UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended MarchDecember 31, 2021
or
¨TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 333-197692
| STAR ALLIANCE INTERNATIONAL CORP. |
| (Exact name of registrant as specified in its charter) |
| Nevada | 37-1757067 | |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
| 91362 | ||
| (Address of principal executive offices) | (Zip Code) |
833-443-STAR (7827)833-443-7827
(Registrant’s telephone number)
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| Common | STAL | OTC MARKETS-PINK |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ¨Nox
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☐Nox
No Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ¨ | Accelerated filer | ¨ |
| Non-accelerated filer | x | Smaller reporting company | x |
| Emerging Growth Company | ¨ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐Nox
Securities registered pursuant to Section 12(b) of the Act: None.
Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date: 122,399,584 shares of common stock par value $0.001, were outstanding as at as of May 18, 2021.February 14, 2022.
STAR ALLIANCE INTERNATIONAL CORP.
FORM 10-Q
Quarterly Period Ended MarchDecember 31, 2021
| 2 |
PART I -I. FINANCIAL INFORMATION
Item 1. Financial Statements.1 .Financial Statements
STAR ALLIANCE INTERNATIONAL CORP.
| March 31, 2021 | June 30, 2020 | December 31, 2021 | June 30, 2021 | |||||||||||||
| (unaudited) | (unaudited) | |||||||||||||||
| ASSETS | ||||||||||||||||
| Current assets: | ||||||||||||||||
| Cash | $ | 4,533 | $ | 20,058 | $ | 10,293 | $ | 6,789 | ||||||||
| Prepaid stock for services | 4,755,104 | 0 | ||||||||||||||
| Total current assets | 4,533 | 20,058 | 4,765,397 | 6,789 | ||||||||||||
| Other assets: | ||||||||||||||||
| Property and equipment | 450,000 | 450,000 | 450,000 | 450,000 | ||||||||||||
| Mining claims | 57,532 | 57,532 | 57,532 | 57,532 | ||||||||||||
| Total other assets | 507,532 | 507,532 | 507,532 | 507,532 | ||||||||||||
| Total Assets | $ | 512,065 | $ | 527,590 | $ | 5,272,929 | $ | 514,321 | ||||||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||||||||||
| Current liabilities: | ||||||||||||||||
| Accounts payable | $ | 10,448 | $ | 40,630 | $ | 23,747 | $ | 18,378 | ||||||||
| Accrued expenses | 14,006 | 8,658 | 20,852 | 12,888 | ||||||||||||
| Accrued compensation | 180,502 | 144,360 | 303,641 | 171,370 | ||||||||||||
| Notes payable | 466,390 | 435,700 | 447,380 | 467,380 | ||||||||||||
| Loans payable – related parties | 24,550 | 0 | ||||||||||||||
| Note payable – former related party | 32,000 | 32,000 | 32,000 | 32,000 | ||||||||||||
| Related party advance | 6,035 | 2,576 | ||||||||||||||
| Due to former related party | 42,651 | 42,651 | 42,651 | 42,651 | ||||||||||||
| Total current liabilities | 752,032 | 706,575 | 894,821 | 744,667 | ||||||||||||
| Total liabilities | 752,032 | 706,575 | 894,821 | 744,667 | ||||||||||||
| COMMITMENTS AND CONTINGENCIES | – | – | ||||||||||||||
| COMMITMENTS AND CONTINGENCIES (see footnotes) | ||||||||||||||||
| Stockholders’ deficit: | ||||||||||||||||
| Preferred stock, $0.001 par value, 21,100,000 authorized, none issued and outstanding | – | – | ||||||||||||||
| Series A preferred stock, $0.001 par value, 1,000,000 authorized, 1,000,000 and 0 shares issued and outstanding, respectively | 1,000 | – | ||||||||||||||
| Series B preferred stock, $0.001 par value, 1,900,000 authorized, 1,883,000 shares issued and outstanding, respectively | 1,883 | 1,883 | ||||||||||||||
| Common stock, $0.001 par value, 175,000,000 shares authorized, 119,299,584 and 107,313,334 shares issued and outstanding, respectively | 119,300 | 107,314 | ||||||||||||||
| Preferred stock, $ par value, authorized, issued and outstanding | – | – | ||||||||||||||
| Series A preferred stock, $ par value, authorized, and shares issued and outstanding, respectively | 1,000 | 1,000 | ||||||||||||||
| Series B preferred stock, $ par value, authorized, issued and outstanding | 1,883 | 1,883 | ||||||||||||||
| Common stock, $ par value, shares authorized, and shares issued and outstanding, respectively | 137,976 | 124,320 | ||||||||||||||
| Additional paid-in capital | 2,697,629 | 2,382,859 | 6,849,253 | 2,793,609 | ||||||||||||
| Common stock to be issued | 6,633 | 8,633 | 2,025,633 | 41,633 | ||||||||||||
| Stock subscription receivable | (20,000 | ) | (9,900 | ) | (60,000 | ) | (20,000 | ) | ||||||||
| Accumulated deficit | (3,046,412 | ) | (2,669,774 | ) | (4,577,637 | ) | (3,172,791 | ) | ||||||||
| Total stockholders’ deficit | (239,967 | ) | (178,985 | ) | 4,378,108 | (230,346 | ) | |||||||||
| Total liabilities and stockholders’ deficit | $ | 512,065 | $ | 527,590 | $ | 5,272,929 | $ | 514,321 | ||||||||
The accompanying notes are an integral part of these unaudited financial statements.
| 3 |
STAR ALLIANCE INTERNATIONAL CORP.
STATEMENTS OF OPERATIONS
(Unaudited)
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Operating expenses: | ||||||||||||||||
| General and administrative | $ | 1,039,338 | $ | 13,906 | $ | 1,048,400 | $ | 42,799 | ||||||||
| General and administrative – related party | 1,500 | 1,000 | 3,000 | 4,000 | ||||||||||||
| Professional fees | 11,020 | 2,500 | 13,020 | 28,190 | ||||||||||||
| Consulting | 188,362 | 5,000 | 188,362 | 33,350 | ||||||||||||
| Director compensation | 30,000 | 15,000 | 60,000 | 30,000 | ||||||||||||
| Officer compensation | 45,000 | 30,000 | 90,000 | 65,000 | ||||||||||||
| Total operating expenses | 1,315,220 | 67,406 | 1,402,782 | 203,339 | ||||||||||||
| Loss from operations | (1,315,220 | ) | (67,406 | ) | (1,402,782 | ) | (203,339 | ) | ||||||||
| Other expense | ||||||||||||||||
| Interest expense | (1,182 | ) | (882 | ) | (2,064 | ) | (9,036 | ) | ||||||||
| Loss on conversion of accrued salary | 0 | 0 | 0 | (46,200 | ) | |||||||||||
| Gain on forgiveness of debt | 0 | 0 | 0 | 3,870 | ||||||||||||
| Total other expense | (1,182 | ) | (882 | ) | (2,064 | ) | (51,366 | ) | ||||||||
| Loss before provision for income taxes | (1,316,402 | ) | (68,288 | ) | (1,404,846 | ) | (254,705 | ) | ||||||||
| Provision for income taxes | 0 | 0 | 0 | 0 | ||||||||||||
| Net loss | $ | (1,316,402 | ) | $ | (68,288 | ) | $ | (1,404,846 | ) | $ | (254,705 | ) | ||||
| Net loss per common share - basic and diluted | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | ||||
| Weighted average common shares outstanding – basic and diluted | 134,853,791 | 112,193,103 | 135,573,180 | 110,946,941 | ||||||||||||
The accompanying notes are an integral part of these unaudited financial statements.
| 4 |
STAR ALLIANCE INTERNATIONAL CORP.
STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT
FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2020 AND 2021
(Unaudited)
Preferred Stock Series A | Preferred Stock Series B | Common Stock | Additional Paid-in | Common Stock To Be | Stock Subscription | Accumulated | ||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Capital | Issued | Receivable | Deficit | Total | ||||||||||||||||||||||||||||||||||
| Balance, June 30, 2020 | – | $ | – | 1,833,000 | $ | 1,883 | 107,313,334 | $ | 107,314 | $ | 2,382,859 | $ | 8,633 | $ | (9,900 | ) | $ | (2,669,774 | ) | $ | (178,985 | ) | ||||||||||||||||||||||
| Stock issued for services | – | – | – | – | 1,250,000 | 1,250 | 23,750 | – | – | – | 25,000 | |||||||||||||||||||||||||||||||||
| Stock issued for debt | – | – | – | – | 1,375,000 | 1,375 | 128,325 | – | – | – | 129,700 | |||||||||||||||||||||||||||||||||
| Stock sold for cash | – | – | – | – | 1,555,000 | 1,555 | 18,445 | (2,000 | ) | 9,900 | – | 27,900 | ||||||||||||||||||||||||||||||||
| Stock issued for accrued officer compensation | 1,000,000 | 1,000 | – | – | – | – | 67,556 | – | – | – | 68,556 | |||||||||||||||||||||||||||||||||
| Net loss | – | – | – | – | – | – | – | – | – | (186,417 | ) | (186,417 | ) | |||||||||||||||||||||||||||||||
| Balance, September 30, 2020 | 1,000,000 | 1,000 | 1,833,000 | 1,883 | 111,493,334 | 111,494 | 2,620,935 | 6,633 | – | (2,856,191 | ) | (114,246 | ) | |||||||||||||||||||||||||||||||
| Stock sold for cash | – | – | – | – | 1,806,250 | 1,806 | 22,694 | – | – | – | 24,500 | |||||||||||||||||||||||||||||||||
| Net loss | – | – | – | – | – | – | – | – | – | (68,288 | ) | (68,288 | ) | |||||||||||||||||||||||||||||||
| Balance, December 31, 2020 | 1,000,000 | $ | 1,000 | 1,833,000 | $ | 1,883 | 113,299,584 | $ | 113,300 | $ | 2,643,629 | $ | 6,633 | $ | – | $ | (2,924,479 | ) | $ | (158,034 | ) | |||||||||||||||||||||||
Preferred Stock Series A | Preferred Stock Series B | Common Stock | Additional Paid-in | Common Stock To Be | Stock Subscription | Accumulated | ||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Capital | Issued | Receivable | Deficit | Total | ||||||||||||||||||||||||||||||||||
| Balance, June 30, 2021 | 1,000,000 | $ | 1,000 | 1,833,000 | $ | 1,883 | 124,319,584 | $ | 124,320 | $ | 2,793,609 | $ | 41,633 | $ | (20,000 | ) | $ | (3,172,791 | ) | $ | (230,346 | ) | ||||||||||||||||||||||
| Stock issued for services | – | – | – | – | 4,444 | 4 | 19,996 | – | – | – | 20,000 | |||||||||||||||||||||||||||||||||
| Stock sold for cash | – | – | – | – | 10,790,000 | 10,790 | 574,210 | (35,000 | ) | (550,000 | ) | – | – | |||||||||||||||||||||||||||||||
| Net loss | – | – | – | – | – | – | – | – | – | (88,444 | ) | (88,444 | ) | |||||||||||||||||||||||||||||||
| Balance, September 30, 2021 | 1,000,000 | 1,000 | 1,833,000 | 1,883 | 135,114,028 | 135,114 | 3,387,815 | 6,633 | (570,000 | ) | (3,261,235 | ) | (298,790 | ) | ||||||||||||||||||||||||||||||
| Stock sold for cash | – | – | – | – | 300,000 | 300 | 29,700 | 19,000 | (10,000 | ) | – | 39,000 | ||||||||||||||||||||||||||||||||
| Cash not collectible | – | – | – | – | – | – | (520,000 | ) | – | 520,000 | – | – | ||||||||||||||||||||||||||||||||
| Stock issued for services | – | – | – | – | 2,562,000 | 2,562 | 3,951,738 | 2,000,000 | – | – | 5,954,300 | |||||||||||||||||||||||||||||||||
| Net loss | – | – | – | – | – | – | – | – | – | (1,316,402 | ) | (1,316,402 | ) | |||||||||||||||||||||||||||||||
| Balance, December 31, 2021 | 1,000,000 | $ | 1,000 | 1,833,000 | $ | 1,883 | 137,976,028 | $ | 137,976 | $ | 6,849,253 | $ | 2,025,633 | $ | (60,000 | ) | $ | (4,577,637 | ) | $ | 4,378,108 | |||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited financial statements.
STAR ALLIANCE INTERNATIONAL CORP.
STATEMENTS OF CASH FLOWS
(Unaudited)
STAR ALLIANCE INTERNATIONAL CORP. (UNAUDITED)
| ||||||||||||||||
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
| March 31, | March 31, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Operating expenses: | ||||||||||||||||
| General and administrative | $ | 18,212 | $ | 738,608 | $ | 61,011 | $ | 794,984 | ||||||||
| General and administrative – related party | 5,000 | – | 9,000 | – | ||||||||||||
| Consulting | 5,000 | – | 38,350 | – | ||||||||||||
| Professional fees | 17,839 | 109,180 | 46,029 | 126,680 | ||||||||||||
| Director compensation | 30,000 | 441,000 | 60,000 | 469,000 | ||||||||||||
| Officer compensation | 45,000 | 45,000 | 110,000 | 123,000 | ||||||||||||
| Total operating expenses | 121,051 | 1,333,788 | 324,390 | 1,513,664 | ||||||||||||
| Loss from operations | (121,051 | ) | (1,333,788 | ) | (324,390 | ) | (1,513,664 | ) | ||||||||
| Other expense | ||||||||||||||||
| Interest expense | (882 | ) | (1,745 | ) | (9,918 | ) | (3,800 | ) | ||||||||
| Loss on conversion of accrued salary | – | (118,000 | ) | (46,200 | ) | (118,000 | ) | |||||||||
| Gain on forgiveness of debt | – | – | 3,870 | – | ||||||||||||
| Total other expense | (882 | ) | (119,745 | ) | (52,248 | ) | (121,800 | ) | ||||||||
| Loss before provision for income taxes | (121,933 | ) | (1,453,533 | ) | (376,638 | ) | (1,635,464 | ) | ||||||||
| Provision for income taxes | – | – | – | – | ||||||||||||
| Net loss | $ | (121,933 | ) | $ | (1,453,533 | ) | $ | (376,638 | ) | $ | (1,635,464 | ) | ||||
| Net loss per common share - basic and diluted | $ | (0.00 | ) | $ | (0.01 | ) | $ | (0.00 | ) | $ | (0.02 | ) | ||||
| Weighted average common shares outstanding – basic and diluted | 114,625,671 | 96,781,173 | 112,164,693 | 92,426,933 | ||||||||||||
For the Six Months Ended December 31, | ||||||||
| 2021 | 2020 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net loss | $ | (1,404,846 | ) | $ | (254,705 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Common stock issued for services | 1,219,196 | 25,000 | ||||||
| Loss on conversion of debt | 0 | 46,200 | ||||||
| Gain of forgiveness of debt | 0 | (3,870 | ) | |||||
| Changes in assets and liabilities: | ||||||||
| Accounts payable | 5,370 | (15,696 | ) | |||||
| Accrued expenses | 7,964 | 4,036 | ||||||
| Accrued compensation | 132,270 | 69,772 | ||||||
| Net cash used in operating activities | (40,046 | ) | (129,263 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Proceeds of borrowings from a related party | 24,550 | 23,582 | ||||||
| Repayment to related party | 0 | (18,280 | ) | |||||
| Proceeds from the sale of common stock | 39,000 | 42,500 | ||||||
| Proceeds from notes payable | 0 | 121,500 | ||||||
| Payment on notes payable | (20,000 | ) | (58,000 | ) | ||||
| Net cash provided by financing activities | 43,550 | 111,302 | ||||||
| Net change in cash | 3,504 | (17,961 | ) | |||||
| Cash at the beginning of period | 6,789 | 20,058 | ||||||
| Cash at the end of period | $ | 10,293 | $ | 2,097 | ||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||
| Interest paid | $ | 0 | $ | 0 | ||||
| Income taxes paid | $ | 0 | $ | 0 | ||||
| NON-CASH TRANSACTIONS: | ||||||||
| Conversion of debt | $ | 0 | $ | 83,500 | ||||
| Common stock issued for prepaid services | $ | 4,755,104 | $ | 0 | ||||
The accompanying notes are an integral part of these unaudited financial statements.
STAR ALLIANCE INTERNATIONAL CORP.
STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT
FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2020 AND 2021
(UNAUDITED)
| Preferred Stock | Common Stock | Additional Paid-in | Common Stock To Be | Preferred Stock To Be | Stock Subscription | Accumulated | ||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Issued | Issued | Receivable | Deficit | Total | |||||||||||||||||||||||||||||||
| Balance, June 30, 2019 | – | $ | – | 83,450,000 | $ | 83,450 | $ | 551,289 | $ | 7,000 | $ | – | $ | – | $ | (775,454 | ) | $ | (133,715 | ) | ||||||||||||||||||||
| Stock issued for services | – | – | 1,500,000 | 1,500 | 1,500 | 80 | – | – | – | 3,080 | ||||||||||||||||||||||||||||||
| Stock issued for services – related party | – | – | 4,000,000 | 4,000 | 4,000 | – | – | – | – | 8,000 | ||||||||||||||||||||||||||||||
| Stock issued for conversion of debt | – | – | 250,000 | 250 | – | – | – | – | – | 250 | ||||||||||||||||||||||||||||||
| Stock sold for cash | – | – | 1,000,000 | 1,000 | 2,000 | 53,000 | – | – | – | 56,000 | ||||||||||||||||||||||||||||||
| Preferred stock issued for acquisition | – | – | – | – | – | – | 7,532 | – | – | 7,532 | ||||||||||||||||||||||||||||||
| Net loss | – | – | – | – | – | – | – | – | (73,751 | ) | (73,751 | ) | ||||||||||||||||||||||||||||
| Balance, September 30, 2019 | – | – | 90,200,000 | 90,200 | 558,789 | 60,080 | 7,532 | – | (849,205 | ) | (132,604 | ) | ||||||||||||||||||||||||||||
| Stock issued for services | – | – | 140,000 | 140 | 140 | (80 | ) | – | – | – | 200 | |||||||||||||||||||||||||||||
| Stock sold for cash | – | – | 3,780,000 | 3,780 | 106,220 | (51,367 | ) | – | – | – | 58,633 | |||||||||||||||||||||||||||||
| Net loss | – | – | – | – | – | – | – | – | (108,180 | ) | (108,180 | ) | ||||||||||||||||||||||||||||
| Balance, December 31, 2019 | – | – | 94,120,000 | 94,120 | 665,149 | 8,633 | 7,532 | – | (957,385 | ) | (181,951 | ) | ||||||||||||||||||||||||||||
| Preferred stock issued for acquisition | 1,883,000 | 1,883 | – | – | 5,649 | – | (7,532 | ) | – | – | – | |||||||||||||||||||||||||||||
| Stock issued for services | – | – | 2,820,000 | 2,820 | 470,940 | – | – | – | – | 473,760 | ||||||||||||||||||||||||||||||
| Stock issued for services – related party | – | – | 4,500,000 | 4,500 | 751,500 | – | – | – | – | 756,000 | ||||||||||||||||||||||||||||||
| Stock issued for debt | – | – | 2,000,000 | 2,000 | 33,796 | – | – | – | – | 35,796 | ||||||||||||||||||||||||||||||
| Stock issued for accrued salary | – | – | 1,000,000 | 1,000 | 167,000 | – | – | – | – | 168,000 | ||||||||||||||||||||||||||||||
| Stock sold for cash | – | – | 1,273,334 | 1,274 | 80,626 | (2,000 | ) | – | (9,900 | ) | – | 70,000 | ||||||||||||||||||||||||||||
| Net loss | – | – | – | – | – | – | – | – | (1,453,533 | ) | (1,453,533 | ) | ||||||||||||||||||||||||||||
| Balance, March 31, 2020 | 1,883,000 | $ | 1,883 | 105,713,334 | $ | 105,714 | $ | 2,174,660 | $ | 6,633 | $ | – | $ | (9,900 | ) | $ | (2,410,918 | ) | $ | (131,928 | ) | |||||||||||||||||||
| Preferred Stock Series A | Preferred Stock Series B | Common Stock | Additional Paid-in | Common Stock To Be | Stock Subscription | Accumulated | ||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Capital | Issued | Receivable | Deficit | Total | ||||||||||||||||||||||||||||||||||
| Balance, June 30, 2020 | – | $ | – | 1,883,000 | $ | 1,883 | 107,313,334 | $ | 107,314 | $ | 2,382,859 | $ | 8,633 | $ | (9,900 | ) | $ | (2,669,774 | ) | $ | (178,985 | ) | ||||||||||||||||||||||
| Stock issued for services | – | – | – | – | 1,250,000 | 1,250 | 23,750 | – | – | – | 25,000 | |||||||||||||||||||||||||||||||||
| Stock issued for debt | – | – | – | – | 1,375,000 | 1,375 | 128,325 | – | – | – | 129,700 | |||||||||||||||||||||||||||||||||
| Stock sold for cash | – | – | – | – | 1,555,000 | 1,555 | 18,445 | (2,000 | ) | 9,900 | – | 27,900 | ||||||||||||||||||||||||||||||||
| Stock issued for accrued officer compensation | 1,000,000 | 1,000 | – | – | – | – | 67,556 | – | – | – | 68,556 | |||||||||||||||||||||||||||||||||
| Net loss | – | – | – | – | – | – | – | – | – | (186,417 | ) | (186,417 | ) | |||||||||||||||||||||||||||||||
| Balance, September 30, 2020 | 1,000,000 | 1,000 | 1,883,000 | 1,883 | 111,493,334 | 111,494 | 2,620,935 | 6,633 | – | (2,856,191 | ) | (114,246 | ) | |||||||||||||||||||||||||||||||
| Stock sold for cash | – | – | – | – | 1,806,250 | 1,806 | 22,694 | – | – | – | 24,500 | |||||||||||||||||||||||||||||||||
| Net loss | – | – | – | – | – | – | – | – | – | (68,288 | ) | (68,288 | ) | |||||||||||||||||||||||||||||||
| Balance, December 31, 2020 | 1,000,000 | 1,000 | 1,883,000 | 1,883 | 113,299,584 | 113,300 | 2,643,629 | 6,633 | – | (2,924,479 | ) | (158,034 | ) | |||||||||||||||||||||||||||||||
| Stock sold for cash | – | – | – | – | 6,000,000 | 6,000 | 54,000 | – | (20,000 | ) | – | 40,000 | ||||||||||||||||||||||||||||||||
| Net loss | – | – | – | – | – | – | – | – | – | (121,933 | ) | (121,933 | ) | |||||||||||||||||||||||||||||||
| Balance, March 31, 2021 | 1,000,000 | $ | 1,000 | 1,883,000 | $ | 1,883 | 119,299,584 | $ | 119,300 | $ | 2,697,629 | $ | 6,633 | $ | (20,000 | ) | $ | (3,046,412 | ) | $ | (239,967 | ) | ||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited financial statements.
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STAR ALLIANCE INTERNATIONAL CORP.
(UNAUDITED)
For the Nine Months Ended March 31, | ||||||||
| 2021 | 2020 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net loss | $ | (376,638 | ) | $ | (1,635,464 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Common stock issued for services | 25,000 | 477,040 | ||||||
| Common stock issued for services – related party | – | 764,000 | ||||||
| Gain on forgiveness of debt | (3,870 | ) | – | |||||
| Loss on conversion of debt | 46,200 | 118,000 | ||||||
| Changes in assets and liabilities: | ||||||||
| Accounts payable | (30,182 | ) | 7,357 | |||||
| Accrued expenses | 7,918 | 3,800 | ||||||
| Accrued compensation | 114,598 | 145,200 | ||||||
| Net cash used in operating activities | (216,974 | ) | (120,067 | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | – | – | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Proceeds of borrowings from related party | 23,932 | 38,100 | ||||||
| Repayments to a related party | (20,473 | ) | (36,108 | ) | ||||
| Proceeds from the sale of common stock | 82,500 | 184,633 | ||||||
| Proceeds from notes payable | 213,500 | 55,500 | ||||||
| Payment on note payable | (98,010 | ) | (119,000 | ) | ||||
| Net cash provided by financing activities | 201,449 | 123,125 | ||||||
| Net (decrease) increase in cash | (15,525 | ) | 3,058 | |||||
| Cash at the beginning of period | 20,058 | 471 | ||||||
| Cash at the end of period | $ | 4,533 | $ | 3,529 | ||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||
| Interest paid | $ | – | $ | – | ||||
| Income taxes paid | $ | – | $ | – | ||||
| NON-CASH TRANSACTIONS | ||||||||
| Principal and interest converted to common stock | $ | 83,500 | $ | 35,796 | ||||
| Accrued salary converted to common stock | $ | – | $ | 50,000 | ||||
The accompanying notes are an integral part of these unaudited financial statements.
Star Alliance International Corp.
Notes to Unaudited Financial Statements
MarchDecember 31, 2021
(Unaudited)
NOTE 1 – NATURE OF BUSINESS
Star Alliance International Corp. (“the Company”, “we”, “us”) was originally incorporated with the name Asteriko Corp. in the State of Nevada on April 17, 2014 under the laws of the Statestate of Nevada, for the purpose of acquiring and developing gold minesmining as well as certain other mining properties worldwide.
NOTE 2 – SIGNIFICANT AND CRITICAL ACCOUNTING POLICIES AND PRACTICES
Basis of Presentation
The accompanying unaudited interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission ("SEC"), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company's latest Annual Report on Form 10-K filed with the SEC. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of operations for the full year. Notes to the financial statements which would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal year, as reported in the Form 10-K for the fiscal year ended June 30, 2020,2021, have been omitted.
Use of Estimates
The preparation of the unaudited financial statements in conformity with accounting principles generally accepted in the United Statesaccounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time; however, actualperiod. Actual results could differ materially from those estimates.
NOTE 3 – GOING CONCERN
The unaudited accompanying unaudited financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. As shown in the accompanying unaudited financial statements, the Company has an accumulated deficit of $3,046,412 and negative working capital of $239,967$4,577,637 as of MarchDecember 31, 2021. For the ninesix months ended MarchDecember 31, 2021 the Company had a net loss of $376,638,$1,404,846, with $216,974$40,046 of cash used in operating activities. Due to these conditions, it raises substantial doubt about the Company’s ability to continue as a going concern.
The Company is attempting to commence operations and generate sufficient revenue; however, the Company’s cash position may not be sufficient to support its daily operations. While the Company believes in the viability of its strategy to commence operations and generate sufficient revenue and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon its ability to further implement its business plan and generate sufficient revenue and its ability to raise additional funds. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that may result should the Company be unable to continue as a going concern.
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NOTE 4 – ACQUISITION
On August 13, 2019, The Company closed an Asset Purchase Agreement (the “APA”) with Troy Mining Corporation (“Troy”). Under the APA, the company acquired 78 gold mining claims consisting of approximately 4,800 acres, located east/southeast of El Portal, California, in Mariposa County, together with all of Troy’s rights to related equipment and buildings currently located on the mining claims. In exchange for the mining claims and related assets, the company agreed to issue shares of a new class of preferred stock designated Series B Preferred Stock; and agreed to make total cash payments in the amount of $500,000$500,000 under a Promissory Note (the “Purchase Note”).
Under the Purchase Note, we paid $50,000 at the time of the closing, and are required to pay an additional $50,000 within sixty days of the closing, and $25,000 every other month thereafter, with the entire remaining amount due no later than March 31, 2020. In the event of default under the Purchase Note, all assets acquired under the APA will be forfeited back to Troy. We are current on all the terms of the agreement.
On October 9, 2019, a contract extension was agreed between Star Alliance International Corporation and Troy Mining Corporation. The agreement gives the Company 150 days to file an S-1 registration statement and obtain approval for the shares that are to be issued to the Troy shareholders to become free trading. The S-1 registration was filed on August 14, 2020.
On July 14, 2020 a contract extension was agreed between Star Alliance International Corporation and Troy Mining Corporation. The agreement provides for a sixty-day extension on the loan agreement with Troy mining Corporation and also an extension to file the S-1 registration.
On February 16, 2021, a contract extension for ninety (90) days was signed between Troy Mining Corporation and Star Alliance International Corporation. A payment of $40,000$40,000 was made by Star Alliance that reduces the final amount due to Troy Mining Corporation to $305,000$330,000 as of MarchDecember 31, 2021.
On October 21, 2021, a contract extension for ninety (90) days was signed between Troy Mining Corporation and Star Alliance International Corporation. A payment of $20,000 was made by Star Alliance that reduces the final amount due to Troy Mining Corporation to $310,000.
NOTE 5 – RELATED PARTY TRANSACTIONS
As of March 31, 2021 and June 30, 2020, the Company owes Anthony Anish, a board member, $0 and $1,976 for expense reimbursement.
On AugustJanuary 1, 2019,2021 the employment agreements for Richard Carey John Baird and Anthony Anish were signed providing for annualupdated to include salaries of $120,000$180,000 and $120,000 per annum for Richard Carey and $60,000 for John Baird and Anthony Anish.respectively. As of MarchDecember 31, 2021, the Company has accrued compensation due to Mr. Carey of $55,857, Mr. Baird of $60,000$114,862 and Mr. Anish of $64,644.$128,778. As of June 30, 2020,2021, the Company has accrued compensation due to Mr. Carey of $46,360, Mr. Baird of $55,000$39,691 and Mr. Anish of $43,000.$71,679. In addition, the Company has accrued salary to Mr. Baird (a former officer) of $60,000. Mr. Baird resigned his position on August 12, 2020.
Mr. Carey is using his personal office space at no cost to the Company.
As of MarchDecember 31, 2021, the Company owes NewMarket Financial Services, Inc. $6,035,Mr. Anish $4,550 for reimbursementcash advances to pay for paymentcertain operating expenses.
As of company expenses. TheDecember 31, 2021, the Company owes Mr. Carey $20,000 for a cash advance is non-interest bearing and due on demand. NewMarket Financial Services, Inc. is owned by Mr. Anish.to that was paid to Troy Mining Corporation (Note 4).
On January 1, 202124, 2022, the employment agreements for Richard CareyBoard of Directors appointed Mr. Weverson Correia as the Chief Executive Officer and Anthony Anish were updated to include salaries of $180,000 and $120,000 per annum respectively. All other termsa Director of the new agreements remainedCompany. Mr. Correia was issued shares of common stock on December 16, 2021. The shares were valued at $ per share, the sameclosing stock price on the date of grant, for total non-cash expense of $772,500. The $772,500 has been debited to prepaid stock for services as previously.of December 31, 2021.
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NOTE 6 – NOTES PAYABLE
As of MarchDecember 31, 2021, and June 30, 2020,2021, the Company owed Kok Chee Lee, the former CEO and Director of the Company, $42,651$42,651 and $42,651,$42,651, respectively for operating expenses he paid on behalf of the Company during the year ended June 30, 2018. The borrowing is unsecured, non-interest-bearing and due on demand.
On June 1, 2018, the Company executed a promissory note in the amount of $32,000$32,000 with the former Secretary of the Board for $30,128 of accrued expenses for services previously provided and an additional $1,872 for services rendered. The note is unsecured, bears interest at 5%5% per annum and matures on December 1, 2018.2018. As of MarchDecember 31, 2021 and June 30, 2020,2021, there is $4,546$5,756 and $1,732,$4,949, respectively, of accrued interest due on the note. The note is past due and in default.
On October 15, 2018, the Company executed a promissory note for $20,000, for amounts previously accrued and payable to the Company’s former attorney. The note bears interest at 8% and was due on October 15, 2019. As of March 31, 2021, and June 30, 2020, there is $0 and $0 and $20,000 and $1,131, respectively, of principal and accrued interest due on the note.
On June 11, 2019, the company executed a promissory note with Troy for $500,000$500,000 (Note 7). The Company paid the initial $50,000$50,000 due on the note on August 13, 2019, and $35,000$35,000 as of December 31, 2019.2019 and $20,000 on October 21, 2021. As MarchDecember 31, 2021 there is $305,000$310,000 due on this note.note (Note 4).
On June 26, 2020, an individual loaned the Company $25,000, $6,000$25,000, $6,000 of which was converted into shares of common stock on July 27, 2020. On February 24,2021, he loaned an additional $20,000 to the Company. During April 2021, another $14,000 was converted into shares of comm on stock. As of MarchDecember 31, 2021, there is $19,000$25,000 and $1,509$4,096 of principal and interest due on this loan, respectively.
As of December 31, 2021, the Company owes various other individuals and entities a total of $112,380. All the loans are non-interest bearing and due on demand.
NOTE 7 – PREFERRED STOCK
Of the shares of the Company's authorized Preferred Stock, $0.001$ par value per share, are designated Series A preferred stock and shares are designated as Series B Preferred Stock.
Series A Preferred Stock
Each Share of Series A preferred stock shall have 500 votes per share and each share can be converted into 500 shares of common stock. The holders of the Series A preferred stock are not entitled to dividends.
On July 2, 2020, the Board granted all shares of the Series A preferred stock to the Company’s Chairman and CEO, Richard Carey, in conversion of $68,556$ of accrued compensation.
Series B Preferred Stock
Only one person or entity, is entitled to be designated as the owner of all of the Series B Preferred Stock (the “Holder”), in whose name the initial certificates representing the Series B Preferred Stock shall be issued. Any transfer of the Series B Preferred Stock to a different Holder must be approved in advance by the Corporation; provided, however, the Holder shall have the right to transfer the Series B Preferred Stock, or any portion thereof, to any affiliate of Holder or nominee of Holder, without the approval of the Corporation. Each share of Preferred Stock shall have one vote per share. Holder is not entitled to dividends or distributions and each share of Series B Preferred Stock shall be convertible at the rate of two Common Shares for each one B Preferred stock.
In conjunction with the APA with Troy, the company issued shares of Series B Preferred Stock, the shares were valued at $0.002 or $7,532$7,532 as if they had been converted into shares of common stock.
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On October 9, 2019, the parties have agreed to extend the date for filing the registration statement relating to the preferred shares of the Company to be issued to the Troy shareholders and that would in turn extend the date that the shares would become free trading. This extension will be for 150 days for filing the registration statement and obtaining approval for the shares to become free trading. All the remaining terms included in the contract will remain the same.
NOTE 8 – COMMON STOCK
During the nine monthsyear ended March 31,June 30, 2021, the Company granted shares of common stock for services. The shares were valued at $0.02 per share for total non-cash expense of $25,000.$25,000.
During the nine monthsyear ended March 31,June 30, 2021, the Company issued shares of common stock in conversion of a $83,500$83,500 of principal. The Company recognized a $46,200$46,200 loss on the conversion.
During the nine monthsyear ended March 31,June 30, 2021, the Company sold 9,361,000 shares of common stock for total cash proceeds of $102,500, $20,000$129,400, $20,000 of which is a receivable as of MarchJune 30, 2021. In addition, the Company has common stock be issued from the sale of $41,633.
During the six months ended December 31, 2021.2021, the Company granted shares of common stock for services. The shares were valued at $4.50 per share, based on the value of the services as provided by the services provider’s invoice, for total non-cash expense of $20,000. The $20,000 is being amortized over the one-year service term for the services being provided.
During the six months ended December 31, 2021, the Company granted 4,000,000 shares of common stock for services. The shares were valued at $0.50 per share, based on the value of the services as provided by the services provider’s invoice, for total non-cash expense of $2,000,000. The $2,000,000 is being amortized over the one-year service term for the services being provided.
During the six months ended December 31, 2021, the Company granted shares of common stock for services. The shares were valued at $1.12 per share, the closing stock price on the date of grant, for total non-cash expense of $11,200.
During the six months ended December 31, 2021, the Company granted shares of common stock for services. The shares were valued at $1.55 per share, the closing stock price on the date of grant, for total non-cash expense of $80,600.
During the six months ended December 31, 2021, the Company granted shares of common stock for services. The shares were valued at $1.55 per share, the closing stock price on the date of grant, for total non-cash expense of $2,317,500. The $2,317,500 is being amortized over the one-year service term for the services being provided.
During the six months ended December 31, 2021, the Company granted shares of common stock for services. The shares were valued at $1.55 per share, the closing stock price on the date of grant, for total non-cash expense of $775,500.
During the six months ended December 31, 2021, the Company sold shares of common stock for total cash proceeds of $589,000. Of the stock sold $39,000 has been received and $60,000 is still to received. Of the shares issued it has been determined that $500,000 will not be received. The Company is in the process of having he 5,000,000 shares returned. The Company also issued shares that were sold in the prior year.
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NOTE 9 – SUBSEQUENT EVENTS
Management has evaluated subsequent events pursuant to the requirements of ASC Topic 855, from the balance sheet date through the date the financial statements were available to be issued, and has determined that no material subsequent events exist other than the following material eventsfollowing.
On December 15, 2021, the Company signed a definitive agreement to purchase 51% of Compania Minera Metalurgica Centro Americana SA. (“Commsa”). For $1,000,000 in cash and 5,000,000 in restricted shares of common stock. In addition, the Company has agreed to provide up to $7,500,000 working capital to expand the mining operations in a gold mining project (Rio Jalan Project) in Olancho state in the highlands of Central Honduras. This transaction has become effective as of January 1, 2022.
This project, that runs along a 12.5 mile stretch of the Rio Jalan River, is a peaceful agrarian area, with only farmers and ranchers in the nearby five villages.
The environmental licenses have occurred.been obtained and exploration is ongoing. The mines are expected to be producing gold in the second quarter of 2022 and will be expanded during the year. Gold resources are estimated to be in excess of 1 million oz. This estimate came from a limited appraisal of the area in which the mines are located.
On January 4, 2022, the Company issued the 4,000,000 shares of common stock that were granted for services in Q2.
On January 10, 2022, the Company issued 1,000,000 shares of common stock to Themis Glatman, director, for services.
On January 24, 2022, the Board accepted the resignation of Mr. Richard Carey as Chief Executive Officer. Mr. Carey is resigning as CEO but remains as Chairman.
On January 24, 2022, the Board of Directors appointed Mr. Weverson Correia as the Chief Executive Officer and a Director of the Company.
Subsequent to MarchDecember 31, 2021, the Company sold 2,100,000issued the 1,600,000 shares of common stock for total cash proceeds of $59,000.services.
Subsequent to MarchDecember 31, 2021, the Company sold 4,770,000issued 277,000 shares of common stock to an individual for total cash proceedsconversion of $75,000.$27,000 and $700 of principal and interest, respectively.
On April 22,Subsequent to December 31, 2021, the company withdrew its S-1 registration. The BoardCompany issued 7,110,000 shares of common stock for cash. 60,000 of the shares were sold in Q2. The Company felt that the Company neededreceived $90,000.
Star Alliance has entered into an agreement to complete a new NI 43-101 appraisalNI43-101 valuation report. It is anticipated that the report will be completed late in the first quarter or early in the second quarter of the gold reserves to be able to answer the SEC comments completely and as this appraisal was previously planned for, it was felt that it would make sense to refile after that valuation is completed.Fiscal 2022.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
FORWARD-LOOKING STATEMENTS
This document contains “forward-looking statements”. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to, any projections of earnings, revenue or other financial items; any statements of the plans, strategies and objections of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; any statements or belief; and any statements of assumptions underlying any of the foregoing.
Forward-looking statements may include the words “may”, “could”, “estimate”, “intend”, “continue”, “believe”, “expect” or “anticipate” or other similar words. These forward-looking statements present our estimates and assumptions only as of the date of this report. Accordingly, readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the dates on which they are made. Except for our ongoing securities laws, we do not intend, and undertake no obligation, to update any forward-looking statement. Additionally, the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 most likely do not apply to our forward-looking statements as a result of being a penny stock issuer. You should, however, consult further disclosures we make in future filings of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.
Although we believe the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and inherent risks and uncertainties.
BUSINESS
Star Alliance International Corp. (“the Company”, “we”, “us”) was originally incorporated with the name Asteriko Corp. in the State of Nevada on April 17, 2014 under the laws of the state of Nevada. Our prior business plans, which generated limited or no earnings, included interior decorating products, and a travel and tourism service.
On May 14, 2018, Richard Carey our President and Chairman of the Board, acquired 22,000,000 shares of common stock of the Company, representing 62.15% ownership of the Company which constitutes control. Mr. Carey accepted the positions of President and Chairman of the Board on the same day.
On May 17, 2018, Mr. Carey appointed Alexei Tchernov as CEOCurrent officers and Director, Franz Allmayer as Vice President and Director, John C. Baird as CFO and Director and Themis Glatman as Secretary and Director.
On May 22, 2019, the Board discussed the positions of the Directors and Officers. Mr. Tchernov resigned his position as CEO and Themis Glatman resigned as Company Secretary. Current appointmentsdirectors are as follows:
| Richard Carey | |
| James Baughman | President Operations |
| Alexei Tchernov | Executive Vice President Finance, Board Member |
| Franz Allmayer | Vice President Finance, Board Member |
| Themis Glatman | Treasurer, Board Member |
| Anthony Anish | Company Secretary, Interim CFO, Board Member |
| Fernando Godina | Vice President, Board Member |
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In August 14, 2018, the Company entered into an Exclusive Option Agreement (the “Agreement”) with Starving Lion, Inc. (“Lion”). Under the Agreement, the Company has been granted the exclusive option, for a period of six (6) months, to acquire the assets from Starving Lion, Inc. specified under the June 4, 2018 Letter of Intent. The assets pertain mainly to two mines located in Guatemala; one is a magnesium mine in El Progresso, and the other is a gold mine in Livingston.
The required purchase price for the Starving Lion, Inc. assets was to be $1,000,000 cash, together with the issuance to Lion of new common and/or preferred stock to represent fifty-eight percent (58%) of the Company’s issued and outstanding common stock on a fully-diluted, post-closing basis. The Company decided not to proceed with this potential acquisition at this time.
On October 25, 2018, Star entered into a Letter of Intent (the “LOI”) with Troy Mining Corporation, a Nevada corporation (“Troy”) and its two majority shareholders and on March 25, 2019 and on August 5th this LOI was extended. Troy is the owner of 78 gold mining claims consisting of approximately 4800 acres, located east/southeast of El Portal, California, in Mariposa County. Troy also owns a production processing mill together with related equipment and buildings. On August 13, 2019, the Company closed the transaction making the first payment on the acquisition of all the assets of Troy Mining Corporation. Further payments have been made since that date and the Company is current on all its obligations.
The Company’s business focus will be the pursuit of mining and mining technology businesses. The Company acquired the assets of Troy Mining Corporation, its first mining assets, on August 13, 2019.
On November 22, 2021, STAL entered into a binding Letter of Intent to acquire 49% of Lions Works Advertising, SA, a Guatamala Corporation that owns the “Genesis” ore extraction process. Since the letter of Intent was signed STAR has renegotiated and STAR is now acquiring a controlling interest of 51% of the Company. The purchase requires STAL to invest up to $3 million to be used to grow the business, building a number of Genesis plants that can be placed in customer mining sites including our own Troy mining site. The green, environmentally friendly process, extracts up to 98% of the gold ore from the rock.
Results of Operations for the Three Months Ended MarchDecember 31, 2021 andas Compared to the Three Months Ended December 31, 2020
Operating expenses
General and administrative expenses (“G&A”) were $18,212$1,039,338 for the three months ended MarchDecember 31, 2021, compared to $738,608$13,906 for the three months ended MarchDecember 31, 2020, a decreasean increase of $720,396 or 97.5%.$1,025,432. In the priorcurrent period we recognized $255,000 of non-cash expense for stock issued common stock for service for total non-cash expenses of $725,760. Not considering the stock compensation expenseinvestor relation services and we had $12,848recognized $772,500 of G&Anon-cash expense for stock issued for mine development services.
Professional fees were $11,020 for the three months ended MarchDecember 31, 2020. In the current period we also had $5,000 of G&A expense paid2021, compared to a related party for services rendered.
Consulting fees were $5,000$2,500 for the three months ended March 31, 2021, compared to $0 for the three months ended March 31, 2020.
Professional fees were $17,839 for the three months ended March 31, 2021, compared to $109,180 for the three months ended MarchDecember 31, 2020, a decreasean increase of $91,341 or 83.7%.$8,520. Professional fees consist mainly of legal, accounting and audit expense. The increase in the current period is due to an increase in audit fees.
Consulting fees were $188,362 for the three months ended December 31, 2021, compared to $5,000 for the three months ended December 31, 2020. In the priorcurrent period we issued shares of common stock for service for total$188,362 on non-cash expenses of $84,000. Not considering the stock compensation expense we had $25,180 of professional fee expense in the prior period.consulting expense.
Director compensation was $30,000 and $441,000$15,000 for the three months ended MarchDecember 31, 2021 and 2020, respectively. In the prior period we issued common stock for total non cash expense of $420,000.Monthly compensation to our director was increased in January 2021.
Officer compensation for our CEO was $45,000 and $45,000$30,000 for the three months ended MarchDecember 31, 2021 and 2020, respectively. Monthly compensation to our CEO was increased in January 2021.
Other income (expense)
For the three months ended MarchDecember 31, 2021 and 2020, we had interest expense of $1,182 and $882, and $1,745, respectively. Interest expense is being incurred on several of our promissory notes (Note 6).
Net Loss
Net loss for the three months ended MarchDecember 31, 2021 was $121,933$1,316,402 compared to $1,453,533$68,288 for the three months ended MarchDecember 31, 2020. The decreaselarge increase in our net loss is mainly attributeddue to the decrease in non-cash stock compensation expense compared to the prior period.expense.
Results of Operations for the Nine Months Ended March 31, 2021 and 2020
Operating expenses
General and administrative expenses (“G&A”) were $61,011 for the nine months ended March 31, 2021, compared to $794,984 for the nine months ended March 31, 2020, a decrease of $733,973 or 92.3%. In the prior period we issued common stock for service for total non-cash expenses of $729,040. Not considering the stock compensation expense and we had $64,944 of G&A expense for the nine months ended March 31, 2020. In the current period we also had $9,000 of G&A expense paid to a related party for services rendered.
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Consulting fees were $38,350Results of Operations for the nineSix Months Ended December 31, 2021 as Compared to the Six Months Ended December 31, 2020
Operating expenses
General and administrative expenses (“G&A”) were $1,048,400 for the six months ended MarchDecember 31, 2021, compared to $0$42,799 for the ninesix months ended MarchDecember 31, 2020.2020, an increase of $1,005,601. In the current period we recognized $258,334 of non-cash expense for stock issued for investor relation services and we recognized $772,500 of non-cash expense for stock issued for mine development services.
Professional fees were $46,029$13,020 for the ninesix months ended MarchDecember 31, 2021, compared to $126,680$28,190 for the ninesix months ended MarchDecember 31, 2020, a decrease of $80,651 or 63.7%.$15,170. Professional fees consist mainly of legal, accounting and audit expense. The decrease in the current period is due to a decrease in audit and legal fees.
Consulting fees were $188,362 for the six months ended December 31, 2021, compared to $33,350 for the six months ended December 31, 2020. In the current period we issued shares of common stock for $188,362 on non-cash consulting expense. In the prior period we issued shares of common stock for service for total$30,000 on non-cash expenses of $84,000. Not considering the stock compensation expense we had $42,680 of professional fee expense in the prior period.consulting expense.
Director compensation was $60,000 and $469,000$30,000 for the ninesix months ended MarchDecember 31, 2021 and 2020, respectively. In the prior period we issued common stock for total non-cash expense of $420,000.Monthly compensation to our director was increased in January 2021.
Officer compensation for our CEO was $110,000$90,000 and $123,000$65,000 for the ninesix months ended MarchDecember 31, 2021 and 2020, respectively, a decrease of $13,000. Compensationrespectively. Monthly compensation to our CEO was increased in the prior period included the former CFO.January 2021.
Other income (expense)
For the ninesix months ended MarchDecember 31, 2021 and 2020, we had interest expense of $9,918$2,064 and $3,800,$9,036, respectively. Interest expense is being incurred on several of our promissory notes (Note 6). The increase is due to an interest payment to Troy Mining.
DuringIn the nine months ended March 31, 2021,prior period we also recognized ahad $46,200 loss on the conversion of debt of $46,200accrued salary and a $3,870 gain ofon the forgiveness of debt of $3,870.debt.
Net Loss
Net loss for the ninesix months ended MarchDecember 31, 2021 was $376,639$1,404,846 compared to $1,635,464$254,705 for the ninesix months ended MarchDecember 31, 2020. The decreaselarge increase in our net loss is mainly attributeddue to the decrease in non-cash stock compensation expense compared to the prior period.expense.
LIQUIDITY AND CAPITAL RESOURCES
The accompanying unaudited financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. As shown in the accompanying financial statements, the Company has an accumulated deficit of $3,046,412.$4,577,637. For the ninesix months ended MarchDecember 31, 2021 the Company had a net loss of $376,638$1,404,846 with $216,974$40,046 of cash used in operating activities. Due to these conditions, it raises substantial doubt about the Company’s ability to continue as a going concern.
Net cash used in operating activities was $216,974$40,046 during the ninesix months ended MarchDecember 31, 2021 compared to $120,067$129,263 in the prior period.
Net cash provided by financing activities was $201,449$43,550 and $123,125$111,302 for the ninesix months ended MarchDecember 31, 2021 and 2020, respectively. In the current period we received $213,500, ($77,500 of which was converted to common stock), from loans, $82,500$39,000 from the sale of common stock and $23,932$4,550 from a cash advance from a director. In the prior period we received $121,500 from loans, $42,500 from the sale of common stock and $23,582 from loans from our CEO. This was offset by $20,473$18,280 paid back to our CEO and $98,010$58,000 paid on other loans.
Over the next twelve months, we expect our principal source of liquidity will be dependent on borrowings from related parties.
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Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
Critical Accounting Policies
We have identified the policies outlined below as critical to our business operations and an understanding of our results of operations. The list is not intended to be a comprehensive list of all of our accounting policies. In many cases, the accounting treatment of a particular transaction is specifically dictated by accounting principles generally accepted in the United States, with no need for management's judgment in their application. The impact and any associated risks related to these policies on our business operations is discussed throughout management's Discussion and Analysis or Plan of Operation where such policies affect our reported and expected financial results. Note that our preparation of the financial statements requires us to make estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities at the date of our financial statements, and the reported amounts of revenue and expenses during the reporting period. There can be no assurance that actual results will not differ from those estimates.
Item 3. Quantitative and Qualitative Disclosure about Market Risk
This item is not applicable as we are currently considered a smaller reporting company.
Item 4. Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed by us in reports that we file or submit under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission (SEC) rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate, to allow timely decisions regarding required disclosure.
Limitations on the Effectiveness of Disclosure Controls
In designing and evaluating the Company's disclosure controls and procedures, management recognized that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Additionally, in designing disclosure controls and procedures, Company management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
Evaluation of Disclosure Controls and Procedures
Our CEO and CFO, have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on the evaluation, they have concluded that our disclosure controls and procedures are not effective in timely alerting them to material information relating to us that is required to be included in our periodic SEC filings and ensuring that information required to be disclosed by us in the reports we file or submit under the Act is accumulated and communicated to our management, including our chief financial officer, or person performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Our disclosure controls and procedures were not effective as of MarchDecember 31, 2021 due to the material weaknesses as disclosed in the Company’s Annual Report on Form 10-K filed with the SEC.
Changes in Internal Control over Financial Reporting
Such officers also confirmed that there was no change in our internal control over financial reporting during the threesix months ended MarchDecember 31, 2021 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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We know of no material pending legal proceedings to which our company or subsidiary is a party or of which any of their property is the subject. In addition, we do not know of any such proceedings contemplated by any governmental authorities.
We know of no material proceedings in which any director, officer or affiliate of our company, or any registered or beneficial stockholder of our company, or any associate of any such director, officer, affiliate, or stockholder is a party adverse to our company or subsidiary or has a material interest adverse to our company or subsidiary.
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
None.
None.
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| Incorporated by reference | |||||||||||||
| Exhibit | Exhibit Description | Filed herewith | Form | Period ending | Exhibit | Filing date | |||||||
| 31.1 | Certification by the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act | X | |||||||||||
| 31.2 | Certification by the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act | X | |||||||||||
| 32.1 | Certification by the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act | X | |||||||||||
| 32.2 | Certification by the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act | X | |||||||||||
| 101.INS | Inline XBRL Instance Document | ||||||||||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | ||||||||||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | ||||||||||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | ||||||||||||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | ||||||||||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | ||||||||||||
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Date: February 17, 2022 | By: | ||
| /s/ Richard Carey | |||
| Richard Carey | |||
| By: | /s/ Anthony L. Anish | ||
| Date: | Anthony L. Anish | ||
| Interim Chief Financial Officer | |||