| Discontinued Operations |
13. Discontinued Operations During the year ended December 31, 2022, the Company decided to discontinue all of its operating activities. Based on that decision, the Company’s board of directors committed to a plan to sell the CMCS entity operating the mine in Honduras. In accordance with the provisions of ASC 205-20, the Company has separately reported the assets and liabilities of the discontinued operations (held for sale) in the consolidated balance sheets as of September 30, 2023 and December 31, 2022. | | September 30, 2023 | | | December 31, 2022 | | CURRENT ASSETS OF DISCONTINUED OPERATIONS: | | | | | | | Cash and cash equivalents | | $ | - | | | $ | 2,576 | | Accounts receivable | | | - | | | | 10,752 | | Inventories | | | - | | | | 277,106 | | Prepaid expenses and other current assets | | | - | | | | 9,698 | | TOTAL CURRENT ASSETS OF DISCONTINUED OPERATIONS | | $ | - | | | $ | 300,132 | | | | | | | | | | | NON-CURRENT ASSETS OF DISCONTINUED OPERATIONS: | | | | | | | | | Property, plant and equipment, net | | $ | - | | | $ | 680,643 | | Other assets | | | - | | | | 142,291 | | TOTAL NON-CURRENT ASSETS OF DISCONTINUED OPERATIONS | | $ | - | | | $ | 822,934 | | | | | | | | | | | CURRENT LIABILITIES OF DISCONTINUED OPERATIONS: | | | | | | | | | Accounts payable and accrued liabilities | | $ | - | | | $ | 2,504,735 | | Finance lease liabilities - current portion | | | - | | | | 139,029 | | Note payable | | | - | | | | 272,418 | | Taxes payable | | | - | | | | 389,045 | | TOTAL CURRENT LIABILITIES OF DISCONTINUED OPERATIONS | | $ | - | | | $ | 3,305,227 | | | | | | | | | | | NON-CURRENT LIABILITIES OF DISCONTINUED OPERATIONS: | | | | | | | | | Finance lease liabilities, net of current portion | | $ | - | | | $ | 23,851 | | Mine reclamation obligation | | | - | | | | 743,822 | | TOTAL NON-CURRENT LIABILITIES OF DISCONTINUED OPERATIONS | | $ | - | | | $ | 767,673 | |
In accordance with the provisions of ASC 205-20, the Company has not included in the results of continuing operations the results of operations of the discontinued operations in the consolidated statements of operations and comprehensive loss. The results of operations from discontinued operations for the three and nine months ended September 30, 2023 and 2022 have been reflected as discontinued operations in the consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2023 and 2022, and consist of the following. | | Three Months Ended | | | Nine months Ended | | | | September 30, 2023 | | | September 30, 2022 | | | September 30, 2023 | | | September 30, 2022 | | Precious Metals Income | | $ | - | | | $ | - | | | $ | - | | | $ | 1,365,387 | | Cost of goods sold | | | - | | | | 173,917 | | | | 315,152 | | | | 1,413,495 | | Gross profit (loss) | | | - | | | | (173,917 | ) | | | (315,152 | ) | | | (48,108 | ) | | | | | | | | | | | | | | | | | | OPERATING EXPENSES OF DISCONTINUED OPERATIONS: | | | | | | | | | | | | | | | | | General and administrative | | | - | | | | 67,552 | | | | 181,519 | | | | 255,948 | | Depreciation and amortization | | | - | | | | 934 | | | | 212 | | | | 3,227 | | | | | - | | | | 68,486 | | | | 181,731 | | | | 259,175 | | OPERATING LOSS OF DISCONTINUED OPERATIONS | | | - | | | | (242,403 | ) | | | (496,883 | ) | | | (307,283 | ) | | | | | | | | | | | | | | | | | | OTHER (INCOME) EXPENSE OF DISCONTINUED OPERATIONS | | | | | | | | | | | | | | | | | Other (income) expense | | | - | | | | (662 | ) | | | - | | | | (8,329 | ) | Interest expense | | | - | | | | 7,703 | | | | 698 | | | | 7,703 | | | | | - | | | | 7,081 | | | | 698 | | | | (626 | ) | | | | | | | | | | | | | | | | | | LOSS BEFORE INCOME TAXES OF DISCONTINUED OPERATIONS | | | - | | | | (249,444 | ) | | | (497,581 | ) | | | (306,657 | ) | Provision for income taxes of discontinued operations | | | - | | | | (54,723 | ) | | | - | | | | (82,137 | ) | NET LOSS OF DISCONTINUED OPERATIONS | | $ | - | | | $ | (304,167 | ) | | $ | (497,581 | ) | | $ | (388,794 | ) |
In accordance with the provisions of ASC 205-20, the Company has separately reported the cash flow activity of the discontinued operations in the consolidated statements of cash flows. The cash flow activity from discontinued operations for the nine months ended September 30, 2023 and 2022 have been reflected as discontinued operations in the consolidated statements of cash flows for the nine months ended September 30, 2023 and 2022, and consist of the following. | | Nine Months Ended | | | | September 30, 2023 | | | December 31, 2022 | | DISCONTINUED OPERATING ACTIVITIES | | | | | | | Net loss | | $ | (497,581 | ) | | $ | (388,794 | ) | Depreciation expense | | | 4,259 | | | | 45,902 | | Changes in operating assets and liabilities: | | | | | | | | | Trade receivables | | | 91 | | | | (8,223 | ) | Inventories | | | (12,981 | ) | | | (285,978 | ) | Prepaid expenses and other current assets | | | (34,670 | ) | | | (58,433 | ) | Accounts payable and accrued liabilities | | | (294,243 | ) | | | 772,905 | | Accounts payable and accrued liabilities - related parties | | | 834,659 | | | | 599,981 | | Net cash provided by operating activities of discontinued operations | | $ | (466 | ) | | $ | 677,360 | | | | | | | | | | | INVESTING ACTIVITIES OF DISCONTINUED OPERATIONS | | | | | | | | | Purchase of property, plant and equipment | | $ | (652 | ) | | $ | (49,777 | ) | Net cash provided by (used in) investing activities of discontinued operations | | $ | (652 | ) | | $ | (44,167 | ) | | | | | | | | | | FINANCING ACTIVITIES OF DISCONTINUED OPERATIONS | | | | | | | | | Payments on finance leases | | $ | - | | | $ | (76,943 | ) | Net cash used in financing activities of discontinued operations | | $ | - | | | $ | (76,943 | ) |
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