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11. Equity
 12 Months Ended
Dec. 31, 2014
Notes  
11. Equity

11.  Equity

 

The Company has authorized 200,000,000 shares of no par common stock at December 31, 2014 and 2013. In addition, the Company has authorized 1,000,000 shares of no par preferred stock, none of which had been issued at December 31, 2014 or 2013.

 

Stock Purchase Warrants Outstanding

Transactions in common stock purchase warrants for the year ended December 31, 2014 and 2013, are as follows:

 

 

 

 

Number of Warrants

 

Exercise Prices

Balance December 31, 2012

 

5,961,550

$

0.30

Issued in connection with private placement

 

11,000,000

 

0.15

Expired

 

(5,961,550)

 

0.30

Balance December 31, 2013

 

11,000,000

 

0.15

Issued in connection with private placement

 

10,200,000

$

0.10-0.20

Balance December 31, 2014

 

21,200,000

$

0.10-0.20

 

 

These warrants expire as follows:

 

 

Shares

Exercise Price

Expiration Date

11,000,000

$0.15

May 31, 2015

3,000,000

$0.15

March 4, 2017

6,000,000

$0.20

August 11, 2017

1,200,000

$0.10

August 11, 2019

 

 

Stock Options

In April 2014 the Board of Directors of the Company established a stock option plan to authorize the granting of stock options to officers and employees. Upon exercise of the options shares are issued from the available authorized shares of the Company.

 

On April 30, 2014, 2,250,000 options were issued to management, 750,000 options vested immediately and the remaining 1,500,000 vested at a rate of 750,000 each year on the anniversary for 2 additional years, and they expire after 3 years. Each option allows the holder to purchase one share of the Company’s stock at $0.10 prior to expiration. Utilizing the Black Scholes option pricing model, an expected life of three years, a risk free rate of 0.87%, and expected volatility of 161.30% compensation cost of $173,844 is associated with these options. Of this $115,896 was recorded as a general and administrative expense in 2014. The remaining compensation cost of $57,948 is expected to be recognized over the next 1.5 years. All options expire on April 30 three years after their vest date.

 

On December 31, 2014, 500,000 options which vested immediately and expire after two years were issued to R Patrick Highsmith in connection with his hiring as the Company’s President and CEO. Each option allows the holder to purchase one share of the Company’s stock at $0.11 prior to expiration. Utilizing the Black Scholes option pricing model, an expected life of two years, a risk free rate of 0.49%, and expected volatility of 158.10% compensation cost of $36,250 is associated with these options and was recorded as a general and administrative expense in 2014.

 

On December 12, 2014, 1,750,000 options were issued to management, 750,000 options vested immediately and the remaining 1,000,000 vested after one year. The options expire after 5 years. Each option allows the holder to purchase one share of the Company’s stock at $0.15 prior to expiration. Utilizing the Black Scholes option pricing model, an expected life of 5 years, a risk free rate of 1.65%, and expected volatility of 150.60% compensation cost of $116,153 is associated with these options. Of this $49,780 was recorded as a general and administrative expense in 2014. The remaining compensation cost of $66,373 is expected to be recognized over the next year. All options expire on December 12 five years after their grant date.

 

 

 

 

Number of Options

 

Exercise Prices

Balance January 1, 2014

 

0

 

0

Issued

 

4,500,000

 

$0.10-0.15

Outstanding December 31, 2014

 

4,500,000

 

$0.10-0.15

Exercisable at December 31, 2014

 

2,000,000

 

$0.10-0.15

 

 

Outstanding options had no intrinsic value at December 31, 2014.

 

Common Stock issued for Management and Directors Fees

During 2013 the Company issued 150,000 shares of its restricted common stock for management and directors fees. The Company recorded expense of $7,250 based upon fair value of the shares issued.

 

Common Stock issued For Cash

The Company initiated a private placement in September of 2013. Each unit consisted of 1 share of the Company’s common stock and ½ purchase warrant, each full warrant exercisable for one share of the Company’s common stock at $0.15 through May 31, 2015. At closing of the private placement on October 31, 2013, 22,000,000 shares were sold for net proceeds of $990,000 after deducting 10% brokerage fees. Additionally, the Company sold 200,000 units for cash at $0.05 each, resulting in net proceeds of $10,000.

 

The Company completed a private placement in the first quarter of 2014. Each unit consisted of two shares of the Company’s common stock and one purchase warrant, each warrant exercisable for one share of the Company’s stock at $0.15 through March 2017. At closing of the private placement in March 2014, 3,000,000 units consisting of 6,000,000 shares and 3,000,000 warrants were sold for net proceeds of $405,000 after deducting the 10% commission.

 

The Company completed a private placement in the third quarter of 2014. Each unit consisted of two shares of the Company’s common stock and one purchase warrant for $0.20; each warrant is exercisable for one share of the Company’s stock at $0.20 through August 2017; 6,000,000 units were sold for net proceeds of $1,080,000 after deducting the 10% commission. In addition to the 10% cash commission 1,200,000 warrants were issued to the placing broker. These warrants are exercisable at $0.10 through August 11, 2019.

 

Common Stock Issued for Mineral Property

During 2013 the Company issued 5,180,000 of its common stock for mineral properties. The Company recorded $259,000 based upon the fair value of the shares issued. No shares were issued for this purpose in 2014.

 

Common Stock Issued for Services and Exploration

During 2013 the Company issued 714,286 shares of its common stock for exploration and other services rendered the Company. The Company recorded $50,000 based upon fair value of the shares issued. No shares were issued for this purpose in 2014.