NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1 – Organization, Basis of Presentation, and Nature of
Operations
Organization and Nature of Operations
Magellan Gold Corporation (“we” “our”,
“us”, the “Company” or “Magellan”) was incorporated on September 28, 2010, under the laws
of the State of Nevada. Our principal business is the acquisition and exploration of mineral resources. We have not presently determined
whether the properties to which we have mining rights contain mineral reserves that are economically recoverable.
Our primary focus is to explore and develop mineral
properties in the United States. Effective March 31, 2020, we divested our subsidiary holding all of our international assets and plan
to advance our recently acquired Idaho Gold project towards resource definition and eventual development, and possibly to acquire additional
mineral rights and conduct additional exploration, development and permitting activities. Our mineral lease payments, permitting applications
and exploration and development efforts will require additional capital. We rely upon the sale of our securities as well as advances and
loans from executive management and significant shareholders to fund our operations as we have not generated any significant revenue.
Note 2 – Summary of Significant Accounting Policies
Basis of Presentation
We prepare our financial statements in accordance
with accounting principles generally accepted in the United States (“GAAP”). The accompanying unaudited interim consolidated
financial statements have been prepared in accordance with GAAP for interim financial information 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 months ended March 31, 2021 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 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,
2020.
On July 1, 2020, the Company entered into a Stock
Purchase Agreement to acquire Clearwater Gold Mining Corporation (“Clearwater”) which owns certain unpatented mining claims
in Idaho County, Idaho. The Company will be evaluating the historic mine data to assess the potential to develop a gold resource at Center
Star. The project area is located 45 miles from Grangeville, Idaho and near the town of Elk City, Idaho.
On August 25, 2020, the Company, a new wholly
owned subsidiary, M Gold Royalty (“M Gold”), to expand into the royalty business. M Gold Royalty will engage in organically
generating royalties derived from a portfolio of mineral property interests in North America. Royalties from this portfolio will be complemented
by royalties from selected acquisitions as well as income from other strategic investments.
Our consolidated financial statements include
our accounts and the accounts of our 100% owned subsidiary, Clearwater and M Gold. All intercompany transactions and balances have been
eliminated. Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the
United States of America (“U.S. GAAP”).
Net Loss per Common Share
We
compute basic net loss per common share by dividing our net loss attributable to common shareholders by our weighted-average number of
common shares outstanding during the period. Computation of diluted net loss per common share adds the weighted-average number of potential
common shares outstanding to the weighted-average common shares outstanding, as calculated for basic net loss per share, except for instances
in which there is a net loss. For the three months ended March 31, 2021, 72,000 of stock options, 1,808,635 of warrants, 192,269 shares
issuable from Series A Preferred Stock and 1,236,527 shares issuable from convertible notes were considered for their dilutive effects.
For the three months ended March 31, 2020, 72,000 of stock options, 335,000 of warrants, 242,269 shares issuable from Series A Preferred
Stock and 430,978 shares issuable from convertible notes were
considered for their dilutive effects.
Derivative Financial Instruments
Fair value accounting requires bifurcation
of embedded derivative instruments such as conversion features in convertible debt or equity instruments and measurement of their
fair value for accounting purposes. In assessing the convertible debt instruments, management determines if the convertible debt
host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement. If
the instrument is not considered conventional convertible debt under ASC 470, the Company will continue its evaluation process of
these instruments as derivative financial instruments under ASC 815. The Company applies the guidance in ASC 815-40-35-12 to
determine the order in which each convertible instrument would be evaluated for derivative classification. The Company’s
sequencing policy is to evaluate for reclassification contracts with the earliest maturity date first.
Once determined, derivative liabilities are adjusted
to reflect fair value at each reporting period end, with any increase or decrease in the fair value being recorded in results of operations
as an adjustment to fair value of derivatives.
Recent Accounting Pronouncements
The Company does not believe that any recently
issued effective pronouncements, or pronouncements issued but not yet effective, if adopted, would have a material effect on the accompanying
financial statements.
Liquidity and 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 March 31, 2021 we had a working capital deficit of $1,500,718, we had not yet generated any significant
revenues or achieved profitable operations and we have accumulated losses of $16,654,975. We expect to incur further losses in the development
of our business, all of which raises substantial doubt as to 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 anticipate that additional funding will be
in the form of additional loans from officers, directors or significant shareholders, or equity financing from the sale of our common
stock but cannot assure than any future financings will occur.
Note 3 – Mineral Rights and Properties
Center Star Gold Mine
On July 1, 2020, the Company entered into a Stock
Purchase Agreement to acquire Clearwater Gold Mining Corporation (“Clearwater”) which owns certain unpatented mining claims
in Idaho County, Idaho that include the historic Center Star Gold Mine (“Center Star”) near Elk City, Idaho. As a result of
the Clearwater acquisition, Gregory Schifrin, the sole shareholder of Clearwater, was appointed to serve as a member of the Company’s
Board on July 1, 2020. In consideration for 100% of the issued and outstanding shares of Clearwater, the Company has agreed to pay Clearwater’s
sole shareholder 1,000,000 shares of Magellan common stock, $125,000 convertible note and $25,000 in cash. The 1,000,000 shares are to
be issued to the shareholder on and under the terms as follows: 250,000 shares at the time of closing, 250,000 shares at the time the
Center Mine receives its permit to reopen the main portal of the mine, 250,000 shares at the point the main portal has been reopened and
250,000 shares two-years from closing concurrent the pay-off of the $125,000 convertible note. As of March 31, 2021, the total purchase
price for the Clearwater was determined to be $1,000,000 which consisted of $12,500 cash paid, $12,500 accrued in accounts payable –
related party, a $125,000 convertible promissory note, and 1,000,000 shares of common stock with a fair value of $850,000. The Company
concluded the transaction qualified as an asset acquisition and all such acquisition costs have been capitalized.
As of March 31, 2021 and December 31, 2020, the
Company had $112,968 in capitalized development cost to develop gold resources at Center Star.
Note 4 – Disposition of Business
Mexico Operations
On March 3, 2017 the Company entered into a Memorandum
of Understanding (“MOU”) with Rose Petroleum plc (“Rose”), a multi-asset natural resource business, to purchase
an operating floatation plant that also includes a precious metals leach circuit and associated assets, licenses and agreements (together,
the “SDA Mill”) located in the State of Nayarit, Mexico.
Prior to closing, all of the assets and operations
related to the SDA Mill were transferred to a newly incorporated entity, Minerales Vane 2 S.A. de C.V. (“Minerales Vane 2”).
Effective November 30, 2017, the Company’s newly incorporated wholly owned subsidiary, Magellan Acquisition Corporation (“MAC”),
acquired 100% of the issued and outstanding shares of Minerales Vane 2 (“MV2”).
Effective March 31, 2020 the Company entered into
an Agreement to Accept Collateral in Full Satisfaction of Obligations (the “Agreement”) with certain holders of Promissory
Notes (the “Lenders”) due December 31, 2019 (the “Notes”) in the aggregate principal amount of $1.05 million.
The Company is indebted under the Notes to the Lenders and the Company’s obligations to the Lenders are secured by a Stock Pledge
and Security Agreement covering 100 shares of common stock of Magellan Acquisition Corporation and one (1) share of MV2 (the “Collateral”)
held under a Collateral Agent Agreement. Magellan Acquisition Corp. and MV2 own the SDA Mill and El Dorado prospect in Nayarit, Mexico.
The Notes matured on December 31, 2019 and remain unpaid and in default. The Lenders have accelerated the Company’s
indebtedness. Pursuant to terms set forth in the Agreement, the Lenders have agreed to accept the Collateral in full satisfaction of the
Notes and unconditionally and irrevocably waive any entitlement or right to receive payment of (i) the initial 10% Financing Fee included
in the principal amount of the Notes, (ii) the 5% Rollover Fee agreed to in an Allonge and Modification Agreement. The effective date
of the Agreement was March 31, 2020.
Silver District
On July 21, 2020, the Company entered into a Stock
Purchase agreement with Tri Power Resources, LLC to sell 1,000 shares representing 100% ownership of Gulf+Western Industries, Inc (“Gulf+Western”)
to Tri Power in consideration for the return and cancellation of 50,000 shares of the Company’s Series A Preferred Stock with a
stated value of $10 per share. John Gibbs, a majority shareholder in the Company, is the Managing Member and Chief Executive Officer of
Tri Power Resources, LLC.
Due to
the related party nature of the above transactions, the gain of $206,860 associated with the disposals were recorded to additional
paid in capital.
Summary
The agreements qualify as a discontinued operation
in accordance with U.S. GAAP. As a result, operating results and cash flows related to the Gulf+Western, MAC and MV2 operations have been
reflected as discontinued operations in the Company’s consolidated statements of operations and comprehensive loss and consolidated
statements of cash flows.
|
|
March 31, 2021
|
|
|
March 31, 2020
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
–
|
|
|
$
|
–
|
|
Cost of sales
|
|
|
–
|
|
|
|
–
|
|
Exploration costs
|
|
|
–
|
|
|
|
–
|
|
General and administrative expenses
|
|
|
–
|
|
|
|
(29,693
|
)
|
Operating loss
|
|
|
–
|
|
|
|
(29,963
|
)
|
Other expense
|
|
|
–
|
|
|
|
–
|
|
Net loss from discontinued operations
|
|
$
|
–
|
|
|
$
|
(29,963
|
)
|
Note 5 – Fair Value of Financial Instruments
Financial assets and liabilities recorded at fair
value in our consolidated balance sheets are categorized based upon a fair value hierarchy established by GAAP, which prioritizes the
inputs used to measure fair value into the following levels:
Level 1 – Quoted market prices in active
markets for identical assets or liabilities at the measurement date.
Level 2 – Quoted prices for similar
assets or liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active;
or other inputs that are observable and can be corroborated by observable market data.
Level 3 – Inputs reflecting management’s
best estimates and assumptions of what market participants would use in pricing assets or liabilities at the measurement date. The inputs
are unobservable in the market and significant to the valuation of the instruments.
A financial instrument's categorization within
the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.
The carrying values for cash and cash equivalents,
prepaid assets, accounts payable and accrued liabilities, related party line of credit and notes payable approximate their fair value
due to their short-term maturities.
Fair Value Measurements
The Company’s assets and liabilities recorded
at fair value have been categorized based upon a fair value hierarchy.
The following table presents information about
the Company’s liabilities measured at fair value on a recurring basis and the Company’s estimated level within the fair value
hierarchy of those assets and liabilities as of March 31, 2021 and December 31, 2020:
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Fair value at March 31, 2021
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative liability
|
|
$
|
–
|
|
|
$
|
–
|
|
|
$
|
86,616
|
|
|
$
|
86,616
|
|
|
|
|
Level 1
|
|
|
|
Level 2
|
|
|
|
Level 3
|
|
|
|
Fair value at December 31, 2020
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative liability
|
|
$
|
–
|
|
|
$
|
–
|
|
|
$
|
–
|
|
|
$
|
–
|
|
There were no transfers between Level 1, 2 or
3 during the period.
The table below presents the change in the fair
value of the derivative liability during the three months ended March 31, 2021:
Fair value as of December 31, 2020
|
|
$
|
–
|
|
Fair value on the date of issuance recorded as a debt discount
|
|
|
95,715
|
|
Gain on change in fair value of derivatives
|
|
|
(9,099
|
)
|
Fair value as of March 31, 2021
|
|
$
|
86,616
|
|
Note 6 – Advances
Unsecured advances – related party
During the three months ended March 31, 2021,
a Director paid of expenses on behalf the Company of $30,252. As of March 31, 2021, the advances from related party balance were $40,252.
Unsecured advances –third party
During the three months ended March 31, 2021,
the Company received $605 in cash advances, had expenses paid on behalf of $276 and made repayments on advances of $420. As of March 31,
2021, the advances from third party balance were $48,223.
Note 7 – Convertible Note Payable and
Derivative Liability
Series 2019A 10% Unsecured Convertible Notes
In 2019, the Company sold $135,000 of Series 2019A
10% Unsecured Convertible Notes. The purchase price of the Note is equal to the principal amount of the Note. The Series 2019A Notes are
convertible into shares of Common Stock at a conversion price of $1.00 during the life of the Note. The lenders were issued 100,000 common
stock warrants with an exercise price of $2.00 per share. The Company evaluated the conversion option and concluded a beneficial conversion
feature was present at issuance. The Company recognized the beneficial conversion feature and relative fair value of the warrants as a
debt discount and additional paid in capital in August and December 2019. The $135,000 debt discount is amortized over the term of the
loan. The Notes will accrue interest at the rate of 10% per annum, payable quarterly in arrears. The Notes mature twelve (12) months from
the date of issue. The maturity date can be extended at the option of the Company for an additional one (1) year. There are two Series
2019A 10% Unsecured Convertible Notes that were due and payable in August 2020 and are currently past due and in default. The default
interest rate on the notes is 12%. As of March 31, 2021, the balance due under these notes net of unamortized discount of $0, is $75,000,
with accrued interest of $10,700.
On October 1, 2019, the Company sold a 10% Unsecured
Convertible Note for $145,978 due on demand to settle accounts payable. The purchase price of the 10% Unsecured Convertible Note is equal
to the principal amount of the Note. The 10% Unsecured Convertible Note is convertible into shares of Common Stock at a conversion price
of $1.00 during the life of the Note. The Company evaluated the conversion option and concluded a beneficial conversion feature was present
at issuance. The Company recognized the beneficial conversion feature as a debt discount and additional paid in capital in October 2019.
The debt discount will be amortized over the term of the loan. The 10% Unsecured Convertible Note will accrue interest at the rate of
10% per annum payable quarterly, accruing from the date of issuance. As of March 31, 2021, the balance due under these notes net of unamortized
discount of $0, is $145,978, with accrued interest of $21,837.
Series 2020A 8% Unsecured Convertible Notes
In 2020, the Company sold $285,000 of Series 2020A
8% Unsecured Convertible Notes with a maturity date of November 30, 2020. The purchase price of the Note is equal to the principal amount
of the Note. The Series 2020A Notes are convertible into shares of Common Stock at a conversion price of $0.50 during the life of the
Note. The lenders were issued 142,500 common stock warrants with an exercise price of $0.50 per share for a term of 5 years. Two related
parties purchased $60,000 of the 2020A notes. The Company evaluated the conversion option and concluded a beneficial conversion feature
was present at issuance. The Company recognized the beneficial conversion feature as a debt discount and additional paid in capital as
of December 31, 2020. The $237,263 debt discount will be amortized over the term of the loan. The Notes will accrue interest at the rate
of 8% per annum, payable quarterly in arrears. In July 2020, $25,000 of Series 2020A 8% Unsecured Convertible Notes were converted into
50,000 shares of common stock at a conversion price of $0.50 per share. As of March 31, 2021, the balance due to a related party under
these notes net of unamortized discount of $0, is $60,000, with accrued interest of $4,021. As of March 31, 2021, the balance due to a
third party under these notes net of unamortized discount of $0, is $200,000, with accrued interest of $12,242.
3% Secured Convertible Note
On July 1, 2020, the Company issued a $125,000
Secured Convertible Note to a related party for the as part of the purchase of Clearwater Mining Corporation. The secured convertible
note matures on July 1, 2022 and will accrue interest at the rate of 3% per annum, payable yearly in arrears beginning July 1, 2021. The
Note is convertible into shares of Common Stock at a conversion price of $0.50 during the life of the Note. The Company evaluated the
conversion option and concluded a beneficial conversion feature was present at issuance. The Company recognized the beneficial conversion
feature and relative fair value of the warrants as a debt discount and additional paid in capital in July 2019. The $87,500 debt discount
will be amortized over the term of the loan. Amortization expense of $10,788 was recognized during the three months ended March 31, 2020.
As of March 31, 2021, the balance due to a related party under this note net of unamortized discount of $54,777, is $70,223, with accrued
interest of $2,805.
AJB Convertible Note
On February 10, 2021, the Company entered into
a debt agreement to borrow $200,000. The secured note has an original issuance discount of $16,000 along with $9,000 in legal and finder
fees recorded as a discount, which will be amortized over the life of the note. The loan bears interest at a rate of 10% and has a six-month
maturity. The unpaid principal is convertible into shares of the Company’s common stock at the conversion price. The conversion
price shall be the less of 90% of the lowest trading price during the previous twenty (20) trading day period ending on the issuance date,
or during the previous twenty (20) trading day period ending on date of conversion of this note. The Company issued the debtholder 266,667
common shares as a commitment fee. Due to the variable conversion feature the note conversion feature was bifurcated from the note and
recorded as a derivative liability. The day one derivative liability was $95,715 was recorded as a discount on the convertible notes payable.
As of March 31, 2021, the balance on the loan, net of unamortized discount of $81,818, is $118,182, with accrued interest of $321.
As of March 31, 2021, the total derivative liability
on the above note was adjusted to a fair value of $86,616. During the three months ended March 31, 2021, $38,897 of the discount was amortized
leaving an unamortized balance of $81,818. The fair value of the conversion option was estimated using the Black-Scholes option pricing
model and the following assumptions during the period: fair value of stock $0.92 1.03, volatility of 91.27% - 103.48% based on a comparable
company peer group, expected term of 0.50 years, risk-free rate of 0.05% - 0.06% and a dividend yield of 0%.
Note 8 – Stockholders’ Deficit
Common Stock
On February 10, 2021, the Company issued the 266,667
common shares as a commitment fee. The shares were valued at $0.92, the closing price of the Company’s stock on February 10, 2021.
During the three months ended March 31, 2021, the Company recognized $245,334 of stock based compensation related to this issuance.
On August 6, 2020, the Company entered into a
one-year investor relations consulting agreement. As consideration for its services under the Agreement, the Company agreed to pay to
the consultant 261,538 restricted shares of the Company’s common stock. The shares were valued at $1.56, the closing price of the
Company’s stock on August 6, 2020. As of December 31, 2020, the Company had not issued the shares and accrued $136,000 related to
this agreement.
During the three months ended March 31, 2021,
the Company issued the 261,538 shares related to this agreement, settled the prior year accrual of $136,000 for 2020 services and recognized
$102,000 of stock based compensation for services provided in the first quarter of 2021.
During the three months ended March 31, 2021,
the Company received net proceeds of $10,000 from the exercise of 50,000 warrants. On July 15, 2020, the Company issued 500,000 shares
for services rendered pursuant to two investor relations agreements: 200,000 shares under a Services Agreement and 300,000 shares under
a Consulting Agreement. The shares were valued at $1.29, the closing price of the Company’s stock on July 15, 2020. The Services
Agreement is $7,500 per month and has a term of twelve months The Consulting Agreement is $7,500 per month and has an initial term of
six months. If the Consulting Agreement is not terminated at least thirty days prior to the end of the initial term, the term will continue
for an additional six months. During the three months ended March 31, 2020 the Company recognized $161,125 of expense related to these
shares.
Preferred Stock
In September 2020, the Company established a Series
B Convertible Preferred Stock (“Series B Preferred”) and authorized an aggregate of 5,000 shares with a par value of $0.001
per share and a stated value of $1,250.00 per share. The holders of outstanding Series B Preferred shall be entitled to receive dividends
at the annual rate of 10% based on the stated value per share. Dividends on the share of Series B Preferred shall be cumulative.
During the three months ended March 31, 2021,
the Company accrued $48,067 for the Series A preferred stock dividend.
Stock Options and the 2017 Equity Incentive
Plan:
Under the 2017 Equity Incentive Plan, the Company
is authorized to grant rights to acquire up to a maximum of 200,000 shares of common stock. The 2017 Plan provides for the grant of (1)
both incentive and nonstatutory stock options, (2) stock bonuses, (3) rights to purchase restricted stock and (4) stock appreciation rights.
As of March 31, 2021, the Company had 128,000 shares available for future grant.
On September 15, 2020, John Gibbs, a related party,
transferred 330,000 warrants to purchase common stock back to the Company. Deepak Malhotra, a member of the board, received 300,000 of
the transferred warrants as compensation for services to be performed over a one year term. The warrants were valued $386,764 and will
recognized over the one year service period. During the three months ended March 31, 2021, the Company recognized $96,691 of expense related
to the issuance of these warrants. The remaining 30,000 warrants were transferred to three 2018A 10% Unsecured Convertible noteholder
as inducements to convert their notes. See Note 7 – Convertible Note Payable.
Stock option activity within the 2017 Equity Incentive
Plan and warrant activity outside the plan, for the nine months ended March 31, 2021 is as follows:
|
|
Stock Options
|
|
|
Stock Warrants
|
|
|
|
Shares
|
|
|
Weighted Average
Exercise Price
|
|
|
Shares
|
|
|
Weighted Average
Exercise Price
|
|
Outstanding at December 31, 2020
|
|
|
72,000
|
|
|
$
|
2.00
|
|
|
|
1,858,635
|
|
|
$
|
0.67
|
|
Granted
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
Cancelled
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
Expired
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
Exercised
|
|
|
–
|
|
|
|
–
|
|
|
|
(50,000
|
)
|
|
|
0.20
|
|
Outstanding at March 31, 2021
|
|
|
72,000
|
|
|
$
|
2.00
|
|
|
|
1,808,635
|
|
|
$
|
0.43
|
|
Exercisable at March 31, 2021
|
|
|
72,000
|
|
|
$
|
2.00
|
|
|
|
1,808,635
|
|
|
$
|
0.43
|
|
As of March 31, 2021, the outstanding stock options
have a weighted average remaining term of 6.58 years and has no intrinsic value, and the outstanding stock warrants have a weighted average
remaining term of 0.43 years and an intrinsic value of $1,465,917.
Note 9 – Commitments and Contingencies
Mining Claims
As part of our acquisition of the Center Star
gold mine project, we acquire 15 Bureau of Land Management (“BLM”) unpatented mining claims and subsequently staked another
16 unpatented mining claims. In order to maintain the BLM lode claims, annual payments are required before the end of August of each
year. As of March 31, 2021, all of these claims are in good standing.
Note 10 – Executive Employment Agreement
Effective August 1, 2020, the Company and Michael
Lavigne, executed a Restricted Stock Unit Agreement pursuant to which the Company agreed to grant to Mr. Lavigne, in consideration of
services to be rendered as President, CEO and Director, restricted stock units consisting of 15,000 units for each month of service. The
vested stock units will be settled in shares of common stock upon or as soon as practicable (a) upon written request any time after December
31, 2020 or (b) following the termination date, whichever occurs first. As of March 31, 2021, 120,000 restricted stock units may be settled
in shares of common stock. During the three months ended March 31, 2021, the Company recognized $46,200 of stock based compensation related
to the agreement.
Note 11 – Related Party Transactions
Conflicts of Interests
Athena Silver Corporation (“Athena”) is a company under
common control. Mr. Gibbs is a significant investor in both Magellan and Athena. Magellan and Athena are both exploration stage companies
involved in the business of acquisition and exploration of mineral resources.
Silver Saddle Resources,
LLC is also a company under common control. Mr. Gibbs are significant investors and managing members of Silver Saddle. Magellan and Silver
Saddle are both exploration stage companies involved in the business of acquisition and exploration of mineral resources.
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 Magellan, Athena and Silver Saddle been autonomous.
As of March 31, 2021, Mr. Power and Dr. Carson
are no longer considered related parties, and therefore all amounts due to them have been reclassified out of related party accounts.
Accrued Interest - Related Parties
Accrued interest due to related parties is included
in our consolidated balance sheets as follows:
|
|
March 31, 2021
|
|
|
December 31, 2020
|
|
Accrued interest payable – Mr. Gibbs
|
|
$
|
3,583
|
|
|
$
|
2,597
|
|
Accrued interest payable – Dr. Carson
|
|
|
–
|
|
|
|
752
|
|
Accrued interest payable – Mr. Schifrin
|
|
|
2,805
|
|
|
|
1,880
|
|
Accrued interest payable – Mr. Malhotra
|
|
|
438
|
|
|
|
241
|
|
|
|
$
|
6,826
|
|
|
$
|
5,470
|
|