UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~December~~March 31, ~~2022~~2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________.

Commission file number: 000-54853

SMARTMETRIC, INC.

(Exact name of registrant as specified in its charter)

Nevada		05-0543557
(State or Other Jurisdiction of Incorporation or Organization)		(IRS Employer Identification No.)

3960 Howard Hughes Parkway, Suite 500, Las Vegas, NV		89169
Address of Principal Executive Offices		Zip Code

(702) 990-3687

Registrant’s telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
N/A		N/A		N/A

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 ☒ No ☐

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 ☐ No ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a 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	☒	Smaller reporting company	☒
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 ☐ No ☒

The number of shares outstanding of the registrant’s common stock, $0.001 par value per share, as of ~~February 07,~~May 22, 2023 was ~~1,487,909,032~~1,643,695,878.

SMARTMETRIC, INC.

TABLE OF CONTENTS

INDEX

PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements
	Condensed consolidated balance sheets as of ~~December~~March 31, ~~2022~~2023 (unaudited) and June 30, 2022	1
	Condensed consolidated statements of operations for the three and ~~six~~nine months ended ~~December~~March 31, ~~2022~~2023 (unaudited) and ~~2021~~2022	2
	Condensed consolidated statements of stockholders’ deficit for the three and six ended December 31, 2022 and 2021 (unaudited)	3
	Condensed consolidated statements of cash flows for the ~~six~~nine months ended ~~December~~March 31, 2023 and 2022 ~~and 2021~~ (unaudited)	4
	Notes to condensed consolidated financial statements (unaudited)	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	20
Item 4.	Controls and Procedures	20

PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	21
Item 1A.	Risk Factors	21
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	21
Item 3.	Defaults Upon Senior Securities	21
Item 4.	Mine Safety Disclosures	21
Item 5.	Other Information	21
Item 6.	Exhibits	22
	20

~~PART II~~	~~OTHER INFORMATION~~
~~Item 1.~~	~~Legal Proceedings~~	22
~~Item 1A.~~	~~Risk Factors~~	22
~~Item 2.~~	~~Unregistered sales of equity securities and use of proceeds~~	22
~~Item 3.~~	~~Defaults Upon Senior Securities~~	23
~~Item 4.~~	~~Mine Safety Disclosures~~	23
~~Item 5.~~	~~Other Information~~	23
~~Item 6.~~	~~Exhibits~~	24
	Signatures	2624

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

In this Quarterly Report on Form 10-Q, references to “SmartMetric, Inc.,” “SmartMetric,” “SMME,” the “Company,” “we,” “us,” and “our” refer to SmartMetric, Inc. Also, any reference to “common shares,” or “common stock” refers to our $0.001 par value common stock.

This Quarterly Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. These statements relate to our business development plans, timing strategies, expectations, anticipated expense levels, business prospects, business outlook, technology spending and various other matters (including contingent liabilities and obligations and changes in accounting policies, standards and interpretations). These statements express our current intentions, beliefs, expectations, strategies or predictions as well as historical information. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “may,” “will,” “could,” “continue,” and similar expressions or variations of such words are intended to identify forward-looking statements, but are not deemed to represent an all-inclusive means of identifying forward-looking statements as denoted in this Quarterly Report. Additionally, statements concerning future matters are forward-looking statements.

Although forward-looking statements in this Quarterly Report reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by us. Consequently, forward-looking statements are inherently subject to risks and uncertainties and actual results and outcomes may differ materially from the results and outcomes discussed in or anticipated by the forward-looking statements. These statements are no guarantee of future performance and involve risks and uncertainties that are difficult to predict. Our future operating results are dependent upon many factors which are outside our control. You should not place undue reliance on forward-looking statements. Forward-looking statements may not be realized due to a variety of factors, including, without limitation, our ability to:

●

manage our business given continuing operating losses and negative cash flows;

●

obtain sufficient capital to fund our operations, development, and expansion plans;

●

manage competitive factors and developments beyond our control;

●

maintain and protect our intellectual property;

●

obtain patents based on our current and/or future patent applications;

●

obtain and maintain other rights to technology required or desirable to conduct or expand our business; and

●

manage any other factors, if any, discussed in this report and in the section titled “Risk Factors” in our most recent Annual Report on Form 10-K.

We undertake no obligation to revise or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this Quarterly Report, except as required by federal securities laws. Readers are urged to carefully review and consider the various disclosures made throughout the entirety of this Quarterly Report, which are designed to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects.

PART I. FINANCIAL INFORMATION

SMARTMETRIC, INC. AND SUBSIDIARY

Condensed consolidated Balance Sheet

(Unaudited)


	March 31,			June 30,
	2023			2022
Assets
Current assets:
Cash	$	35,522		$	126,791
Notes payable		-			-
Prepaid expenses and other current assets		7,850			13,720

Total current assets		43,372			140,511

Non-current assets
Patent costs (net of amortization)		24,243			-
Discount		-			-
Deferred financing costs		-			35,000

Total assets	$	67,615		$	175,511

Liabilities and Stockholders’ Deficit
Current liabilities:
Accounts payable and accrued expenses	$	1,169,125		$	1,052,553
Liability for stock to be issued		2,540			115,790
Deferred Officer’s salary		737,642			753,475
Related party interest payable		292,763			253,898
Dividends payable		1,858			1,858
Due to shareholders		52,927			52,927
Covid19 SBA loan		-			20,832
Convertible note payable, net of discount		377,166			35,000
Derivative liability		-			120,996
Convertible interest payable		5,170			7,249
Interest payable		-			2,625
Shareholder loan		16,231			-

Total current liabilities		2,655,422			2,417,203

Total Liabilities		2,655,422			2,417,203

Commitments and contingencies (See note 4)
Series C mandatory redeemable convertible preferred stock, net of discount, authorized 1,000,000 shares, 17,300 and 65,425 shares issued and outstanding, respectively		15,728			59,478

Stockholders’ deficit:
Class B Preferred stock, $.001 par value; 5,000,000 shares authorized, 610,000 and 610,000 shares issued and outstanding		610			610
Class A Preferred stock, $.001 par value; 50,000,000 shares authorized 0 and 0 shares issued and outstanding		-			-
Common stock, $.001 par value; 2,400,000,000 shares authorized, 1,643,695,878 and 647,886,336 shares issued and outstanding, respectively		1,643,696			647,886
Additional paid-in capital		27,230,603			27,546,376
Accumulated deficit		(31,478,445	)		(30,496,042	)

Total stockholders’ deficit		(2,603,535	)		(2,301,170	)

Total liabilities and stockholders’ deficit	$	67,615		$	175,511

December 31, June 30,
2022 2022
Assets

Current assets:
Cash $ 42,998 $ 126,791
Prepaid expenses and other current assets 8,100 13,720

Total current assets 51,098 140,511

Non-current assets
Patent costs (net of amortization) 15,003 -
Discount - -
Deferred financing costs - 35,000

Total assets $ 66,101 $ 175,511

Liabilities and Stockholders’ Deficit

Current liabilities:
Accounts payable and accrued expenses $ 1,155,351 $ 1,052,553
Liability for stock to be issued 62,540 115,790
Deferred Officer’s salary 737,642 753,475
Related party interest payable 279,854 253,898
Dividends payable 1,858 1,858
Due to shareholders 52,927 52,927
Covid19 SBA loan - 20,832
Convertible note payable, net of discount 442,211 35,000
Derivative liability - 120,996
Convertible interest payable - 7,249
Interest payable - 2,625
Shareholder loan 12,969 -

Total current liabilities 2,745,352 2,417,203
Total Liabilities 2,745,352 2,417,203

Commitments and contingencies (See note 4)
Series C mandatory redeemable convertible preferred stock, net of discount, authorized 1,000,000 shares, 17,300 and 65,425 shares issued and outstanding, respectively 15,728 59,478

Stockholders’ deficit:
Class B Preferred stock, $.001 par value; 5,000,000 shares authorized, 610,000 and 610,000 shares issued and outstanding 610 610
Class A Preferred stock, $.001 par value; 50,000,000 shares authorized 0 and 0 shares issued and outstanding - -
Common stock, $.001 par value; 2,400,000,000 shares authorized, 1,487,909,032 and 647,886,336 shares issued and outstanding, respectively 1,487,909 647,886
Additional paid-in capital 26,984,207 27,546,376
Accumulated deficit (31,167,704 ) (30,496,042 )

Total stockholders’ deficit (2,694,978 ) (2,301,170 )

Total liabilities and stockholders’ deficit $ 66,101 $ 175,511

The accompanying notes are an integral part of these condensed consolidated financial statements.

SMARTMETRIC, INC. AND SUBSIDIARY

Condensed ~~consolidated~~Consolidated Statements Of Operations

(Unaudited)


	Six Months Ended			Six Months Ended			Three Months Ended			Three Months Ended
	December 31,			December 31,			December 31,			December 31,
	2022			2021			2022			2021			Three Months Ended March 31, 2023			Three Months Ended March 31, 2022			Nine Months Ended March 31, 2023			Nine Months Ended March 31, 2022
Revenues	$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-

Expenses:
Officer’s salary		95,000			95,000			47,500			47,500			47,500			47,500			142,500			142,500
Advertising costs		116,712			84,153			43,075			41,148			39,240						155,952
Legal and professional fees		98,420			167,228			30,443			25,605			20,816						119,236
General and administrative expenses		10,956			508,104			(63,179	)		200,357			47,308			192,151			58,032			951,636
Amortization Expense														352						584
Research and development		73,000			68,895			56,950			44,500			31,807			44,551			104,807			113,446

Total operating expenses		394,088			923,380			114,789			359,110			187,023			284,202			581,111			1,207,582

Loss from operations before income taxes		(394,088	)		(923,380	)		(114,789	)		(359,110	)		(187,023	)		(284,202	)		(581,111	)		(1,207,582	)
Interest & Financing Expense		(25,956	)		(79,627	)		(12,909	)		(48,844	)		(18,079	)		(22,673	)		(44,035	)		(102,300	)
Gain on PPP loan forgiveness		20,832			20,832			20,832			20,832									20,832			20,832
Gain (loss) on derivative liability		(284,204	)		(437,368	)					68,240
Gain (loss) on conversions														(105,638	)					(389,842	)
Gain (loss) on derivative liabilities																	326,919						(110,449	)
Other income (expenses)		11,754						11,754												(11,754	)
Gain (loss) on conversions								(284,204	)
TOTAL Other income (expenses)														(123,717	)		304,246			(401,291	)		(191,917	)
Net income (loss)														(310,740	)		20,044			(982,402	)		(1,399,499	)
Preferred stock dividends																	(5,787	)		-			(10,589	)
Net income (loss) attributable to common stockholders													$	(310,740	)	$	14,257		$	(982,402	)	$	(1,410,088	)

Net loss		(671,662	)		(1,419,543	)		(379,316	)		(318,882	)
Preferred stock dividends					(4,802	)		-			(3,379	)
Net loss available for common stockholders	$	(671,662	)	$	(1,424,345	)	$	(379,316	)	$	(322,261	)

Net loss per share, basic and diluted	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)
Net income (loss) per share, basic and diluted													$	(0.00	)	$	0.00		$	(0.00	)	$	(0.00	)

Weighted average number of common shares outstanding, basic and diluted		1,010,411,250			493,850,474			1,277,581,461			518,255,935			1,608,311,958			561,587,017			1,200,665,574			532,201,661

The accompanying notes are an integral part of these condensed consolidated financial statements.

SMARTMETRIC, INC. AND SUBSIDIARY

Condensed consolidated Statements of Changes In Stockholders’ (Deficit)

(Unaudited)


	Preferred Series C						Additional Paid In			Accumulated						Preferred Series C						Additional Paid			Accumulated
	Stock			Common Stock			Capital			Deficit			Total			Stock			Common Stock			In Capital			Deficit			Total
Balance June 30, 2021		610,000	610		446,385,628	446,386		25,955,367			(28,859,365	)		(2,457,002	)		610,000	610		446,385,628	446,386		25,955,367			(28,859,365	)		(2,457,002	)

Shares issued of common stock and warrants for cash					80,040,996	80,041		850,661						930,702						80,040,996	80,041		850,661						930,702

Shares converted from Preferred C shares to common					76,954,447	76,955		299,546						376,501						76,954,447	76,955		299,546						376,501

Common shares issued for services					19,505,265	19,504		90,802						110,306						19,505,265	19,504		90,802						110,306

Common shares issued for finders fee					25,000,000	25,000		350,000						375,000						25,000,000	25,000		350,000						375,000

Series C Preferred Dividends														-															-

Prior period adjustments														-															-

Net loss for period			-								(1,636,677	)		(1,636,677	)			-								(1,636,677	)		(1,636,677	)

Balance June 30, 2022		610,000	610		647,886,336	647,886		27,546,376			(30,496,042	)		(2,301,170	)		610,000	610		647,886,336	647,886		27,546,376			(30,496,042	)		(2,301,170	)

Shares issued of common stock and warrants for cash					9,750,000	9,750		23,500						33,250						9,750,000	9,750		23,500						33,250

Shares converted from Preferred C shares to common					14,335,488	14,335		29,415						43,750						14,335,488	14,335		29,415						43,750

Common shares issued for services					22,250,000	22,250		-						22,250						22,250,000	22,250		-						22,250

Common shares issued for equity funding conversions					211,627,209	211,627		329,586						541,213						211,627,209	211,627		329,586						541,213

Series C Preferred Dividends

Prior period adjustments

Net loss for period			-								(292,347	)		(292,347	)			-								(292,347	)		(292,347	)

Balance September 30, 2022		610,000	610		905,849,033	905,848		27,928,877			(30,788,389	)		(1,953,054	)		610,000	610		905,849,033	905,848		27,928,877			(30,788,389	)		(1,953,054	)

Shares issued of common stock and warrants for cash					4,000,000	4,000		16,000						20,000						4,000,000	4,000		16,000						20,000

Shares converted from Preferred C shares to common					-	-		-						-						-	-		-						-

Common shares issued for services					-	-		-						-						-	-		-						-

Common shares issued for equity funding conversions					578,059,999	578,060		(960,669	)					(382,609	)					578,059,999	578,060		(960,669	)					(382,609	)

Series C Preferred Dividends																		-			-		-			-			-

Prior period adjustments																		-			-		-			-			-

Net loss for period			-								(379,316	)		(379,316	)			-								(379,316	)		(379,316	)

Balance December 31, 2022		610,000	610		1,487,909,032	1,487,909		26,984,207			(31,167,707	)		(2,694,978	)		610,000	610		1,487,909,032	1,487,909		26,984,207			(31,167,707	)		(2,694,980	)

Shares issued of common stock and warrants for cash																				11,000,000	11,000		49,000						60,000

Shares converted from Preferred C shares to common																				-	-		-						-

Common shares issued for services																				500,000	500		4,500						5,000

Common shares issued for equity funding conversions																				144,286,846	144,287								144,287

Series C Preferred Dividends

Loss (Gain) from Conversion																							192,896						192,896

Net loss for period																		-								(310,740	)		(310,740	)

Balance March 31, 2023																	610,000	610		1,643,695,878	1,643,697		27,230,603			(31,478,448	)		(2,603,535	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

SMARTMETRIC, INC. AND SUBSIDIARY

Condensed consolidated Statements Of Cash Flows

(Unaudited)


	Six Months Ended			Six Months Ended
	December 31,			December 31,
	2022			2021			Nine Months Ended December 31, 2023			Nine Months Ended December 31, 2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(671,662	)	$	(1,419,543	)	$	(982,402	)	$	(1,399,499	)
Amortization of intangible asset	$	(232	)

Adjustments to reconcile net loss to net cash used in operating activities:
Common stock issued and issuable for services		55,500			435,306			27,250			460,306
Non cash financing expense:					-
Gain (loss) on fair value of derivative liability		(120,996	)		437,368			-			110,449
Amortization of debt discount		-			26,466			-			30,000
Gain on PPP forgiveness		(20,832	)		(20,832	)
Amortization of debt cost		35,000
Change in stock liability		(53,250	)
Loss (Gain) on conversion								192,896			-
Change from PPP forgiveness								(20,832	)		(20,832	)
Changes in assets and liabilities
Increase (Decrease) in prepaid expenses and other current assets		5,620			-			5,870			(15,470	)
Increase in accounts payable and accrued expenses		102,798			(30,166	)		116,573			(33,380	)
(Decrease) in deferred officer salary		(15,833	)		-			(15,833	)		15,833
Increase in Due to shareholder		-			-			16,231			-
Increase in Convertible interest payable		(2,625	)		1,750			(2,625	)		875
Increase in interest payable		(7,249	)					(2,079	)		-
Change in discount		-			-
Decrease In Note Payable								342,165			-
Change in stock liability								(113,250	)		-
Increase in related party interest payable		25,956			25,819			38,865			38,866

Net cash used in operating activities		(667,805	)		(543,832	)		(397,171	)		(812,852	)

CASH FLOWS FROM INVESTING ACTIVITIES
Patent costs (net of amortization)								(24,243	)		-
Net cash used in investing activities								(24,243	)		-

CASH FLOWS FROM FINANCING ACTIVITIES
Loans from related parties		12,969			7,668
Patent costs (net of amortization)		(15,235	)		-
Deferred financing costs								35,000			-
Proceeds from sale of common stock		330,932			135,827			113,250			938,827
Payment of AJB Note								-			(302,717	)
Proceeds from AJB Note		-			270,000			-			270,000
Proceeds from sale of Series C Preferred stock		43,750			155,000			(43,750	)		195,000
Proceeds from conversion of Series C Preferred stock								43,750			-
Change in dividends payable		-			4,802			-			8,147
Change in derivative liability		120,996			-
Change in convertible note payable		90,600			-
Proceeds from equity funding conversions								302,891			-
Change in Derivative liability								(120,996	)
Net cash provided by financing activities		584,012			573,297			330,146			1,109,257

NET INCREASE (DECREASE) IN CASH		(83,793	)		29,465			(91,269	)		296,405

CASH BEGINNING OF PERIOD		126,791			10,325			126,791			10,325

END OF PERIOD		42,998			39,790			35,522			306,730

Non-cash investing and financing activities	$	43,750		$	107,000
Conversion of 48,125 & 125,675 Preferred C Shares into 14,335,488 and 19,148,052 shares of common stock

CASH PAID DURING THE PERIOD FOR:
Income taxes	$	-		$	-		$	-		$	-
Interest	$	-		$	-		$	-		$	-

The accompanying notes are an integral part of these condensed consolidated financial statements.

SMARTMETRIC, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION

SmartMetric, Inc. (the “Company” or “SmartMetric”) was incorporated in the State of Nevada on December 18, 2002. SmartMetric’s main product is a fingerprint sensor-activated credit/debit card with a finger sensor onboard the card and a built-in rechargeable battery for portable biometric identification and card activation. This card may be referred to as a biometric credit and or debit card or the SmartMetric Biometric credit card. SmartMetric has completed development of its card along with pre-mass manufacturing cards and is now in the final stages of production of its credit/debit biometric card. The release of this card is imminent.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management of the Company, the accompanying unaudited financial statements contain all the adjustments (which are of a normal recurring nature) necessary for a fair presentation. Operating results for the three months ended ~~December~~March 31, ~~2022~~2023 are not necessarily indicative of the results that may be expected for the year ending June 30, 2023. For further information, refer to the financial statements and the footnotes thereto contained in the Company’s Annual Report on Form 10-K for the year ended June 30, 2022, as amended, as filed with the Securities and Exchange Commission on ~~October 14,~~November 8, 2022. The consolidated balance sheet as of June 30, 2022, has been derived from the audited financial statements at that date, but does not include all the information and footnotes required by US GAAP for complete financial statements.

Going Concern

As shown in the accompanying condensed consolidated financial statements the Company has sustained recurring losses of $~~671,662~~982,402 and $~~1,419,543~~1,410,088 for the ~~six~~nine months ended ~~December~~March 31, 2023, and March 31, 2022, and ~~December 31, 2021,~~ has an accumulated deficit of $~~31,167,704~~31,478,445, and $~~30,496,042~~30,496,043 at ~~December~~March 31, ~~2022~~2023 and June 30, 2022, respectively.

These conditions raise substantial doubt about the Company’s ability to continue as a going concern within one year of the date of this filing. 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 might be necessary should the Company be unable to continue as a going concern. COVID-19 has had an impact on SmartMetric’s final card production. While the delays are primarily due to supply line disruption, the Company is confident that these delays will be short-lived based on advice from our manufacturing partners, manufacturing alternatives and alternative supply lines that are being put into place by the Company.

Management believes that the Company’s capital requirements will depend on many factors. These factors include product marketing and distribution. The management plans include equity sales and borrowing in order to fund the operations.

There are no assurances that the Company will be able to achieve the level of revenues adequate to generate sufficient cash flow from operations to support the Company’s working capital requirements. To the extent that funds generated are insufficient, the Company will have to raise additional working capital. No assurance can be given that additional financing will be available, or if available, will be on terms acceptable to the Company. If adequate working capital is not available, the Company may not continue its operations.

~~NOTE 1~~ - ~~ORGANIZATION AND BASIS OF PRESENTATION (CONTINUED)~~

As of 2023, the ~~company~~Company has seen its electronics assembly move forward following ~~continued~~ delays in 2020, 2021 and 2022. During the ~~spans’~~span of these past three years, SmartMetric was ~~seriously~~adversely impacted in its ~~mass~~ product development of and production plans for its biometric credit card product.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, SmartMetric Australia Pty. Ltd. All significant intercompany accounts and transactions have been eliminated in consolidation. SmartMetric Australia Pty Ltd., having no assets or bank accounts and no operations, has been voluntarily dissolved as a corporation.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates, including, but not limited to, those related to income taxes and contingencies. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates.

Research and Development

Recent Accounting Pronouncements

The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s results of operations, financial position or cash flow.

Loss Per Share of Common Stock

In accordance with FASB ASC 260, “Earnings Per Share,” the basic loss per share is computed by dividing the loss attributable to common stockholders by the weighted average number of common shares outstanding during the period. Basic net loss per share excludes the dilutive effect of stock options or warrants and convertible notes. Diluted net earnings (loss) per common share is determined using the weighted-average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents, consisting of shares that might be issued upon exercise of common stock options and warrants. In periods where losses are reported, the weighted-average number of common shares outstanding excludes common stock equivalents, because their inclusion would be anti-dilutive. As of ~~December~~March 31, 2023 and 2022, ~~and 2021,~~ ~~19,935,352~~16,935,352 and ~~69,163,518~~54,664,518 dilutive shares were excluded from the calculation of diluted loss per common share, with all dilutive shares being common stock warrants at ~~December~~March 31, ~~2022~~2023 and ~~2021,~~2022, as their effect would be anti-dilutive.

~~NOTE 2~~ - ~~SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)~~

Stock-Based Compensation

The Company records stock-based compensation in accordance with ASC 718, Compensation – Stock Compensation and ASC 505-50, Equity-Based Payments to Non-Employees. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. Equity instruments issued to employees and the cost of the services received as consideration are measured and recognized based on the fair value of the equity instruments issued and are recognized over the employees required service period, which is generally the vesting period.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Fair value of financial instruments

The Company measures fair value in accordance with ASC 820 - Fair Value Measurements. ASC 820 defines fair value and establishes a three-level valuation hierarchy for disclosures of fair value measurements. ASC 820 establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by ASC 820 are:

Level 1 - Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

Level 2 - Inputs (other than quoted market prices included in Level 1) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life.

Level 3 - Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. Valuation of instruments includes unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities.

As defined by ASC 820, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale, which was further clarified as the price that would be received to sell an asset or paid to transfer a liability (“an exit price”) in an orderly transaction between market participants at the measurement date.

The reported fair values for financial instruments that use Level 2 and Level 3 inputs to determine fair value are based on a variety of factors and assumptions. Accordingly, certain fair values may not represent actual values of the Company’s financial instruments that could have been realized as of ~~December~~March 31, ~~2022~~2023 or that will be recognized in the future, and do not include expenses that could be incurred in an actual settlement. The carrying amounts of the Company’s financial assets and liabilities, such as cash, accounts receivable, receivables from related parties, prepaid expenses and other, accounts payable, accrued liabilities, and related party and third-party notes payables approximate fair value due to their relatively short maturities. The Company’s notes payable to related parties ~~approximates~~approximate the fair value of such instrument based upon management’s best estimate of terms that would be available to the Company for similar financial arrangements at ~~December~~March 31, ~~2022.~~2023.

NOTE 3 - PREPAID EXPENSES

Prepaid expenses represent the unexpired terms of various consulting agreements as well as advance rental payments. Prepaid expenses at ~~December~~March 31, ~~2022~~2023 were $~~8,100~~7,850.

NOTE 4 - COMMITMENTS AND CONTINGENCIES

Lease Agreement

The Company’s main office is in Las Vegas, Nevada. Rent expense under all leases for the ~~six~~nine months ended ~~December~~March 31, ~~2022~~2023 and ~~2021~~2022 was $~~4,037~~5,731 and $~~2,916~~1,537 respectively. The Company maintains only one office. This office is in Las Vegas, NV and is a month-to-month lease.

NOTE 4 - COMMITMENTS AND CONTINGENCIES (CONTINUED)

Related Party Transactions

As of ~~December~~March 31, ~~2022~~2023 and ~~2021,~~June 30, 2022, the Company has accrued the amounts of $737,642 and $~~737,642~~753,475, respectively, as deferred Officer’s salary for the difference between the president’s annual salary and the amounts paid.

As a result of shareholder loans and deferred officer salary, the Company has accrued a balance of $~~279,854~~292,763 and $~~227,665~~253,898 as interest payable as of ~~December~~March 31, ~~2022~~2023 and ~~2021.~~June 30, 2022.

On September 11, 2017, we received a license to certain patents from Chaya Hendrick, our founder and CEO, related to our technologies until the expiration of the patents. As consideration, we issued Chaya Hendrick, or her assigns, (i) 200,000 shares of Series B Convertible Preferred Stock, (ii) a royalty equal to 5% of gross revenues derived from products sold related to the patents, and (iii) certain minimum required payments beginning at $50,000 and doubling each year thereafter. The Series B Preferred Stock may be converted at the election of holder on a basis for 50 common shares for each preferred share at any time or an aggregate of 10,000,000 common shares in exchange for all 200,000 shares of Series B Convertible Preferred Stock.

Our CEO maintains an employment agreement that stipulates a $190,000 annual salary. This agreement is still in ~~effect until mutual agreement between its CEO and the Company to terminate.~~effect.

Litigation

From time to time, we may be a defendant or plaintiff in various legal proceedings arising in the normal course of our business. As of the date of this Quarterly Report, there are no material pending legal or governmental proceedings relating to us or properties to which we are a party, and, to our knowledge, there are no material proceedings to which any of our directors, executive officers or affiliates are a party adverse to us or which have a material interest adverse to us.

NOTE 5 - DEBT

On April 17, 2020, we received funds under the Paycheck Protection Program (the “PPP”), a part of the CARES Act. The loan iswas serviced by Chase Bank, and the application for these funds required us to, in good faith, certify that the current economic uncertainty made the loan necessary to support our ongoing operations. We used the funds for payroll and related costs. The receipt of these funds, and the forgiveness of the loan attendant to these funds, was dependent on our ability to adhere to the forgiveness criteria. The loan ~~bears~~bore interest at a rate of 0.98% per annum and had a maturity date of April 6, 2022, with the first payment being deferred until April 17, 2021. Under the terms of the PPP, certain amounts ~~may~~could be forgiven if they ~~are~~were used in accordance with the CARES Act. The Company applied for forgiveness of this loan as of October 2021, and forgiveness was granted by the Small Business Administration. Therefore, the loan is considered paid in full.

On March 5, 2020, the Company issued a $35,000 10% convertible note to GHS Investments, LLC, in relation to an equity financing agreement (see Note 6). The note was due on December 5, 2020, and is convertible at a rate of $0.0175 per share which resulted in a discount from the beneficial conversion feature totaling $5,000. As of March 31, ~~2022,~~2023, the note ~~has~~had been paid in full.

~~NOTE 5 -~~ ~~DEBT (CONTINUED)~~

On July 23, 2021, the Company entered into a securities purchase agreement with AJB Capital Investments, LLC (“AJB”) with respect to the sale and issuance of: (i) a commitment fee in the amount of $250,000in the form of 12,500,000 shares of the Company’s common stock (the “Commitment Fee Shares”), (ii) a promissory note in the aggregate principal amount of $300,000 (the “Note”), (iii) common stock purchase warrants to purchase up to an aggregate of 10,000,000 shares of the common stock (the “Warrants”), and (iv)5,000 shares of the Company’s Series D Convertible Preferred Stock. The Note and Warrants were issued on July 23, 2021. The Commitment Fee Shares were issued at a value of $~~250,000~~,$250,000, the Note was issued in a principal amount of $~~300,000~~ $300,000 for a purchase price of $270,000, resulting in an original issue discount of ~~$30,000;~~$30,000; the Warrants were issued, with an initial exercise price of $0.05 per share, subject to adjustment; and 5,000 Series D Shares were issued to be converted into the shares of common stock of the Company solely in the event of default under the securities purchase agreement. The aggregate cash subscription amount received by the Company from AJB for the issuance of the Commitment Fee Shares, Note and Warrants was $253,000, due to a reduction in the $~~270,000~~$270,000 purchase price as a result of broker, legal, and transaction fees. On February 2, 2022, the Company repaid the amounts due AJB.

NOTE 5 - DEBT (CONTINUED)

On January 27, 2022, the Company entered into a securities purchase agreement with Talos Victory Fund, LLC (“TVF”). The Company issued TVF a 10% promissory note in the principal amount of $250,000 (the “Note”) and a warrant (the “Warrant”) to purchase 12,500,000 shares of the Company’s common stock, $0.001 par value per share (“Common Stock”). In connection with the agreement, the Company ~~has~~ authorized the issuance of 12,500,000common share warrants to TVF (“Warrant Shares”).

On January 27, 2022, the Company entered into a securities purchase agreement with Firstfire Global Opportunities Fund (“Firstfire”). The Company issued Firstfire a 10% promissory note in the principal amount of $250,000 (the “Note”) and a warrant (the “Warrant”) to purchase 12,500,000shares of the Company’s common stock, $0.001 par value per share (“Common Stock”). In connection with the agreement, the Company ~~has~~ authorized the issuance of 12,500,000 common share warrants to Firstfire (“Warrant Shares”).

On January 27, 2022, the Company entered into a securities purchase agreement with Mast Hill Fund, LP (“Mast Hill”). The Company issued Mast Hill a 10% promissory note in the principal amount of $250,000 (the “Note”) and a warrant (the “Warrant”) to purchase 12,500,000 shares of the Company’s common stock, $0.001 par value per share (“Common Stock”). In connection with the agreement, the Company ~~has~~ authorized the issuance of 12,500,000 common share warrants to Mast Hill (“Warrant Shares”).

On March 8, 2022, the Company entered into a securities purchase agreement with Mast Hill, ~~Fund, LP (“Mast Hill”),~~ in which Mast Hill shall purchase up to five million dollars ($5,000,000) of the Company’s common stock. In connection with the execution of the Agreement, on March 8, 2022, the Company issued Mast Hill five (5) common stock purchase warrants, respectively, for the purchase of (i) 500,000 shares of common stock (the “First Warrant”), (ii) 1,000,000 shares of common stock (the “Second Warrant”), (iii) 1,000,000 shares of common stock (the “Third Warrant”), (iv) 2,500,000 shares of common stock (the “Fourth Warrant”), and (v) 62,500,000 shares of the Company’s common stock (the “Fifth Warrant”) at the ~~Exercise Price~~exercise price (as such term is defined in each of the ~~Warrants)~~warrants) per share then in effect.

On March 15, 2022, the Company entered into a securities purchase agreement with Mast ~~Hill Fund, L.P. (“Mast Hill”).~~Hill. The Company issued Mast Hill: (i) a promissory note in the aggregate principal amount of $250,000, ~~(the “Note”),~~ (ii) a common stock purchase warrant ~~(the “Warrant”)~~ to purchase up to an aggregate of 12,500,000 shares of the Company’s common stock, par value $0.001 per share, ~~(the “Common Stock”),~~ and (iii) 12,500,000 shares of ~~Common Stock (the “Commitment Shares”).~~common stock.

Between August 2022 and December 2022, Mast Hill Fund, L.P. converted some of its warrants into 335,467,849 common shares representing a total of $275,000.

Between August and September 2022, Talos Victory Fund, LLC converted some of its warrants into 102,918,679 common shares representing a total of $275,000.

Between August and November 2022, Firstfire Global Opportunities Fund, LLC converted some of its warrants into 190,000,000 common shares representing $275,000.

Between October 2022 and N~~ovember~~November 2022, Blue Lake Partners, LLC converted ~~it’s~~some of its warrants into 161,297,680common shares representing $150,375.

In January 2023, Blue Lake Partners, LLC converted some of its warrants into 66,640,000 common shares representing $66,640.

In February 2023, Mast Hill Fund LP converted its warrants into 77,646,846 common shares.

NOTE 6 - STOCKHOLDERS’ DEFICIT

Preferred Stock

Series B Convertible Preferred Stock

On December 11, 2009, the Company filed a Certificate of Designation with the State of Nevada, to designate 500,000 shares of preferred stock as Series B Convertible Preferred Stock (“Series B Convertible Preferred Stock”). Effective November 5, 2014, the number of shares designated as Series B Convertible Preferred Stock was increased to 5,000,000 shares.

The Company issued 200,000shares of Series B Convertible Preferred Stock upon its inception in 2004.

In October 2015, the Company issued 200,000 shares of Series B Convertible Preferred Stock.

On September 11, 2017, the Company issued an additional 210,000 shares Series B Convertible Preferred Stock to its CEO, Chaya Hendrick, in consideration for the grant of exclusive rights to the licensed patent.

As of ~~December~~March 31, ~~2022,~~2023, the Company has 5,000,000 shares of Series B Convertible Preferred Stock, par value $0.001, authorized, and 610,000shares of Series B Convertible Preferred Stock issued and outstanding.

Holders of the Series B Convertible Preferred Stock are entitled to receive dividends or other distributions with the holders of the common stock of the Company on an as converted basis when, as, and if declared by the directors of the Company. Holders of the Series B Convertible Preferred Stock are entitled to convert each share of the Series B Convertible Preferred Stock into fifty (50) shares of common stock. The outstanding shares of Series B Convertible Preferred Stock are entitled to vote on any matter with the holders of common stock voting together as one (1) class and shall have that number of votes (identical in every other respect to the voting rights of the holder of common stock entitled to vote at any regular or special meeting of stockholders) equal to that number of common shares which is not less than 51% of the vote required to approve any action, which Nevada law provides may or must be approved by vote or consent of the common shares or the holders of other securities entitled to vote, if any.

Upon any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, holders of the Series B Convertible Preferred Stock are entitled to receive out of the assets, whether capital or surplus, of the Company an amount equal to the Stated Value, pro rata with the holders of the common stock.

Series C Convertible Preferred Stock

From time to time, the Company issues Series C Convertible Preferred Stock in exchange for cash. These shares are convertible into shares of the Company’s common ~~stock.~~stock at the price of $0.9090.

The number of issued and outstanding shares of Series C Convertible Preferred Stock were 17,300 and 65,425, respectively, for ~~December~~March 31, ~~2022~~2023 and June 30, 2022.

Series D Convertible Preferred Stock

On July 27, 2021 the Company designated Series D Convertible Preferred Stock (the “Series D Shares”). The Series D Shares have a stated value of $100.00 (the “Stated Value”), and carry a conversion price of the volume weighted average price (for the 20 trading days immediately prior to the conversion date). The number of shares of common stock to be issued upon any conversion shall be calculated as the quotient of (i) the product of the issued shares of the Series D Shares to be converted and the Stated Value, and (ii) the Conversion Price. The Series D Shares are not entitled to receive dividends or other distributions, and have no voting rights.

NOTE 6 - STOCKHOLDERS’ DEFICIT (CONTINUED)

Common Stock

●

~~During the last fiscal quarter of fiscal year ending June 30, 2021, the Company increased its authorized shares of common stock from 600,000,000 to~~ ~~1,200,000,000~~.

~~As of September 30, 2021, the Company had~~ ~~488,648,586~~ ~~shares of common stock issued and outstanding.~~

●

~~During the three months ended September 30, 2021, the Company sold~~ ~~5,500,000~~ ~~shares of common stock for net proceeds of $27,462. With these issuances the company also issued warrants to purchase:~~ (i) 5,500,000 shares of common stock at a price of $0.10 per share and (ii) 5,500,000 shares of common stock at a price of $0.20 per share. The warrants expire at various times through September 21, 2022. None of the 12,000,000 shares of common stock were issued during the quarter ended September 30, 2021, and were recognized as stock payable.

●

~~During the three months ended September 30, 2021, the Company issued~~ ~~42,262,958~~ ~~shares of common stock, of which~~ ~~8,133,333~~ ~~were issued from stock payable,~~ ~~17,534,387~~ ~~were converted from~~ ~~116,050~~ ~~shares of Preferred stock and~~ ~~4,095,238~~ ~~shares were issued for legal services and~~ ~~12,500,000~~ ~~shares were issued as a finder’s fee.~~

~~As of December 31, 2021, the Company had~~ ~~539,310,756~~ ~~shares of common stock issued and outstanding.~~

●

~~During the three months ended December 31, 2021, the Company sold~~ ~~8,625,000~~ ~~shares of common stock for net proceeds of $86,230. With these issuances the Company also issued warrants to purchase:~~ (i) 8,625,000 shares of common stock at a price of $0.70 per share and (ii) 4,312,500 shares of common stock at a price of $1.00 per share. The warrants expire at various times through December 14, 2022. None of the 8,625,000 shares of common stock were issued during the quarter ended December 31, 2021, and were recognized as stock payable.

●

~~During the three months ended December 31, 2021, the Company issued~~ ~~50,662,170~~ ~~shares of common stock, of which~~ ~~11,032,663~~ ~~shares were issued from stock payable,~~ ~~19,148,052~~ ~~were converted from~~ ~~107,000~~ ~~shares of Preferred stock,~~ ~~7,981,445~~ ~~shares were issued for legal services and~~ ~~12,500,000~~ ~~shares were issued as a finder’s fee to AJB Capital.~~

●

During the three months ended March 31, 2022, the Company issued 77,040,836 shares of common stock, of which zero were issued from stock payable, 15,826,550 were converted from 90,750 shares of Preferred stock, 3,714,286 shares were issued for legal services and 57,500,000 shares were issued in conjunction with securities purchase agreements for net proceeds of $783,000.

●

During the three months ended March 31, 2022, the Company sold 2,000,000 shares of common stock for net proceeds of $19,980. With these issuances the Company also issued warrants to purchase: (i) 2,000,000 shares of common stock at a price of $0.70 per share and (ii) 1,000,000 shares of common stock at a price of $1.00 per share. The warrants expire at various times through February 9, 2023. None of the 2,000,000 shares of common stock were issued during the quarter ended March 31, 2022, and were recognized as stock payable.

●

During the three months ended ~~September 30, 2022, the Company issued~~ ~~257,962,697~~ ~~shares of common stock, of which~~ ~~9,750,000~~ ~~were issued from stock payable,~~ ~~14,385,488~~ ~~were converted from~~ ~~48,125~~ ~~shares of Preferred C shares,~~ ~~22,250,000~~ ~~shares were issued for advertising and promotional services and~~ ~~221,327,209~~ ~~shares were issued in conjunction with securities purchase agreements for net proceeds of $330,700~~.

~~NOTE 6~~ - ~~STOCKHOLDERS’ DEFICIT (CONTINUED)~~

●

~~During the three months ended September 30, 2022,~~March 31, 2023, the Company sold 011,000,000 shares of common stock for net proceeds of $0~~. The Company issued~~ ~~4,000,000~~ ~~shares representing $20,000~~60,000.

During the three months that ended March 31, 2023, the Company issued 155,786,846 shares of common stock, of which 11,000,000 were issued for cash, 500,000 shares were issued for services and 144,286,846 shares were issued in conjunction with securities purchase agreements.

●

~~During the three months ended December 31, 2022, the Company issued~~ ~~582,059,999~~ ~~shares of common stock, of which~~ ~~4,000,000~~ ~~were issued for cash and~~ ~~578,059,999~~ ~~shares were issued in conjunction with securities purchase agreements.~~

●

~~During the three months ended December 31, 2022, the Company sold~~ 0 ~~shares of common stock for net proceeds of $~~0.

Equity Financing Agreement

On March 5, 2020, the Company entered into an equity financing agreement (the “Equity Financing Agreement”) with GHS Investments, LLC, a Nevada limited liability company (“GHS”). Pursuant to the Equity Financing Agreement, the Company agreed to sell to GHS an indeterminate amount of shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”), up to an aggregate price of four million dollars ($4,000,000).

Following effectiveness of the Registration Statement, the Company shall have the discretion to deliver puts to GHS and GHS will be obligated to purchase shares of the Company’s Common Stock based on the investment amount specified in each put notice. The maximum amount that the Company shall be entitled to put to GHS in each put notice shall not exceed two hundred percent (200%) of the average daily trading dollar volume of the Company’s Common Stock during the ten (10) trading days preceding the put, so long as such dollar amount does not exceed $500,000. Pursuant to the Equity Financing Agreement, GHS and its affiliates will not be permitted to purchase and the Company may not put shares of the Company’s Common Stock to GHS that would result in GHS’s beneficial ownership, ~~equalling~~equaling more than 4.99% of the Company’s outstanding Common Stock. The price of each put share shall be equal to eighty percent (80%) of the Market Price (as defined in the Equity Financing Agreement). Puts may be delivered by the Company to GHS until the earlier of thirty-six (36) months after the effectiveness of the Registration Statement.

Concurrently with the execution of the Equity Financing Agreement, the Company entered into a convertible promissory note, for the principal balance of $35,000. Per the terms of the convertible promissory note, the Company agreed to pay GHS interest at the rate of ten percent (10%) until it became due on December 5, 2020. The holder of the convertible promissory note shall have the right at any time to convert all or any part of the outstanding and unpaid principal and interest at a fixed conversion price of $0.0175. See Note 5. The principal balance of $35,000 was been recognized as deferred financing costs in current assets on the accompanying Consolidated Balance Sheet, and was charged against the gross proceeds of each put when received. As of the date of this filing, the note has been paid in full.

NOTE 6 - STOCKHOLDERS’ DEFICIT (CONTINUED)

Warrants

From time to time the Company granted warrants in connection with private placements of securities, as described herein.

As of ~~December~~March 31, ~~2022,~~2023, and June 30, 2022, the following is a breakdown of the warrant activity:

Schedule of share based compensation warrant activity
Range of Exercise Prices Number of
Warrants
Outstanding Weighted-
Average
Contractual Life
Remaining in Years Weighted-
Average
Exercise Price Number
Exercisable Weighted-
Average
Exercise Price
Warrants Outstanding and Exercisable at December 31, 2022:
$0.70 - $1.00 32,872,852 1.18 $ 0.22 32,872,852 $ 0.22

Warrants Outstanding and Exercisable at June 30, 2022:
$0.10 - $0.20 19,935,352 1.01 $ 0.23 19,935,352 $ 0.23

~~NOTE 6~~ - ~~STOCKHOLDERS’ DEFICIT (CONTINUED)~~

Schedule of share based compensation warrant activity
Range of Exercise Prices	Number of Warrants Outstanding		Weighted- Average Contractual Life Remaining in Years		Weighted- Average Exercise Price		Number Exercisable		Weighted- Average Exercise Price
Warrants Outstanding and Exercisable at March 31, 2023:
$0.70 - $1.00		16,935,352		1.08	$	0.21		16,935,352	$	0.21

Warrants Outstanding and Exercisable at June 30, 2022:
$0.10 - $0.20		19,935,352		1.01	$	0.23		19,935,352	$	0.23

Warrant Activity:

~~December~~March 31, ~~2022:~~2023:

Schedule of warrant activity
Outstanding - June 30, 2022	~~45,997,852~~	45,997,852
Issued	-		-
Exercised	-		-
Expired	~~(26,062,500~~	(29,062,500	)
Outstanding - ~~December~~March 31, ~~2022~~2023	~~19,935,352~~	16,935,352

December 31, 2021:

Outstanding - June 30, 2021		124,888,519
Issued	~~19,937,499~~	19,937,499
Exercised	-			-
Expired		(75,662,500	)
Outstanding - ~~December~~March 31, ~~2021~~2022	~~69,163,518~~	54,664,518

At ~~September 30, 2022,~~March 31, 2023, all ~~32,872,852~~16,935,352 warrants are vested and all ~~54,664,518~~16,935,352 warrants expire at various times prior to ~~February~~July 9, 2023.

NOTE 7 - MANDATORY REDEEMABLE CONVERTIBLE PREFERRED STOCK

Issuances of Series C Convertible Preferred Stock

On January 10, 2019, the Board of Directors of the Company adopted a resolution pursuant to the Company’s Certificate of Incorporation, as amended, providing for the designations, preferences and relative, participating, optional and other rights, and the qualifications, limitations and restrictions, of the Series C Convertible Preferred Stock.

On January 14, 2019, the Company filed a Certificate of Designations for its Series C Convertible Preferred Stock. The authorized number of Series C Convertible Preferred Stock is 1,000,000 shares, par value 0.001. The Series C Convertible Preferred Stock will, with respect to dividend rights and rights upon liquidation, winding-up or dissolution, rank: (a) senior with respect to dividends and right of liquidation with the Company’s common stock, (b) junior with respect to dividends and right of liquidation with respect to the Company’s Series B Preferred Stock, and (c) junior with respect to dividends and right of liquidation to all existing indebtedness of the Company. The Series C Convertible Preferred Stock will carry an annual ten percent (10%) cumulative dividend, compounded daily, payable solely upon redemption, liquidation or conversion. The Company will have a right, at any time in the period of 180 days from the date of the issuance, at the Company’s option, to redeem all or any portion of the Series C Preferred Stock at prices ranging from 105% to 130%, based on the passage of time.

The number of shares of Series C Convertible Preferred Stock issued and outstanding were 17,300 and 65,425, respectively, for ~~December~~March 31, ~~2022~~2023 and June 30, 2022.

The holders of Series C Convertible Preferred Stock shall have the right at any time during the period beginning on the date which is six (6) months following the date of their issuance, to convert all or any part of the outstanding Series C Convertible Preferred Stock into fully paid and non-assessable shares of common stock at the Variable Conversion Price. The “Variable Conversion Price” shall mean ~~71%~~71% multiplied by the Market Price (representing a discount rate of 29%). “Market Price” means the average of the two (2) lowest Trading Prices (which means, for any security as of any date, the closing bid price on the OTCQB, OTCQX, Pink Sheets electronic quotation system or applicable trading market (the “OTC”) as reported by a reliable reporting service (“Reporting Service”) designated by the holder (i.e. Bloomberg) for the common stock during the fifteen (15) Trading Day Period ending on the latest complete Trading Day prior to the date of conversion (both terms as defined in the Certificate of Designations).

~~NOTE 7~~ - ~~MANDATORY REDEEMABLE CONVERTIBLE PREFERRED STOCK (CONTINUED)~~

The Series C Convertible Preferred stock is convertible after six months at 71%71% of the average market price of the Company’s stock based on the lowest two (2) market closes fifteen (15) days prior. Consequently, the shares were converted at different rates. The Company assessed the conversion feature and determined it was required to be bifurcated and recognized as a derivative liability. Three (3) batches of Preferred stock were subject to derivative liability valuation based on the Black Scholes Merton pricing model. As the fair value of each of the three (3) derivative and the shares issued at inception were in excess of the face amount of the Preferred stock, the Company recorded a discount in the amount of $35,000 to be amortized utilizing the effective interest method of accretion over the term of the note.

On the date which is eighteen (18) months following the Issuance Date or upon the occurrence of an Event of Default (the “Mandatory Redemption Date”), the Company shall redeem all of the shares of Series C Convertible Preferred Stock of the holder (which have not been previously redeemed or converted). Within five (5) days of the Mandatory Redemption Date, the Company shall make payment to each holder of an amount in cash equal to the total number of shares of Series C Convertible Preferred Stock held by such holder multiplied by the then current Stated Value.

All shares of mandatorily redeemable convertible preferred stock have been presented outside of permanent equity in accordance with ASC 480, Classification and Measurement of Redeemable Securities. The Company accretes the carrying value of its Series C Convertible Preferred Stock to its estimate of fair value (i.e., redemption value) at period end.

The carrying value of the Series C Convertible Preferred Stock at ~~December~~March 31, ~~2022~~2023 and June 30, 2022 was $15,728 and $59,478net of discount, respectively. There were 0 shares of Series C Preferred Stock issued for net proceeds of $0, and 0 shares of Series C Preferred Stock converted to 0 shares of common stock for the three months ended ~~December~~March 31, ~~2022.~~2023.

NOTE 8 - DERIVATIVE LIABILITIES

The conversion rates of the convertible notes and Series C Convertible Preferred Stock are convertible at a variable rate. Accordingly, the Company concluded there is an embedded derivative which was required to be bifurcated and accounted for as a derivative liability. The Company chose to use the Black Scholes model to calculate the derivative liability. The assumptions in the derivative liability calculation included the price of the Company’s common stock of $0.0141 at the valuation date, term of zero, a risk-free rate of between $0.0010 and $0.0011 and a volatility rate of between 150% and 341%. The Company has recorded the embedded derivative liability at its’ fair value utilizing the Black Scholes Merton option pricing model, as follows:

Schedule of derivative liability

Level 1

Level 2

Level 3

Total

Derivative liability

NOTE 9 - INCOME TAXES

The Company provides for income taxes at the end of each interim period based on the estimated effective tax rate for the full fiscal year. Cumulative adjustments to the Company’s estimate are recorded in the interim period in which a change in the estimated annual effective rate is determined.

The Company has estimated its effective tax rate to be 0%, based primarily on losses incurred and the uncertainty of realization of the tax benefit of such losses.

NOTE 10 - SUBSEQUENT EVENTS

In accordance with ASC 855-10, the Company has reviewed its operations subsequent to ~~December~~March 31, 2022 to the date these financial statements were issued. Between ~~January 1,~~March 31, 2023 and ~~February 7,~~May 31, 2023, other than as described in “Recent Developments” in Part I, Item 2 of this Quarterly Report, there were no subsequent events.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion of our financial condition and results of operations in conjunction with our condensed consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q and with our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended June 30, 2022, as filed with the Securities and Exchange Commission. In addition to our historical condensed consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Quarterly Report on Form 10-Q, particularly in Part II, Item 1A, “Risk Factors.”

Overview

SmartMetric, Inc. is a company engaged in the development and manufacture of biometric ~~technology industry. SmartMetric~~fingerprint activated credit and debit cards. SmartMetric’s founder and product inventor Chaya Hendrick, has secured ~~a patent~~issued patents covering ~~technology that involves connection to networks using data cards (smart cards~~the biometric credit and ~~EMV cards).~~debit card fingerprint activated invention. In addition, SmartMetric holds the ~~sole~~ license to issued patents covering features of its biometric fingerprint activated cards. SmartMetric’s main product under development is a fingerprint sensor activated ~~payments~~credit/debit card with a finger sensor and fully functional fingerprint reader embedded inside the card. The cards have a rechargeable battery allowing for portable biometric identification and card activation. These cards are herein sometimes referred to as a biometric card or the SmartMetric Biometric card.

SmartMetric has created earlier versions of its credit/debit biometric fingerprint activated credit card. The latest version, designed to be compliant with the requests of a major global payments network, is now in the final stages of development so that it can be presented to the network and various card issuing banks.

To date, we have devoted a substantially all of our efforts and financial resources to the development of our biometric card. Since our inception in 2002, we have generated no revenue from product sales and have funded our operations principally through the private sales of our equity securities. We have never been profitable and, as of ~~December~~March 31, ~~2022~~2023 and June 30, 2022, we had an accumulated deficit of approximately ~~$31,167,704~~$31,478,445 and ~~$30,496,042~~$30,496,043, respectively. We expect to continue to incur significant operating losses for the foreseeable future as we continue the development of our technologies and advance them to market.

Our cash and cash equivalents balance at ~~December~~March 31, ~~2022~~2023, was approximately ~~$42,998~~$35,522, representing ~~65.0%~~83% of total assets. ~~Notwithstanding our recent capital raises, based~~Based on our current expected level of operating expenditures and capital raises, we expect to be able to fund our operations into ~~2023.~~2024. This period could be shortened if there are any significant increases in spending that were not anticipated or other unforeseen events.

We anticipate raising additional cash through the private or public sales of equity or debt securities to continue to fund our operations and the development of our technologies. There is no assurance that financing will be available to us when needed in order to allow us to continue our operations, or if available, on terms acceptable to us. If we do not raise sufficient funds in a timely manner, we may be forced to curtail operations, delay or stop our ongoing clinical trials, cease operations altogether, or file for bankruptcy. We currently do not have commitments for future funding from any source.

Going Concern

The condensed consolidated financial statements do not include any adjustments relating to the carrying amounts of recorded assets or the carrying amounts and classification of recorded liabilities that may be required should the Company be unable to continue as a going concern.

As shown in the accompanying consolidated financial statements, the Company has incurred recurring losses of ~~$671,662~~$982,402 and ~~$1,419,543~~$1,410,088 for the ~~six-month period~~nine-month periods ending ~~December~~March 31, ~~2022~~2023 and ~~December~~March 31, ~~2021~~2022, respectively, and has incurred a cumulative loss of ~~$31,167,704~~$31,478,445 and ~~$30,496,042~~$30,496,043 as of ~~December~~March 31, ~~2022~~2023 and June 30, ~~2022 - since our inception in December 18,~~ 2022. The Company is currently in the development stage and has spent a substantial portion of its time in the development of its technology.

There is no guarantee that the Company will be able to raise enough capital or generate revenues to sustain its operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern beyond calendar year ~~2023.~~2024. The Company maintains sufficient cash to continue as a going concern throughout all of calendar year ~~2023.~~2024.

Management believes that the Company’s capital requirements will depend on many factors. These factors include the final phase of development and mass production being successful as well as product implementation and distribution.

The consolidated financial statements do not include any adjustments relating to the carrying amounts of recorded assets or the carrying amounts and classification of recorded liabilities that may be required should the Company be unable to continue as a going concern.

~~Effect of Covid-19~~

In December 2019, an outbreak of a novel strain of coronavirus originated in Wuhan, China (“COVID-19”) and has since spread worldwide, including to the Unites States, posing public health risks that have reached pandemic proportions (the “COVID-19 Pandemic”). COVID-19 poses a threat to the health and economic wellbeing of our employees, customers and vendors. Like most businesses world-wide, the COVID-19 Pandemic has impacted the Company financially. Further, the COVID-19 Pandemic, has had an impact on SmartMetric’s final card production. While the delays are due to supply line disruption, the Company is confident that these delays will be short-lived based on advice from our manufacturing partners, manufacturing alternatives and alternative supply lines that are being put into place by the Company. However, management cannot presently predict the scope and severity with which COVID-19 will impact our business, financial condition, results of operations and cash flows.

SmartMetric’s commitment to the health and safety of its employees remains our first priority. Our rigorous precautionary measures include the formation of global and regional response teams that maintain contact with authorities and experts to actively manage the situation, restrictions on company travel, quarantine protocols for employees who may have had exposure or have symptoms, frequent disinfecting of our locations and other measures designed to help protect employees, customers and suppliers. We expect to continue these measures until the COVID-19 pandemic is adequately contained for our business.

In the near-term, our operating results are going to be challenged due to this crisis. We continue to manage our cost structure to meet the uncertain demand, while making additional cost reductions as needed. Our customers’ businesses are subject to the fluctuations in global economic cycles and conditions and other business risk factors which may impact their ability to operate their businesses. The performance and financial condition of our customers may cause us to alter our business terms or to cease doing business with a particular customer. Further, the potential impact of the COVID-19 Pandemic on their businesses could adversely impact our customers’ ability to pay us for work performed, increasing our future estimate of credit losses.

Recent Developments

Issuance of Commitment Shares, Notes and Warrants to Three Investors

On January 27, 2022, we entered into separate securities purchase agreements with three investors, for the sale and issuance to each investor of: (i) a promissory note in the aggregate principal amount of $250,000, (ii) a common stock purchase warrant to purchase 12,500,000 shares of the Company’s common stock, and (iii) a commitment fee in the form of 12,500,000 shares of the Company’s common stock.

Mast Hill Equity Purchase Agreement and Registration Rights Agreement to Mast Hill Fund, L.P.

On March 8, 2022, we entered into an equity purchase agreement with Mast Hill Fund, L.P. (“Mast Hill”), pursuant to which, upon the terms and subject to the conditions thereof, Mast Hill is committed to purchase, shares of our common stock at an aggregate price of up to $5,000,000 over the course of its term.

Additionally, in connection with the execution of the equity purchase agreement, the Company issued Mast Hill five (5) common stock purchase warrants, respectively, for the purchase of (i) 500,000 shares of common stock, (ii) 1,000,000 shares of common stock, (iii) 1,000,000 shares of common stock, (iv) 2,500,000 shares of common stock, and (v) 62,500,000 shares of the Company’s common stock at the Exercise Price (as such term is defined in each warrant) per share then in effect.

The Company also entered into a registration rights agreement whereby the Company shall (i) file with the United States Securities and Exchange Commission (the “SEC”) a registration statement within forty-five (45) days of the date of such agreement; and (ii) have the registration statement declared effective by the Commission within ninety (90) days after the date the registration statement is filed with the SEC (or at the earliest possible date if prior to ninety (90) calendar days from the date hereof), and any amendment declared effective by the SEC at the earliest possible date.

On September 29, 2022, the Company entered into a security purchase agreement with Mast Hill Fund, L.P. for the issuance of a promissory note in the gross amount of $306,000, for net proceeds of $291,410.

Issuance of Commitment Shares, Note, and Warrant to Mast Hill Fund, L.P.

On March 15, 2022, we entered into a securities purchase agreement with Mast Hill ~~Fund, L.P. (the “Mast Hill”)~~ with respect to the sale and issuance to the Mast Hill of: (i) a promissory note in the aggregate principal amount of $250,000, (ii) a common stock purchase warrant to purchase up to an aggregate of 12,500,000 shares of the Company’s common stock, and (iii) 12,500,000 shares of common stock.

Critical Accounting Policies

We have prepared our financial statements in conformity with accounting principles generally accepted in the United States, which requires management to make significant judgments and estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. We base these significant judgments and estimates on historical experience and other applicable assumptions we believe to be reasonable based upon information presently available. These estimates may change as new events occur, as additional information is obtained and as our operating environment changes. These changes have historically been minor and have been included in the financial statements as soon as they became known. Actual results could materially differ from our estimates under different assumptions, judgments or conditions.

All of the Company’s significant accounting policies are discussed in Note 2, Summary of Significant Accounting Policies, to our financial statements, included above in this Quarterly Report. We have identified the following as our significant accounting policies and estimates, which are defined as those that are reflective of significant judgments and uncertainties, are the most pervasive and important to the presentation of our financial condition and results of operations and could potentially result in materially different results under different assumptions, judgments or conditions.

We believe the following critical accounting policies reflect our more significant estimates and assumptions used in the preparation of our financial statements:

Development Costs

Research and development costs are charged to expense as incurred. Our research and development expenses consist primarily of expenditures for electronics design and engineering, software design and engineering, component sourcing, component engineering, manufacturing, product trials, compensation and consulting costs. Due to the small size of the Company’s research & development staff as well as the lack of any long term research and development-related contracts, we do not believe that the use of this critical accounting estimate will have a material impact on the results of financial operations.

Results of Operations

Comparison of the Three Months Ended ~~December~~March 31, ~~2022~~2023 and ~~2021~~2022

Our results of operations have varied significantly from year to year and quarter to quarter and may vary significantly in the future. We did not have revenue for the three months ending ~~December~~March 31, ~~2022~~2023 and ~~2021.~~2022. Net loss for the three months ended ~~December~~March 31, 2023, and net income (attributable to common shareholders) for March 31, 2022, was $310,740 and ~~2021 were $253,716 and $322,261,~~$14,257, respectively, resulting from the operational activities described below.

Operating Expenses

Operating expense ~~totalled $114,789~~totaled 187,023 and ~~$359,110~~$284,202 during the three months ended ~~December~~March 31, ~~2022~~2023 and ~~2021,~~2022, respectively. The decrease in operating expenses is the result of lower consulting expenses and legal expenses.

	Quarter Ended March 31,				Change in 2023 Versus 2022
	2023		2022		$			%
Operating expense
Officer salary	$	47,500	$	47,500	$	-0-			-0-	%
Advertising costs		39,240		-		35,240			100	%
Legal & professional fees		20,816		-		20,816			100	%
Research and development		31,807		44,551		12,744			(29	)%
Amortization expense		352		-		352			100	%
General and administrative		47,308		192,151		(144,843	)		(75	)%
Total operating expense	$	187,023	$	284,202	$	(97,179	)		(34	)%

Quarter Ended
December 31, Change in 2022
Versus 2021
2022 2021 $ %
Operating expense
Officer salary $ 47,500 $ 47,500 $ -0- -0- %
Research and development 56,950 44,500 12,450 28.0 %
General and administrative (63,179 ) 200,357 (263,536 ) (131.5 )%
Total operating expense $ 41,271 $ 292.357 $ (251,086 ) (85.9 )%

Research and Development

Research and development expenses ~~totalled $56,950~~totaled $31,807 and ~~$44,500~~$44,551 for the three months ended ~~December~~March 31, ~~2022~~2023 and ~~2021,~~2022, respectively. The ~~increase~~decrease of ~~$12,450,~~$12,744, or ~~28.0%~~29%, in ~~2022~~2023 compared to ~~2021~~2022 was primarily attributable to ~~increased~~decreased engineering ~~expenses.~~expenses . Our research and development expenses consist primarily of expenditures related to engineering.

General and Administrative

General and administrative expenses ~~totalled $(63,179)~~totaled $47,308 and ~~$200,357~~$192,151 for the three months ended ~~December~~March 31, ~~2022~~2023 and ~~2021,~~2022, respectively. The decrease of ~~$263,536,~~$144,843, or ~~131.5%~~75%, in ~~2022~~2023 compared to ~~2021~~2022 was primarily the result of a decrease in consulting and legal expenses. Our general and administrative expenses consist primarily of expenditures related to employee compensation, legal, accounting and tax, other professional services, and general operating expenses.

Other Expense

Other income (expense) ~~totalled~~totaled ($~~264,527)~~123,717) and ~~$40,228~~$304,246 for the three months ended ~~December~~March 31, 2023 and 2022, ~~and 2021,~~ respectively.

	Quarter Ended December 31,						Change in 2022 Versus 2021						Quarter Ended March 31,						Change in 2023 Versus 2022
	2022			2021			$			%			2023			2022			$			%
Gain (loss) on change in derivatives		-0-			68,240		$	(68,240	)		(100	%)		-0-			-0-		$	-0-			(-	)
Gain (loss) on conversions		(284,204	)		-0-			(284,204	)		(100	%)		(105,638	)		-0-			(105,638	)		(100	)%
Gain (loss) on derivative liabilities														-0-			326,919			326,919			(100	)%
Gain on PPP loan forgiveness		20,832			20,832		$	0	)		-0-			-0-			-0-		$	0	)		(100	)%
Interest Expense		(12,909	)		(48,844	)	$	35,935			73.6	%		(18,079	)		(22,673	)	$	(4,594	)		(20	)%
Other income (expense)	$	11,754						11,754			100	%	$	-0-
Total other (income) expense	$	(264,527	)	$	40,228		$	(304,755	)		(757.6	)%	$	(123,717	)		304,246		$	(427,963	)		(141	)%

Interest income (expense)

We had net interest expense of ($~~12,909)~~18,079) in the three months ended ~~December~~March 31, ~~2022~~2023, compared to ($~~48,844)~~22,673) net interest expense for the three months ended December 31, ~~2021.~~2022. The decrease of ~~($35,935)~~$4,594 was attributable to lower interest on deferred officer salary.

Gain (loss) on change in derivatives

We had a gain (loss) on change in derivatives of $0 in the three months ended ~~December~~March 31, ~~2022~~2023, compared to a ~~$68,240~~$326,919 gain ~~(loss)~~ on change in derivatives for the three months ended ~~December~~March 31, ~~2021.~~2022.

Gain on PPP loan forgiveness

We recognized ~~$20,832~~$0 on the forgiveness of a PPP loan during the three months ended ~~December~~March 31, ~~2022~~2023, compared to ~~$20,832~~$0 for the three months ended ~~December~~March 31, ~~2021.~~2022.

Liquidity and Capital Resources

We have incurred losses since our inception ~~in 2002~~ as a result of significant expenditures for operations and research and development and the lack of any revenue. We have an accumulated deficit of ~~$31,167,704~~$31,478,445 as of ~~December~~March 31, ~~2022~~2023, and anticipate that we will continue to incur additional losses for the foreseeable future. Through ~~December~~March 31, ~~2022,~~2023, we have funded our operations through the private sale of our equity securities and exercises of options and warrants, resulting in gross proceeds of approximately ~~$28.5~~$287 million from inception through ~~December~~March 31, ~~2022.~~2023.

Six Months Ended
December 31, Change in 2022
Versus 2021
2022 2021 $ %
Cash at beginning of period $ 126,791 $ 10,325 $ 116,466 1128.0 %
Net cash used in operating activities (667,805 ) (543,832 ) 123,793 (22.8 )%
Net cash used in investing activities - - - -
Net cash provided by financing activities 584,012 573,297 10,715 1.9 %
Cash at end of period $ 42,998 $ 39,790 $ 3,208 8.1 %

	Nine Months Ended December 31,						Change in 2023 Versus 2022
	2023			2022			$			%
Cash at beginning of period	$	126,791		$	10,325		$	116,466			1128.0	%
Net cash used in operating activities		(397,171	)		(812,852	)		415,681			(51	)%
Net cash used in investing activities		(24,243	)		-			(24,243	)		100	%
Net cash provided by financing activities		330,146			1,109,257			(779,111	)		(70	)%
Cash at end of period	$	35,522		$	306,730		$	(271,208	)		(88	)%

Net Cash Used in Operating Activities

Net cash used in operating activities was ~~$667,805~~$397,171 and ~~$543,832~~$812,852 for the ~~six~~nine months ended ~~December~~March 31, ~~2022~~2023 and ~~2021,~~2022, respectively. The ~~increase~~decrease of ~~$123,793~~$415,681 in cash used during ~~2022~~2023 compared to ~~2021~~2022 was primarily attributable to an increase in ~~consultant costs and legal expenses.~~proceeds from private placements, loss from conversion of notes to shares, offset by change in fair value of derivative liability.

Net Cash Used in Investing Activities

Cash used in investing activities was $0$24,243 and $0 for the ~~six~~nine months ended ~~December~~March 31, ~~2022~~2023 and ~~2021,~~2022, respectively.

Net Cash Provided by Financing Activities

During the ~~six~~nine months ended ~~December~~March 31, ~~2022,~~2023, net cash provided by financing activities was ~~$584,012,~~$330,146, compared to ~~$573,297~~$1,109,257 for the ~~six~~nine months ended ~~December~~March 31, ~~2022.~~2023. The ~~increase~~decrease of ~~$10,715~~$779,111 was due to ~~higher~~lower sales of the Company’s securities in private placements. We continue to seek funding through private placement sales of equity to fund our continued operations, sales and marketing and ongoing research and development programs.

Equity Financing Agreement

Issuance of Commitment Shares, Notes and Warrants to Three Investors

Mast Hill Equity Purchase Agreement and Registration Rights Agreement to Mast Hill Fund, L.P.

Issuance of Commitment Shares, Note, and Warrant to Mast Hill Fund, L.P.

On March 15, 2022, we entered into a securities purchase agreement with Mast Hill ~~Fund, L.P. (the “Mast Hill”)~~ with respect to the sale and issuance to ~~the~~ Mast Hill of: (i) a promissory note in the aggregate principal amount of $250,000, (ii) a common stock purchase warrant to purchase up to an aggregate of 12,500,000 shares of the Company’s common stock, and (iii) 12,500,000 shares of common stock.

On September 29, 2022, the Company entered into a security purchase agreement with Mast Hill ~~Fund, L.P.~~ for the issuance of a promissory note in the gross amount of $306,000, for net proceeds of $291,410.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are not required to provide the information required by this item as we are considered a smaller reporting ~~company, as defined by Rule 229.10(f)(1).~~company.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure controls are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), such as this Form 10-Q, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including the Principal Executive Officer and Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Internal controls are procedures which are designed with the objective of providing reasonable assurance that (1) our transactions are properly authorized, recorded and reported; and (2) our assets are safeguarded against unauthorized or improper use, to permit the preparation of our condensed consolidated financial statements in conformity with GAAP. In designing and evaluating the disclosure controls and procedures, our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

In connection with the preparation of this Quarterly report on Form 10-Q for the quarter ended ~~December~~March 31, ~~2022,~~2023, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were not effective (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) are not effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the U.S. Securities and Exchange Commission’s rules and forms and to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer, as appropriate to allow timely decisions regarding required disclosure.

Limitations on Controls

Management does not expect that the Company’s disclosure controls and procedures or the Company’s internal control over financial reporting will prevent or detect all error and fraud. Any control system, no matter how well designed and operated, is based upon certain assumptions and can provide only reasonable, not absolute, assurance that its objectives will be met. Further, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected.

Due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible. However, to the extent possible, the initiation of transactions, the custody of assets and the recording of transactions are being performed by separate individuals. Management evaluated the impact of our failure to have segregation of duties in all of our financially significant processes and have concluded that this control deficiency represented a material weakness. We plan to remediate this weakness over the next 12 months.

Notwithstanding the assessment that our disclosure controls and procedures and our internal controls over financial reporting were not effective and that there are material weaknesses as identified herein,Consequently, we believe that our condensed consolidated financial statements contained in this Form 10-Q fairly present our financial position, results of operations and cash flows for the periods covered thereby in all material respects.

Changes in Internal Controls

During the three months ended ~~December~~March 31, ~~2022,~~2023, there have been no changes in our internal control over financial reporting that have materially affected or are reasonably likely to materially affect our internal controls over financial reporting.

2120

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, we may be a defendant or plaintiff in various legal proceedings arising in the normal course of our business. We know of no material, active, pending or threatened proceeding against us or our subsidiaries, nor are we, or any subsidiary, involved as a plaintiff or defendant in any material proceeding or pending litigation.

ITEM 1A. RISK FACTORS

In addition to the other information set forth in this report, you should carefully consider the risk factors discussed in Part I, Item 1A in our Annual Report on Form 10-K for the year ended June 30, 2022, as amended, filed with the Commission on ~~October 14,~~November 8, 2022, and our subsequent filings with the Commission, which could materially affect our business, financial condition or future results. These cautionary statements are to be used as a reference in connection with any forward-looking statements. The factors, risks and uncertainties identified in these cautionary statements are in addition to those contained in any other cautionary statements, written or oral, which may be made or otherwise addressed in connection with a forward-looking statement or contained in any of our subsequent filings with the Commission.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following information is given with regard to unregistered securities sold ~~since July 1, 2022~~during the three months ended March 31, 2023, and not previously reported on a Current Report on Form 8-K. The following securities were issued in private offerings pursuant to the exemption from registration contained in the Securities Act of 1933, as amended (the “Securities Act”) and the rules promulgated thereunder in reliance on Section 4(a)(2) thereof and Regulation D and Regulation S promulgated thereunder, relating to offers of securities by an issuer not involving any public ~~offering, although none of these were used as of the date of this filing.~~offering.

During the three months ended ~~June 30, 2021,~~March 31, 2023, the Company sold ~~3,333,333~~no shares of common stock for ~~net proceeds~~cash.

During the three months that ended March 31, 2023, the Company issued 155,786,846 shares of ~~$20,000. With these issuances the company also~~common stock, of which 11,000,000 were issued warrants to purchase: (i) 3,333,333 shares at a price of $0.10 per share and (ii) 3,333,333 shares at a price of $0.20. The warrants expire at various times through June 7, 2022. None of the 3,333,333for cash received in prior quarters, 500,000 shares were issued ~~during the quarter ended June 30, 2021,~~for services and 144,286,846 shares were ~~recognized as stock payable.~~issued in conjunction with securities purchase agreements.

●

~~During the three months ended June 30, 2021, the Company issued 3,025,952 shares, of which all were converted from 36,300 Preferred C shares.~~

	●	During the three months ended September 30, 2021, the Company sold 5,500,000 shares of common stock for net proceeds of $27,462. With these issuances the Company also issued warrants to purchase: (i) 5,500,000 shares of common stock at a price of $0.10 per share and (ii) 5,500,000 shares of common stock at a price of $0.20 per share. The warrants expire at various times through September 21, 2022. All of these shares were recognized as stock payable.

	●	During the three months ended September 30, 2021, the Company issued 42,262,958 shares of common stock, of which 8,133,333 were issued from stock payable, 17,534,387 were converted from 116,050 Preferred stock, 4,095,238 shares were issued for legal services and 12,500,000 shares were issued as a finder’s fee.

	●	During the three months ended December 31, 2021, the Company sold 8,625,000 shares of common stock for net proceeds of $86,230. With these issuances the company also issued warrants to purchase: (i) 8,625,000 shares of common stock at a price of $0.70 per share and (ii) 4,312,500 shares of common stock at a price of $1.00 per share. The warrants expire at various times through December 14, 2022. All of these shares were recognized as stock payable.

●

During the three months ended December 31, 2021, the Company issued 50,662,170 shares of common stock, of which 11,032,663 were issued from stock payable, 19,148,052 were converted from 107,000 shares of Preferred stock, 7,981,455 shares were issued for legal services and 12,500,000 shares were issued as a finder’s fee.

	●	During the three months ended March 31, 2022, the Company issued 77,040,836 shares of common stock, of which zero were issued from stock payable, 15,826,550 were converted from 90,750 shares of Preferred stock, 3,714,286 shares were issued for legal services and 57,500,000 shares were issued in conjunction with securities purchase agreements for net proceeds of $783,000.

	●	During the three months ended March 31, 2022, the Company sold 2,000,000 shares of common stock for net proceeds of $19,980. With these issuances the Company also issued warrants to purchase: (i) 2,000,000 shares of common stock at a price of $0.70 per share and (ii) 1,000,000 shares of common stock at a price of $1.00 per share. The warrants expire at various times through February 9, 2023. None of the 2,000,000 shares of common stock were issued during the quarter ended March 31, 2022, and were recognized as stock payable.

●

During the three months ended June 30, 2022, the Company issued 31,534,744 shares of common stock, of which zero were issued from stock payable, 24,445,458 were converted from 76,250 shares of Preferred stock, 3,714,286 shares were issued for legal services and 0 shares were issued in conjunction with securities purchase agreements for net proceeds of $0.

●

~~During the three months ended June 30, 2022, the Company sold 0 shares of common stock for net proceeds of $0.~~

●

During the three months ended September 30, 2022, the Company issued 257,962,697 shares of common stock, of which 9,750,000 were issued from stock payable, 14,385,488 were converted from 48,125 shares of Preferred stock, 22,250,000 shares were issued for advertising and promotional services and 221,327,209 shares were issued in conjunction with securities purchase agreements for net proceeds of $330,700.

●

~~During the three months ended September 30, 2022, the Company sold 0 shares of common stock for net proceeds of $0.~~

●

During the three months ended December 31, 2022, the Company issued 582,059,999 shares of common stock, of which 4,000,000 were issued from stock payable and 578,059,999 shares were issued in conjunction with securities purchase agreements.

●

~~During the three months ended December 31, 2022, the Company sold 0 shares of common stock for net proceeds of $0. The Company issued 4,000,000 shares representing $20,000.~~

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

On March 5, 2020, the Company issued a $35,000 10% convertible note to GHS in relation to the equity financing agreement. The note was due on December 5, 2020, and is convertible at a rate of $0.0175 per share which resulted in a discount from the beneficial conversion feature ~~totalling~~totaling $5,000. During the year ended June 30, 2020, $2,127 of the debt discount was amortized. For the three-month period ended September 30, 2020, $3,804 of the debt discount was amortized. As of December 31, 2021, all $5,000 of the debt discount was fully amortized and the note was at its full amount of $35,000. As of March 31, 2022, the note had not been paid and was is in default. As of the date of this filing, the note has been paid in full.

ITEM 4. MINE SAFETY DISCLOSURES

Not Applicable.

ITEM 5. OTHER INFORMATION

On March 8, 2022, the Company entered into a securities purchase agreement with Mast Hill Fund, LP (“Mast Hill”), in which Mast Hill shall purchase up to five million dollars ($5,000,000) of the Company’s common stock. In connection with the execution of the Agreement, on March 8, 2022, the Company issued Mast Hill five (5) common stock purchase warrants, respectively, for the purchase of (i) 500,000 shares of common stock (the “First Warrant”), (ii) 1,000,000 shares of common stock (the “Second Warrant”), (iii) 1,000,000 shares of common stock (the “Third Warrant”), (iv) 2,500,000 shares of common stock (the “Fourth Warrant”), and (v) 62,500,000 shares of the Company’s common stock (the “Fifth Warrant”) at the Exercise Price per share then in effect.None.

2321

ITEM 6. EXHIBITS

INDEX TO EXHIBITS

Filed or
Furnished

Incorporated by Reference

Filed or
Furnished

Incorporated by Reference

Exhibit No.

Description

Herewith

Form

Exhibit No.

Filing Date

Description

Herewith

Form

Exhibit No.

Filing Date

3.01

Articles of Incorporation of SmartMetric, Inc. 12/18/02

SB-2

3.1

09/03/04

Articles of Incorporation of SmartMetric, Inc. 12/18/02

SB-2

3.1

09/03/04

3.02

Amendment to Articles of Incorporation dated 12/11/09

8-K

3.1

12/18/09

Amendment to Articles of Incorporation dated 12/11/09

8-K

3.1

12/18/09

3.03

Amendment to Articles of Incorporation dated 06/08/16

10-K

3.5

09/28/16

Amendment to Articles of Incorporation dated 06/08/16

10-K

3.5

09/28/16

3.04

Amendment to Articles of Incorporation dated 10/17/19

8-K

3.1

12/11/19

Amendment to Articles of Incorporation dated 10/17/19

8-K

3.1

12/11/19

3.05

Amendment to Articles of Incorporation dated 05/24/21

8-K

3.1

05/28/21

Amendment to Articles of Incorporation dated 05/24/21

8-K

3.1

05/28/21

3.06

Series B Preferred Stock Certificate of Designations dated 12/11/09

8-K

3.2

12/18/09

Series B Preferred Stock Certificate of Designations dated 12/11/09

8-K

3.2

12/18/09

3.07

Amendment to Series B Preferred Stock Certificate of Designation dated 11/05/14

10-Q

3.1

11/14/14

Amendment to Series B Preferred Stock Certificate of Designation dated 11/05/14

10-Q

3.1

11/14/14

3.08

Amendment to Series B Preferred Stock Certificate of Designation dated 06/08/16

10-K

3.4

09/28/16

Amendment to Series B Preferred Stock Certificate of Designation dated 06/08/16

10-K

3.4

09/28/16

3.09

Series C Preferred Stock Certificate of Designations dated 01/14/19

8-K

3.1

01/18/19

Series C Preferred Stock Certificate of Designations dated 01/14/19

8-K

3.1

01/18/19

3.10

Series D Preferred Stock Certificate of Designations dated 07/27/21

8-K

3.1

07/29/21

Series D Preferred Stock Certificate of Designations dated 07/27/21

8-K

3.1

07/29/21

3.11

Amended and Restated Bylaws of SmartMetric

8-K

3.1

04/26/16

Amended and Restated Bylaws of SmartMetric

8-K

3.1

04/26/16

3.12

Amended and Restated Bylaws of SmartMetric

8-K

3.1

04/29/21

Amended and Restated Bylaws of SmartMetric

8-K

3.1

04/29/21

4.1

Promissory Note in the principal amount of $300,000 dated 07/23/21

8-K

4.1

07/29/21

Promissory Note in the principal amount of $300,000 dated 07/23/21

8-K

4.1

07/29/21

4.2

Common Stock Purchase Warrant dated 07/23/21

8-K

4.2

07/29/21

Common Stock Purchase Warrant dated 07/23/21

8-K

4.2

07/29/21

4.3

Form of Promissory Note dated 01/27/22

8-K

4.1

02/03/22

Form of Promissory Note dated 01/27/22

8-K

4.1

02/03/22

4.4

Form of Common Stock Purchase Warrant dated 01/27/22

8-K

4.2

02/03/22

Form of Common Stock Purchase Warrant dated 01/27/22

8-K

4.2

02/03/22

4.5

Form of Common Stock Purchase Warrant dated 03/08/22

S-1

4.13

05/23/22

Form of Common Stock Purchase Warrant dated 03/08/22

S-1

4.13

05/23/22

4.6

Promissory Note in the principal amount of $250,000 dated 03/15/22

8-K

4.1

03/21/22

Promissory Note in the principal amount of $250,000 dated 03/15/22

8-K

4.1

03/21/22

4.7

Common Stock Purchase Warrant dated 03/15/22

8-K

4.2

03/21/22

Common Stock Purchase Warrant dated 03/15/22

8-K

4.2

03/21/22

10.1

Securities Purchase Agreement dated 07/23/21

8-K

10.1

07/29/21

10.2

Form of Securities Purchase Agreement dated 01/27/22

8-K

10.1

02/03/22

10.1

Securities Purchase Agreement dated 07/23/21

8-K

10.1

07/29/21

10.2

Form of Securities Purchase Agreement dated 01/27/22

8-K

10.1

02/03/22

10.3

Equity Purchase Agreement dated 03/08/22

S-1

10.19

05/23/22

Equity Purchase Agreement dated 03/08/22

S-1

10.19

05/23/22

10.4

Registration Rights Agreement dated 03/08/22

S-1

10.20

05/23/22

Registration Rights Agreement dated 03/08/22

S-1

10.20

05/23/22

10.5

Securities Purchase Agreement dated 03/15/22

8-K

10.1

03/21/22

Securities Purchase Agreement dated 03/15/22

8-K

10.1

03/21/22

10.6**

Waiver and Consent Agreement dated 11/03/21

10-Q

10.2

02/15/22

Waiver and Consent Agreement dated 11/03/21

10-Q

10.2

02/15/22

10.7

Employment Agreement with Chaya Hendrick dated 05/13/22

S-1

10.7

05/23/22

Employment Agreement with Chaya Hendrick dated 05/13/22

S-1

10.7

05/23/22

31.1

Certification by the Principal Executive Officer of Registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a)).

31.2

Certification by the Principal Financial Officer of Registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a)).

32.1*

Certification by the Principal Executive Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*.

32.2*

Certification by the Principal Financial Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*.

101.INS

XBRL Instance Document

101.SCH

XBRL Taxonomy Extension Schema Document

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

XBRL Taxonomy Extension Label Linkbase Document

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document

104

Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101).

*	In accordance with SEC Release 33-8238, Exhibits 32.1 and 32.2 are being furnished and not filed.

**	Certain schedules, exhibits and similar attachments have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company hereby undertakes to furnish copies of such omitted materials supplementally upon request by the SEC.

2523

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	SMARTMETRIC, INC.

Dated: ~~February 22,~~May 31, 2023	By:	/s/ Chaya Hendrick
		Chaya Hendrick, President,
		Chief Executive Officer and Chairman
		(Principal Executive Officer)

Dated: ~~February 22,~~May 31, 2023	By:	/s/ Jay Needelman
		Jay Needelman, Chief Financial Officer
		(Principal Financial Officer)

2624

	Six Months Ended December 31,						Change in 2022 Versus 2021
	2022			2021			$		%
Cash at beginning of period	$	126,791		$	10,325		$	116,466		1128.0	%
Net cash used in operating activities		(667,805	)		(543,832	)		123,793		(22.8	)%
Net cash used in investing activities		-			-			-		-
Net cash provided by financing activities		584,012			573,297			10,715		1.9	%
Cash at end of period	$	42,998		$	39,790		$	3,208		8.1	%