SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2022

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Earnings (Loss) Per Share

For the nine-month periods ended September 30, 2022 and 2021, potentially dilutive shares including outstanding stock options, warrants and convertible preferred stock were excluded from the computation of diluted loss per share because they were anti-dilutive due to net losses in those periods. For the periods ended September 30, 2022 and 2021, potentially dilutive common stock equivalents excluded from the calculation of diluted earnings per share are as follows:

	September 30, 2022		September 30, 2021
Stock options		1,050,000		1,050,000
Warrants		18,667,077		26,450,058
Convertible Preferred Stock		30,190,475		32,190,475
Total		49,907,552		59,690,553

Recent Accounting Pronouncements

In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) ASU No. 2020-06 Debt – Debt With Conversion And Other Options (Subtopic 470-20) And Derivatives and Hedging – Contracts In Entity’s Own Equity (Subtopic 815-40): Accounting For Convertible Instruments And Contracts In An Entity’s Own Equity. The update simplifies the accounting for and disclosures related to company debt that is convertible or can be settled in a company’s own equity securities with adoption of this standard beginning January 1, 2024. The early adoption of this standard on January 1, 2022, did not impact the Company’s condensed consolidated financial statements.

Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the condensed consolidated financial statements upon adoption.

Fair Value Measurements

When required to measure assets or liabilities at fair value, the Company uses a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used. The Company determines the level within the fair value hierarchy in which the fair value measurements in their entirety fall. The categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Level 1 uses quoted prices in active markets for identical assets or liabilities, Level 2 uses significant other observable inputs, and Level 3 uses significant unobservable inputs. The amount of the total gains or losses for the period are included in earnings that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date.

During 2022 and 2021, the Company determined fair value on a recurring basis and non-recurring basis as follows:

	Balance September 30, 2022		Balance December 31, 2021		Fair Value Hierarchy level
Liabilities
Recurring: Notes payable in gold (Note 6)	$	446,003	$	481,780		2

The carrying amounts of financial instruments, including notes payable and notes payable – related party, approximate fair value at September 30, 2022 and December 31, 2021. The inputs to the valuation of Level 2 liabilities are described in Note 6 Notes Payable in Gold.