Quarterly report pursuant to Section 13 or 15(d)

STOCKHOLDERS' DEFICIT

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STOCKHOLDERS' DEFICIT
 3 Months Ended
Mar. 31, 2014
Equity [Abstract]  
STOCKHOLDERS' DEFICIT

On March 28, 2014, upon consummation of the Merger and resulting Reincorporation (see Note 1), all share and per share values for all periods presented in the accompanying condensed consolidated financial statements are retroactively restated for the effect of the Merger and Reincorporation.

 

Preferred Stock

 

As of March 31, 2014, there were 20,000,000 shares of Preferred Stock authorized.

 

As of March 31, 2014, there were 20,000 shares of Series A Preferred Stock authorized and 20,000 shares issued and outstanding.

 

As of March 31, 2014, there were 30,000 shares of Series B Preferred Stock authorized and 6,666 shares issued and outstanding.

 

Common Stock

 

As of March 31, 2014, there were 200,000,000 shares of Common Stock authorized and 1,510,950 shares issued and outstanding.

 

Stock Options

 

2014 Equity Incentive Plan

 

On January 21, 2014, the Board approved the adoption of a 2014 Equity Incentive Plan (the “2014 Plan”).  The purpose of the 2014 Plan is to promote the success of the Company and to increase stockholder value by providing an additional means through the grant of awards to attract, motivate, retain and reward selected employees and other eligible persons.  The 2014 Plan provides for the grant of incentive stock options, nonqualified stock options, restricted stock, restricted stock units, stock appreciation rights and other types of stock-based awards to the Company’s employees, officers, directors and consultants.  Pursuant to the terms of the 2014 Plan, either the Board or a board committee is authorized to administer the plan, including by determining which eligible participants will receive awards, the number of shares of common stock subject to the awards and the terms and conditions of such awards.  Unless earlier terminated by the Board, the Plan shall terminate at the close of business on January 21, 2024.  Up to 226,667 shares of common stock are issuable pursuant to awards under the 2014 Plan, as adjusted in a single adjustment for an issuance no later than sixty (60) days following the date of shareholder approval of the Plan in connection with (i) a private placement of the Company’s securities in which the Corporation receives gross proceeds of at least $1,000,000 and (ii) an acquisition of at least 50 mining leases and/or claims in the Holbrook Basin.  

 

On January 21, 2014, the board approved non-employee director fees of $1,000 per month and issued to each of Mr. Uribe and Mr. Bhansali, the Company’s non-employee directors, a four year option to purchase up to 30,000 of the Company’s issued and outstanding common stock at a cashless exercise price of $0.0001 per share.  The options vest immediately.  The 60,000 options were valued on the grant date at approximately $3.00 per option or a total of $179,834 using a Black-Scholes option pricing model with the following assumptions: stock price of $3.00 per share (based on the quoted trading price on the grant date), volatility of 260%, expected term of 4 years, and a risk free interest rate of 0.81%. During the three months ended March 31, 2014, the Company recorded stock based consulting expense related to options of $179,834.

 

Option activities for the three months ended March 31, 2014 are summarized as follows:

 

    Three Months Ended March 31, 2014  
    Number of Options     Weighted Average Exercise Price  
 Balance at January 1, 2014     -     $ -  
 Granted     60,000       0.0001  
                 
                 
 Balance at March 31, 2014     60,000     $ 0.0001  
 Options exercisable at March 31, 2014     60,000       0.0001  

 

Options exercisable at end of period     60,000     $ 0.0001  
 Weighted average fair value of options granted during the period             3.00  

 

Stock options outstanding at March 31, 2014 as disclosed in the above table have approximately $405,000 of intrinsic value at the end of the period.

 

Stock Warrants

 

The following table summarizes the Company’s stock warrants outstanding at March 31, 2014:

 

Warrants Outstanding     Warrants Exercisable  

Exercise

Price

     Number Outstanding at March 31, 2014   Weighted Average Remaining Contractual Life   Weighted Average Exercise Price     Number Exercisable at March 31, 2014     Weighted Average Exercise Price  
$ 3.75       240,000    0.81 Years   $ 3.75       240,000     $ 3.75  
  4.50       5,000    3.11 Years     4.50       5,000       4.50  
$ 3.75       245,000    1.86 Years   $ 3.75       245,000     $ 3.75  

 

There were no changes that occurred during the three months ended March 31, 2014. 

 There were 245,000 warrants outstanding as of March 31, 2014.