Months Ended | |
|---|---|---|---|
Aug. 12, 2022 |
Aug. 31, 2022 |
Sep. 30, 2022 |
|
| Class of Stock [Line Items] | |||
| Risk free interest rate | 3.20% | ||
| Expected term (years) | 5 years 6 months | ||
| Expected volatility | 177.90% | ||
| Warrant Liability [Member] | |||
| Class of Stock [Line Items] | |||
| Risk free interest rate | 3.25% | 4.22% | |
| Expected term (years) | 2 years | 1 year 10 months 24 days | |
| Expected volatility | 132.00% | 129.00% | |
| Warrant Liability 1 [Member] | |||
| Class of Stock [Line Items] | |||
| Risk free interest rate | 3.45% | 4.22% | |
| Expected term (years) | 2 years | 1 year 10 months 24 days | |
| Expected volatility | 132.00% | 135.00% |
Common Stock and Warrants (Details Narrative) |
1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Sep. 30, 2022
USD ($)
$ / shares
shares
|
Sep. 14, 2022
USD ($)
shares
|
Aug. 12, 2022
USD ($)
shares
|
Jun. 09, 2022
USD ($)
|
Sep. 30, 2021
USD ($)
shares
|
May 25, 2021
USD ($)
shares
|
Sep. 30, 2022
USD ($)
$ / shares
shares
|
Aug. 31, 2022
USD ($)
shares
|
Apr. 30, 2022
USD ($)
shares
|
Jun. 30, 2022
USD ($)
|
Sep. 30, 2022
USD ($)
$ / shares
shares
|
Sep. 30, 2022
CAD ($)
shares
|
Sep. 30, 2021
USD ($)
|
Dec. 31, 2021
USD ($)
shares
|
Sep. 30, 2022
$ / shares
|
Apr. 30, 2022
$ / shares
|
Mar. 31, 2022
USD ($)
|
Dec. 31, 2020
shares
|
|||
| Class of Stock [Line Items] | ||||||||||||||||||||
| Stock issued new, shares | shares | 443,110 | 1,181,250 | ||||||||||||||||||
| Share price | $ / shares | $ 0.08 | $ 0.08 | ||||||||||||||||||
| Broker warrants issued | shares | [1] | 519,160 | 519,160 | |||||||||||||||||
| Note payable | $ 125,000 | $ 125,000 | $ 125,000 | $ 0 | ||||||||||||||||
| Purchase acqusition | $ 185,000 | |||||||||||||||||||
| Repayments of Long-Term Loans from Vendors | 25,000 | |||||||||||||||||||
| Number value purchase price issuance | 35,000 | $ 35,000 | ||||||||||||||||||
| Loan settled | 125,000 | |||||||||||||||||||
| Repayment of Loans | $ 25,000 | |||||||||||||||||||
| Number of shares issued, other | shares | 3,375,000 | |||||||||||||||||||
| Offering private placement | $ 75,000 | $ 793,738 | $ 742,375 | |||||||||||||||||
| Class of Warrant or Right, Outstanding | shares | 24,435,560 | 24,435,560 | 24,435,560 | 9,623,510 | 0 | |||||||||||||||
| Private Placement [Member] | ||||||||||||||||||||
| Class of Stock [Line Items] | ||||||||||||||||||||
| Sale of stock | shares | 6,250,000 | |||||||||||||||||||
| Gibbs [Member] | ||||||||||||||||||||
| Class of Stock [Line Items] | ||||||||||||||||||||
| Interest rate | 6.00% | |||||||||||||||||||
| Gibbs [Member] | Private Placement [Member] | ||||||||||||||||||||
| Class of Stock [Line Items] | ||||||||||||||||||||
| Note payable | $ 26,100 | $ 26,100 | $ 75,000 | $ 26,100 | ||||||||||||||||
| Accrued interest | $ 463 | $ 463 | 463 | |||||||||||||||||
| Share price | $ / shares | 0.08 | 0.08 | ||||||||||||||||||
| Gibbs [Member] | Promissory Note [Member] | ||||||||||||||||||||
| Class of Stock [Line Items] | ||||||||||||||||||||
| Note payable | $ 26,100 | |||||||||||||||||||
| Interest rate | 6.00% | |||||||||||||||||||
| Gibbs [Member] | Promissory Note One [Member] | ||||||||||||||||||||
| Class of Stock [Line Items] | ||||||||||||||||||||
| Note payable | $ 50,000 | |||||||||||||||||||
| Gibbs [Member] | Promissory Note Two [Member] | ||||||||||||||||||||
| Class of Stock [Line Items] | ||||||||||||||||||||
| Note payable | $ 25,000 | |||||||||||||||||||
| Power [Member] | ||||||||||||||||||||
| Class of Stock [Line Items] | ||||||||||||||||||||
| Debt Conversion, amount | $ 96,500 | |||||||||||||||||||
| Debt Conversion, Shares Issued | shares | 2,144,444 | 2,144,444 | ||||||||||||||||||
| Share price | $ / shares | $ 0.045 | $ 0.045 | $ 0.045 | |||||||||||||||||
| Common Stock [Member] | ||||||||||||||||||||
| Class of Stock [Line Items] | ||||||||||||||||||||
| Share price | $ / shares | $ 0.12 | $ 0.15 | ||||||||||||||||||
| Placement Sept 2022 [Member] | Common Stock And One Warrant Unit [Member] | Tranche One [Member] | ||||||||||||||||||||
| Class of Stock [Line Items] | ||||||||||||||||||||
| Stock issued new, shares | shares | 8,307,700 | |||||||||||||||||||
| Placement Sept 2022 [Member] | Common Stock And One Warrant Unit [Member] | Tranche Two [Member] | ||||||||||||||||||||
| Class of Stock [Line Items] | ||||||||||||||||||||
| Stock issued new, shares | shares | 8,307,700 | 8,307,700 | ||||||||||||||||||
| Placement Sept 2022 [Member] | Broker Warrants [Member] | ||||||||||||||||||||
| Class of Stock [Line Items] | ||||||||||||||||||||
| Broker warrants issued | shares | 184,350 | |||||||||||||||||||
| Placement Sep 2022 [Member] | Common Stock And One Warrant Unit [Member] | ||||||||||||||||||||
| Class of Stock [Line Items] | ||||||||||||||||||||
| Broker warrants | $ 14,748 | |||||||||||||||||||
| Proceeds from Issuance or Sale of Equity | $ 649,868 | |||||||||||||||||||
| Placement Sep 2022 [Member] | Warrants 2 [Member] | Tranche Three [Member] | ||||||||||||||||||||
| Class of Stock [Line Items] | ||||||||||||||||||||
| Derivative Liability | $ 97,080 | $ 100,656 | $ 97,080 | $ 97,080 | ||||||||||||||||
| Warrant issued | shares | 2,760,200 | |||||||||||||||||||
| Derivative, Gain on Derivative | 3,576 | |||||||||||||||||||
| Placement Sep 2022 [Member] | Broker Warrants 1 [Member] | Tranche Three [Member] | ||||||||||||||||||||
| Class of Stock [Line Items] | ||||||||||||||||||||
| Warrant issued | shares | 80,100 | |||||||||||||||||||
| Fair Value Adjustment of Warrants | 2,921 | |||||||||||||||||||
| Placement Aug 2022 [Member] | Broker Warrants [Member] | Tranche Two [Member] | ||||||||||||||||||||
| Class of Stock [Line Items] | ||||||||||||||||||||
| Warrant issued | shares | 104,250 | |||||||||||||||||||
| Fair Value Adjustment of Warrants | 6,312 | |||||||||||||||||||
| Placement Aug 2022 [Member] | Warrants [Member] | Tranche One [Member] | ||||||||||||||||||||
| Class of Stock [Line Items] | ||||||||||||||||||||
| Derivative Liability | 106,093 | $ 129,812 | 106,093 | 106,093 | ||||||||||||||||
| Warrant issued | shares | 3,247,500 | |||||||||||||||||||
| Derivative, Gain on Derivative | 23,719 | |||||||||||||||||||
| Placement Aug 2022 [Member] | Warrants 1 [Member] | Tranche Two [Member] | ||||||||||||||||||||
| Class of Stock [Line Items] | ||||||||||||||||||||
| Derivative Liability | 79,609 | 79,609 | $ 139,255 | 79,609 | ||||||||||||||||
| Warrant issued | shares | 2,300,000 | |||||||||||||||||||
| Derivative, Gain on Derivative | 59,646 | |||||||||||||||||||
| Placement April 2022 [Member] | Common Stock And One Warrant Unit [Member] | ||||||||||||||||||||
| Class of Stock [Line Items] | ||||||||||||||||||||
| Proceeds from Issuance or Sale of Equity | $ 394,082 | |||||||||||||||||||
| Placement April 2022 [Member] | Broker Warrants [Member] | ||||||||||||||||||||
| Class of Stock [Line Items] | ||||||||||||||||||||
| Broker warrants issued | shares | 70,000 | |||||||||||||||||||
| Placement Aprl 2022 [Member] | Warrants 3 [Member] | ||||||||||||||||||||
| Class of Stock [Line Items] | ||||||||||||||||||||
| Derivative Liability | $ 203,838 | |||||||||||||||||||
| Placment Aprl 2022 [Member] | Warrants 3 [Member] | ||||||||||||||||||||
| Class of Stock [Line Items] | ||||||||||||||||||||
| Derivative Liability | $ 248,760 | |||||||||||||||||||
| Fair Value Adjustment of Warrants | 44,922 | |||||||||||||||||||
| Placment Aprl 2022 [Member] | Private Placement [Member] | ||||||||||||||||||||
| Class of Stock [Line Items] | ||||||||||||||||||||
| Fair Value Adjustment of Warrants | 1,344 | |||||||||||||||||||
| Private Placement [Member] | ||||||||||||||||||||
| Class of Stock [Line Items] | ||||||||||||||||||||
| Stock issued new, shares | shares | 14,358,700 | |||||||||||||||||||
| Proceeds from sale of stock | $ 742,375 | |||||||||||||||||||
| Placement Sept 2021 [Member] | Common Stock And One Warrant Unit [Member] | ||||||||||||||||||||
| Class of Stock [Line Items] | ||||||||||||||||||||
| Stock issued new, shares | shares | 3,108,700 | |||||||||||||||||||
| Proceeds from Issuance or Sale of Equity | $ 190,552 | |||||||||||||||||||
| Placement Sept 2021 [Member] | Broker Warrants [Member] | ||||||||||||||||||||
| Class of Stock [Line Items] | ||||||||||||||||||||
| Broker warrants issued | shares | 91,000 | |||||||||||||||||||
| Placement Sept 2021 [Member] | Warrants [Member] | ||||||||||||||||||||
| Class of Stock [Line Items] | ||||||||||||||||||||
| Warrant expiration date | May 31, 2024 | May 31, 2024 | ||||||||||||||||||
| Placement Sept 2021 [Member] | Warrants 4 [Member] | ||||||||||||||||||||
| Class of Stock [Line Items] | ||||||||||||||||||||
| Derivative Liability | 80,463 | 80,463 | 80,463 | 341,145 | ||||||||||||||||
| Derivative, Gain on Derivative | 260,682 | |||||||||||||||||||
| Placement Sept 2021 [Member] | Broker Warrants 3 [Member] | Private Placement [Member] | ||||||||||||||||||||
| Class of Stock [Line Items] | ||||||||||||||||||||
| Fair Value Adjustment of Warrants | 7,472 | |||||||||||||||||||
| Placment May 2021 [Member] | Common Stock And One Warrant Unit [Member] | Private Placement [Member] | ||||||||||||||||||||
| Class of Stock [Line Items] | ||||||||||||||||||||
| Stock issued new, shares | shares | 6,250,000 | |||||||||||||||||||
| Proceeds from Issuance or Sale of Equity | $ 401,823 | |||||||||||||||||||
| Warrant expiration date | May 31, 2024 | |||||||||||||||||||
| Placment May 2021 [Member] | Broker Warrants [Member] | Private Placement [Member] | ||||||||||||||||||||
| Class of Stock [Line Items] | ||||||||||||||||||||
| Broker warrants issued | shares | 173,810 | |||||||||||||||||||
| Placment May 2021 [Member] | Warrants 5 [Member] | Private Placement [Member] | ||||||||||||||||||||
| Class of Stock [Line Items] | ||||||||||||||||||||
| Derivative Liability | $ 163,161 | $ 163,161 | 163,161 | $ 683,063 | ||||||||||||||||
| Fair Value Adjustment of Warrants | 519,902 | |||||||||||||||||||
| Placment May 2021 [Member] | Broker Warrants 4 [Member] | Private Placement [Member] | ||||||||||||||||||||
| Class of Stock [Line Items] | ||||||||||||||||||||
| Fair Value Adjustment of Warrants | $ 12,943 | |||||||||||||||||||
| ||||||||||||||||||||
Share-based compensation (Details - Assumptions) |
9 Months Ended |
|---|---|
|
Sep. 30, 2022
$ / shares
shares
| |
| Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
| Expected volatility | 177.90% |
| Expected life | 5 years 6 months |
| Risk free interest rate | 3.20% |
| Option | shares | 730,000 |
| Exercise Price | $ / shares | $ 0.08 |
| Stock Options [Member] | |
| Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
| Expected volatility | 211.00% |
| Expected life | 3 years 4 months 24 days |
| Risk free interest rate | 0.31% |
Share Based Compensation (Details - Stock option) - USD ($) |
9 Months Ended | 12 Months Ended | |
|---|---|---|---|
Sep. 30, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
| Stock option exercised | 0 | 0 | |
| Outstanding at ending | 730,000 | ||
| Equity Option [Member] | |||
| Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
| Outstanding at beginning | 2,000,000 | 0 | |
| Weighted average exercise price outstanding at beginning | $ 0.09 | $ 0.00 | |
| Stock option exercised | 0 | 0 | |
| Weighted average exercise price Exercised | $ 0 | $ 0 | |
| Stock option Issued | 730,000 | 2,000,000 | |
| Weighted average exercise price Issued | $ 0.06 | $ 0.09 | |
| Weighted average remaining contractual life years Issued | 10 years | 4 years 2 months 12 days | |
| Stock option Canceled | 0 | 0 | |
| Weighted average exercise price Canceled | $ 0 | ||
| Weighted average remaining contractual life years | 5 years 2 months 12 days | 4 years 2 months 12 days | |
| Aggregate intrinsic value option exercisable | $ 80,000 | ||
| Outstanding at ending | 2,730,000 | 2,000,000 | 0 |
| Weighted average exercise price outstanding at ending | $ 0.07 | $ 0.09 | $ 0.00 |
| Option Exercisable at ending | 2,230,000 | ||
| Weighted average exercise price option exercisable | $ 0.08 | ||
| Weighted average remaining contractual life years Exercisable | 5 years 7 months 6 days | ||
Share Based Compensation (Details Narrative) - USD ($) |
1 Months Ended | 3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|---|
Apr. 22, 2022 |
Mar. 22, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
Aug. 31, 2022 |
|
| Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
| Share-Based Payment Arrangement, Noncash Expense | $ 79,120 | $ 165,815 | |||
| Equity Option [Member] | |||||
| Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
| Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross | 730,000 | ||||
| Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Vested and Expected to Vest, Outstanding, Aggregate Intrinsic Value | $ 43,456 | ||||
| Stock Options [Member] | |||||
| Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
| Options issued | 2,000,000 | ||||
| Fair value of options granted | $ 190,202 | ||||
| Share-Based Payment Arrangement, Noncash Expense | $ 35,664 | $ 135,815 | |||
| Restricted Stock [Member] | |||||
| Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
| Restricted stock units issued | 300,000 | ||||
| Additional paid in capital | $ 30,000 | ||||
Related Party Transactions (Details Narrative) |
1 Months Ended | 3 Months Ended | 9 Months Ended | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Sep. 30, 2022
USD ($)
$ / shares
shares
|
Apr. 30, 2022
USD ($)
shares
|
Sep. 30, 2022
USD ($)
$ / shares
shares
|
Jun. 30, 2022
USD ($)
shares
|
Sep. 30, 2021
shares
|
Jun. 30, 2021
shares
|
Mar. 31, 2021
shares
|
Sep. 30, 2022
USD ($)
$ / shares
shares
|
Sep. 30, 2022
$ / shares
|
Apr. 30, 2022
$ / shares
|
Mar. 31, 2022
USD ($)
|
Dec. 31, 2021
USD ($)
|
|
| Related Party Transaction [Line Items] | ||||||||||||
| Note payable | $ 125,000 | $ 125,000 | $ 125,000 | $ 0 | ||||||||
| Number of shares issued | shares | 443,110 | 1,181,250 | ||||||||||
| Common Stock [Member] | ||||||||||||
| Related Party Transaction [Line Items] | ||||||||||||
| Number of shares issued | shares | 2,760,200 | 3,375,000 | 8,307,700 | 6,250,000 | 3,108,700 | 8,000,000 | 3,250,000 | |||||
| Power [Member] | ||||||||||||
| Related Party Transaction [Line Items] | ||||||||||||
| Professional and Contract Services Expense | 22,500 | |||||||||||
| Debt Conversion, amount | $ 96,500 | |||||||||||
| Debt Conversion, Shares Issued | shares | 2,144,444 | |||||||||||
| Share price | $ / shares | $ 0.045 | $ 0.045 | $ 0.045 | |||||||||
| Gibbs [Member] | ||||||||||||
| Related Party Transaction [Line Items] | ||||||||||||
| Interest rate | 6.00% | |||||||||||
| Gibbs [Member] | Private Placement [Member] | ||||||||||||
| Related Party Transaction [Line Items] | ||||||||||||
| Note payable | $ 26,100 | $ 75,000 | $ 26,100 | $ 26,100 | ||||||||
| Share price | $ / shares | $ 0.08 | $ 0.08 | ||||||||||
| Accrued interest | $ 463 | $ 463 | $ 463 | |||||||||
| Gibbs [Member] | Promissory Note One [Member] | ||||||||||||
| Related Party Transaction [Line Items] | ||||||||||||
| Note payable | $ 50,000 | |||||||||||
| Gibbs [Member] | Promissory Note Two [Member] | ||||||||||||
| Related Party Transaction [Line Items] | ||||||||||||
| Note payable | $ 25,000 | |||||||||||
| Gibbs [Member] | Promissory Note [Member] | ||||||||||||
| Related Party Transaction [Line Items] | ||||||||||||
| Note payable | $ 26,100 | |||||||||||
| Interest rate | 6.00% | |||||||||||
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