XML 34 R17.htm IDEA: XBRL DOCUMENT v3.7.0.1
11. Equity
 12 Months Ended
Dec. 31, 2016
Notes  
11. Equity

11. Equity

 

The Company has authorized 200,000,000 shares of no par common stock at December 31, 2016 and 2015. In addition, the Company has authorized 1,000,000 shares of no par preferred stock, none of which had been issued at December 31, 2016 or 2015.

 

The Company began a private placement in the fourth quarter 2016 which ran through the first quarter of 2017. Each unit consisted of two shares of the Company’s common stock and one stock purchase warrant with each warrant exercisable for one share of the Company’s stock at $0.20 through February 2020. As of December 31, 2016, 537,500 units were sold consisting of 1,075,000 shares and 537,500 warrants for net proceeds of $92,500 after deducting the 10% commission and other related placement fees. See Note 16 Subsequent Events.

 

In 2016, the Company issued 500,000 shares of common stock pursuant to the exercise of stock purchase options at $0.10 per share for $16,250 in cash and $33,750 in exchange for a reduction of a note payable with a related party.

 

During the year ended December 31, 2016 the Company issued 3,000,000 shares of common stock for the purchase of a 50% interest in Butte Highlands joint venture at $0.07 per share for a value of $210,000 and 175,760 shares of common stock for the acquisition of GF&H at $0.15 per share for a value of $26,364. Fair values were based on the trading price of the Company’s stock on the date of the respective transactions.

 

During the year ended December 31, 2016, the Company issued 682,796 shares of its common stock valued at $71,507 for professional services. Fair value was based on the trading price of the Company’s stock on the dates of each transaction.

 

No shares of common stock were issued in 2015.

 

Stock Purchase Warrants Outstanding

Transactions in common stock purchase warrants for the year ended December 31, 2016 and 2015 are as follows:

 

 

 

 

Number of Warrants

 

Exercise Prices

Balance December 31, 2014

 

21,200,000

$

0.10-0.20

Expired

 

(11,000,000)

 

0.15

Balance December 31, 2015

 

10,200,000

 

0.10-0.20

Issued in connection with private placement

 

537,500

 

0.20

Balance December 31, 2016

 

10,737,500

$

0.10-0.20

 

 

These warrants expire as follows:

 

 

Shares

Exercise Price

Expiration Date

3,000,000

$0.15

March 4, 2017

6,000,000

$0.20

August 11, 2017

1,200,000

$0.10

August 11, 2019

537,500

$0.20

February 28, 2020

10,737,500

 

 

 

 

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 3 years after vesting date. 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 and $43,461 was recognized in 2015, the remaining $14,487 was recognized in 2016.

 

On December 30, 2015, 1,500,000 options were granted to management, 750,000 options vested immediately and the remaining 750,000 vested on December 30, 2016. The options expire 5 years after their corresponding vesting date. 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 five years, a risk free rate of 1.80%, and expected volatility of 158.50%, a compensation cost of $110,208 is associated with the options. Of this, $55,104 was recorded as a general and administrative expense in 2015. The remaining compensation cost of $55,104 was recognized in 2016.

 

In the fourth quarter of 2016 2,750,000 options were granted to management, directors, consultants, and employees of the Company. 1,225,000 vested in the fourth quarter of 2016 and the remaining 1,525,000 vest in 2017. The options expire three years after their grant date. 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 three years, a risk free rate of between 0.91% and 1.47%, and expected volatility of between 147.1% and 148.2%, a compensation cost of $268,032 is associated with the options. Of this, $151,143 was recorded as a general and administrative expense in 2016. The remaining unrecognized compensation cost of $116,889 is expected to be recognized in 2017.

 

 

 

 

Number of Options

 

Exercise Prices

Balance January 1, 2015

 

4,500,000

$

0.10-0.15

Cancelled

 

(250,000)

 

0.15

Issued

 

1,500,000

 

0.10

Balance December 31, 2015

 

5,750,000

 

0.10-0.15

   Exercised

 

(500,000)

 

0.10

Issued

 

2,750,000

 

0.15

Expired

 

(500,000)

 

0.11

Balance December 31, 2016

 

7,500,000

 

0.10-0.15

 

 

 

 

 

Exercisable at December 31, 2016

 

5,975,000

$

0.10-0.15

 

 

At December 31, 2016, the stock options have an intrinsic value of approximately $65,000 and have a weighted average remaining term of 3 years.