As filed with the Securities and Exchange Commission on
November 24, 2014June 15, 2023Registration
No: 333-197692 ================================================================================No. 333-_______UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
S-1/A (AMENDMENT NO. 4)S-1REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
ASTERIKOSTAR ALLIANCE INTERNATIONAL CORP.
(Exact(Exact name of registrant as specified in its charter)
| Nevada | 1040 | 37-1757067 | ||
| State or other jurisdiction | Primary Standard Industrial | (I.R.S. Employer | ||
| incorporation or organization | Classification Code Number) | Identification |
Star Alliance International Corp.
5743 Corsa Avenue Suite 2-6834
Valley Cottage,218
Westlake Village, CA91362
310-571-0020
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
with copy to
Mark Crone, Esq.
Joe Laxague, Esq.
The Crone Law Group, P.C.
420 Lexington Avenue, Suite 2446
New York, NY 10989
10710
Telephone: (845) 512-5020
Fax: (647) 795-8676
E-mail: asteriko.corp@gmail.com
Web Site: http://www.asteriko.com
(Address,(775) 234-5221
jlaxague@cronelawgroup.com
(Address, including zip code, and telephone number, including area code of registrant'sregistrant’s principal executive offices)
Incorp Services, Inc.
2360 Corporate Circle Ste 400
Henderson, Nevada 89074-7722
Telephone: (702) 866-2500
(Name, address, including zip code, and telephone number,
including area code,
Approximate Date of agent for service)
Copies To:
MATHEAU J. W. STOUT, ESQ.
400 E. Pratt Street
8th Floor
Baltimore, Maryland 21202
(410) 429-7076 Tel
(888) 907-1740 Fax
mjwstout@gmail.com
Approximate date of commencementCommencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement.
Registration Statement.
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. [X]
☒
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act Registration Statementregistration statement number of the earlier effective Registration Statementregistration statement for the same offering. [ ]
☐
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act Registration Statementregistration statement number of the earlier effective Registration Statementregistration statement for the same offering. [ ]
☐
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act Registration Statementregistration number of the earlier effective Registration Statementregistration statement for the same offering. [ ]
☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. LargeSee definitions “large accelerated filer, [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller” “accelerated file,” and “smaller reporting company [X]
(Do not check if a smaller reporting company)
CALCULATION OF REGISTRATION FEE
================================================================================
Title of Each Proposed Proposed
Class of Maximum Maximum
Securities Offering Aggregate Amount of
to be Amount to be Price Per Offering Registration
Registered Registered Share (1) Price Fee
--------------------------------------------------------------------------------
Common Stock 10,000,000 $0.01 $100,000 $12.88
--------------------------------------------------------------------------------
Total 10,000,000 $0.01 $100,000 $12.88
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(1) There is no current market for the securities; the price at which the
shares are being offered has been arbitrarily determined by us; this price
is used for the purpose of computing the amountcompany” in Rule 12b-2 of the Exchange Act. (Check one):
| Large accelerated filer | ☐ | Accelerated filed | ☐ |
| 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. ☐
The registrant hereby amends this registration feestatement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Rule 457(a)section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission acting pursuant to said section 8(a), may determine.
The information contained in this prospectus is not complete and may be changed. A registration statement relating to these securities has been filed with the Securities and Exchange Commission and these securities may not be sold until that registration statement becomes effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
| PRELIMINARY PROSPECTUS | SUBJECT TO COMPLETION, DATED: JUNE 15, 2023 |
Star Alliance International Corp.
Up to 71,000,000 shares of Common Stock
This prospectus relates to the offer and sale, from time to time, of up to an aggregate of 71,000,000 shares (the “Shares”) of common stock, $0.001 par value per share (the “Common Stock”) of Star Alliance International Corp., a Nevada corporation (the “Company”), to be offered by the selling stockholder, Keystone Capital Partners, LLC (“Keystone” or “Selling Stockholder”) identified in this prospectus. We are registering the offer and sale of the Shares by the Selling Stockholder to satisfy registration rights we have granted to the Selling Stockholder under Common Stock Purchase Agreement (the “Purchase Agreement”) and a registration rights agreement (the “Registration Rights Agreement”), each dated March 15, 2023.
The Selling Stockholder may sell the Shares of Common Stock described in this prospectus in a number of different ways and at varying prices. We provide more information about how the Selling Stockholder may sell its shares of Common Stock in the section titled “Plan of Distribution.” The Selling Stockholder has informed us that it does not have any agreement or understanding, directly or indirectly, with any person to distribute the Common Stock.
All net proceeds from the sale or other disposition of the shares of Common Stock sold by the Selling Stockholder covered by this prospectus will go to the Selling Stockholder. The Company will not realize any proceeds from sales by the Selling Stockholder.
The Selling Stockholder is an underwriter within the meaning of the Securities Act of 1933, as amended.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A)amended (the “Securities Act”), MAY
DETERMINE.
================================================================================
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED _____ __, 2014
PRELIMINARY PROSPECTUS
ASTERIKO CORP.
10,000,000 SHARES OF COMMON STOCK AT $0.01 PER SHARE
This Prospectus relatesand any broker-dealers or agents that are involved in selling the Shares may be deemed to be underwriters within the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the Shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. The Selling Stockholder will pay all underwriting discounts and selling commissions relating to the offering by Asteriko Corp. ("Asteriko," "we,"
"our,"sale of these shares. We have agreed to pay the "Company" orlegal, accounting, printing, and other expenses related to the "Registrant")registration of a totalthe resale of 10,000,000 shares (the
"Shares")the Shares.
Our Common Stock is traded on the OTC Pink Market under the symbol “STAL”. On June 14, 2023, the last reported sale price of our common stock on a "self-underwritten" basis at a fixed price of
$0.01Common Stock was $0.0102 per share.
There is no minimum offering of the Asteriko shares.
We are a development stage company with limited earnings focusing on early-stage
business activities. This fact may impose some limitations on our shareholders'
ability to re-sell their shares
Investing in our company. Accordingly, investors should
consider our shares to be a high-risk illiquid investment (see "Risk Factors"
section).
We are not a blank check company and have no plans or intentions to engage in a
business combination following this offering.
These securities involveCommon Stock involves a high degree of risk, and prospective purchasers
should be prepared to sustain the loss of their entire investment. There is
currently no publicrisk. The trading market for the securities.
Management will have sole control over company's accounts. We have not made
arrangements to place the fundsvolume in an escrow account with a third party escrow
agent due to the costs involved. As a result, investors are subject to the risk
that creditors could attach these funds during the offering process (see "Use of
Proceeds" and "Plan of Distribution" sections)
This is our initial public offering. Prior to this offering therestock has been no
public market forlimited. Before making any investment in our common stocksecurities, you should read and we have not applied for listing or
quotationcarefully consider risks described in the “Risk Factors” section beginning on any public market. After the effective date of the registration
statement, we intend to list our common stock on the Over-The-Counter Bulletin
Board (OTCBB), which is maintained by the Financial Industry Regulatory
Authority, Inc. (FINRA).
This Offering of shares will terminate 180 days from the effective datepage 7 of this Prospectus, although we may close the Offering on any date prior if the Offering
is fully subscribed.
Our President will market our common stock and offer / sell the securities on
our behalf. This is the best effort direct participation offering that will not
utilize broker-dealer arrangement. No Officer or Director will receive any
compensation for her/his role in selling shares in the offering.
Our Director and his affiliates have not acted as promoters nor do they have a
controlling interest in any companies (either viable or dormant).
The Company is considered an "emerging growth company" as defined in the
Jumpstart Our Business Startups Act and will be subject to reduced public
company reporting requirements.
Before purchasing any of the common stock covered by this Prospectus, carefully
read and consider the risk factors included in the section entitled "RISK
FACTORS".
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this Prospectus. Any representation to the contrary is a
criminal offense.
prospectus.
You should rely only on the information contained in this Prospectus.prospectus or any prospectus supplement or amendment thereto. We have not authorized any personanyone to provide you with anydifferent information.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Prospectus dated __________, 2023
TABLE OF CONTENTS
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About This Prospectus
This prospectus is part of a registration statement on Form S-1 that we filed with the U.S. Securities and Exchange Commission (the “SEC”). You should read this prospectus and the information and documents incorporated herein by reference carefully. Such documents contain important information you should consider when making your investment decision. See “Where You Can Find Additional Information” in this prospectus.
You should rely only on the information contained in or incorporated by reference into this prospectus. Neither we nor the Selling Stockholder named herein have authorized anyone to provide you with information different from, or in addition to, that contained in or incorporated by reference into this prospectus. This prospectus is an offer to sell only the securities offered hereby but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in or incorporated by reference into this prospectus is current only as of their respective dates or on the date or dates that are specified in those documents. Our business, financial condition, results of operations and prospects may have changed since those dates.
If required, each time the Selling Stockholder offers shares of Common Stock, we will provide you with, in addition to this prospectus, a prospectus supplement that will contain specific information about this
offering, Asteriko Corp.,the terms of that offering. We may also authorize the Selling Stockholder to use one or the shares offered herebymore free writing prospectuses to be provided to you that is different frommay contain material information relating to that offering. We may also use a prospectus supplement and any related free writing prospectus to add, update or change any of the information includedcontained in this Prospectus.
THE DATE OF THIS prospectus or in documents we have incorporated by reference. This prospectus, together with any applicable prospectus supplements, any related free writing prospectuses and the documents incorporated by reference into this prospectus, includes all material information relating to this offering. To the extent that any statement that we make in a prospectus supplement is inconsistent with statements made in this prospectus, the statements made in this prospectus will be deemed modified or superseded by those made in a prospectus supplement. Please carefully read both this prospectus and any prospectus supplement together with the additional information described below before buying any of the securities offered.
As used in this prospectus, unless otherwise designated, the terms “we,” “us,” “our,” the “Company,” and “our company” refer to Star Alliance International Corp. a Nevada corporation.
Unless otherwise indicated, information contained in this prospectus or incorporated by reference herein concerning our industry and the markets in which we operate is based on information from independent industry and research organizations, other third-party sources (including industry publications, surveys and forecasts), and management estimates. Management estimates are derived from publicly available information released by independent industry analysts and third-party sources, as well as data from our internal research, and are based on assumptions made by us upon reviewing such data and our knowledge of such industry and markets, which we believe to be reasonable. Although we believe the data from these third-party sources is reliable, we have not independently verified any third-party information. In addition, projections, assumptions and estimates of the future performance of the industry in which we operate and our future performance are necessarily subject to uncertainty and risk due to a variety of factors, including those described in “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements.” These and other factors could cause results to differ materially from those expressed in the estimates made by the independent parties and by us.
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PROSPECTUS IS _______________, 2014.
TABLE OF CONTENTS
THE FOLLOWING TABLE OF CONTENTS HAS BEEN DESIGNED TO HELP YOU FIND INFORMATION
CONTAINED IN THIS PROSPECTUS. WE ENCOURAGE YOU TO READ THE ENTIRE PROSPECTUS.
SUMMARY................................................................... 3
RISK FACTORS.............................................................. 5
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS................. 11
USE OF PROCEEDS........................................................... 11
DETERMINATION OF OFFERING PRICE........................................... 12
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.................. 12
DIVIDENT POLICY........................................................... 13
DILUTION.................................................................. 13
PLAN OF DISTRIBUTION...................................................... 14
DESCRIPTION OF SECURITIES TO BE REGISTERED................................ 16
SHARES ELIGIBLE FOR FUTURE RESALE......................................... 16
INTERESTS OF NAMED EXPERTS AND COUNSEL.................................... 17
EXPERTS................................................................... 17
LEGAL MATTERS............................................................. 17
DESCRIPTION OF OUR BUSINESS............................................... 17
MANAGEMENT................................................................ 22
EXECUTIVE COMPENSATION.................................................... 25
COMPENSATION OF DIRECTORS................................................. 25
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS............................ 25
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT............ 26
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES
ACT LIABILITIES.......................................................... 26
MANAGEMENT'S DISCUSSION AND ANALYSIS...................................... 27
AVAILABLE INFORMATION..................................................... 33
WHERE YOU CAN GET MORE INFORMATION........................................ 34
2
PART I
SUMMARY
This summary provides a brief overview ofhighlights some information from this prospectus, and it may not contain all the key aspects of our offering. It
mayinformation important to making an investment decision. This summary is not complete and does not contain all of the information that is important to you. Youshould be considered before investing in our Common Stock. Potential investors should read the entire Prospectusprospectus carefully, including the more detailed information regarding our company,business provided below, the risks of purchasing our common stockCommon Stock discussed under "Riskthe “Risk Factors"” section, and our financial statements and theirthe accompanying notes.
In this Prospectus, "Asteriko," "we," "our,"notes to the "Company" orfinancial statements.
Overview
We are an early-stage company in the "Registrant"
refer to Asteriko Corp., unless the context otherwise requires. Unless otherwise
indicated, the term "fiscal year" refers to our fiscal year ending June 30.
Unless otherwise indicated, the term "common stock" refers to sharesbusiness of acquiring gold mining and other mining properties worldwide and environmentally safe and other new technologies both in mining and other business areas. As of the Company's common stock, par value $0.001 per share.
THE COMPANY
Asteriko Corp.date of this prospectus, we have not commenced our mining operations or other business activities. We anticipate starting our mining operations in the third quarter of 2023.
The Company was incorporated in the State of Nevada on April 17, 2014.2014 under the name Asteriko Corp.” Our offices are located at 616 Corporate Way, Suite 2-6834, Valley Cottage, NY
10989.
We are a development stage company with limited earnings to date and nominal
operations and assets with a focus on early-stage business activities such as
proof of concept development, small batch manufacturing and promoting our new
technology. Since incorporation, management has developed a detailedprior business plan, to provide customers with uniquewhich generated limited or no earnings, included interior decorating products, and innovative solution for their
decorative needs. Our initial product is lattice panels designed for suspended
ceiling. These panels will dynamically change the color of their surface witha travel and tourism service. Following the change of control transaction, on May 14, 2018, when our current Chairman, President and director, Richard Carey, acquired approximately 62.15% ownership of the viewing angleCompany, the Company developed its new business plan, focusing on the acquisition and /development of gold mining as well as certain other mining properties and acquisition of other business with significant patented and environmentally safe technologies both in mining and other business areas.
On August 13, 2019, the Company acquired its first assets, the assets of Troy Mining Corp, a Nevada corporation pursuant to the asset purchase agreement dated June 13, 2019 (the “Troy Asset Acquisition”), which included 78 gold mining claims consisting of approximately 4800 acres, located east/southeast of El Portal, California, in Mariposa County. In consideration for the Troy Asset Acquisition, the Company issued to Troy a promissory note in principal amount of $500,000 (the “Purchase Note”), and 1,883,000 shares of a newly-designated Series B Preferred Stock. The Purchase Note was repaid in full in April, 2022.
On January 1, 2022, the Company acquired 51% of the capital stock of Compania Minera Metalurgica Centro Americana (Commsa), a Honduran Corporation, pursuant to the share exchange agreement dated December 15, 2021 between the Company and Commsa’s sole shareholder, Juan Lemus (the “Share Exchange Agreement”), in consideration for $1,000,000 in cash and the issuance of 5,000,000 shares of the Company’s common stock to Mr. Lemus. In addition, the Company has agreed to provide up to $7,500,000 in working capital to expand the mining operations in a gold mining project (Rio Jalan Project) in Olancho state in the highlands of Central Honduras. As the result of this acquisition, the Company now owns the mining rights to five operating mines that run along a 12.5-mile stretch of the Rio Jalan River that are being prepared for production. As of the date of this prospectus, the Company is not in compliance with its obligations under the Share Exchange Agreement, since it issued to Mr. Lemus only 200,000 shares of its Common Stock and paid only $75,000 toward the required $1,000,000 cash payment.
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On February 7, 2023, the Company issued a 12% convertible promissory note to Quick Capital LLC (“Quick Capital”). The note is convertible at the lessor of 1) $0.05, or a price per share equal to the type65% of illumination.
the lowest trading price of the Company’s common stock during the 20 consecutive trading days prior to the date on which lender elects to convert all or part of the Note. In addition the Company issued Quick Capital warrants to purchase up to 1,211,111 shares of common stock. The Warrants are exercisable for shares of the Company’s common stock at a price of $0.05 per share and expire 5 five years from the date of issuance.
On February 8, 2023, the Company executed a 10% convertible promissory note with AES Capital Management, LLC (“AES”). The note is convertible at the lessor of 1) $0.02, or a price per share equal to the 65% of the lowest trading price of the Company’s common stock during the 20 consecutive trading days prior to the date on which AES elects to convert all or part of the Note.
Recent Developments
Purchase Agreement and Registration Rights Agreement with Keystone.
On March 15, 2023, the Company entered into and executed the Purchase Agreement and a Registration Rights Agreement (the “RRA”) with Keystone, pursuant to which the Company shall have the right, but not the obligation, to direct Keystone, an unrelated third party, to purchase up to 75,000,000 shares of its Common Stock (the “Shares”, pursuant to separate purchase notices to be delivered by the Company to Keystone from time to time (each, a “Purchase Notice”). The Purchase Agreement provides that each Purchase Notice may be for not less than $20,000 and not more than $75,000 worth of the Company’s Common Stock. The price per share of Common Stock shall be eighty-five percent (85%) of the average of the closing prices per share of the Company’s Common Stock for five (5) trading days preceding the purchase.
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Our aimability to require Keystone to purchase the Shares under the Purchase Agreement is subject to develop Asteriko Corp.various limitations and conditions, including but not limited to the following:
| · | The Company shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by the Purchase Agreement and the Registration Rights Agreement to be performed, satisfied or complied with by the Company; | |
| ● | The Company shall deliver to Keystone on the Commencement Date (as defined in the Purchase Agreement) the compliance certificate executed by the Company’s executive officer | |
| · | This Initial Registration Statement, which covers the resale by Keystone of the Registrable Securities (as defined in the Registration Rights Agreement), including the Commitment Shares and the shares to be issued pursuant to the Purchase Notice, shall have been declared effective under the Securities Act by the SEC, and Keystone shall be permitted to utilize the prospectus therein to resell (a) all of the Commitment Shares and (b) all of the Shares included in the prospectus | |
| · | The applicable purchase price for each Purchase Notice must be not less than $0.01 per share | |
| · | At least five (5) trading days must have passed since the last Purchase Notice | |
| · | The Company’s Common Stock must be DWAC eligible | |
| · | Keystone’s beneficial ownership of the Company’s common stock is limited such that Keystone may not purchase shares of Star’s common stock to the extent that, immediately following such purchase, Keystone would own more than 4.99% of Star’s total issued and outstanding common stock. | |
| · | Selling Stockholder shall have received an opinion from our outside legal counsel in the form previously agreed to. | |
| · | Trading of the Company’s Common Stock shall not have been suspended by the SEC, the Trading Market or the FINRA |
In consideration for Keystone entering into the Purchase Agreement and to induce Keystone to execute and deliver the Purchase Agreement, the Company has agreed to issue to Keystone Commitment Shares (as defined below) and to provide Keystone with certain registration rights with respect to the Commitment Shares in phases.accordance with the terms of the Purchase Agreement. The first phaseCommitment Shares include (i) 1,000,000 shares of development
will focusits Common Stock issued to Keystone on design solutions. The second phasethe date of the execution of the Purchase Agreement, (b) 500,000 shares of the Company’s Common Stock to be issued to Keystone on the date this initial Registration Statement will be manufacturing.
We have identified our target marketdeclared effective, and obtained initial funding(c) 2,274,588 additional shares of $10,000the Company’s Common Stock having an aggregate dollar value of $75,000 upon the investment by Keystone of more than $500,000 in the Company under the Purchase Agreement.
The shares of Common Stock that may be issued to Keystone pursuant to the Purchase Notices and the Commitment Shares, were issued and will be issued pursuant to an exemption from Mr. Tomski (our President and Director).
We will require additional funding in order to pursue our business objectives;
thereregistration under the Securities Act.
There is no guarantee that we will be successful inable to meet the foregoing conditions or any other conditions under the Purchase Agreement or that we will be able to draw down any portion of the amounts available under the Purchase Agreement.
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We also entered into the Registration Rights Agreement with Keystone, pursuant to which, we have filed this regard.
We will need to complete our offering in order to cover an estimated $9,500 in
federal securities law compliance costsInitial Registration Statement, , which includes $5,000 in accountingthis prospectus, with the SEC relating to Keystone’s resale of any shares of Common Stock it purchased under the Purchase Agreement, including the Commitment Shares we issued and auditing costs forwill issue, taking into account the 12 month period followinglimitation pursuant to Rule 415 under the Securities Act, with respect to the maximum number of the Registrable Securities that may be covered by this Initial Registration Statement. The effectiveness of our
registration statement.
Currently, our President devotes approximately fifteen hoursthis Initial Registration Statement is a week to the
Company. We will require the funds from this offering in order to fully
implement our business plan (as discussed in the "Plan of Operation" section of
this Prospectus).
Our financial statements from inception (April 17, 2014) through September 30,
2014 report revenue of $3,808, net loss of ($3,240), and total assets of $6,415
including cash balance of $5,773, which was generated from the sale of 5,000,000
shares to our President and Director, and advances from Director's loan. We
anticipate incurring average quarterly operational costs of about $5,000 until
our offering is completed.
Investors should be aware that our independent auditors have issued an audit
opinion which includes a statement expressing substantial doubt ascondition precedent to our ability to continuesell shares of our Common Stock to Keystone under the Purchase Agreement. The Company will use its commercially reasonable efforts to amend the Initial Registration Statement or file a new Registration Statement, to cover all of such Registrable Securities, subject to any limits that may be imposed by the SEC pursuant to Rule 415 under the Securities Act.
If all 71,000,000 shares offered in this Initial Registration Statement pursuant to this prospectus were sold, they would represent approximately 24.9 % of the total number of shares of our Common Stock outstanding as of the date of this prospectus. Issuance of the shares in this offering will not affect the rights or privileges of our existing stockholders except that the economic and voting interests of each of our existing stockholders will be diluted as a going concern forresult of any such issuances. Although the next 12 months. Our auditor's
opinion is based onnumber of shares of our initial financial loss, limited operations, and limited
working capital. Our sourceCommon Stock that our existing stockholders own will not decrease, the shares owned by our existing stockholders will represent a smaller percentage of cash at this time is investments and loans from
our Director and three salestotal outstanding shares after any issuances of shares of our Common Stock to the home remodeling companiesSelling Stockholder.
Acquisition of 51% of Lion Works and Genesis
On March 19, 2023, the Company entered into and executed a share purchase agreement (the “Share Purchase Agreement”) with Lion Works Advertising, SA, a Guatemalan corporation (“Lion Works”) and Juan Lemus, the sole shareholder of Lion Works, pursuant to which it acquired from Mr. Lemus 51% of the capital stock of Lion Works, including 51% of the intellectual property rights and know-how related to the Genesis extraction system (“Genesis”), The Share Purchase Agreement superseded the terms of the binding Letter of Intent that generated
revenuethe parties entered into and executed by the parties on November 21, 2021. Pursuant to the terms of $3,808. We currently do not have any written agreementsthe Share Purchase Agreement, Genesis will be managed by a new company, in place for
any investments or loans from third parties. We must raise cashwhich the Company will own 51% interest, with the remaining 49% interest to implement our
projectsbe owned by Juan Lemus. The Company’s title and expand our operations.
Investors mustrights to Genesis are subject to the satisfaction of the following obligations:
| · | The Company shall pay the total purchase price of $5,100,000 in cash, with the first minimum payment in the amount of $2,550,000 to be paid by September 30, 2023, and the remaining outstanding balance of $2,550,000 to be paid by September 30, 2024, within 12 months of the first payment. | |
| · | The Company will invest an additional 5,000,000 as a working capital toward the development of the Genesis plants, with $2,000,000 to be paid by July 31, 2023 and the remaining $3,000,000 to be paid by July 31, 2024, within 12 months of the first payment. | |
| · | The Company will engage a patent attorney and pay for the cost of that patent attorney to prepare the patent application related to Genesis and to register that patent, provided that Lion Works will engage an expert to prepare a report on the Genesis system, to be used in this patent application. |
To secure the Company’s obligations under the Share Purchase Agreement, Juan Lemus placed the lien on the 51% of the Company’s capital stock in Lion Works and, upon formation of a new company, that lien will be awareplaced on the Company’s ownership in that we do not have sufficient capitalnewly formed subsidiary. Such lien shall continue until the Company performs all its obligations under the Share Purchase Agreement, which subjects the Company to independently
finance our own plans. We have no arrangements or contingencies in placethe risk of losing its title to Genesis in the event of ceased operations,breach of its obligations set forth in which case investors would lose their entire
investment.
THE OFFERING
Wethe Share Purchase Agreement.
Corporate Information
Our principal executive offices are offering, on a self-underwritten basis, a total of 10,000,000 shareslocated at 5743 Corsa Avenue Suite 218, Westlake Village, CA 91362. Our telephone number is 833-443-7827.
Employees
The Company currently has two employees, its President and Chairman, Richard Carey, Anthony Anish, Chief Financial Officer, and Corporate Secretary. The management of the common stock of our Company at a price of $0.01 per share. This is a fixed
price Offering. This Offering of shares will terminate 180 days from the
effective date of this Prospectus, although we may close the Offering on any
date prior if the Offering is fully subscribed. The offering price of the common
stock has been arbitrarily determinedexpects to use consultants, attorneys and bears no relationship to any objective
criterion of value. The priceaccountants as necessary, and does not bearanticipate a need to engage any relationshipfull-time employees so long as it is seeking and evaluating business opportunities. The need for employees and their availability will be addressed in connection with the decision whether or not to acquire or participate in specific business opportunities.
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SUMMARY OF THE OFFERING
| Issuer: | Star Alliance International Corp. | |
| Securities Being Offered by the Selling Stockholder: | Up to 71,000,000 shares of our Common Stock, including (i) 1,000,000 issued to the Selling Stockholder as Commitment Shares, (ii) 500,000 Commitment Shares of the Company’s Common Stock to be issued to the Selling Stockholder on the date this Registration Statement will be declared effective, (iii) 2,274,588 additional shares of the Company’s Common Stock having an aggregate dollar value of $75,000, to be issued upon the investment by the Selling Stockholder of more than $500,000 in the Company under the Purchase Agreement and (iv) the remaining shares may be purchased by the Selling Stockholder and issuable under the Purchase Agreement (the reduced number of shares of Common Stock issuable under the Purchase Agreement reflects the limitation pursuant to Rule 415 under the Securities Act, with respect to the maximum number of the Registrable Securities that may be covered by this Initial Registration Statement). | |
| Offering Price: | The Selling Stockholder may offer, sell, or distribute all or a portion of the Shares registered hereby either through public or private transactions at prevailing market prices or at negotiated prices. See “Plan of Distribution”. | |
| Common stock outstanding before this offering: | 213,603,598 shares (1) | |
| Common stock outstanding after the offering: | 284,603,598 shares. Assumes that the Selling Stockholder sells all of the Shares offered pursuant to this prospectus. | |
| Terms of the offering: | The Selling Stockholder will determine when and how it sells the Shares offered in this Prospectus as described in “Plan of Distribution.” | |
| Use of proceeds: | We will not receive any proceeds from the sale of the Shares by the Selling Stockholder. We have agreed to bear the expenses relating to the registration of the Shares. See “Use of Proceeds.” | |
| Risk factors: | See “Risk Factors” and the other information included in this prospectus for a discussion of factors you should carefully consider before deciding to invest in our Common Stock. | |
| Market Information | Our shares of Common Stock are traded on the Pink Market of OTC Markets, Inc. under the symbol “STAL.” |
(1) As of June 15, 2023.
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RISK FACTORS
Investing in our assets, book
value, historical earnings or net worth.
There is no minimum offering of the Asteriko shares; investors will not receive
a return of their investment if all shares are not sold.
3
The purchase of the common stock in this offeringCommon Stock involves a high degree of risk. The common stock offeredBefore investing in our Common Stock, you should carefully consider the risks described below, as well as the other information in this Prospectusprospectus, Investors should consider carefully the following information about these risks, together with the other information contained in this prospectus, including our consolidated financial statements and the related notes. If any of the following risks actually occur, the business, financial condition or results of operations of the Company could be materially adversely affected, the market price of the Common Stock would likely decline, and investors could lose all or a portion of their investment
Risks Related to our Business and Industry.
Risks Related to the Company
We are an early operational stage company and our success is for investment purposes
only; no market forsubject to the substantial risks inherent in the establishment of a new business venture.
The implementation of our common stock currently exists. Please referbusiness strategy and our business operations are in the early stage and subject to "RISK
FACTORS"all of the risks inherent in the establishment of a new business venture. Accordingly, our intended business operations may not prove to be successful in the near future, if at all. Any future success that we might enjoy will depend upon many factors, several of which may be beyond our control, or which cannot be predicted at this time, and "DILUTION" sections before makingwhich could have a material adverse effect upon our financial condition, business prospects and operations and the value of an investment in our stock.
Securities Being Offered 10,000,000 shares of common stock
Offering Price $0.01 per share
Offering Periodcompany.
Our financial situation creates doubt whether we will continue as a going concern.
Since inception, the Company has incurred significant operating losses and has a working capital deficit and accrued liabilities. The shares are being offered forfinancial statements have been prepared assuming that the Company will continue as a periodgoing concern and, accordingly, do not to
exceed 180 daysinclude any adjustments that might result from the effective dateoutcome of this Prospectus
Numberuncertainty. The Company’s existing operational cash flow is not sufficient to fund presently anticipated operations, and the Company will need to raise additional funds through alternative sources of Common Stock
Issued and Outstanding
Before Offering 5,000,000, allfinancing. The Company also has contractual obligations to various parties to make cash payments timely. As of which are held by our President
Number of Common Stock
to be Issued and
Outstanding After Offering 15,000,000 shares
Net Gross Proceeds to
Our Company $100,000
Use of Proceeds Funding of business operations
Risk Factors The securities offered hereby involve a high degree
of risk and should not be purchased by investors
who cannot afford the loss of their entire
investment. See "Risk Factors" section.
Going Concern From inception until the date of this filing, we
have had limited operating activities. Our
financial statements from inception (April 17,
2014) through Septmber 30, 2014, report revenueprospectus, the Company is in default with its obligations under the Share Exchange Agreement in connection with its purchase of $3,808 and a net loss51% of ($5,834). Our independent
registered public accounting firmCommsa. It also has issued an
audit opinion for Asteriko which includes an
explanatory paragraph asobligations to an uncertaintypay $2,000,000 by July 31, 2023 with respect to “Genesis” program it just acquired and the Company'soutstanding. There is no assurance that the Company will be able to obtain additional funding when it is needed, or that such funding, if available, will be obtainable on terms acceptable to us. There can be no assurances that we will ever be able to achieve a level of revenues adequate to generate sufficient cash flow from operations or obtain additional financing through private placements, public offerings and/or bank financing necessary to support our working capital requirements and to pay our contractual obligations. If we cannot obtain needed funds, we may be forced to reduce or cease our activities with a consequent loss to investors. In addition, should we incur significant presently unforeseen expenses or delays, we may not be able to accomplish our goals. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. Our President and Director does not intendIf the Company is unable to purchase any shares in this
offering.
SUMMARY FINANCIAL INFORMATION
The following tables set forth a summary of the Company's financial information
as provided in its year-end financial statements. You should read this
information together with our audited financial statements and the notes thereto
appearing elsewhere in this Prospectus and the information under "Management's
Discussion and Analysis of Financial Condition and Results of Operations."
BALANCE SHEETS
September 30, 2014 June 30, 2014
------------------ -------------
(Unaudited)
Cash $ 5,773 $10,000
Total current assets $ 5,773 $10,713
Current liabilities $ 7,249 $ 8,984
Total stockholder's equity (deficit) $ (834) $ 2,406
STATEMENTS OF OPERATIONS
For the Period
For the Three Months from April 17, 2014
Ended (inception) through
September 30, 2014 June 30, 2014
------------------ -------------
(Unaudited)
Revenue $ 569 $ 3,239
Total operating expenses $ 3,809 $ 5,833
Net loss $(3,240) $(2,594)
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RISK FACTORS
An investment in our common stock involves a high degree of risk. You should
carefully consider the risks described below and the other information in this
Prospectus before investing in our common stock. If any of the risks disclosed
below occur,obtain sufficient funding, our business, operating results andprospects, financial condition couldand results of operations will be seriously harmed.
We do not plan to register our common stock under Section 12(g) of the
Securities Exchange Act of 1934 ("Exchange Act") by filing a Form 8-A on a
pre-effective basis. The consequences to investors of us being a Section 15(d)
registrant in comparison to a Section 12(g) registrant are as follows: Under
Section 15(d) of the Exchange Act, we are not required to file periodic reports
if we have less than 300 holders of record for the fiscal year after the year of
effectiveness. If we do not register our securities under Section 12 of the
Exchange Act,materially and adversely affected, and we may not have an ongoing periodic reporting obligation and will
not be subject to the Commission's proxy rules and Section 16 of the Exchange
Act.
RISKS RELATED TO OUR BUSINESS
GOING CONCERN
Our independent auditors express substantial doubt about our abilityunable to continue as a going concern. This opinion is based on limited operations
We may have difficulty raising additional capital, which could deprive us of necessary resources.
We expect to date, the
needcontinue to secure additional financingdevote significant capital resources to fund set up and marketing. In order to support our operating plan. We have
completedthe initiatives envisioned in our business plan, identified target market, and commenced our
business activities with 4 sales to-date. We cannot guarantee full success of
our business.we will need to raise additional funds through public or private debt or equity financing, collaborative relationships or other arrangements. Our ability to designraise additional financing depends on many factors beyond our control, including the state of capital markets, the market price of our common stock and manufacture color panelsthe development or prospects for the development of competitive technology by others. Because our common stock is dependent
upon obtaining sufficient finances. There islisted on the OTC Markets, many investors may not be willing or allowed to purchase it or may demand steep discounts. Sufficient additional operational risk of
product design/manufacturingfinancing may not be available to ensure customer satisfaction. Our competitive
position in North America within the industry in negligible in light of the
recent start up. Weus or may be unableavailable only on terms that would result in further dilution to attract enough customersthe current owners of our common stock. If we are unsuccessful in raising additional capital, or the terms of raising such capital are unacceptable, we may have to compete
effectively.
AS A DEVELOPMENT STAGE COMPANY, AN INVESTMENT IN OUR COMPANY IS CONSIDERED A
HIGH RISK INVESTMENT WHEREBY YOU COULD LOSE YOUR ENTIRE INVESTMENT
We will incur significant expenses in order to implementmodify our business plan including estimated $9,500 in federal securities law compliance costs for the 12
month period following the effectiveness ofand/or significantly curtail our registration statement. As an
investor, you should be aware of the difficulties, delaysplanned activities and expenses normally
encountered by an enterprise in the development stage, many of which are beyondother operations.
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Failure to manage our control (such as unanticipated developmental expenses, inventory costs,
employment costs, advertising and marketing expenses). We cannot assure you that
our proposed business plan as described in this Prospectus will materialize or
prove successful.
OUR COMPANY MAY NOT SUSTAIN UNLESS WE FIND SUFFICIENT NUMBER OF CUSTOMERS
INTERESTED IN OUR PRODUCTS
We have developed a new product that customers are not familiar with and it may
take some time and marketing effort to properly introduce it to the potential
customers.
OUR BUSINESS OPERATIONS ARE DEPENDENT UPON THE FUNDS TO BE RAISED IN THIS
OFFERING.
We require the proceeds from this Offering in order to expand our operations. It
will enable us (after paying the expenses of this Offering) to design and
manufacture color panels in 2014 and potentially expand operations in 2015. We
estimate that it will cost us $25,000 to design and manufacture color panels and
cover all related licensing fees and the SEC compliance and filing expenses
including legal fees.
It will also allow us to initiate our marketing plans and prepare support
material such as promotional video, web site and web advertising with an
estimated cost of $2,500. We may need additional funds to furthergrowth effectively could cause our business activitiesto suffer and to achieve a sustainable sales level where ongoing operations and
expansion can be funded out of profits. There is no assurance that any
additional financing will be available or if available, on terms that will be
acceptable to us.
BUSINESS EVALUATION IS DIFFICULT SINCE WE HAVE NOT YET COMMENCED SIGNIFICANT
BUSINESS ACTIVITIES
We were incorporated on April 17, 2014 and to date have been involved primarily
in organizational activities.
We have generated revenue of $3,808 and have incurred total losses of ($5,834)
from inception to September 30, 2014.
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You cannot evaluate our business or our future prospects due to our lack of
operating history. To-date, we have been involved in limited business activities
(4 pilot sales). Potential investors should be aware of the difficulties
normally encountered by development stage companies and the high rate of failure
of such enterprises. In addition, there is no guarantee that we will commence
full business operations.
Furthermore, we anticipate that we will incur increased operating expenses
without realizing any significant revenue. We therefore expect to incur
significant losses into the foreseeable future. We recognize that if we are
unable to generate sufficient revenues from selling color panels, we will not be
able to continue operations.
IF OUR PRESIDENT LEAVES THE COMPANY PRIOR TO SECURING REPLACEMENTS, WE WILL BE
LEFT WITHOUT MANAGEMENT AND OUR BUSINESS OPERATIONS WOULD CEASE
We depend on the services of our President, Ilia Tomski, and our success depends
on the decisions made by him. The loss of the services of our President could have an adverse effect on our business, financial condition and operating results.
Failure to manage our growth effectively could cause our business to suffer and have an adverse effect on our financial condition and operating results. To manage our growth effectively, we must continually evaluate and evolve our business and manage our employees, operations, finances, technology and development, and capital investments efficiently. Our efficiency, productivity and the quality of our business may be adversely impacted if we fail to appropriately coordinate across our business operations. Additionally, rapid growth may place a strain on our resources, infrastructure, and ability to maintain the quality of our production. If and when our structure becomes more complex as we add additional staff, we will need to improve our operational, financial and management controls as well as our reporting systems and procedures. Our failure to manage our growth could disrupt our operations and ultimately prevent us from generating revenues.
If our business plans are not successful, we may not be able to continue operations as a going concern and our shareholders may lose their entire investment in us.
Our ability to manage growth effectively will depend on our ability to quickly scale-up operations and to recruit, train and manage operations, management, and technical personnel. There can be no assurance that management will be able to manage growth effectively. However, our current plan calls for retaining the current successful management team and adding experienced personnel to the team to enable us to meet our production expansion plan.
If we do not properly manage the growth of our business, we may experience significant strains on our management and operations and disruptions in our business. Our failure to properly manage our planned rapid transition to fully active mining operations at the California mining properties could negatively impact our ability to execute our operating plan and, accordingly, could have an adverse impact on our business, and our cash flow and results of operations. ThereIn addition, we may not have sufficient working capital to fund the expansion of our operations and to provide the working capital necessary for our ongoing operations and obligations. We may need to raise significant additional capital to fund our operating expenses, pay our obligations, and grow our company. Therefore, our future operations may be adversely impacted.
Our intellectual property rights are critical to our success, and the loss of such rights could materially adversely affect our business.
We acquired intellectual property rights related to Genesis, which is critical to our success, and we attempt to protect such intellectual property with registered and common law trademarks, restrictions on disclosure and other actions to prevent infringement. However, there can be no assurance that our Presidentother third parties will not leaveinfringe or misappropriate our trademarks and similar proprietary rights. If we lose some or all of our intellectual property rights, our business may be materially adversely affected.
We may be subject to intellectual property infringement claims, which may be expensive to defend and may disrupt our business and operations.
We cannot be certain that our operations or any aspects of our business do not or will not infringe upon or otherwise violate intellectual property rights held by third parties. We have not but in the companyfuture may be, subject to legal proceedings and claims relating to the intellectual property rights of others. There could also be existing intellectual property of which we are not aware that our products may inadvertently infringe. We cannot assure you that holders of intellectual property purportedly relating to some aspect of our technology or competebusiness, if any such holders exist, would not seek to enforce such intellectual property against us in the United States, or any other jurisdictions. We could be required to participate in interference proceedings involving issued patents and pending applications of another entity. The cost to us of any such proceeding could be substantial. An adverse outcome in an interference proceeding could require us to cease using the technology, substantially modify it or to license rights from prevailing third parties. In addition, third parties may, in the future, asassert other intellectual property infringement claims against us with respect to our services and technologies. If we presentlyare found to have no employment
agreement with him. In such circumstance,violated the intellectual property rights of others, we may havebe subject to recruit qualified
personnel with competitive compensation packages, equity participation and other
benefits that may affect the working capital availableliability for our infringement activities or may be prohibited from using such intellectual property, and we may incur licensing fees or be forced to develop alternatives of our own.
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Our future acquisitions and capital raises may dilute our existing shareholders’ ownership, the value of their equity securities and/or have other adverse effects on our operations.
All our recent acquisitions resulted in the issuance of equity securities by the Company, and we are planning more acquisitions in the near future which will require the Company to issue equity securities. Also, we may raise additional capital by issuing equity securities or debt instruments. The issuance of additional shares of common stock in future acquisitions or subsequent offerings for the will result in immediate and substantial dilution to our existing shareholders. If we raise additional funds by issuing debt instruments, these debt instruments could impose significant restrictions on our operations, including liens on our assets. If we raise additional funds through collaborations and licensing arrangements, we may be required to relinquish some rights to our technologies or products, or to grant licenses on terms that are not favorable to us or could diminish the rights of our shareholders. Furthermore, if we offer to sell our shares of common stock in subsequent offerings for the purchase price that is less than the purchase price of shares of common stock offered pursuant to this prospectus, this may impact the value of equity securities of out existing shareholders. In addition, the issuance of such additional shares may impact the ability of any investor to sell their shares once such shares are eligible for sale.
Our failure to attractadopt certain corporate governance procedures may prevent us from obtaining a listing on a national securities exchange.
We do not have an audit, compensation, or nominating and corporate governance committee. The functions such committees would perform are performed by the board as a whole. Consequently, there is a potential conflict of interest in board decisions that may adversely affect our ability to become a listed security on a national securities exchange and as a result adversely affect the liquidity of our common stock.
Since our management beneficially owns substantial voting power, their interests may differ from the interests of our other shareholders, which could cause a material decline in the value of our shares.
As of the date of this Initial Registration Statement, our officers and directors beneficially own approximately 41.2% of shares of Common Stock. In addition, our Chairman and President owns 1,000,000 shares of Series A Preferred Stock, which vote with the common stock as if each share of Series A Preferred Stock had been converted into 500 shares of common stock. Accordingly, management beneficially controls most of the voting stock of the Company. As a result, management has significant influence on determining the outcome of any matters submitted to the shareholders for approval, including mergers, consolidations, the election of directors and other significant corporate actions. This ownership and control may also have the effect of delaying or preventing a future change in control, impeding a merger, consolidation, takeover or other business combination that may be in the best interest of the Company. Without the consent of management, we may be prevented from entering into transactions that could be beneficial to us or our minority shareholders. The interest of management may differ from the interests of our other shareholders. The concentration in the ownership of our shares may cause a material decline in the value of our shares. We cannot assure you that management will act in our best interests given management’s ability to control a significant majority of our voting shares.
Risks Related to Our Business
Mining and Exploration activities involve a high degree of risk.
When we commence operations on our mining properties, we will be subject to all the hazards and risks normally encountered in the mining of and exploration for deposits of gold and other minerals. These hazards and risks include, without limitation, unusual and unexpected geologic formations, seismic activity, rock bursts, pit-wall failures, cave-ins, flooding and other conditions involved in the drilling and removal of material, any of which could result in damage to, or destruction of, mines and other producing facilities, damage to life or property, environmental damage and legal liability. Milling operations, if any, are subject to various hazards, including, without limitation, equipment failure and failure of retaining dams around tailings disposal areas, which may result in environmental pollution and legal liability.
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The parameters that would be used at our properties in estimating possible mining and processing efficiencies would be based on the testing and experience our management has acquired in operations elsewhere. Various unforeseen conditions can occur that may materially affect estimates based on those parameters. In particular, past mining operations with respect to gold mining properties we acquired from Troy indicate that proper steps are taken to ensure that the underground mining operations are executed as planned. Other unforeseen and uncontrollable difficulties may occur in planned operations at our properties that could lead to failure of the operation. When we are ready to re-open mining properties we acquired from Troy and build a gold mining operation based on existing or additional qualified employeesdeposits of gold mineralization that may be discovered and proven, we plan to process the resource using Genesis innovative technology, where plants can be placed in customer mining sites including mining sites we acquired from Troy. This green, environmentally friendly, process, extracts up to 98% of the gold ore from the rock. Furthermore, the process takes no more than 24 hours which is considerably shorter than the 40 to 120 days’ other leaching processes take. We believe that this technology will be very efficient, however it may not be as economical, as we anticipate, and we may never achieve profitability. Furthermore, this project will require us to invest up to $5,000,000 with respect to using the “Genesis” ore extraction process. We may also lose our title to Genesis if we do not perform all of our obligations under the Share Purchase Agreement, as a lien was placed on the Company’s 51% ownership, which will be later placed on our ownership in the new company that will own Genesis.
Growing production costs could affect our financial condition.
We anticipate that costs at our projects that we may explore or develop, will frequently be subject to retainvariation from one year to the servicesnext due to a number of Mr. Tomskifactors, such as changing ore grade, metallurgy and revisions to mine plans, if any, in response to the physical shape and location of the ore body. In addition, costs are affected by the price of commodities such as fuel, rubber, and electricity. Such commodities are at times subject to volatile price movements, including increases that could make extraction at certain operations less profitable. A material increase in costs at any significant location could have a significant effect on our profitability.
Shortage of equipment and supplies could adversely affect our ability to operate our business.
We are dependent on various supplies and equipment to carry out our mining exploration and, if warranted, development and production operations. The shortage of such supplies, equipment and parts could have a material adverse effect on our operatingability to carry out our operations and therefore limit or increase the cost of reaching production.
We may be adversely affected by a fluctuation and potential decrease in gold prices.
The value and price of our securities, our financial results, and our exploration activities may be significantly adversely affected by declines in the price of gold and other precious metals. Gold prices fluctuate widely and are affected by numerous factors beyond our control such as interest rates, exchange rates, inflation or deflation, fluctuation in the relative value of the United States dollar against foreign currencies on the world market, global and regional supply and demand for gold, and the political and economic conditions of gold producing countries throughout the world. The price for gold fluctuates in response to many factors beyond anyone’s ability to predict. The prices that would be used in making any economic assessment estimates of mineralized material on our properties would be disclosed and would probably differ from daily prices quoted in the news media. Percentage changes in the price of gold cannot be directly related to any estimated resource quantities at any of our properties, as they are affected by a number of additional factors. For example, a ten percent change in the price of gold may have little impact on any estimated quantities of commercially viable mineralized mining properties we acquired from Troy and in Honduras and would affect only the resultant cash flow. Because any future mining at these properties would occur over a number of years, it may be prudent to continue mining for some periods during which cash flows are temporarily negative for a variety of reasons, including a belief that a low price of gold is temporary and/or that a greater expense would be incurred in temporarily or permanently closing a mine there. In addition to adversely affecting any of our mineralized material estimates and its financial condition. We will fail without appropriate replacements.
ALTHOUGH OUR PRESIDENT IS NOT CURRENTLY RECEIVING COMPENSATION FOR HIS SERVICES,
HE MAY DECIDE TO PAY HIMSELF, WHICH WILL ADVERSELY IMPACT ANY POTENTIAL NET
PROFIT THAT WE MAY GENERATE
aspects, declining metal prices may impact our operations by requiring a reassessment of the commercial feasibility of a particular project. Such a reassessment may be the result of a management decision related to a particular event, such as a cave-in of a mine tunnel or open pit wall. Even if any of our projects may ultimately be determined to be economically viable, the need to conduct such a reassessment may cause substantial delays in establishing operations or may interrupt on-going operations, if any, until the reassessment can be completed.
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Government regulation may adversely affect our business and planned operations.
Our mining activities are subject to various laws governing prospecting, mining, development, production, taxes, labor standards and occupational health, mine safety, toxic substances, land use, water use, land claims of local residents and other matters in the United States. New rules and regulations may be enacted or existing rules and regulations may be applied in a manner that could limit or curtail exploration at our mining properties in California and Honduras. The economics of any potential mining operation on our properties would be particularly sensitive to changes in the tax regimes.
Amendments to current laws, regulations and permits governing our operations and the general activities of mining and exploration companies, or more stringent implementation thereof, could cause unanticipated increases in our exploration expenses, capital expenditures or future extraction or production costs, or could result in abandonment or delays in establishing operations at our mining properties in California and Honduras.
Our activities are subject to environmental laws and regulation that may materially adversely affect our future operations, in which case our operations could be suspended or terminated.
We are subject to a variety of federal, state and local statutes, rules and regulations in connection with our exploration activities. We are required to obtain various governmental permits to conduct exploration at and development of our property. Obtaining the necessary governmental permits is often a complex and time-consuming process involving numerous federal, state and local agencies. The duration and success of each permitting effort is contingent upon many variables not currently compensatingwithin our President for providing management
services to us.control. In the futurecontext of permitting, including the approval of reclamation plans, we might pay him compensation ifmust comply with known standards, existing laws, and regulations that may entail greater or lesser costs and delays depending on the cash flow
generated from operations significantly exceeds our total expenses. Mr. Tomski,
as our Presidentnature of the activity to be permitted and Director, has the powerinterpretation of the laws and regulations implemented by the permitting authority. The failure to set his own compensation as he
sees fit. If he determines to compensate himself, itobtain certain permits or the adoption of more stringent permitting requirements could have ana material adverse effect on our net profit, if any.
OUR MANAGEMENT HAS LIMITED PRIOR EXPERIENCE IN THE MANUFACTURING SECTOR AND
THEREFORE MAY NOT BE ABLE TO SUCCESSFULLY MANAGE THE DEVELOPMENT AND GROWTH OF
OUR COMPANY IN THIS FIELD
Our management has limited experiencebusiness, plans of operation, and property in manufacturing sector. Although Mr.
Tomski has over 12 years of experience in designing new hi-tech devices such as
high vacuum systems for utilization in particle accelerator applications in
general and for Accelerator Mass Spectrometry applications in particular; ion
optical elements such as atmospheric pressure to vacuum sampling interface, ion
guides, ion collision cells that are vital components of commercial mass
spectrometers for bio-medical applications; cryogenic systems for commercial
superconducting gravity gradiometer this also includes design and manufacturing
of superconducting electrical circuits and gradiometer sensor components.
However, Mr. Tomski has limited experience in manufacturing this may result in
serious missteps in development/implementation of our business plan.
SINCE OUR PRESIDENT AND DIRECTOR HAS NO FORMAL TRAINING IN FINANCIAL ACCOUNTING
AND MANAGEMENT, IN THE FUTURE, OUR DISCLOSURE AND ACCOUNTING CONTROLS MAY NOT BE
EFFECTIVE TO COMPLY WITH APPLICABLE LAWS AND REGULATIONS, WHICH COULD RESULT IN
POTENTIAL FINES, PENALTIES AND ASSESSMENTS
Our President and Director has no formal training in financial accounting and
management; however, he has been preparing the financial statements that have
been audited and reviewed by our auditors (included in this Prospectus).
Furthermore, he is responsible for our managerial and organizational structure,
which will include preparation of disclosure and accounting controls pursuant to
Section 404 of the Sarbanes-Oxley Act of 2002 (the SOX Act). Inability to create
and implement the disclosure and accounting controls required under the SOX Act
could result in fines, penalties and assessments against the company, and could
ultimately cause you to lose your entire investment.
THE LACK OF PUBLIC COMPANY EXPERIENCE OF OUR PRESIDENT AND DIRECTOR COULD
ADVERSELY IMPACT OUR ABILITY TO COMPLY WITH THE REPORTING REQUIREMENTS OF U.S.
SECURITIES LAWS
Mr. Ilia Tomski, our President and Director, has had no responsibility for
managing a public company in the United States, which could impair our ability
to comply with legal and regulatory requirements such as those imposed by the
Sarbanes-Oxley Act of 2002. Such responsibility includes complying with federal
securities laws and making required disclosures on a timely basis. In addition,
Mr. Tomskiwe may not be able to implement programsproceed with our exploration programs. Compliance with statutory environmental quality requirements may require significant capital investments, significantly affect our earning power, or cause material changes in our intended activities. Environmental standards imposed by federal, state, or local governments may be changed or become more stringent in the future, which could materially and policiesadversely affect our proposed activities. As a result of these matters, our operations could be suspended or cease entirely.
Minerals exploration and mining are subject to potential risks and liabilities associated with pollution of the environment and the disposal of waste products occurring as a result of mineral exploration and production. Insurance against environmental risk (including potential liability for pollution or other hazards as a result of the disposal of waste products occurring from exploration and production) is not generally available to us (or to other companies in an effectivethe minerals industry) at a reasonable price. To the extent that we become subject to environmental liabilities, the remediation of any such liabilities would reduce funds otherwise available to us and timely manner or in a manner which adequately responds to such increased
legal, regulatory compliance and reporting requirements, including establishing
and maintaining internal controls over financial reporting. Any such
deficiencies, weaknesses or lack of compliance could have a materiallymaterial adverse effect on our financial condition. Laws and regulations intended to ensure the protection of the environment are constantly changing, and are generally becoming more restrictive.
Federal legislation and regulations adopted and administered by the U.S. Environmental Protection Agency, Forest Service, Bureau of Land Management (“BLM”), Fish and Wildlife Service, Mine Safety and Health Administration, and other federal agencies, and legislation such as the Federal Clean Water Act, Clean Air Act, National Environmental Policy Act, Endangered Species Act, and Comprehensive Environmental Response, Compensation, and Liability Act, have a direct bearing on U.S. exploration and mining operations within the United States. These regulations will make the process for preparing and obtaining approval of a plan of operations much more time-consuming, expensive, and uncertain. Plans of operation will be required to include detailed baseline environmental information and address how detailed reclamation performance standards will be met. In addition, all activities for which plans of operation are required will be subject to review by the BLM, which must make a finding that the conditions, practices or activities do not cause substantial irreparable harm to significant scientific, cultural, or environmental resource values that cannot be effectively mitigated.
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U.S. federal initiatives are often administered and enforced through state agencies operating under parallel state statutes and regulations. Although some mines continue to be approved in the United States, the process is increasingly cumbersome, time-consuming, and expensive, and the cost and uncertainty associated with the permitting process could have a material effect on exploring and mining our properties. Compliance with statutory environmental quality requirements described above may require significant capital investments, significantly affect our earning power, or cause material changes in our intended activities. Environmental standards imposed by federal, state, or local governments may be changed or become more stringent in the future, which could materially and adversely affect our proposed activities. As a result of these matters, our operations could be suspended or cease entirely.
Our mining properties in California include federal lands, and, therefore we need to file plans of operations with the BLM. We also could be subject to obtaining watercourse diversion permits from the U.S. Army Corp of Engineers. There may also be regulations in Honduras and Guatemala that we are not aware of or that might change without notice.
Land reclamation requirements for our properties may be burdensome and expensive.
Although variable depending on location and the governing authority, land reclamation requirements are generally imposed on mineral exploration companies (as well as companies with mining operations) in order to minimize long term effects of land disturbance.
Reclamation may include requirements to:
| · | control dispersion of potentially deleterious effluents; and | |
| · | reasonably re-establish pre-disturbance land forms and vegetation. |
In order to carry out reclamation obligations imposed on us in connection with our potential development activities, we must allocate financial resources that might otherwise be spent on further exploration and development programs. If we are required to carry out unanticipated reclamation work, our financial position could be adversely affected.
Future legislation and administrative changes to the mining laws could prevent us from exploring and operating our properties.
New local, state and U.S. federal laws and regulations, amendments to existing laws and regulations, administrative interpretation of existing laws and regulations, or more stringent enforcement of existing laws and regulations, could have a material adverse impact on our ability to conduct exploration and mining activities. Any change in the regulatory structure making it more expensive to engage in mining activities could cause us to cease operations. We are at this time unaware of any proposed U.S. federal laws and regulations or California laws and regulations that would have an adverse impact on the future of our California mining properties.
Regulations and pending legislation governing issues involving climate change could result in increased operating costs, which could have a material adverse effect on our business.
A number of governments or governmental bodies have introduced or are contemplating regulatory changes in response to various climate change interest groups and the potential impact of climate change. Legislation and increased regulation regarding climate change could impose significant costs on us, our venture partners and our suppliers, including costs related to increased energy requirements, capital equipment, environmental monitoring and reporting and other costs to comply with the reporting requirements of the Exchange
Act, which is necessary to maintain our public company status. If we were to
fail to fulfill those obligations,such regulations. Any adopted future climate change regulations could also negatively impact our ability to compete with companies situated in areas not subject to such limitations. Given the political significance and uncertainty around the impact of climate change and how it should be dealt with, we cannot predict how legislation and regulation will affect our financial condition, operating performance and ability to compete. Furthermore, even without such regulation, increased awareness and any adverse publicity in the global marketplace about potential impacts on climate change by us or other companies in our industry could harm our reputation. The potential physical impacts of climate change on our operations are highly uncertain and would be particular to the geographic circumstances in areas in which we operate. These may include changes in rainfall and storm patterns and intensities, water shortages, changing sea levels and changing temperatures. These impacts may adversely impact the cost, production and financial performance of our operations.
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We do not have insurance against all risks.
Our insurance policies will not cover all the potential risks associated with our operations. We may also be unable to maintain insurance coverage to cover these risks at economically feasible premiums. Insurance coverage may not continue to be available or may not be adequate to cover any resulting liability. Moreover, insurances against risks such as environmental pollution or other hazards as a U.S. public
company wouldresult of exploration and production are not generally available to us or to other companies in the mining industry on acceptable terms. We might also become subject to liability for pollution or other hazards for which we may not be insured against or for which we may elect not to insure against because of premium costs or other reasons. Losses from these events may cause us to incur significant costs that could have a material adverse effect upon our financial condition and results of operations.
We compete with larger, better capitalized competitors in jeopardy,the mining industry.
The mining industry is acutely competitive in which event youall of its phases. We face strong competition from other mining companies in connection with the acquisition of exploration stage properties, or properties capable of producing precious metals. Many of these companies have greater financial resources, operational experience and technical capabilities than us. As a result of this competition, we may be unable to maintain or acquire attractive mining properties on terms we consider acceptable or at all. Consequently, our revenues, operations and financial condition and possible future revenues could lose your entire
investment.
6
OUR PRESIDENT AND DIRECTOR WILL ALLOCATE ONLY A PORTION OF HIS TIME - ABOUT
FIFTEEN HOURS A WEEK TO OUR BUSINESS, WHICH COULD HAVE A NEGATIVE IMPACT ON OUR
SUCCESS
Currently,be materially adversely affected by actions by our Presidentcompetitors.
We may experience cybersecurity threats.
We rely on secure and Director allocates onlyadequate operations of information technology systems in the conduct of our operations. Access to and security of the information technology systems are critical to our operations. Given that cyber risks cannot be fully mitigated and the evolving nature of these threats, we cannot assure that our information technology systems are fully protected from cybercrime or that the systems will not be inadvertently compromised, or without failures or defects. Potential disruptions to our information technology systems, including, without limitation, security breaches, power loss, theft, computer viruses, cyber-attacks, natural disasters, and noncompliance by third party service providers and inadequate levels of cybersecurity expertise and safeguards of third party information technology service providers, may adversely affect our operations as well as present significant costs and risks including, without limitation, loss or disclosure of confidential, proprietary, personal or sensitive information and third party data, material adverse effect on its financial performance, compliance with its contractual obligations, compliance with applicable laws, damaged reputation, remediation costs, potential litigation, regulatory enforcement proceedings and heightened regulatory scrutiny.
Newly adopted rules regarding mining property disclosure by companies reporting with the SEC may result in increased operating and legal costs.
On October 31, 2018, the SEC adopted new rules to modernize mining property disclosure in reports filed with the SEC in order to harmonize SEC disclosure requirements with international standards. These rules became effective after January 1, 2021. The new rules require the preparation and filing of technical reports on the Company’s properties on a portion of his timemore frequent basis than the Company’s historical practice. Such changes to the operationCompany’s reporting requirements and the preparation of technical reports and assessments result in increased compliance costs.
| 13 |
Risks Related to Our Common Stock
Since our business. If our business develops faster than anticipated,
or if his other commitments require him to devote more substantial amounts of
time thancommon stock is currently planned, there is no guarantee that he will devote the
time necessary to assure our successful operations.
OUR EXECUTIVE OFFICERS DO NOT RESIDE IN THE UNITED STATES.
Our executive Officers do not reside in the United States. The U.S. stockholders
would face difficulty in:
* effecting service of process within the United States on our Officers;
* enforcing judgments obtained in U.S. courts basedtraded on the civil
liability provisions of the U.S. federal securities laws against the
Officers;
* enforcing judgments of U.S. courts based on civil liability provisions
of the U.S. federal securities laws in foreign courts against our
Officers; and
* bringingOTC Pink Market, an original action in foreign courts to enforce liabilities
based on the U.S. federal securities laws against our Officers.
WE ARE AN "EMERGING GROWTH COMPANY" AND INTEND TO TAKE ADVANTAGE OF REDUCED
DISCLOSURE AND GOVERNANCE REQUIREMENTS APPLICABLE TO EMERGING GROWTH COMPANIES;
AS A RESULT OUR COMMON STOCK MAY BE LESS ATTRACTIVE TO INVESTORS
We are an "emerging growth company," as defined in the Jumpstart Our Business
Startups Act of 2012. We intend to take advantage of certain exemptions from
various reporting requirements that are applicable to other public companies
that are not emerging growth companies. Such exemptions include, but not limited
to: not being required to comply with the auditor attestation requirements of
Section 404 of the Sarbanes-Oxley Act; reduced disclosure obligations regarding
executive compensation in our periodic reports and proxy statements; exemptions
from the requirements of holding a nonbinding advisory vote on executive
compensation and shareholder approval of any golden parachute payments not
previously approved. . We may take advantage of these reporting exemptions until
we are no longer considered an emerging growth company, which in certain
circumstances could be up to five years. There may be a less active, liquid trading market for our common stock andmay not develop or be sustained.
Presently, our common stock is traded on the OTC Pink Market. Presently there is limited trading in our stock priceand there is no assurance that an active market will develop further. In the absence of an active trading market, investors may have difficulty buying and selling or obtaining market quotations, market visibility for shares of our common stock may be more volatile.
Aslimited, and a lack of visibility for shares of our common stock may have a depressive effect on the market price for shares of our common stock. The lack of an emerging growth company, exemptions fromactive market impairs your ability to sell your shares at the following provisions are
availabletime you wish to us:
1. Section 404(b)sell them or at a price that you consider reasonable. The lack of an active market may also reduce the fair market value of your shares. Any such market price of the Sarbanes-Oxley Actcommon stock may not necessarily bear any relationship to our book value, assets, past operating results, financial condition or any other established criteria of 2002, which requires
auditor attestation of internal controls;
2. Section 14A(a)value, and (b)may not be indicative of the Securities Exchange Actmarket price for the common stock in the future.
Trading in stocks quoted on the OTC Pink Market is often thin and characterized by wide fluctuations in trading prices, due to many factors that may have little to do with our operations or business prospects. The securities market has, from time to time, experienced significant price and volume fluctuations that are not related to the operating performance of 1934,particular companies. These market fluctuations may also materially and adversely affect the market price of shares of our common stock. Moreover, the OTC Pink Market is not a stock exchange and is not an established market, and trading of securities is often more sporadic than the trading of securities listed on a national stock exchange like the NYSE. Accordingly, you may have difficulty reselling any shares of common stock.
Even if an active market develops, the trading price of our common stock is likely to be volatile, which require companiescould result in substantial losses to hold shareholder advisory votes on executive
compensationinvestors.
The trading price of our common stock is likely to be volatile and golden parachute compensation;
3. Section 14(i)could fluctuate widely due to factors beyond our control. This may happen because of broad market and industry factors, including the performance and fluctuation of the Exchange Act (which has not yet been
implemented), which requiresmarket prices of other companies to disclose the relationship
between executive compensation actually paid and the financial
performancewith business operations located outside of the company;
4. Section 953(b)(1)United States. In addition to market and industry factors, the price and trading volume for our common stock may be highly volatile for factors specific to our own operations, including the following:
| · | variations in our revenues, earnings and cash flow; | |
| · | announcements of new investments, acquisitions, strategic partnerships or joint ventures by us or our competitors; | |
| · | announcements of new offerings, solutions and expansions by us or our competitors; | |
| · | changes in financial estimates by securities analysts; | |
| · | detrimental adverse publicity about us, our brand, our services or our industry; | |
| · | additions or departures of key personnel; | |
| · | sales of additional equity securities; and | |
| · | potential litigation or regulatory investigations. |
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In the past, shareholders of public companies have often brought securities class action suits against those companies following periods of instability in the market price of their securities. If we were involved in a class action suit, it could divert a significant amount of our management’s attention and other resources from our business and operations and require us to incur significant expenses to defend the suit, which could harm our results of operations. Any such class action suit, whether or not successful, could harm our reputation and restrict our ability to raise capital in the future. In addition, if a claim is successfully made against us, we may be required to pay significant damages, which could have a material adverse effect on our financial condition and results of operations. Any of these factors may result in large and sudden changes in the volume and price at which our common stock will trade.
There is no assurance that we will be able to pay dividends to our shareholders, which means that you could receive little or no return on your investment.
Payment of dividends from our earnings and profits may be made at the sole discretion of our Board of Directors. There is no assurance that we will generate any distributable cash from operations. Our Board may elect to retain cash for operating purposes, debt retirement, or some other purpose. Consequently, you may receive little or no return on your investment.
Our shares will be subordinate to all of our debts and liabilities, which increases the risk that you could lose your entire investment.
Our shares are equity interests that will be subordinate to all of our current and future indebtedness with respect to claims on our assets. In any liquidation, all of our debts and liabilities must be paid before any payment is made to our shareholders. The amount of any debt financing we incur creates a substantial risk that in the event of our bankruptcy, liquidation or reorganization, we may have no assets remaining for distribution to our shareholders after payment of our debts.
Our Board of Directors may authorize and issue shares of new classes of stock that could be superior to or adversely affect you as a holder of our common stock.
Our Board of Directors has the power to authorize and issue shares of classes of stock, including preferred stock that have voting powers, designations, preferences, limitations and special rights, including preferred distribution rights, conversion rights, redemption rights and liquidation rights without further shareholder approval which could adversely affect the rights of the Dodd-Frank Act (whichholders of our common stock. In addition, our Board could authorize the issuance of a series of preferred stock that has greater voting power than our common stock or that is convertible into our common stock, which could decrease the relative voting power of our common stock or result in dilution to our existing common stockholders.
Any of these actions could significantly adversely affect the investment made by holders of our common stock. Holders of common stock could potentially not yet been
implemented), which requires companies to disclose the ratio between
the annual total compensationreceive dividends that they might otherwise have received. In addition, holders of our common stock could receive less proceeds in connection with any future sale of the CEOCompany, whether in liquidation or on any other basis.
We are subject to the penny stock rules, which will make shares of our common stock more difficult to sell.
We are subject now and, in the median offuture, may continue to be subject, to the annual
total compensation of all employees of the companies; and
5. The requirement to provide certain other executive compensation
disclosure under Item 402 of Regulation S-K. Instead, an emerging
growth company must only comply with the more limited provisions of
Item 402 applicable to smaller reporting companies, regardless of the
issuer's size.
RISKS RELATING TO OUR COMMON STOCK
BECAUSE OUR PRESIDENT AND DIRECTOR, WHO IS ALSO OUR SOLE PROMOTER, WILL OWN 33%
OF THE OUTSTANDING SHARES AFTER THIS OFFERING, HE WILL RETAIN SIGNIFICANT
CONTROL OF THE COMPANY, WHICH IN TURN COULD DECREASE THE PRICE AND MARKETABILITY
OF THE SHARES
7
After all 10,000,000SEC’s “penny stock” rules if our shares of common stock sell below $5.00 per share. Penny stocks generally are equity securities with a price of this Offeringless than $5.00. The penny stock rules require broker-dealers to deliver a standardized risk disclosure document prepared by the SEC which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer must also provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson, and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations, and the broker-dealer and salesperson compensation information must be given to the customer orally or in writing prior to completing the transaction and must be given to the customer in writing before or with the customer’s confirmation.
In addition, the penny stock rules require that prior to a transaction, the broker dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. The penny stock rules are sold Mr. Tomski
will own 5,000,000 or 33.3%burdensome and may reduce purchases of total outstandingany offerings and reduce the trading activity for shares and will retain
significant control. As a result, Mr. Tomski will have an ability to influence
the Company as follows:
* elect or defeat the election of our Directors;
* amendcommon stock. As long as our shares of common stock are subject to the penny stock rules, the holders of such shares of common stock may find it more difficult to sell their securities.
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The sale or prevent amendmentavailability for sale of substantial amounts of our articlescommon stock could adversely affect their market price.
Sales of incorporation or bylaws;
* effect or prevent a merger, salesubstantial amounts of assets or other corporate
transaction; and
* affect the outcome of any other matter submitted to the stockholders
for vote
Moreover, because of the significant ownership position held by our insider, new
investors may not be able to effect a changecommon stock in the Company's business or
management, and therefore, shareholders would be subject to decisions made by
management and the majority shareholder.
In addition, sales of significant amounts of shares held by Mr. Tomski,public market, or the prospect ofperception that these sales could occur, could adversely affect the market price of our common stock. Management's stock and could materially impair our ability to raise capital through equity offerings in the future. Shares held by our existing shareholders may be sold in the public market in the future subject to the restrictions in Rule 144 and Rule 701 under the Securities Act. We cannot predict what effect, if any, market sales of securities held by our significant shareholders or any other shareholder or the availability of these securities for future sale will have on the market price of our common stock.
Keystone will pay less than the then-prevailing market price for our Common Stock.
We will sell shares of our Common Stock to Keystone pursuant to the Purchase Agreement at 85% of the average of the closing price per share of the Company’s Common Stock on its trading market for five (5) trading days preceding the purchase, associated with the applicable Purchase Notice during which the purchase price is valued. Keystone has a financial incentive to sell our Common Stock immediately upon receiving the shares to realize the profit equal to the difference between the discounted price and the market price. If Keystone sells the shares, the market price of our Common Stock could decrease.
The sale of shares of our Common Stock to Keystone may cause dilution, and the subsequent resale of the shares of our Common Stock acquired by Keystone, or the perception that such resales may occur, could cause the price of our Common Stock to fall.
Under the Purchase Agreement, we may require Keystone to purchase up to 75,000,000 shares of Common Stock, except that, pursuant to the terms of the Purchase Agreement, we would be unable to sell shares to Keystone if such purchase would result in its beneficial ownership of more than 4.99% of our outstanding Common Stock. After Keystone has acquired our shares, it may discouragesell all, some, or none of those shares. Therefore, sales to Keystone by us could result in substantial dilution to the interests of other holders of our Common Stock. Additionally, the sale of a potential acquirer from
makingsubstantial number of shares of our Common Stock to Keystone, or the anticipation of such sales, could make it more difficult for us to sell equity or equity-related securities in the future at a tender offer ortime and at a price that we might otherwise attemptingwish. Under the Purchase Agreement, Keystone’s per-share purchase price for our shares will be equal to eighty-five percent (85%) of the average of the closing price per share of the Company’s Common Stock for five (5) trading days preceding the purchase, associated with the applicable Purchase Notice during which the purchase price is valued. Depending on market liquidity at the time, resales of these shares may cause the trading price of our Common Stock to fall.
FINRA sales practice requirements may limit a stockholder’s ability to buy and sell our stock.
The Financial Industry Regulatory Authority (“FINRA”) has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain controlinformation about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low-priced securities will not be suitable for at least some customers. The FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our Common Stock, which may have the effect of reducing the level of trading activity in our Common Stock. As a result, fewer broker-dealers may be willing to make a market in our Common Stock, reducing a stockholder’s ability to resell shares of our Common Stock.
| 16 |
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements” within the meaning of the Company;Private Securities Litigation Reform Act of 1995. Forward-looking statements are based upon our current assumptions, expectations and beliefs concerning future developments and their potential effect on our business. In some cases, you can identify forward-looking statements by the following words: “may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “approximately,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing,” or the negative of these terms or other comparable terminology, although the absence of these words does not necessarily mean that a statement is not forward-looking. This information may involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from the future results, performance or achievements expressed or implied by any forward-looking statements.
We cannot predict all of the risks and uncertainties. Accordingly, such information should not be regarded as representations that the results or conditions described in such statements or that our objectives and plans will be achieved. We do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements. These forward-looking statements are found at various places throughout this could reduceprospectus and include information concerning possible or assumed future results of our stock priceoperations, including statements about potential acquisition or prevent our stockholders from realizing a
premium over our stock price.
WE ARE SELLING SHARES IN THIS OFFERING WITHOUT AN UNDERWRITER AND MAY BE UNABLE
TO SELL ALL OF THE SHARES; WE MAY HAVE TO SEEK ALTERNATIVE FINANCING TO
IMPLEMENT OUR BUSINESS PLANS
This offering is self-underwritten,merger targets; business strategies; future cash flows; financing plans; plans and objectives of management; any other statements regarding future acquisitions, future cash needs, future operations, business plans and future financial results, and any other statements that is, we are not engaginghistorical facts.
All forward-looking statements speak only as of the servicesdate of this prospectus. We undertake no obligation to update any forward-looking statements or other information contained herein. Shareholders and potential investors should not place undue reliance on these forward-looking statements. Although we believe that our plans, intentions and expectations reflected in or suggested by the forward-looking statements in this prospectus are reasonable, we cannot assure stockholders and potential investors that these plans, intentions or expectations will be achieved.
These forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. Considering these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this prospectus. All subsequent written and oral forward-looking statements concerning other matters addressed in this prospectus and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to herein.
Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.
| 17 |
SELLING STOCKHOLDER
We are registering for resale by the Selling Stockholder up to an underwriteraggregate of 71,000,000 shares of Common Stock pursuant to sell the shares. We intendprovisions of the Registration Rights Agreement we entered into with Keystone on March 15, 2023, in order to sell them through our President
and Director, who will receive no commissions. He willpermit the Selling Stockholder to offer the shares of our Common Stock for resale from time to friends, relatives, acquaintancestime. Except for the transactions contemplated by the Purchase Agreement and business associates; however, there is no
guarantee that hethe Registration Rights Agreement, the Selling Stockholder has not had any material relationship with us within the past three years. For additional information regarding the issuance of common stock covered by this prospectus, see the section titled “Purchase Agreement” and “Registration Rights Agreement” above.
These transactions were and will be ableexempt from registration under Section 4(a)(2) of the Securities Act as not involving any public offering. Except as described in “Prospectus Summary” above or as described in the table below, the Selling Stockholder has not had any material relationship with us within the past three years. The Selling Stockholder may sell all or a portion of their shares through public or private transactions at prevailing market prices or at privately negotiated prices.
All expenses incurred with respect to the registration of the Shares will be borne by us, but we will not be obligated to pay any underwriting fees, discounts, commissions or other expenses incurred by the Selling Stockholder in connection with the sale of such Shares.
Neither the Selling Stockholder nor any of its associates or affiliates has held any position, office, or other material relationship with us in the past three years.
The Shares being offered hereby are being registered to permit public secondary trading, and the Selling Stockholder may offer all or part of the Shares for resale from time to time. However, the Selling Stockholder is under no obligation to sell any/all or any portion of the shares. InShares.
The table below presents information regarding the event we do
not sellSelling Stockholder and the shares of common stock that it may offer from time to time under this prospectus. This table is prepared based on information supplied to us by the Selling Stockholder and reflects holdings as of June 15, 2023. The number of shares in the column “Maximum Number of Shares of Common Stock to be Offered Pursuant to this Prospectus” represents all of the shares beforeof common stock that the expirationSelling Stockholder may offer under this prospectus. The Selling Stockholder may sell some, all or none of its shares in this offering.
Beneficial ownership is determined in accordance with Rule 13d-3(d) promulgated by the SEC under the Exchange Act, and includes shares of common stock with respect to which the selling stockholder has voting and investment power. The percentage of shares of common stock beneficially owned by the selling stockholder prior to the offering shown in the table below is based on an aggregate of 213,603,598 shares of our common stock outstanding on June 15, 2023. Because the purchase price of the shares of Common Stock issuable under the Purchase Agreement is determined based on the date of such purchase, the Offering,number of shares that may actually be sold by the Company under the Purchase Agreement may be fewer than the number of shares being offered by this prospectus. The fourth column assumes the sale of all of the shares offered by the Selling stockholder pursuant to this prospectus.
| Name of Selling Stockholder | Number of Shares of Common Stock Owned Prior to Offering | Maximum Number of Shares of Common Stock to be Offered Pursuant to this Prospectus | Number of Shares of Common Stock Owned After Offering | ||||||||
| Number(1) | Percent(2) | Number(3) | Percent(2) | ||||||||
| Keystone Capital Partners, LLC(4) | 1,000,000 | * | 71,000,000 | 284,603,598 | 24.9% | ||||||
________________
* Represents beneficial ownership of less than 1% of the outstanding shares of our common stock.
| 18 |
| (1) | This number represents 1,000,000 shares of Common Stock we issued to the Selling Stockholder on March 16, 2023 as Commitment Shares in consideration for entering into the Purchase Agreement with us. In accordance with Rule 13d-3(d) under the Exchange Act, we have excluded from the number of shares beneficially owned prior to the offering all of the shares that Selling Stockholder may be required to purchase under the Purchase Agreement, because the issuance of such shares is solely at our discretion and is subject to conditions contained in the Purchase Agreement, the satisfaction of which are entirely outside of Selling Stockholder’s control. including the Initial Registration Statement that includes this prospectus becoming and remaining effective. Furthermore, the purchases of common stock are subject to certain agreed upon maximum amount limitations set forth in the Purchase Agreement. Also, the Purchase Agreement prohibits us from issuing and selling any shares of our common stock to Keystone Capital to the extent such shares, when aggregated with all other shares of our common stock then beneficially owned by the Selling Stockholder, would cause its beneficial ownership of our common stock to exceed the 4.99% beneficial ownership cap. |
| (2) | Applicable percentage ownership is based on 213,603,598 shares of our common stock outstanding as of June 15, 2023. |
| (3) | Assumes the sale of all shares being offered pursuant to this prospectus. |
| (4) | The business address of Selling Stockholder is 139 Fulton Street, Suite 412, New York, NY 10038. Keystone Capital Partners, LLC’s principal business is that of a private investor. Ranz Group, LLC, a Delaware limited liability company, is the managing member of Selling Stockholder and the beneficial owner of 97% of the membership interests in Keystone Capital Partners, LLC. Fredric G. Zaino is the managing member of Ranz Group, LLC and has sole voting control and investment discretion over securities beneficially owned directly by Keystone Capital, LLC and indirectly by Ranz Group, LLC. We have been advised that none of Mr. Zaino, Ranz Group, LLC or Keystone Capital Partners, LLC is a FINRA member, or an independent broker-dealer, or an affiliate or associated person of a FINRA member or independent broker-dealer. The foregoing should not be construed in and of itself as an admission by Mr. Zaino as to beneficial ownership of the securities beneficially owned directly by Keystone Capital Partners, LLC and indirectly by Ranz Group, LLC. |
Material Relationships with the Selling Stockholder
Other than in connection with the transactions described above, we have not had any material relationships with the Selling Stockholder in the last three (3) years.
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USE OF PROCEEDS
We will havenot receive any proceeds from the sale of the Common Stock by the Selling Stockholder in this Offering.
DETERMINATION OF OFFERING PRICE
The prices at which the shares of Common Stock covered by this prospectus may actually be sold will be determined by the prevailing public market price for shares of our Common Stock, by negotiations between the Selling Stockholder and buyers of our Common Stock in private transactions, or as otherwise described in “Plan of Distribution.”
PLAN OF DISTRIBUTION
The shares of Common Stock offered by this prospectus are being offered by the Selling Stockholder. These shares may be sold or distributed from time to seek alternative financing sources. Theretime by the Selling Stockholder directly to one or more purchasers or through brokers, dealers, or underwriters who may act solely as agents. The sales could be made at prices and at terms then prevailing or at prices related to the then current market price on the OTC Markets or any other stock exchange, market or trading facility on which the securities are traded or in private transactions. The Selling Stockholder may use any one or more of the following methods when selling securities:
| · | ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; | |
| · | block trades in which the broker-dealer will attempt to sell the securities as agent but may position and resell a portion of the block as principal to facilitate the transaction; | |
| · | purchases by a broker-dealer as principal and resale by the broker-dealer for its account; | |
| · | an exchange distribution in accordance with the rules of the applicable exchange; | |
| · | privately negotiated transactions; | |
| · | settlement of short sales; | |
| · | in transactions through broker-dealers that agree with the Selling Stockholder to sell a specified number of such securities at a stipulated price per security; | |
| · | through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise; | |
| · | a combination of any such methods of sale; or | |
| · | any other method permitted pursuant to applicable law. |
The Selling Stockholder may also sell securities under Rule 144 under the Securities Act, if available, rather than under this Prospectus.
The Selling Stockholder is no provisiondeemed to refundbe statutory underwriter within the meaning of Section 2(a)(11) of the Securities Act and may sell all or a portion of the fundsshares of common stock beneficially owned by it and offered hereby from time to time directly or through one or more underwriters, broker-dealers or agents.
The Selling Stockholder has informed us that it intends to use one or more registered broker- dealers to effectuate all sales, if any, of our existing shareholders raisedcommon stock that it has acquired and may in the future acquire from us pursuant to the Purchase Agreement. Selling Stockholder has informed us that each such broker-dealer will receive commissions from Selling Stockholder that will not exceed customary brokerage commissions.
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Brokers, dealers, underwriters or agents participating in the distribution of the shares of our common stock offered by this prospectus may receive compensation in the form of commissions, discounts, or concessions from the purchasers, for whom the broker-dealers may act as agent, of the shares sold by the Selling Stockholder through this prospectus. The compensation paid to any such particular broker-dealer by any such purchasers of shares of our common stock sold by the selling company
shares.
YOU WILL INCUR IMMEDIATE AND SUBSTANTIAL DILUTION OF THE PRICE YOU PAY FOR YOUR
SHARES
Our existing stockholder acquired his shares at a cost of $0.001 per share, a
cost per share that is substantiallymay be less than or in excess of customary commissions. Neither we nor the selling stockholder can presently estimate the amount youof compensation that any agent will pay forreceive from any purchasers of shares of our common stock sold by the Selling Stockholder. We know of no existing arrangements between the selling stockholder or any other stockholder, broker, dealer, underwriter or agent relating to the sale or distribution of the shares you purchase inof our common stock offered by this offering. Accordingly, any investment you make in
these shares will resultprospectus.
Any agents, dealers or underwriters that participate in the immediate and substantial dilutiondistribution of the net
tangible book valueShares may be deemed to be “underwriters” under the Securities Act, and any discounts, commissions or concessions received by any such underwriters, dealers or agents might be deemed to be underwriting discounts and commissions under the Securities Act. At the time a particular offering of thosethe shares of common stock is made, a prospectus supplement, if required, will be distributed which will set forth the aggregate amount of shares of common stock being offered and the terms of the offering, including the name or names of any broker-dealers or agents, any discounts, commissions and other terms constituting compensation from the $0.01 you paySelling Stockholder and any discounts, commissions or concessions allowed or reallowed or paid to broker-dealers. If the shares of common stock are sold through underwriters or broker-dealers, the Selling Stockholder will be responsible for them (seeunderwriting discounts or commissions or agent’s commissions. The Company will not receive any proceeds from the Dilution table).
THE PROCEEDS OF OUR OFFERING WILL BE HELD IN A STANDARD CORPORATE CHECKING
ACCOUNT (RATHER THAN AN ESCROW ACCOUNT) UNTIL THE OFFERING CLOSES, IT IS
POSSIBLE THAT CREDITORS OF THE COMPANY COULD ATTACH THESE FUNDS
Our management willsale of the shares by the Selling Stockholder. The Selling Stockholder does not currently have sole control over the withdrawal of funds. We have not
made arrangements to place the funds in an escrow accountagreement with a third party
escrow agent dueany underwriters with respect to the costs involved. As a result, investors are subjectsale of the shares pursuant to the risk that creditors could attach these funds during the offering process.
THERE IS CURRENTLY NO PUBLIC MARKET FOR OUR SECURITIES, THERE CAN BE NO
ASSURANCE THAT ANY PUBLIC MARKET WILL DEVELOP OR THAT OUR COMMON STOCK WILL BE
QUOTED FOR TRADINGthis prospectus. There is no public market for our securities and there can be no assurance that an active trading market forany Selling Stockholder will sell any or all of the securities offered herein will develop after
this offering by the selling stockholders, or, if developed, be sustained. After
the effective dateshares of common stock registered pursuant to the registration statement, of which this Prospectusprospectus forms a part.
The Selling Stockholder and any other person participating in such distribution will be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder, including, without limitation, Regulation M of the Exchange Act, which may limit the timing of purchases and sales of any of the shares of common stock by the Selling Stockholder and any other participating person. We have advised the Selling Stockholder that it is required to comply with Regulation M promulgated under the Exchange Act. With certain exceptions, Regulation M precludes the selling stockholder, any affiliated purchasers, and any broker-dealer or other person who participates in the distribution from bidding for or purchasing, or attempting to induce any person to bid for or purchase any security which is the subject of the distribution until the entire distribution is complete. Regulation M may also restrict the ability of any person engaged in the distribution of the shares of common stock to engage in market-making activities with respect to the shares of common stock, including making any bids or purchases made in order to stabilize the price of a security in connection with the distribution of that security. All of the foregoing may affect the marketability of the securities offered by this prospectus.
We may from time to time file with the SEC one or more supplements to this prospectus or amendments to the registration statement of which this prospectus forms a part we intend to identifyamend, supplement or update information contained in this prospectus, including, if and when required under the Securities Act, to disclose certain information relating to a market makerparticular sale of shares offered by this prospectus by the selling stockholder, including the names of any brokers, dealers, underwriters or agents participating in the distribution of such shares by the selling stockholder, any compensation paid by the selling stockholder to file an application withany such brokers, dealers, underwriters or agents, and any other required information.
We will pay the Financial Industry Regulatory Authority (FINRA)expenses incident to havethe registration under the Securities Act of the offer and sale of the shares of our common stock covered by this prospectus by the selling stockholder. As consideration for its irrevocable commitment to purchase our common stock under the Purchase Agreement, we have issued to Keystone Capital 1,000,000 shares of our common stock as Commitment Shares. We will also issue an additional 500,000 shares of our Common Stock as Commitment Shares upon the effective date of this registration statement plus additional 2,274,588 shares of Common Stock once Keystone has invested $500,000 in accordance with the Purchase Agreement.
The Selling Stockholder has represented to us that at no time prior to the date of the Purchase Agreement has Keystone or its agents, representatives or affiliates engaged in or effected, in any manner whatsoever, directly or indirectly, any short sale (as such term is defined in Rule 200 of Regulation SHO of the Exchange Act) of our common stock or any hedging transaction, which establishes a net short position with respect to our common stock. Keystone has agreed that during the term of the Purchase Agreement, neither Keystone, nor any of its agents, representatives or affiliates will enter into or effect, directly or indirectly, any of the foregoing transactions.
This Offering will terminate on the date that all shares of our common stock offered by this prospectus have been sold by the Selling Stockholder.
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MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Market Price for our Common Stock
Our Common Stock is quoted on the Over-the-Counter Bulletin Board. Pink Market of OTC Markets, Inc. under the symbol “STAL.” Over-the-counter market quotations reflect inter-dealer prices, without retail mark-up, mark-down or commissions and may not necessarily represent actual transactions.
Trading volume in our Common Stock has often been limited. As a result, the trading price of our common stock have been subject to significant fluctuations. There can be no assurance that a liquid market will develop in the foreseeable future. Transfer of our common stock may also be restricted under the securities or “blue sky” laws of certain states and foreign jurisdictions. Consequently, investors may not be able to liquidate their investments and should be prepared to hold the common stock for an indefinite period of time. Over-the-counter market quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.
Holders
On June 14, 2023, the closing price on our Common Stock was $0.0102 per share. There were 111 holders of record. The number of record holders does not include an indeterminate number of shareholders whose shares are held by brokers in street name.
Dividend Policy
We have not paid any cash dividends since our inception. Any future determination as to the declaration and payment of dividends on shares of our Common Stock will be made at the discretion of our Board of Directors out of funds legally available for such purpose. We are under no contractual obligations or restrictions to declare or pay dividends on our shares of Common Stock. In addition, we currently have no plans to pay such dividends. Our Board of Directors currently intends to retain all earnings for use in the business for the foreseeable future.
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OUR BUSINESS
Corporate History and Structure
The Company was incorporated in the State of Nevada on April 17, 2014 under the name the name “Asteriko Corp.” Our prior business plan, which generated limited or no earnings, included interior decorating products, and a travel and tourism service. On January 6, 2017, the Company amended its Articles of Incorporation, effecting the change of its name to “Star Alliance International Corp.”
As of the date of this prospectus, the Company has two subsidiaries in which it has majority ownership:
| 1) | Compania Minera Metalurgica Centro Americana (Commsa), a Honduran corporation, in which the Company owns 51% of capital stock and | |
| 2) | Lion Works, Inc., a Guatemalan corporation, in which the Company owns 51% of capital stock. |
On May 14, 2018, our current Chairman, President and Director, Richard Carey, acquired approximately 62.15% ownership of the Company, constituting a change of control transaction.
On August 13, 2019, the Company completed the Troy Asset Acquisition which included 78 gold mining claims consisting of approximately 4800 acres, located east/southeast of El Portal, California, in Mariposa County. In consideration for the Troy Asset Acquisition, the Company issued to Troy a promissory note in principal amount of $500,000 (the “Purchase Note”), and 1,883,000 shares of a newly-designated Series B Preferred Stock. The Purchase Note was repaid in full in April, 2022.
On January 1, 2022, the Company acquired 51% of capital stock of Commsa, a Honduran Corporation, pursuant to the share exchange agreement dated December 15, 2021 (the “Share Exchange Agreement”), in consideration for the payment of the purchase price, consisting of$1,000,000 in cash and 5,000,000 shares of common stock. In addition, the Company has agreed to provide up to $7,500,000 working capital to expand the mining operations in a gold mining project (Rio Jalan Project) in Olancho state in the highlands of Central Honduras. Commsa owns the mining rights to five operating mines that run along a 12.5 mile stretch of the Rio Jalan River that are being prepared for production. As of the date of this prospectus, the Company issued only 200,000 shares of its common stock to Juan Lemus and paid only $75,000 toward $1,000,000 cash payment. Accordingly, it is in default of its obligations to Mr. Lemus.
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On March 19, 2023, the Company entered into and executed the Share Purchase Agreement with Lion Works and Juan Lemus, the sole shareholder of Lion Works, pursuant to which it acquired from Mr. Lemus 51% of the capital stock of Lion Works, including 51% of the intellectual property rights and know-how related to the Genesis extraction system (“Genesis”), The Share Purchase Agreement superseded the terms of the Lion Works LOI that the parties entered into and executed by the parties on November 21, 2021. Pursuant to the terms of the Share Purchase Agreement, Genesis will be managed by a new company, in which the Company will own 51% interest, with the remaining 49% interest to be owned by Juan Lemus. The Company’s title and rights to Genesis are subject to the satisfaction of the following obligations:
| · | The Company shall pay the total purchase price of $5,100,000 in cash, with the first minimum payment in the amount of $2,550,000 to be paid by September 30, 2023, and the remaining outstanding balance of $2,550,000 to be paid by September 30, 2024, within 12 months of the first payment. | |
| · | The Company will invest an additional 5,000,000 as a working capital toward development of the Genesis plants, with $2,000,000 to be paid by July 31, 2023 and the remaining $3,000,000 to be paid by July 31, 2024, within 12 months of the first payment. | |
| · | The Company will engage a patent attorney and pay for the cost of that patent attorney to prepare the patent application related to Genesis and to register that patent, provided that Lion Works will engage an expert to prepare a report on the Genesis system, to be used in this patent application. for the acquisition of Genesis |
To secure the Company’s obligations under the Share Purchase Agreement, Juan Lemus placed the lien on the Company’s 51% ownership in Lion Works, and, upon formation of a new company, that lien will be placed on the Company’s ownership in that newly formed subsidiary. Such lien shall continue until the Company performs all its obligations under the Share Purchase Agreement, which subjects the Company to the risk of losing its title to Genesis in the event of breach of its obligations set forth in the Share Purchase Agreement.
Business Overview
We are an early-stage company in the business of acquiring gold mining and other mining properties worldwide and environmentally safe and other new technologies both in mining and other business areas. As of the date of this prospectus, we have not commenced our mining operations We anticipate starting our mining operations in the third quarter of 2023. This will require, among other things, the completion of the Plan of Operation and obtaining the approval from the Bureau of Land Management and Forestry Service. In order to start operation in Honduras we need to purchase the equipment necessary and obtain a final mining permit.
Our mining assets include: (1) the mining assets we acquired from Troy pursuant to the Asset Purchase Agreement (the “Troy Asset Acquisition”) on August 13, 2019 and (2) mining rights to five mines in Honduras we acquired on January 1, 2022 upon acquisition of 51% of Commsa.
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The Company requires substantial funding and additional work to implement its business plan with respect to its mining properties, the funding for the acquisition of Genesis ore extraction plants. The Company also needs to invest up to $5,000,000 in connection with its completed acquisition of the controlling 51% interest in Lion Works Advertising, SA, a Guatemala Corporation that owns the “Genesis” ore extraction process, which will be used to grow the business, building a number of Genesis plants that can be placed in customer mining sites including our own Troy mining site.
Troy Asset Acquisition
As a result of the Troy Asset Acquisition, the Company acquired 78 gold mining claims consisting of approximately 4800 acres, located east/southeast of El Portal, California, in Mariposa County, together with all of Troy’s rights to related equipment and buildings currently located on the mining claims, including a production processing mill together with associated buildings, all the mining and support equipment at the Troy mine site, all the Troy mining claims, and related geological reports relating to the property, assay reports on the property, and all core drilling samples. The reserves have been estimated at 2 million ounces by Robert Garcia, a qualified geologist who prepared his report for the US government. Based upon the extensive geological reports, core drilling samples, and existing portals, Star believes it can rapidly bring this mining property into economic production. See Garcia Valuation and Gold Reserves respecting AT&E claims (a.k.a. USA Mining claims) of which the Troy claims are a subset. The Garcia Valuation and Gold Reserves Report respecting AT&E claims (a.k.a. USA Mining claims) of which the Troy claims are a subset is attached as Exhibit 99.1 to this registration statement.
| Description | Garcia Valuation | Est. Reserves | Est. Reserve Value |
| Mining Claims | 2,048,720 oz | 2,048,720 ozA | $4.062 billionB |
A See Garcia Valuation and Gold Reserves
B The price of gold per troy ounce at the close on June 1, 2023 (e.g., $1,983.00/troy oz.)
This valuation was prepared on August 5, 2004, and although this area has not been mined since that time the Company recognizes that a new NI 43-101 appraisal prepared under US current standards and regulations with extensive core drilling is needed. Management intends to use some of the funds raised from the S 1 registration to complete the drilling and updated valuation.
The Company is currently working with the Forestry Service and BLM to finalize the permits to reopen the mine. The Company expects to restart mining operations in 2023.
Overview of Mining Property in Mariposa County, CA, acquired from Troy
Location and Means of Access to the Troy Claims
The 78 current mining claims registered to Troy Mining Corporation are located west/southwest of El Portal, California and are located on BLM land. The claims are accessible via California State route 140 with the prime portals located approximately two to two and one-half (2 – 2 ½) miles east of Hwy 140 (based on a direct route). There is a graded dirt road that connects the portals located the greatest distance from Hwy 140 with the highway that is owned and maintained by Star. This road is approximately eight (8) miles in length due to the many required switch-backs in order to build the road into the side of the mountain. With proper maintenance, which can be accomplished by the mining company using the equipment purchased for working the mine, this road is normally passable year-round. The road is shared with the Forestry Department who use it to maintain visual surveillance of the area and for fire fighting access. In addition to this road, there are additional roads owned by Troy that connect the main portal with additional portals located within the claim area. Further, the claims are located at what is considered to be the east base of what is commonly known as the Mother Lode gold-quartz vein system.
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Overview of Previous Mining Operations on the Troy Claims
There are three main portals (Hite Mine, Gibbs/Williams Brothers Mine and the Gold Star Mine) located within the area currently included in the Troy mining claims that have been worked from as early as 1849 to as recently as 1996 (Note: in total there are 17 portals on the property). These mines have never been worked with modern equipment but have always been worked with dynamite and pick & shovel with the ore being transported via donkey prior to the construction of the access road. The roadway system currently in place allows for the ore to be moved via truck either to the processing mill located at the site of the main portal or to off-site locations if it should be desired to do so. All of the mining done in this area is what is known as Hardrock or below-grade, tunnel mining. The total production from the mines located within this area is estimated to exceed 1,000,000 ounces. A large portion of this production was done when the price of gold was around $20 per ounce but based on today’s prices this would equate to over $600,000,000. During the production years for these mines, the technique followed by the Hardrock miners was known as “drift mining” where the miner located an external outcropping and then followed the gold vein until it petered out then he moved to another outcropping location. Underground mining extended to 900 feet with development extending down to 1200 feet in depth. Elsewhere on the property, mining and development all occurred within 100 feet of the surface.
Previous Work on the Troy Claims
The history of gold mining in Mariposa County dates back to placer mining by Mexicans or Californians of Spanish descent in 1848. Details concerning work in this time are limited. The discovery of lode gold in Mariposa is generally credited to Kit Carson and the discovery of the Mariposa mine in 1849; however, it is possible that the Mexicans were mining bedrock gold in Mariposa County prior to this discovery.
Subsequent to this discovery, large portions of Mariposa County were covered by land grants issued to John Fremont (The Las Mariposas Spanish Land Grant) and the Cook Estate. Because these grants and their private administration covered much of the Mother Lode, mining and development of the area was not conducted in the same fashion as claims located on public land.
Report on the Troy Mining Property
Below is a summary of the report prepared October 2010 by Jon Grossman, current shareholder of Troy Mining & former officer of USA Mining, which acquired the former ATE (AT&E) Mining property.
(The following is provided as information only and is based on various records, reports and publications obtained by Management which are assumed to be authentic and accurate. Based on the consistency of the historic reports compared with recent date geological reports, Management believes the information to be well-founded. In some instances, the information has been paraphrased or summarized for ease of reading and understanding. Any opinions are those solely of the writer).
1.0 Executive Summary
The Mother Lode is the most extensive mineral zone in the State of California. It extends from the southern part of Mariposa County to the northern part of El Dorado County, a distance of 300 miles, then extends northeast along the Sierra Nevada foothills. Some of the most famous and productive gold mines in the West are located along the length of this mineral zone. The Mother Lode Gold Belt is a long, narrow strip on the western foothills of the Sierra Nevada mountain range. There is a wall-like mass of quartz that outcrops at intervals along the belt. The wide zone of parallel and discontinuous gold vein deposits is referred to as the Mother Lode System.
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From the discovery of gold at Sutter's Mill on the American River in January 24, 1848 to the present, the area known as the “Mother Lode Region” has been one of most prolific gold producing areas in the world. In 1849, Quartz lode mining began on claims that currently make up part of the Troy Mining claims. Later this mine was one of the first to install a stamp mill, which ground the quartz ore to separate out the free gold.
The Troy Mining (Troy) property is specifically located geologically, at the southern end of the “Mother Lode System” in Central East California, Mariposa County, approximately 200 miles east of San Francisco. The property borders on the western the age of Yosemite National Park in the El Portal, California quadrangle, and is three miles southwest of the town of the El Portal, California. The mining property is bounded on the north by the Middle Fork of the Merced River and on the south by the South Fork of the Merced River. The property ranges in elevation from 1,700 feet to 5,500 feet and with worker housed on-site, can be worked year-round. All claims are contiguous.
The former AT&E Company controlled approximately 10,500 acres of ground in Mariposa County, California, covering 250 mining claims. The property was acquired from AT&E in the late 90’s by USA Mining and then the 79 most important claims were reinstated by Troy Mining in the early 2000’s (Note: both these transactions occurred when gold was less than $300/oz). The property includes more than 50 mine portals dating back to the late 1800’s or early 1900’s most of which have not been located and viewed by the current owner. Because of the existence of historical mining records, nine of these mines have been characterized as former gold producing mines. Included in this list of mines is the Hite Mine. With estimated total production of at least 150,000 ounces, the Hite Mine is ranked as the fifth largest historic gold producing mine in Mariposa County.
The following should be considered as a brief review of the property and entails my thoughts and opinions of future prospects. This review will summarize previous assessments done on the property and will touch on different aspects, including geology, mineralization, historic production and published reserves from past operations. In addition. A review of the potential of additional prospects on the property has been undertaken.
The property has a gravity mill with a sulfide circuit with a rated capacity of 500 tons per day throughput. The area’s historic mining method is cut and fill stoping. Timbers for the underground operations were, in the past, cut on an on-site sawmill that no longer exists and surface exploration by AT&E was conducted by using a reverse circulation drilling rig that will also need to be replaced.
Because of some historic records, the property includes the following historic recognized gold mines: (1) Bunker Hill, (2) Emma I, (3) Eureka III, (4) Georgia Point, (5) Hite, (6) Hite Central, (7) Kaderitas, (8) Mexican II, and Williams Brothers. In addition, there are at least 50 additional mining portals which at one time in the last 150 years were actively producing gold in unknown quantities. Mind you, actively producing with pick and shovel in pack-mule days. No modern equipment or scientific means of geological study were employed. Considering the fact that these other 50 or so mines were scattered on both faces of a single piece of terrain gives some indication of the potential value of the property.
2.0 Introduction
Mariposa County, California, has a long history of gold production from small lode and placer mining operations. The county covers part of the Sierra Nevada Mother Lode belt first discovered in the 19th century. Historic production data indicates approximately $48 million in gold was taken from the mines in the county up to 1957. The majority of gold production occurred prior to 1900 and was taken from mineralized quartz veins. At a gold price of $20.00/ounce (the then prevailing price) the total production is calculated to be approximately 2.4 million ounces of gold, which at today’s market value (Note: e.g., January 2020, $1562.90/oz) would be equal to three billion seven hundred and fifty million dollars ($3,750,960,000).
The former AT&E Mining Company operated and mined gold sporadically from the Williams Brother Mine from about 1980 to 1995 (Note: a period during which gold remained largely below $400/oz.). Both USA Mining and Troy Mining have had no mining operations during their ownership.
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The purpose of this overview is to review the property and to provide information concerning the merits for investment in the property. The scope of this report includes the following:
Review of property location and infrastructure;
Review of general geology and mineralization;
Discussion of the previous operations;
Discussion of reserves on the property as determined by third parties;
Conclusions and recommendations.
3.0 Property Location and Infrastructure
The property encompasses approximately 10,500 acres of ground between the north and south forks of the Merced River. Elevations on the property range from 1,600 feet along the banks of the Merced River to approximately 5,000 feet above sea level. Relief on the property is generally severe and is characterized by steep slopes from narrow valleys up too ridge crests. Vegetation consists of dense stands of chaparral and greasewood giving way to yellow pine and sparse oak vegetation at higher levels.
There is no present mining activity on the property. The Williams Brothers (also referred to as the Gibbs) mine, where the mill is presently located, is on the southeast slope of Brown Peak at an elevation of 4,500 feet. Access to the mine site is via a steep, single lane switchback road accessible from Route 140.
4.0 Geology and Mineralization
The property lies within the Western Metamorphic Belt of the Sierra Nevada Province identified by Bateman and Warhaftig (1966). This Belt is composed of strongly deformed Late Paleozoic and Mesozoic marine sediments and volcanic rocks contained in a northwest-trending band. These sediments lap on the east with the Sierra Nevada Batholith, the predominant feature of the Sierra Nevada Province. The Sierra Nevada Batholith is composed of predominantly granitic rocks of Mesozoic age. Chemically, the range of compositions of the Sierra Nevada Batholith ranges from diorite-granodiorite through aplites.
The gold deposits of the property belong to the East Belt of gold mineralization as described by Bowen and Gray (op. cit.).
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5.0 Previous Work
The history of gold mining in Mariposa County dates back to placer mining by Mexicans or Californians of Spanish descent in 1848. Details concerning work in this time are limited. The discovery of lode gold in Mariposa is generally credited to Kit Carson and the discovery of the Mariposa mine in 1849; however, it is possible that the Mexicans were mining bedrock gold in Mariposa County prior to this discovery.
Bowen and Gray (1957 op. cit.) have identified ten (10) historic mining areas that lie within the confines of the property. These are identified as follows (number in parentheses identify the property given by Bowen and Gray), I have added an 11th mine which is adjacent to the property:
Bunker Hill (52)
Emma 1 (81)
Eureka III (95)
Georgia Point (97)
Hite (113)
Hite Central (114)
Kaderitas (124)
Mexican II (158)
Williams Brothers (253)
Blue Star Mine (295)
Clearing House Mine
All of these prospects, except for the last one, relate to historic area of gold mining. Mining area #10 (Blue Star Group) is the site of a tungsten mine where a small amount of material (200 tons) was mined in the 1950’s. More complete descriptions of each of the gold mines is provided below. In general, the information contained in this section is obtained from Bowen and Gray (1957 op. cit. pp. 69-187 and pp. 223-343.). Additional, references for this section include the California Bureau of Mines Report of the State Mineralogist (various) and Clark (1970 p.64).
| Mine | Description |
| Bunker Hill | Discovered in 1851. Located on Pinoche Ridge 1.5 miles southeast of Hite Cove and discovered in 1851. No production data but was equipped with one of the first quartz mills in California. Also known as the Squirrel prospect. Gold mineralization occurs in northwest- striking, southwest dipping veins in slate and hornfels. |
| Emma I | Located 1.5 miles southwest of Browns Peak, 1.5 miles west of the Williams Brothers mine. Mineralization occurs in two (2) parallel northwest trending, northeast dipping quartz veins. It is indicated that the veins pinch and swell rapidly, and ore shoots are limited but rich. Apparently last worked in 1920 when a 90-foot tunnel was driven into the vein and previously-caved workings. Hangingwall and footwall rocks are reported to be slate and diorite respectively. No production data available. |
| Eureka III | Old property active prior to 1868. Vein reported to be 3.5 feet wide and consisting of galena, sphalerite, pyrite, native gold, and tellurides in quartz. Reported that ore mined between 1868 and 1880 ran an average of between $40 and $100 per ton ( 2-5 ounces). The Mill onsite was water powered arrastra. |
| Georgia Point | This is a patented property consisting of the Spring Tunnel, Georgia Point, and South Side claims. Vein is indicated to be an extension of the Hite gold mineralized system. Workings at this site indicated to be superficial. |
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| Hite | Located on the north shore of the South Fork of the Merced River. Discovered in 1862 by John Hite. Initial mining occurred at the Hite Mine during the period 1862-1881. Reported production from this mine totaled approximately $3 million worth of gold (150,000 ounces). (At today’s price of $1,325 the present value would be $198,000,000.) Mineralization occurs in quartz veins that trend northwest and are steeply northeast dipping. The majority of the production has been taken from a single vein that is split by large lens of slate and schist. Overall vein thickness ranges from a few feet up to 25 feet. The veins of the Hite deposit crop out on the slope of a west-trending ridge. Mineralization occurs in metasedimentary rocks consisting of slate, graphitic schist, quartzite, metasandstone, and quartz-biotite hornfels. These rocks are cut by a series of dikes and sills ranging from aplite to granodiorite. Access to the veins at the Hite Mine was done through 2 crosscut adits connected with the drift levels. Overall, it is indicated that the ore of the hangingwall vein was of, much lower grade than in the footwall vein. It is indicated that the mine was last operated in the early 1900's with limited production from the lower levels. However, several crosscuts accessed by a winze were created within the lower levels of the mine; it is not known whether) or not significant production has occurred from these workings. Figure 4 is a longitudinal projection of the Hite Mine showing the location of ore taken from the mine. Ore was processed through a 40-stamp mill with a nominal capacity of 72 tons per day. It is reported that the quartz is free milling and contains an average of 1.5% sulfides. |
| Hite Central | This is a patented property, 4 acres in size, that adjoins the Hite property to the southeast. The geology is reported to be similar to that of the Hite Mine. Workings on this property are indicated to be superficial. |
| Kaderitas | Also known as the Caderitas, Cader Idra, and Little Wonder. Located on the south slope of Browns Peak! approximately 0.25 miles from the Williams Brothers Mine. At one time was known as the Mina de la Libertad. The mineralized quartz vein strikes northwest and dips steeply to the northeast. The vein mineral assemblage is described as gold, pyrite, arsenopyrite, galena, and sphalerite in milky quartz. Wall rocks at the Kaderitas consist of graphitic slate and schist with intrusions of granodiorite. Mine workings consist of an adit approximately 100 feet long and superficial workings. Vein is indicated to extend to the Mexican II mine and thus represents an extension of this mineralized zone. Last worked in 1953-1954. No production data is available. |
| Mexican II | Also known as the El Carmen mine. Located on the south slope of Browns Peak. Indicated to adjoin the Kaderitas Mine. First discovered at about the time of the Hite Mine by Mexicans. Ore at this mine is indicated to be high grade but patchy. Ore occurs in 2 roughly northwest trending, steep northeast dipping quartz veins. Development of the mine was undertaken by an inclined shaft approximately 150 feet deep that accesses workings which includes 625 feet of drifts, and two tunnels of length 240 and 380 feet. Quartz veins are enclosed in slate and massive quartz biotite rock. No production data is available. |
| Williams Bros. | Also known as the Gibbs mine. Located on the southeast slope of Browns Peak. First indicated to be worked in the 1860's through three drift adits. Due to its inaccessibility, little development work was done prior to 1949. Property is now accessed by a 9-mile switchback road from State Route 140. Ore was initially processed through a 5-stamp mill. Ore from the mine was reported to run as high as $27.22/ton (1.36 oz/ton). Mineralization occurs in a northwest striking vein that dips northeast at angles ranging from approximately 25° to nearly vertical. The vein ranges from 6 to 20 feet in thickness with an estimated average of 6 to 8 feet. The mineralogy of the vein consists of fractured, friable pyrite, gold, and ankerite in milky to glassy quartz. Gold mineralization is closely associated with the pyrite. Ore occurs in shoots and pods. During the ATE period of ownership, the mine was being exploited on a limited basis from 2 headings. A 500 ton- per day gravity mill with a sulfide circuit was added to the site. Spotty production records exist. |
| Clearing House | The Clearing House Mine, which is NOT on the property but is directly across and several hundred yards northwest of the Gold Star Mine, is said to have mined from a 1000 ft deep shaft, more than $3.35 million (approx. $225 million - Oct 2010) in gold through 1937. It is believed by many that the vein structure trends toward the Gold Star and Hite Mines which are on the property. |
Clearly, the property has been the subject of significant historic production. Data pertaining to the majority of the operations are sketchy and it is assumed that the cessation of operations at each of these operations occurred as the result of the pinching out of the vein structure and the inability of the miners to locate the continuing vein.
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6.0 Data Review
For the purposes of conducting a data review, several sources of information were utilized. These sources include information gained from AT&E records and published data described above and at the end of this review. The data review is concerned with the Williams Brothers Mine, the Kaderitas and Mexican mines, and the Hite mine. Other prospects described above are not included, as insufficient data are available to make any statements regarding historic production.
It is a known fact that Reserve Estimates are sometimes reduced significantly to reduce the tax impact – especially in the state of California where the property is located.
Geology and Gold Sources on the Troy Claims
Geological Summary
The property lies within the Western Metamorphic Belt of the Sierra Nevada Province identified by Bateman and Warhaftig (1966). This Belt is composed of strongly deformed Late Paleozoic and Mesozoic marine sediments and volcanic rocks contained in a northwest-trending band. These sediments lap on the east with the Sierra Nevada Batholith, the predominant feature of the Sierra Nevada Province. The Sierra Nevada Batholith is composed of predominantly granitic rocks of Mesozoic age. Chemically, the range of compositions of the Sierra Nevada Batholith ranges from diorite-granodiorite through aplites.
Structurally, the sedimentary and volcanic rocks of the area exhibit a preferred foliation direction of northwest. This is generally consistent with the entire Western Metamorphic Belt. In this area, Bateman and Warhaftig (1966, op.cit pp.114-116) note that complex folding and faulting and the resultant beds, cleavages, and lineations are steeply to vertically dipping. Additionally, evidence of a large synclinorium trending northwest indicates a preferred northeast-southwest orientation of compressional stress. Numerous large-scale thrust faults are identified throughout the area; this thrusting has resulted in reversing the directions of bedding tops and jumbling the overall sequence of rocks within the belt.
Bedrock gold mineralization occurs in discontinuous quartz veins of general northwest trend. Collectively, the vein systems form part of the so-called California Mother Lode, an a really extensive system of vein mineralization. The Mother Lode is grouped into East and West Belts in Mariposa County, a nomenclature which reflects broad trends of mineralized zones.
Gold mineralization within these quartz systems generally occurs as steeply plunging, discontinuous ore shoots. The average down-plunge length of these shoots is estimated to be 300 feet (Bowen and Gray, 1957, p.72) with reported plunge lengths up to 600 feet. Ore mineralogy generally consists of an assemblage of gold, quartz, ankerite, Cr-mica (mariposite), and graphitic material. The timing of emplacement of gold mineralization is indicated to be primarily syntectonic with the Nevadan Orogeny; however, occurrences of indicated post-tectonic mineralization are noted.
The method of emplacement of gold vein mineralization, and the generally rodded nature of higher grade gold mineralization within larger zones of quartz veining is consistent with models of dilation within zones of bulk, inhomogeneous flattening as described by Hodgson (1993). In these cases, preferred zones of mineralization occur at the intersection of non-parallel shears within a deformation zone and the overall geometry of the deposits is controlled by the three-dimensional layout of these intersection points.
The gold deposits of the property belong to the East Belt of gold mineralization as described by Bowen and Gray (op. cit.).
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Available Data on Potential Gold Reserves on the Troy Claims
For the purposes of conducting a data review, several sources of information were utilized. These sources include information gained from AT&E records and published data described above and at the end of this review. The data review is concerned with the Williams Brothers Mine, the Kaderitas and Mexican mines, and the Hite mine. Other prospects described above are not included, as insufficient data are available to make any statements regarding historic production.
It is a known fact that Reserve Estimates are sometimes reduced significantly to reduce the tax impact – especially in the state of California where the property is located. One Confidential document written by Geoffrey A. Clarke, M.Sc., prepared for Lakefield Minerals in Canada (1995) wrote the following about the AT&E property and mines.
The Troy Mining Zone Location Map – Mariposa County
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Location of Star’s Mining Property
Within the Historic “California Mother Load”
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There are seven (7) portals. The method Troy used to stake its claims was to land-lock the area surrounding these claims in a way to prevent outside interests to stake the additional original AT&E claims. Since existing roads, trails, etc. may be expanded but no new ones constructed without further government approval, this program proved effective. Troy’s plan was at such time as it was ready to begin opening the various portals for production to survey and stake the additional 290+ claims facilitated by its road and trail structure that provides access to them. These additional claims together with the existing claims would provide Star with control over ~10,500 acres, 130 miles due East of San Francisco Bay.
Photographs of the Troy Mining Zone
The Mining Property, showing site buildings
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Mining Property
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Mining Property
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Mine Shaft
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Bunker
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Main Road
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Mine
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Mill
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Mill
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Mill
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Mill
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Mill Building
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Rock Face Inside the Mine Showing Ore
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Bunker
Mine Map |
Inside Mine |
Inside Mine |
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Several Pictures Taken at the Mine Site late November 2019 Follow
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commsa mining rights
Upon acquisition of 51% of Compania Minera Metalurgica Centro Americana SA (Commsa), a Honduran Corporation on January 1, 2022, the Company acquired Commsa’s mining rights to five mines that run along a 12.5 mile stretch of the Rio Jalan River. These five operating mines run along a 12.5 mile stretch of the Rio Jalan River that are being prepared for production. The environmental licenses have been obtained and exploration is ongoing. Local small mining operations are producing a minimum of 250 to 300 oz of gold per site per month while losing approximately 50% of the recoverable gold particles. We expect that our expanded operations, using modern equipment and our new Genesis program, recently acquired, should result in up to a 98% rate of recoverable gold, leading to significantly higher quantities of gold per site.
Below is a mineral resource summary for the Clavos. The report is compiled from internationally validated exploration documentation that meets the standards set by Canadian National Instrument 43-101, (NI 43-101) and National Instrument 43-101CP, and National Instrument 43-101F1.
GENERAL OVERVIEW
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Executive exploration summary: Choluteca Project
1996 sampling traverses by Entre Mares personnel (geologists Scoretz, Malfair, Cheng, Fraser and McCarthy at different times) indicated that anomalous gold was present at Clavos zone in structurally and stratigraphically favorable terrain. Then by an independent group of Geologist from Guatemala lead by Ruben Leal in 2005 and then by 2020 Golden Jaguar made a detail sampling from Clavos to confirm the ancient mineralized zones, new potential ones and complete economics and metallurgic reports.
Drilling, reconnaissance mapping and sampling by BMG's D. Mashburn in 1994 discovered spectacular gold values (up to 305.2g/T/0.3m in DDH 94-5 at the San Antonio zone) at Clavos.
These values, added to the proximity to the Nicaraguan Depression qualified the area for further geological exploration.
Golden Jaguar now owns land property, rents of lands and the license permits since 2020 focus on start production in the Clavos Zone. With the capacity of grow through the economic gold concentrations in properties included within a 390km2 around our license. We finish having a 3D model of proven reserves and inferred ones. 10.2 Km of grid lines were cut and mapped before a total of 2435.5m were drilled on the Clavos area. The property is in southern Honduras, Central America.
Location and Access
Choluteca, the fourth largest city in Honduras, has a wide range of hotels and rental dwellings as well as good supply, repair, and communications infrastructure. The city and the national capital, Tegucigalpa, are joined by 130km of the paved highway. The highway also provides access from Choluteca to Clavos road, one of many logging and agricultural roads throughout the area. Potosi is reached by driving 50km east on the highway from Choluteca and taking the dirt road to Porteritos, a total of 1.5 hours driving time. The highway has both passenger and heavy transport capabilities.
Choluteca is serviced by twelve daily bus runs. Daily international airline service is available to Tegucigalpa from every country while Choluteca is serviced by an airstrip capable of landing 737 sized aircraft. International flights can go to Choluteca by a small-time scale at Tegucigalpa.
A large, skilled labor force with some mining experience, can be mobilized in most Honduran towns and Guatemala.
Physiography and Climate
The Choluteca concessions encompass an area characterized by steep hills, rugged relief interspersed with rounded coast mountains and ridges and domes interspersed with precipitous valleys. Cliffs are not uncommon particularly along zones of structural uplift or downthrow.
Clavos is steeper topographically with rhyolite doming and very steep valleys throughout the property.
Topography varies widely from 60m on the west side to 1190m in the northeast corner of the properties.
Honduras is subject to temperatures ranging from the low 20's into the 40's (degrees Celsius) dependent upon the season. Climate is logically broken up into extremes: the rainy season (June to October) and the dry season (November to May).
Hardy plants and trees populate the region proportional to altitude, soil and water supply although the topographically higher flora resemble the North American Pacific northwest species of plants i.e. open-oak pine forests. Drainages are populated by deciduous jungle flora.
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Introduction
Location and access
The Potosi Project is in the Municipality of Concepcion de Maria in southern Honduras, Department of Choluteca.
Map 2855-IV (Concepcion de Maria - Cinco Pinos, 1:50,000 topographic sheet) covers most of the property. The nearest center of commerce is the fourth largest city in Honduras: Choluteca. This modern city has support services, an airstrip, and the added advantage of being approximately two hours from the national capital of Tegucigalpa via paved highway.
Access to Potosi is best achieved from the San Francisco turn-off on the Pan American Highway east of Choluteca. A 1.5-hour journey from Choluteca by 4x4 to the village of Porteritos via highway and dirt road is the most efficient means of travel. An alternate route is Choluteca - El Corpus - San Judas - Aguacatal. Older reports (E. Cardoze's 1939 "Report on the Potosi Mining Property") refer to access from Nicaragua which may, eventually, become viable given any continuity between Honduras and Nicaraguan gold trends.
Physiography
The Potosi area is rugged with elevations ranging from 300m to 1050m ASL. Saprolite and quartz - rich outcrop provide often treacherous footing on steep hills. Outcrop is sparse with topographic highs being capped either by resistant quartz - veined andesites, Padre Miguel group rocks or rhyolite intrusive doming.
Hardy plants and trees populate the regions proportional to altitude, soil, and water supply. Generally, the topographically higher elevations are covered with pine forests and pine needle carpets. Lower regions, especially in stream and river drainages are covered in deciduous single canopy jungle.
Mining and exploration history
At present, the Potosi area is not being mined by other than small, high-grade operations consisting of one or two local individuals. They focus upon known occurrences such as Tajo, San Antonio and, lately, San Benito with hand tools, cobbing and molinete techniques. The area has seen sporadic gold mining activity since the time of the Spanish colonists 100 hundred years ago. Within the Potosi concession, Rosario Mining performed large scale underground tunneling in the Guadaloupe, San Antonio, Guapinol, El Caballo and Tajo adits using tracked techniques of First World War vintage. Brush-overgrown roads and at least several hundred meters of tunnels, most of them collapsed, are the legacy of this earlier work. An unnamed American company did some small shafts and tunnels at Volcancito, and Jobos. No production records or plans are available.
Geology
Geology Project
Perhaps ten percent of the Potosi area is rock outcrop. In a macro sense the outcrop available for mapping may be broken up into two Tertiary volcanic rock groups: the Oligocene Matagalpa Formation (mainly andesitic in composition) and the Miocene Padre Miguel Group (mainly rhyolite / dacite). Matagalpa Formation rocks contain andesite flows, crystal tuffs, feldspar porphyries, basalt, and finer grained volcano-sediments unconformably overlain by the Padre Miguel rocks (rhyolitic to dacitic tuffs). Later stage rhyolite doming occurs in the San Antonio Mine area and immediately east of the San Benito occurrence. The Cerro Potosi topographic high is probably correlative to the Padre Miguel group rooks. Later stage mafic, intermediate, and felsic diking crosscut the main units. Padre Miguel rocks are invariably bleached white to pink to grey mass of devitrified and silicified rhyolite to dacite, ignimbrite or silicified breccia. White, angular metamorphosed/altered clasts are diagnostic of this occurrence at Pantaleon. Welding is observable in core.
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At Potosi, the rock types are variations on the Matagalpa theme, except for Pantaleon, where the prime target was gold bearing epithermal quartz veining within Padre Miguel rocks. It was also hoped that the contact between the Padre Miguel and Matagalpa rocks would be a logical horizon for gold alteration zones.
The majority of outcrop mapped on the project is from the Matagalpa group: a flat-lying sequence of medium grained porphyritic tuff breccia of intermediate composition. Markedly porphyritic flows were mapped on surface and logged in drill holes. The size and shape of the light grey/white feldspar phenocrysts varies from millimeter to slightly less than 0,75 cm. More massive, non-porphyritic, fine-grained andesite was identified either as volcanic flow or tuffs. The Matagalpa group is predominantly subaerial with limited sections of banded, lamellar tuffs which may have been subaqueous. Pyroclastic andesite breccias are mapped and logged in all the focus zones. Heterolithic lapilli are common constituents of the lapilli tuff. Heterolithic agglomeratic andesite and medium to coarse tuff breccia is logged in the San Benito drill holes. Fine grained intermediate dykes which may be feeder dykes cut the same drill holes.
Felsic intrusive domes are subaerial in nature. Flow banding and spherulites are common.
The main target of the drilling at San Antonio and Tajo is epithermal quartz veining and attendant alteration and silicification zones.
Structure: The principal trend mapped at San Antonio dips steeply to the north and is coincident with an east - west striking ridge. The trend is traceable on surface from San Antonio through Corales / Guadaloupe where the strike becomes more northerly, increasing from generally east-west to west-north-west (270 to 310/320). There are indications that the west-north-west striking Corales / Guadaloupe Mines exploit a second structure mirroring the Nicaraguan trough. This trend disrupts the east-west trend hosting the San Antonio structure.
Epithermal quartz veining is evidently controlled by structurally prepared fault and fracture zones. These zones have provided the conduit for gold bearing siliceous fluids driven by felsic doming as a "heat engine".
Alteration: Feldspar and clay alteration is to moderate intense in the weathering horizon and adjacent to structurally affected areas and/or within the aura of related, epithermally altered, siliceous zones. This alteration is in direct proportion to proximity of structural movement and quartz veining. The near surface feldspar phenocrysts are soft, crumbly and subhedral to anhedral in form. Sausseritization is common in core.
Hematization is ubiquitous in surface rocks due to the weathering profile created by meteoric water circulation and subsequent oxidation. Faulted and fractured rocks are also commonly hematized to varying extents.
Silicification: All rock units have silicified intersections (usually influenced by epithermal quartz veining) although pervasive silicification has been noted on the metre scales in core and adjacent to quartz breccia zones during the mapping phase. Epidotization is part of a classic zonation especially noticeable at San Benito where pervasive epidote gives way to pyritization and finally to silicification proximal to epithermal quartz veining and associated chalcopyrite, galena, sphalerite, silver minerals and gold.
Sulphides / mineralization: There is a distinct correlation between the presence of sulphide presence, type, and percentages to gold mineralization as noted in zone descriptions and core logs. Sulphides are not consistent as to type or quantity between drilled zones. If indeed there is a gold pathfinder element at Potosi, it is copper. Chalcopyrite, galena, pyrite, sphalerite, silver minerals (acanthite) and their oxide analogues are present in the best mineralized intersections. Visible gold was logged in DDH PT97-1 while V.G. is also seen in the surface oxidation zones at Tajo, Volcancito and San Benito. The gold logged in PT97-1 was coarse (several mm. in diameter) within a vuggy epithermal quartz vein. Other visible gold was noted occurring as <mm. flecks within very oxidized siliceous capstone at known workings on the property.
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POTOSI
Drilling at the Tajo showing delineated a quartz vein structure striking WNW and dipping moderately to the northeast. Diamond drill holes PT97-05 to PT97-11 intersected the structure along a strike length of 150m over a 125m down dip extension.
The Tajo Showing is located on a variably dipping (15-30o) north-east facing slope. The Tajo structure was approached through a series of short drill holes. The structure was pierced repeatedly at anticipated depths based on a 295o strike and -35o N dip; except in PT97-11 where the vein was intercepted 20m higher in the hole. This may be explained by a swing in the strike to the northwest or an offset through faulting. Field evidence indicates that the structure begins to strike 315o on the western end of the grid. The best assay was in PT97-7 (2.29g/T over 8.0m including a core zone of 12.2g/T over 1.4m). it is geometrically demonstrable that the core zone corresponds to the base metal rich sulfide intervals of the Tajo vein.
The next drawing is the proved gold reserves from Potosi before naming Tajo with a total of 78,318.27 ounces of Au.
There is much to still explore all around this rich zone, pretty much everywhere you walk we found more gold in area of 30 km.
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San Benito
Geology
Recommendations: San Benito
Further drilling at San Benito is highly recommended. An approximately 700 x 350m zone has been sampled with highly anomalous Au values obtained. It is open to both east and west and appears to represent stacked epithermal quartz zones with Au, Ag and Cu mineralization. Another hole to the west of the Vespa Pit, possibly drilling under the chimney zone would be useful in extending mineralization; a hole should be drilled to test the eastward extension of the chalcopyrite-bearing quartz veins mapped there. Surface samples in pits and trenches returned more than 10g/T Au values. A program of at least five, 100m drill holes would be necessary to properly test the very wide and persistent zone of base metal and gold enhancement within silicification and quartz veining identified on the grid.
Cerro Copal
Geology
Lithology of Cerro Copal is the same as Tajo.
From 1999 to this day this place is also being mine at a small scale by locals following high gold grades. Ending with complex underground structure that allows us to create a 3D without drilling.
This new exploration area follows the Limon’s trend from Nicaragua Gold belt.
The inferred gold reserves of Cerro Copal are 341,022 ounces with a gold grade of 6.28 g/t:
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Genesis Ore Extraction Process
On March 19, 2023, Star Alliance acquired 51% of the capital stock of Lion Works, including 51% of the intellectual property rights and know-how related to the Genesis proprietary system (“Genesis”) pursuant to the Share Purchase Agreement. This green, environmentally friendly, process, extracts up to 98% of the minerals, including gold and many rare earth elements from Oxide and complex Ores. Furthermore, the process takes 12 - 48 hours which is considerably shorter than the 40 to 120 days other leaching processes take. Furthermore, this heap leaching process only extracts up to 70% of the gold or other minerals from the ore. If left for one to two years it is possible to extract up to 90% of the minerals from the ore using heap leaching methods and compared to CIL plant processing has the same effectiveness without the cost. CIL stands for carbon in leach. This is a gold extraction process called cyanidation where carbon is added to the leach tanks or reaction vessels so that leaching and absorption take place in the same tanks. It is the most commonly used leaching process for the extraction of gold. This process has a higher capital and operating cost but generally has an improved gold recovery of between 20 and 30%. However, this process is still more expensive than our Genesis system, is environmentally unfriendly, is still slow compared to Genesis and in the first 4 to 6 months extracts much less ore than our Genesis system achieves over 12 to 48 hours.
Genesis is the key process that makes economically unviable deposits around the world viable and profitable again.
Genesis is a sustainable extraction method, that yields an improved recovery rate in a much shorter time period even where the presence of gold is as little as 0.10 parts per million. There are no emissions, and the system is environmentally friendly.
The Genesis Oxide System
The Genesis system accelerates the rate of dissolution of gold to nearly an immediate rate, therefore reducing the standard time of extraction from approximately 40-120 days to a mere 12 to 48 hours. Consequently, the costs of production are dramatically reduced. The system is scaleable and the smaller units are modular and can easily be transported from location to location.
Beyond the economic advantages it also provides immediate technical solutions to difficulties caused by fine materials and resolves the need to agglomerate. The speed of extraction of gold is up to 400 times faster than conventional heap leaching.
Versatility
At the heart of the Genesis system is a reactor module that makes the system versatile in its relationship with installation, construction, and repositioning. The system’s conception, design, and its structural development is the innovative solution to older methods of extraction. In addition to the numerous international collaborations it has resulted in the creation and implementation of Genesis for the provision of a practical and economical solution that is effective, feasible, and reliable; characteristics which the mining industry has always required.
The area needed to operate a complete module is merely 2,500 square meters which includes the absorption plant, a convenient reduction in space requirements as compared to Heap leaching.
The Genesis Refractory System
The Genesis Refractory system works on complex ores. This genesis system has up to a 98% transformation rate from double refractory lock gold into free oxide gold. The system operates within a 12 to 48 hour process time, thereby reducing very significantly the time that a heap leaching system would take.
The Genesis system is the only economically feasible solution for complex low-grade deposits and the only Cost-effective process to treat double refractory gold and other minerals.
This system like the Genesis oxide system is an innovative solution that significantly improves the older methods. It is environmentally safe, has no emissions and its speed of extraction is very cost effective. The true benefits are that it can be used on tailing piles, extracting in most instances more minerals than was originally extracted with the older methods. It also cleans up these tailing piles during the extraction process leaving smaller rocks and gravel that can be used on roads and rail tracks etc. The dirtiest of all tailings are coal tailings and our equipment works very efficiently on these tailings extracting minerals and leaving useable rock residue.
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Key Points:
• Lower capital investment needs in comparison to the standard processes available in the industry.
• System is much faster than regular heap leaching methods.
• Improved rate of extraction.
• Solution for low gold grade deposits.
• Solution for economically unviable deposits.
• Genesis has the same efficiency as a CIL plant without the costs.
• Reduced cost of production as compared with standard methods of extraction.
• Environmentally friendly process
• Modular structure system
• Easy to scale
• the smaller units are mobile, designed to be easily transported without any secondary costs
• Easy to adapt and displace in complicated terrains
• Option to substitute cyanide for a green chemical agent
• Lower cost of production per ounce
• The construction of processing plant from scratch would require under 6 months
• Capacity for complete automation
• Precise control and measurement of the recovery of the precious metals.
• Experience in managing conventional mining plants is not required for setting-up Genesis
• Eliminates all risk in setting-up production in under a non-explored gold-bearing zones
• Eliminates the need to grind the mineral ore
• Genesis is a closed system, eliminating the risk for spillages
• Considerably reduces the need for water, making it particularly viable for arid sites
• Water and chemical agents are all reutilized and recycled
• Machine has no emissions, making it very safe.
The Genesis system also solves the problem that mining companies may experience following the decision in 2022 of the U.S. Appellate Court for the 9th Circuit known as the “Rosemont decision. In that decision the Court rules that while federal mining law allows companies to mine on federal land where economically valuable minerals are present, they are not guaranteed the right to use federal land without valuable minerals as a dumping site for the mine. The Genesis system resolves any potential issues related to the mining waste/tailings, since it not only extracts minerals from the tailings, but also cleans tailings leaving the residual as usable gravel for roads and railways.
The cost effectiveness of our Genesis eco-friendly system means that many closed and unprofitable mines can be operated again, due to the significant increase in profitability with the lower cost of operation than conventional methods.
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First Prototype of the GENESIS oxide System
First Industrial Scale GENESIS Refractory System
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Our Growth Strategies
The Company is planning to reopen the mining properties it acquired from Troy in the third quarter of 2023. and to purchase the equipment necessary to start operations in Honduras and West Africa and actualize commercial production from the mines. We believe that these activities will generate revenues and profit. In order to implement this business plan, it will require the full utilization of our management, financial and other resources and raising the funds necessary for the businesses. Our ability to manage growth effectively will depend on our ability to quickly scale-up operations and to recruit, train and manage operations, management, and technical personnel and to retain the current successful management team and adding experienced personnel to the team to enable us to meet our production expansion plan.
Intellectual Property
We currently do not have any patents or trademarks registered in the name of the Company. As a result of the acquisition of 51% interest in Lion Works, we acquired 51% in the proprietary technology owned by Lion Works, called “Genesis,” however this technology has not been patented, and the Company needs to engage a patent attorney to apply for the patent registration with the United States Patent and Trademark Office. Currently, the Company uses a combination of copyright, non-registered trademark and trade secret laws, as well as confidentiality procedures and licensing arrangements, to establish and protect its intellectual property rights to the Genesis technology and other technologies that the Company may acquire or develop.
Competition
The mining business is highly competitive. Many of our competitors have greater financial resources than we have. As a result, we may experience difficulty competing with other businesses when conducting development and mining activities. In addition, marketing our new Genesis technology will take time to gain traction in the mining industry. Numerous factors beyond our control may affect the marketability of gold recovered from our mining properties. These factors include market fluctuations, the proximity and capacity of natural resource markets and processing equipment, government regulations, including regulations relating to prices, taxes, royalties, land tenure, land use, importing and exporting of minerals and environmental protection. The exact effect of these factors cannot be accurately predicted, but the combination of these factors may result our not receiving an adequate return on invested capital.
Compliance with U.S. Government Regulation.
The General Mining Law of May 10, 1872, as amended (30 U.S.C. §§ 22-54 and §§ 611-615) is the major U.S. federal law governing locatable minerals. This law allows citizens of the United States the opportunity to explore for, discover, and purchase certain valuable mineral deposits on those federal lands that are open to mineral entry. The law sets general standards and guidelines for claiming the possessory right to a valuable mineral deposit discovered during exploration. The General Mining Law allows for the enactment of state laws governing location and recording of mining claims and sites that are consistent with federal law. The federal regulations implementing the General Mining Law are found at Title 43 of the Code of Federal Regulations (CFR) in Groups 3700 and 3800.
A mining claim is a selected parcel of U.S. federal land, valuable for a specific mineral deposit or deposits, for which the claimant has asserted a right of possession under the General Mining Law. All rights to the Star Alliance International Corp. Claims are restricted to the exploration and extraction of a mineral deposit. The rights granted by a mining claim protect against a challenge by the United States and other claimants only after the discovery of a valuable mineral deposit. The two types of mining claims are lode and placer. The Star Alliance International Corp. Claims are lode claims. Lode claims cover classic veins or lodes having well-defined boundaries and also include other rock in-place bearing valuable mineral deposits. Lode claims are usually located as parallelograms with the side lines parallel to the vein or lode. The end lines of the lode claim must be parallel to qualify for underground extralateral rights. Extralateral rights involve the rights to minerals in vein or lode form that extend at depth outside the vertical boundaries of the claim. The Star Alliance International Corp. Claims are a mixture of patented and unpatented mining claims. A patented mining claim is one for which the federal government has conveyed title, making it private land. Since October 1, 1994, the BLM has been prohibited by acts of Congress from accepting any new mineral patent applications.
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Generally, all claimants must pay an annual maintenance fee per claim or site to the BLM, or file for a waiver from payment of fees by September 1 of each year. Failure to file for a waiver or pay the fee by September 1 results in the claim or site becoming forfeited by operation of law. Assessment work is work or labor performed that develops the claim for production (43 CFR Part 3836). Geological, geophysical, and geochemical surveys may qualify as assessment work for a limited period. Use of these surveys requires the filing of a detailed report, including basic findings.
State laws also require the annual filing of an affidavit of assessment work with the proper county if the work is performed. The filing of an affidavit of annual assessment work with both the local county office and the proper BLM State Office is required if the claimant elects to file a waiver from payment of the maintenance fees. The affidavit or proof of labor must be filed no later than December 30 following the filing of a waiver in the proper BLM State Office and in the county or borough recorder’s office.
The performance of assessment work must be within a certain period referred to as the assessment year. The assessment year begins at noon of each September 1. It ends at noon September 1 of the next year (43 CFR Part 3836). Performance of assessment work need not occur during the first assessment year of location.
Exploration and mining activities on BLM-administered land are controlled by the regulations of the Secretary of the Interior contained in 43 CFR, Subparts 3715 and 3809. We are required by these regulations to prevent unnecessary or undue degradation of the land. For activities other than casual use, we will be required to submit either a notice or a plan of operations. A plan of operations, which includes a reclamation plan, is required where activities involve the surface disturbance of more than 5 acres. Notices also require the submission of a reclamation plan and are submitted for exploration activities covering 5 acres or less. There is no requirement for notifying the BLM of casual use activities. Casual use activities are those that cause only negligible disturbance of public lands and resources. For example, activities that do not involve the use of earthmoving equipment or explosives may be considered casual use.
We will havebe required to satisfy certain criteria
in orderreclaim any surface disturbing activity, even if the claim or site is declared abandoned and void or forfeited by the BLM. Reclamation will be required if we relinquish the claim or site to the Federal Government. The BLM requires a reclamation bond or other financial security prior to approving a plan of operations or allowing operations under a notice to proceed. Surface Management actions are processed at the local level.
We intend to submit a plan of operations for our applicationplanned activities on the Star Alliance International Corp. Claims to the BLM district office. The plan of operations must include appropriate environmental protection and reclamation measures and describe either the entire operation proposed or reasonably foreseeable operations and how they would be conducted, including the nature and location of proposed structures and facilities.
The public has the conditional right to cross mining claims or sites for recreational and other purposes and to access federal lands beyond the claim boundaries. Although claimants have a right of access to a mining claim or site across federal lands, they are not allowed to cause unnecessary or undue degradation of the surface resources. Claimants may be liable for damages if found responsible for unnecessary loss of or injury to property of the United States. We may not construct permanent structures, mobile structures, or store equipment without the prior approval of an authorized federal official.
Employees
The Company currently has two employees, Richard Carey and Anthony Anish who are our three executive officers.
Subsidiaries
As of the date of this prospectus, we have two subsidiaries:
| 1) | Compania Minera Metalurgica Centro Americana (Commsa), a Honduran corporation, in which the Company owns 51% of capital stock; and | |
| 2) | Lion Works, Inc., a Guatemalan corporation, in which the Company owns 51% of capital stock. |
Properties
The Company does not own real properties. Our President and Chairman, Mr. Carey, is providing his personal office space at no cost to the Company.
Equity Incentive Plan
The Company does not currently have any equity incentive plan.
Legal Proceedings
There are no pending, threatened or actual legal proceedings in which the Company is a party.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
You should read the following discussion together with our consolidated financial statements and the related notes included elsewhere in this prospectus. This discussion contains forward-looking statements that are based on our current expectations, estimates and projections about our business and operations. Our actual results may differ materially from those currently anticipated and expressed in such forward-looking statements.
Overview
The Company is focused on the pursuit of precious metals mining, employing our highly specialized, environmentally safe and patented technologies for the extraction of gold, silver and other metals including lithium and rare earth elements with an additional focus on biodegradable technologies that will dramatically improve many everyday applications.
On August 13, 2019, the Company completed the Troy Asset Acquisition. This purchase includes 78 mining claims, and the equipment located at the mine head. The Company is currently working with the Forestry Service and BLM to finalize the permits to reopen the mine. The Company repaid its obligations under the promissory note in 2022. We expect to restart mining operations utilizing the Genesis process in the third quarter of 2023.
In January 2022, the Company completed the acquisition of 51% of Compania Minera Metalurgica Centro Americana S.A. (“Commsa”) which owns 5 gold mines in Honduras.
On February 7, 2023, the Company executed a 12% convertible promissory note with Quick Capital LLC (“Quick Capital”). The note is convertible at the lessor of 1) $0.05, or a price per share equal to the 65% of the lowest trading price of the Company’s common stock during the 20 consecutive trading days prior to the date on which lender elects to convert all or part of the Note. In addition, the Company issued Quick Capital warrants to purchase up to 1,211,111 shares of common stock. The Warrants are exercisable for shares of the Company’s common stock at a price of $0.05 per share and expire 5 five years from the date of issuance.
On February 8, 2023, the Company executed a 10% convertible promissory note with AES Capital Management, LLC (“AES”). The note is convertible at the lessor of 1) $0.02, or a price per share equal to the 65% of the lowest trading price of the Company’s common stock during the 20 consecutive trading days prior to the date on which lender elects to convert all or part of the Note.
On March 15, 2023, the Company entered into and executed the Purchase Agreement and a Registration Rights Agreement (the “RRA”) with Keystone, pursuant to which the Company shall have the right, but not the obligation, to direct Keystone, an unrelated third party, to purchase up to 75,000,000 shares of its Common Stock. The Company is registering in this registration statement up to of [75,000,000] shares of Common Stock for resale by Keystone issuable pursuant to the Purchase Agreement. For additional information regarding the issuance of common stock to Keystone covered by this prospectus, see the section titled “Purchase Agreement” above.
On March 19, 2023, the Company acquired 51% capital stock of Lion Works, Inc. including rights to Genesis, subject to the satisfaction of its performance obligations under the Share Purchase Agreement.
Limited operating history and need for additional capital
There is no historical financial information about us upon which to base an evaluation of our performance. We are in start-up stage operations and have not generated any significant revenues. We cannot guarantee we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources and possible cost overruns due to price and cost increases in services and products.
Results of Operations for the Three Months Ended March 31, 2023 as Compared to the Three Months Ended March 31, 2022
Operating expenses
General and administrative expenses (“G&A”) were $80,556 for the three months ended March 31, 2023, compared to $189,558 for the three months ended March 31, 2022, a reduction of $119,002. The reduction was mainly due to much smaller overheads for the Troy mine as no work was performed during this quarter.
Professional fees were $22,130 for the three months ended March 31, 2023, compared to $93,500 for the three months ended March 31, 2022, an reduction of $71,370. Professional fees consist mainly of legal, accounting and audit expense. The decrease in the current period is due to reductions in legal fees during the period.
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Consulting fees were $16,500 for the three months ended March 31, 2023, compared to $3,827,475 for the three months ended March 31, 2022. The reduction of $3,810,975 was mainly due to a reduction in non cash expenses for consultants during the earlier period.
Director compensation was $60,000 and $1,469,000 for the three months ended March 31, 2023 and 2022, respectively. Our Chairman, signed a new employment agreement on March 15, 2023 and monthly compensation was increased to $20,000 per month commencing January 1, 2023. The reduction of $1,409,000 in director compensation was mainly due to the elimination during the period of non-cash stock compensation payments.
Officer compensation was $45,000 and $817,500 for the three months ended March 31, 2023 and 2022 respectively. Our Chief Financial Officer signed a new employment agreement on March 15, 2023 and monthly compensation to was increased to $15,000 per month commencing January 1, 2023. The reduction of $772,500 in officer compensation was mainly due to the elimination of non-cash stock compensation expenses.
Other income (expense)
For the three months ended March 31, 2023 and 2022, we had interest expense of $56,151 and $6,780, respectively.
Net Loss
Net loss for the three months ended March 31, 2023, was $384,009 compared to $8,016,068 for the three months ended March 31, 2022. The large decrease in our net loss is due to the elimination during the period of non-cash stock compensation expense.
Results of Operations for the nine Months Ended March 31, 2023, as Compared to the Nine Months Ended March 31, 2022
Operating expenses
General and administrative expenses (“G&A”) were $959,158 for the nine months ended March 31, 2023, compared to $1,250,958 for the nine months ended March 31, 2022, a reduction of $291,800. The reduction was primarily due to a reduction in costs at the Troy mine.
Professional fees were $89,130 for the nine months ended March 31, 2023, compared to $106.520 for the nine months ended March 31, 2022, a reduction of $17,390. Professional fees consist mainly of legal, accounting and audit expense. The decrease in the current period is due to a decrease in legal fees.
Consulting fees were $1,110,593 for the nine months ended March 31, 2023, compared to $4,015,837 for the nine months ended March 31, 2022. The reduction in consulting fees expense of $2,905,244 was due to the issuance of stock for non-cash consulting expenses in the prior period.
Director compensation was $3,207,400 and $1,529,000 for the nine months ended March 31, 2023 and 2022, respectively. The increase of $1,678,400 in the current period was due to non-cash stock compensation.
Officer compensation was $2,885,0000 and $907,500 for the nine months ended March 31, 2023 and 2022, respectively. The increase of $1,977,500 in the current period was mainly due to non-cash stock compensation expenses.
Other income (expense)
For the nine months ended March 31, 2023 and 2022, we had interest expense of $259,661 and $8,884, respectively an increase of $250,777 mainly due to interest charges on loans and convertible notes.
Net Loss
Net loss for the nine months ended March 31, 2023 was $9,943,420 compared to $9,420,914 for the nine months ended March 31, 2022. The increase of $522,506 in our net loss is mainly due to non-cash stock compensation expense.
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LIQUIDITY AND CAPITAL RESOURCES
The accompanying unaudited financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. As shown in the accompanying unaudited financial statements, the Company has an accumulated deficit of $25,001,820 as of March 31, 2023. For the nine months ended March 31, 2023, the Company had a net loss of $9,943,420, which did include over $8 million of non-cash expense incurred for the issuance of common stock for services, loss on conversion of preferred stock and derivatives associated with convertible debt. We used ($405,769) cash in operating activities. Due to these conditions, it raises substantial doubt about the Company’s ability to continue as a going concern.
Net cash used in operating activities was $(405,769) during the three months ended March 31, 2023, compared to $(1,424,871) in the three months ended March 31, 2022. We had a loss on conversion of preferred stock in the amount of $97,249.
Net cash provided by financing activities was $337,652 and $1,589,315 for the three months ended March 31, 2023 and 2022, respectively. In the current period we received $261,200 from the sale of preferred stock.
Over the next twelve months, we expect our principal source of liquidity will be raised from the sale of stock.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
The fiscal year ended June 30, 2022, compared to the fiscal year ended June 30, 2021
Results of Operations for the years ended June 30, 2022 and 2021
Operating expenses
General and administrative expenses were $1,909,581 for the year ended June 30, 2022, compared to $94,508 for the year ended June 30, 2021, an increase of $1,815,073. The increase is due to an increase in filing fees and consulting expenses.
Professional fees were $144,763 for the year ended June 30, 2022, compared to $57,029 for the year ended June 30, 2021, an increase of $87,734. Professional fees consist mainly of legal, accounting and audit expense. The increase is due to an increase in legal and audit fees.
There was a loss on conversion of common stock for Directors compensation of $2,111,500 and officer compensation of $952,500 for the year ended June 30, 2022 compared to $90,000 and $155,000 for the year ended June 30, 2021
Other income (expense)
For the year ended June 30, 2022, we had interest expense of $297,417 and a net loss on conversion of debt of $102,403 compared to interest expense of $10,800 and loss on conversion of debt of $46,200 for the year ended June 30, 2021. In addition, there was a loss on issuance of convertible debt of $575,396 compared to $0 in 2021. Interest expense has increased as a result of interest on notes payable that were added to the Company’s liabilities and the amortization of debt discount associated with our convertible notes.
Net Loss
Net loss for the year ended June 30, 2022 was $11,885,609 compared to $503,017 for the year ended June 30, 2021.
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Plan of Operations
We expect that working capital requirements will continue to be accepted. funded through borrowing from related parties and others. Subsequent to the year end the Company acquired the mining claims and equipment assets of Troy Mining Corporation. We also acquired or entered into binding letters of intent to acquire other businesses during the year ended June 30, 2022.
Off Balance Sheet Arrangements
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
Material Commitments
As of the date of this registration statement, we do not have any material commitments.
Purchase of Significant Equipment
We do not intend to purchase any significant equipment during the next twelve months.
Liquidity and Capital Resources
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. As shown in the accompanying financial statements, the Company has accumulated deficit of $15,058,400 and working capital of $1,034,930 as of June 30, 2022, and a net loss of $11,885,609 most of which is non-cash expense. The Company used $739,630 of cash in operating activities for the year ended June 30, 2022. Due to these conditions, it raises substantial doubt about the Company’s ability to continue as a going concern.
Net cash used in operating activities was $739,630 for the year ended June 30, 2022 as compared to the net cash used in operating activities of $355,574 for the year ended June 30, 2021. The increase in net cash used in operating activities from 2022 to 2021 is because expenses increased during the year ended June 30, 2022.
Net cash provided by financing activities was $1,004,565 and $342,305 for the years ended June 30, 2022 and 2021, respectively.
Over the next twelve months, we expect our principal source of liquidity may be dependent on borrowings from related and other parties.
Going Concern Consideration
Our auditors have issued a “going concern” opinion, meaning that there is substantial doubt if we can continue as an on-going business for the next twelve months unless we obtain additional capital. The Company’s cash position may not be sufficient to support its daily operations.
Limited operating history and need for additional capital
There is no historical financial information about us upon which to base an evaluation of our performance. We are in start-up stage operations and have not generated any significant revenues. We cannot guarantee we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources and possible cost overruns due to price and cost increases in services and products.
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Going Concern Consideration
Our auditors have issued a “going concern” opinion, meaning that there is substantial doubt if we can continue as an on-going business for the next twelve months unless we obtain additional capital. The Company’s cash position may not be sufficient to support its daily operations. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. As shown in the accompanying financial statements, the Company has accumulated deficit of $15,058,400 and working capital of $1,034,930 as of June 30, 2022, and a net loss of $11,885,609 most of which is non-cash expense. The Company used $739,630 of cash in operating activities for the year ended June 30, 2022. Due to these conditions, it raises substantial doubt about the Company’s ability to continue as a going concern.
Net cash used in operating activities was $739,630 for the year ended June 30, 2022, as compared to the net cash used in operating activities of $355,574 for the year ended June 30, 2021. The increase in net cash used in operating activities from 2022 to 2021 is because expenses increased during the year ended June 30, 2022.
Net cash provided by financing activities was $1,004,565 and $342,305 for the years ended June 30, 2022 and 2021, respectively.
Over the next twelve months, we expect our principal source of liquidity may be dependent on borrowings from related and other parties.
Critical Accounting Policies
We have identified the policies outlined below as critical to our business operations and an understanding of our results of operations. The list is not intended to be a comprehensive list of all of our accounting policies. In many cases, the accounting treatment of a particular transaction is specifically dictated by accounting principles generally accepted in the United States, with no need for management's judgment in their application. The impact and any associated risks related to these policies on our business operations is discussed throughout management's Discussion and Analysis or Plan of Operation where such policies affect our reported and expected financial results. Note that our preparation of the financial statements requires us to make estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities at the date of our financial statements, and the reported amounts of revenue and expenses during the reporting period. There can be no assurance that actual results will not differ from those estimates.
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MANAGEMENT
Directors and Executive Officers
The following table sets forth information regarding our current directors and executive officers. Set forth below is a brief description of the background and business experience of our executive officers and directors.
| Name | Age | Position | ||
| Richard Carey | 84 | President, Chairman of the Board, Director | ||
| Anthony L. Anish | 74 | Chief Financial Officer, Secretary, Director | ||
| Weverson Correia | 49 | Chief Executive Officer, Director | ||
| Bryan Cappelli | 38 | Director | ||
| Franz Allmayer | 33 | Vice President Finance, Director | ||
| Themis Glatman | 64 | Treasurer, Director | ||
| Fernando Godina | 55 | Vice President, Director |
Richard Carey
President, Director and Chairman of the Board
Richard Carey, 84, has served as the Company’s director since May 14, 2018, and as President and Chairman of the Board of Directors since May 17, 2018. He has several decades of experience in a wide range of industries, including finance, diamond and gold mining operations, oil and gas exploration. Mr. Carey began his career in 1958 when he received a congressional appointment to the US Naval Academy as the son of Congressional Medal of Honor recipient Charles Francis Carey Jr. Upon honorable discharge from the US Navy in 1964, Mr. Carey began a career in finance as a NYLIC underwriter for New York Life. From 1967 to 1973, Mr. Carey worked as a stockbroker and principal of a brokerage firm. In 1973 he began structuring oil and gas limited partnerships for developmental drilling programs. These programs included hundreds of successful oil and gas wells, and a lucrative Geo-Thermal project in Colorado as a general partner with AMEX (an American Stock Exchange listed company).
In the subsequent 40 years, Mr. Carey has founded and co-founded multiple companies in a wide range of industries including diamond and gold mining operations, oil and gas exploration, energy resellers, entertainment, specialty finance and tax offset programs. With his broad experience and an extensive personal and business network, Mr. Carey’s financial acumen has added significant value to every project in which he has participated. With his unique understanding of the diversity of business structures and an ongoing commitment to innovate and adapt to new practices, he continues to build upon the depth of knowledge and success gained throughout his career.
Anthony L. Anish - Chief Financial Officer and Corporate Secretary
Anthony (“Tony”) Anish has served as a director and Chief Financial Officer of the Company since May 2019. Mr. Anish has been involved in public companies in the US for over 20 years.
Mr. Anish became a Member of the Institute of Chartered Accountants (England) in 1972. Mr. Anish ran his own firm of Chartered Accountants from 1973 until 1978 when he sold his share in the firm to his partners.
He moved to the United States in 1979 to run a subsidiary of a UK Company, Performance Tire Ltd. and led a huge expansion increasing sales from $2 million to over $28 million. He left them in 1982 and ran his own group of stores in the car repair and tire business expanding to 9 locations before selling and returning to his accounting and finance background.
From 1985 until 2009, Mr. Anish’s operations provided business financing programs including equipment leasing and asset based financing programs. During this time Mr. Anish consulted on a number of reverse merger transactions.
In 2010, Mr. Anish became a Director of M Line Holdings, Inc. a small public company in the aerospace business and continued with M Line and another public entity Square Chain Corporation until joining Star Alliance International on a temporary consulting position in March 2019.
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Weverson Correia
Weverson Correia, has served as Chief Executive Officer and a director of the Company since January 24, 2022. Mr. Correia’s strategic initiatives for sales, marketing, and new product launches in Global markets helped develop new business. He consistently exceeds expectations through market analysis, customer/distributor education, negotiating program buy-in, and finding new distribution channels. His extensive experience brings innovative ideas to increase margins, improve productivity, and enhance customer service. He analyzes new product requirements, developing sales forecasts, and pricing structure. He can build, train, and manage high performance teams. Weverson develops long-term relationships with strategic partners to improve market position and expand opportunities. Mr. Correia currently service as VP of sale for Mode Chicago, a position he has held since 2021. Amongst the Companies he has worked for are ROKiT in Malibu California as SVP Sales (2018-2019), Duubee Intelligent Technologies Co. Ltd. Located in Miami as CEO (2017-2018) and Samsung Electronics, South America in Miami as Director of Sales (2009-2014).
As well as having a Bachelor of Business Administration in Management & International Business from Florida International University, Landon School of Business, Miami, FL and an MBA, from Nova Southeastern University, H. Wayne Huizenga School of Business, Miami, FL, Mr. Correia is proficient in SAP, MAS 200, Solomon, POS, Salesforce, and MS Office and is fluent in English, Spanish, and Portuguese.
Mr. Correia’s fluency in Spanish and Portuguese makes him invaluable working with our management team at our mining acquisition in Honduras as well as the team working on the “Genesis” program in Guatemala.
Franz Allmayer
Franz Allmayer has served as Vice President of Finance and a director since May, 2018. Franz is located in Austria and has strong connections in Guatemala. Mr. Allmayer has strong connections to innovative technology which led him to introduce Star to the genesis system in Guatemala.
Mr. Allmayer obtained a Bachelor of Science in 2010 from the Applied Sciences Technikum in Vienna, Austria as well as a Master of Science from the London School of Economics in London, England obtained in 2014.
He worked as a co-ordinator for the Advanced development for Africa (ADA) from June 2010 until April 2012 and then worked to harness soft loan financing for eligible countries to finance hospital projects for Vamed Engineering. He continued as an independent contractor for the Clinton health Access Initiative (CHAI) working to leverage CHAI’s existing capabilities and in in 2015 worked with AFAQ Group to develop an strategy for a portfolio of innovative technologies to serve the UAE and middle eastern markets also representing the Royal Family of Dubai.
Since 2018 Mr. Allmayer founded and manages Integrity Earth a digital venture co-operative for applied regenerative development combining proven frameworks of best practices in ecological restoration. In 2019 he also founded SEEDS, a financial ecosystem that gives value to financial contributions in multiple forms of capital bringing together people and organizations worldwide.
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Themis Glatman – Treasurer, Director
Mrs. Glatman, serves as a director and Treasurer, since May, 2018. She supports the management team in relation to the cash flow and use of cash for investments.
Mrs. Glatman was born in Brazil where she studied Chemistry at the Federal University of Parana. She is a highly decorated athlete, having achieved an athletic scholarship that allowed her to come to the United States. There she attended Brigham Young University in Utah, studying Chemical Engineering for three years. She is fluent in English, Spanish, Portuguese with some French and Italian.
In 1981 she moved to Los Angeles pursuing a seventeen-year career in construction including commercial, residential, multi-family as well as smaller remodeling projects. After receiving her accreditation by the California Contactors License Board, she founded Gotham Design and Construction, which allowed her to acquire homes for her own remodeling projects, as well as projects for companies and individual clients. She is well versed in reading blueprints and understands architectural, engineering, and financial requirements of projects from their financing through excavation, grading, paving, and concrete work through final finishes. Her experience will be of great benefit once Star starts developing land after cleaning tailings with the Genesis System.
She has served on many boards and is currently a director of SCYA (Southern California Yachting Association), SMWYC (Santa Monica Windjammers Yacht Club) and for RBOC ( Recreational Boaters of California, a Lobbying firm based in Sacramento).
Fernando Godina – Vice President and Director
Mr. Fernando Godina became a director and Vice President of the Company in 2021. His experience managing various successful business ventures will be beneficial as he will take a significant role managing our mining operations.
In 1998 Mr. Godina started with Ashley furniture as a furniture representative. By 2001 he increased the territory he managed from $538 K to over $10 million a year.
In 2002, he opened his first Ashley home store in Oahu, Hawaii and then a second store in Reno Nevada in 2003. In 2005 the two stores had revenues of over $43 Million].
In 2003 he and a partner opened 4 mortgage offices with Pinnacle Financial growing the business substantially.
In 2006 Mr. Godina started a private lending and venture capital business that still operates. Mr. Godina has been instrumental in introducing a number of investors to the Company. In addition, over the last ten years, he has successfully built two businesses in partnership with his wife.
Bryan Cappelli – Director
Bryan Cappelli has served as our director since April 20, 2022. Mr. Capelli has financed, developed and/or acquired more than $3.0 billion of real estate projects in the New York Tri State area and has 18 years of development and capital markets experience.
From 2007-2014, Mr. Cappelli served as Chief Operating Officer of the Cappelli Organization overseeing ~$1B of mixed-use developments in Westchester and Fairfield Counties, including The Ritz Carlton Hotel and Condominiums, City Center White Plains, and Trump Parc Residences.
From 2014-2020, Mr. Cappelli served as Co-President of Development for Ceruzzi Holdings and was a member of the investment committee. He oversaw the acquisition and development of the Centrale and Hayworth condominium projects and the Lipstick Building, totaling over 1 million square feet and $1B in value.
In 2017 Mr. Cappelli founded Blue Line Real Estate Ventures, a dynamic real estate investment vehicle which has served as co-general partner in multiple large scale development and acquisitions across all asset classes in addition to making significant angel investments in various emerging development technologies and operating companies. Mr. Cappelli is currently the CEO of XKCappelli, a division of the Cappelli Organization which is currently developing a $800m mixed use project at 790 7th Avenue in Manhattan, NY.
Mr. Cappelli earned a B.S. in Economics and a Minor in Philosophy from Duke University.
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Term of Office
Our directors are appointed for a one-year term and hold office until the next annual general meeting of our shareholders or until removed from office in accordance with our bylaws. Our officers are appointed by our board of directors and hold office until removed by the board.
Family Relationships
There are no family relationships between our directors or executive officers.
Involvement in Certain Legal Proceedings
To our knowledge, during the past ten years, none of our current directors, executive officers, promoters, control persons, or nominees has been:
| · | the subject of any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; | |
| · | convicted in a criminal proceeding or is subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); | |
| · | subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction or any Federal or State authority, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; | |
| · | found by a court of competent jurisdiction (in a civil action), the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law. | |
| · | the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of (a) any Federal or State securities or commodities law or regulation; (b) any law or regulation respecting financial institutions or insurance companies including, but not limited to a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or (c) any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or | |
| · | the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26)))any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member. |
Board Committees
We do not currently have a market
makerstanding audit, nominating or compensation committee of the Board of Directors, or any committee performing similar functions. Our Board of Directors performs the functions of audit, nominating and compensation committees.
Code of Ethics
The Company has not adopted a code of ethics. The Company anticipates that is willingit will adopt a code of ethics when the number of employees increases.
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EXECUTIVE COMPENSATION
The following table sets forth information concerning all cash and non-cash compensation awarded to, participate in this application process,earned by or paid to our named executive officers with compensation exceeding $100,000 for the fiscal year ended June 30, 2022 and even if we
identify a market maker, we cannot assure you2021.
| Non-Equity | Nonqualified | |||||||||||||||||
| Incentive | Deferred | |||||||||||||||||
| Name and | Stock | Option | Plan | Compensation | All Other | |||||||||||||
| Principal | Salary | Bonus | Awards | Awards | Compensation | Earnings | Compensation | Total | ||||||||||
| Position | Year | US$ | US$ | US$ | US$ | US$ | US$ | US$ | US$ | |||||||||
| Richard Carey | 2022 | 180,000 | 0 | 0 | 0 | 0 | 0 | 0 | 180,000 | |||||||||
| Chairman | 2021 | 155,000 | 0 | 0 | 0 | 0 | 0 | 0 | 155,000 | |||||||||
| Anthony L. Anish | 2022 | 120,000 | 0 | 2,500,000(1) | 0 | 0 | 0 | 0 | 175.000 | |||||||||
| CFO and Co. Secretary | 2021 | 90,000 | 0 | 0 | 0 | 0 | 0 | 0 | 90,000 | |||||||||
| Weverson Correia | 2022 | 0 | 0 | 500,000 | 0 | 0 | 0 | 0 | 775,000 | |||||||||
| CEO | 2021 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| (1) | These shares constitute incentive compensation of Mr. Anish during the fiscal year ended June 30, 2022 under the employment agreement dated August 1, 2019, as amended on January 1, 2021. |
Employment Agreements with Key Executives
On August 1, 2019, the Company entered into and executed initial employment agreements with Richard Carey, John Baird and Anthony Anish. Each initial employment agreement provided that we will meet the acceptance
criteria. Our common stock may never be quoted on the Over-the-Counter Bulletin
Board, or, if quoted, a public market may not materialize.
8
RISK OF LOSING INVESTMENT
If our securities are not eligible for initial quotation, or if quoted, are not
eligible for continued quotation on the Over-the-Counter Bulletin Board, or a
public trading market does not develop, purchasersterm of the employment agreement has the term of 36 months starting from August 1, 2019 and continues until July 31, 2022. Thereafter, such employment agreement may be renewed upon mutual agreement of the parties. The employment agreement also may be terminated by each party upon 30 days’ notice to the other party, provided that in the event the Executive breaches his material obligations to the Company, the Company may terminate the executive employment immediately. Each executive agreement included the compensation for the executive, including the base and incentive salary.
The executive employment agreement with Mr. Carey stated that his annual base salary is $120,000 per annum; the executive employment agreements with each of John Baird and Anthony Anish provided that each executive officer will receive annual base salary of $60,000 per annum. Mr. Baird resigned from his position on August 12, 2020.
On January 1, 2021, the Company amended the employment agreements with Mr. Carey and Mr. Anish, which increased the base annual salaries for Richard Carey from $120,000 per annum to $180,000 per annum, and for Anthony Anish from $60,000 per annum to $120,000 per annum. All other terms of the initial employment agreements with Mr. Carey and Mr. Anish remained unchanged.
On March 14, 2023, the Company renewed the employment agreements with Mr. Carey and Mr. Anish (the “New Employment Agreements”), stating that the effective date of the New Employment Agreement is August 1, 2022 and that they have the term of 36 months, the same as the terms of the initial employment agreements. Except for the compensation provisions, the New Employment Agreements contain the same provisions as the initial employment agreement for each executive.
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Under the terms of the New Employment Agreement, Mr. Carey is entitled to receive the following compensation:
| · | For the period from August 1, 2022 to December 31, 2022, Mr. Carey received the base salary equal to $180,000; | |
| · | For the period from January 1, 2023 to July 31, 2024, Mr. Carey will receive the base salary equal to $240,000; and | |
| · | For the period from August 1, 2024 to July 31, 2025, Mr. Carey will receive the base salary equal to $270,000. In addition, Mr. Carey is entitled to receive an equity compensation, as to be determined by the Board of Directors of the Company. |
Under the terms of the New Employment Agreement, Mr. Anish is entitled to receive s the following compensation:
| · | For the period from August 1, 2022 to December 31, 2022, Mr. Anish received the base salary equal to $120,000; | |
| · | For the period from January 1, 2023 to July 31, 2024, Mr. Anish will receive the base salary equal to $180,000; and | |
| · | For the period from August 1, 2024 to July 31, 2025, Mr. Anish will receive the base salary equal to $210,000. In addition, Mr. Anish is entitled to receive an equity compensation, as to be determined by the Board of Directors of the Company. |
As of the date of this prospectus, Mr. Anish received an aggregate of 5,000,000 shares of Common Stock granted to him as equity compensation under his New Employment Agreement.
Director Compensation
We do not have any formal agreements or arrangements with our non-employee directors to pay for their services. We currently have no formal plan for compensating our directors for their services in their capacity, although we may elect to issue stock options to such persons from time to time. Directors are entitled to reimbursement for reasonable travel and other out-of-pocket expenses incurred in connection with attendance at meetings of our board of directors. Our board of directors may award special remuneration to any director undertaking any special services on our behalf other than services ordinarily required of a director. Our non-employee directors received the following compensation for service to the Board during 2022 and 2021:
| Name | Year | Paid in Cash | Stock Awards | Total | ||||
| Themis Glatman | 2022 | 0 | 1,000,000 | $1,400,000 | ||||
| 2021 | 0 | |||||||
| Bryan Cappelli | 2022 | 0 | ||||||
| 2021 | 0 | |||||||
| Franz Allmayer | 2022 | 0 | ||||||
| 2021 | 0 | |||||||
| Fernando Godina | 2022 | 0 | 500,000 | $39,000 | ||||
| 2021 | 0 |
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Outstanding Equity Awards at Fiscal Year-End Table
The Company has not adopted any equity compensation plans. Except for Anthony Anish, none of our named executive officers received any outstanding stock awards as of June 30, 2022 that would be compensatory to the officer.
Long-Term Incentive Plans
There are no arrangements or plans in which we provide pension, retirement or similar benefits.
Compensation Committee
We currently do not have a compensation committee of the Board of Directors. The Board of Directors as a whole determines executive compensation.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table lists, as of June 15, 2023, the number of shares of common stock beneficially owned by (i) each person, entity or group (as that term is used in Section 13(d)(3) of the Securities Exchange Act of 1934) known to the Company to be the beneficial owner of more than 5% of the outstanding common stock; (ii) each of our directors (iii) each of our Named Executive Officers and (iv) all executive officers and directors as a group. Information relating to beneficial ownership of common stock by our principal stockholders and management is based upon information furnished by each person using “beneficial ownership” concepts under the rules of the SEC. Under these rules, a person is deemed to be a beneficial owner of a security if that person directly or indirectly has or shares voting power, which includes the power to vote or direct the voting of the security, or investment power, which includes the power to dispose or direct the disposition of the security. The person is also deemed to be a beneficial owner of any security of which that person has a right to acquire beneficial ownership within 60 days. Under the SEC rules, more than one person may be deemed to be a beneficial owner of the same securities, and a person may be deemed to be a beneficial owner of securities as to which he or she may not have difficulty sellingany pecuniary interest. Except as noted below, each person has sole voting and investment power with respect to the shares beneficially owned and each stockholder’s address is c/o Star Alliance International Corp., 5743 Corsa Avenue Suite 218, Westlake Village, CA 91362.
The percentages below are calculated based on 213,603,598 shares of common stock issued and outstanding as of June 15, 2023.
| Name of Beneficial Owner | Shares | Percentage | Total Combined Voting Power% | |||
| Executive Officers and Directors: | ||||||
| Richard Carey | Common: 57,265,500: | 26.8% | 26.8% | |||
| Preferred: 1,000,000 Series A(1): | 100% | 100% | ||||
| Anthony L. Anish | Common: 10,000,000 | 4.7% | 4.7% | |||
| Preferred: 0 | 0% | 0% | ||||
| Weverson Correia | Common: 5,500,000 | 2.6% | 2.6% | |||
| Preferred: 0 | 0% | 0% | ||||
| Themis Glatman | Common: 3,000,000 | 1.4% | 1.4% | |||
| Preferred: 0 | 0% | 0% | ||||
| Bryan Cappelli | Common: 5,000,000 | 2.4% | 2.4% | |||
| Preferred: 0 | 0% | 0% | ||||
| Franz Allmayer | Common: 250,000: | 0.1% | 0.1% | |||
| Preferred: 0 | 0% | 0% | ||||
| Fernando Godina | Common: 5,552,000 | 2.6% | 2.6% | |||
| Preferred: 0 | 0% | 0% | ||||
| All officers and directors as a group of (7 persons) | Common: 86,567,500 | 40.6% | 40.6% | |||
| Preferred: 1,000,000 | 0% | 0% |
| (1) | Each share of Series A Preferred Stock has the right to 500 votes per each share of common stock. |
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Except as disclosed below, since the beginning of the last two fiscal years, none of the following persons has had any direct or indirect material interest in any transaction to which our Company was or is a party, or in any proposed transaction to which our Company proposes to be unablea party:
| · | any director or officer of the Company; | |
| · | any proposed director or officer of the Company; | |
| · | any person who beneficially owns, directly or indirectly, more than 5% percent of the voting rights attached to our Common Stock; or | |
| · | any member of the immediate family of any of the foregoing persons (including a spouse, parents, children, siblings, and in-laws). |
On July 2, 2020, the Board granted all of the authorized 1,000,000 shares of the Series A preferred stock to sellthe Company’s Chairman and President, Richard Carey, in conversion of $68,556 of accrued compensation.
On January 1, 2021, the Company entered into an amendment to the Carey Agreement, and an amendment to Anish Agreement (the “Amendments”). Pursuant to the Amendments, the annual salary for each executive officer has increased: for Mr. Carey, the annual salary has increased to $180,000, and for Mr. Anish, the annual salary has increased to $120,000. All other terms remain unchanged.
On March 14, 2023, the Company renewed the initial employment agreements for Mr. Carey and Mr. Anish, entering into New Employment Agreements, commencing from August 1, 2022 (the “Effective Date”) until July 31, 2025. For the period from August 1, 2022 through December 31, 2022, Mr. Carey received the base salary equal to $180,000. From August 1, 2022, through December 31, 2022, Mr. Anish received the base salary equal to $120,000. In addition, Mr. Anish received 2,500,000 shares issued on June 3, 2022, under his initial agreement, and 5,000,000 shares issued on August 15, 2022, as equity compensation under Mr. Anish’s New Employment Agreement. The 5,000,000 shares were valued at $0.289 per share, the closing stock price on the date of grant, for total non-cash expense of $1,445,000.
On December 16, 2021, the Company issued 500,000 shares of common stock to Weverson Correia, for his services as Chief Executive Officer.
On February 25, 2022, the Company issued 500,000 shares of common stock to Fernando Godina for his services as a director.
On August 15, 2022, the Company issued 5,000,000 shares of common stock to Fernando Godina, for services as a director. The shares were valued at $0.289 per share, the closing stock price on the date of grant, for total non-cash expense of $1,445,000.
On August 15, 2022, the Company issued 5,000,000 shares of common stock to Bryan Cappelli for his services as a director. The shares were valued at $0.289 per share, the closing stock price on the date of grant, for total non-cash expense of $1,445,000.
On August 15, 2022, the Company issued 5,000,000 shares of common stock to Weverson Correia, CEO and a director, for services. The shares were valued at $0.289 per share, the closing stock price on the date of grant, for total non-cash expense of $1,445,000.
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On November 17, 2022, Our Chairman, Mr. Carey sold 4 million of his own shares of common stock in exchange for $42,000 which was loaned to the Company. The loan to the Company is non-interest bearing and due on demand.
On January 10, 2022 and December 5, 2022, the Company issued a total of 1,000,000 shares of common stock (total of 2,000,000 shares) to Themis Glatman as compensation for her services as a director. The shares were valued at $0.165 per share, the closing stock price on the date of grant, for total non-cash expense of $165,000.
Review, Approval and Ratification of Related Party Transactions
Given our small size and limited financial resources, we have not adopted formal policies and procedures for the review, approval or ratification of transactions, such as those described above, with our executive officer(s), director(s) and significant stockholders. We intend to establish formal policies and procedures in the future, once we have sufficient resources and have appointed additional directors, so that such transactions will be subject to the review, approval or ratification of our Board of Directors, or an appropriate committee thereof. On a moving forward basis, our directors will continue to approve any related party transaction.
Director Independence
The Company is not currently required to have a majority of independent directors, as would be required when the Company’s common stock become listed on the national securities exchanges. However, the Board has determined that except Mr. Carey and Mr. Anish all of our directors are independent, as that term is defined by NASDAQ Marketplace Rule 5605(a)(2). In assessing the independence of the directors, the Board considers any transactions, relationships and arrangements between our Company and our independent directors or their securities, rendering
their shares effectively worthless and resultingaffiliated companies. This review is based primarily on responses of the directors to questions in a partialdirector and officer questionnaire regarding employment, business, familial, compensation and other relationships with our Company or complete lossour management.
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DESCRIPTION OF SECURITIES
Common Stock
The Company’s Articles of their investment.
PURCHASING PENNY STOCK LIMITS INVESTOR'S ABILITY TO RE-SELL
TheIncorporation (the “Articles of Incorporation”) authorizes 500,000 shares offeredof common stock, par value $0.001 per share. There are 213,603,598 total shares of common stock outstanding as of June 15, 2023 held by this Prospectus constitute "penny stock" under the
Exchange Act. The shares will remain "penny stock" for111 holders or records.
Dividends. Each share of common stock is entitled to receive an equal dividend, if one is declared, which is unlikely. We have never paid dividends on our common stock and do not intend to do so in the foreseeable future. "Penny stock"We intend to retain any future earnings to finance our growth. See Risk Factors.
Liquidation. If our company is liquidated, any assets that remain after the creditors are paid, and the owners of preferred stock receive any liquidation preferences, will be distributed to the owners of our common stock pro-rata.
Voting Rights. Each share of our common stock entitles the owner to one vote. There is no cumulative voting. A simple majority can elect all of the directors at a given meeting and the minority would not be able to elect any directors at that meeting.
Preemptive Rights. Owners of our common stock have no preemptive rights. We may sell shares of our common stock to third parties without first offering it to current stockholders.
Redemption Rights. We do not have the right to buy back shares of our common stock except in extraordinary transactions such as mergers and court approved bankruptcy reorganizations. Owners of our common stock do not ordinarily have the right to require us to buy their common stock. We do not have a sinking fund to provide assets for any buy back.
Conversion Rights. Shares of our common stock cannot be converted into any other kind of stock except in extraordinary transactions, such as mergers and court approved bankruptcy reorganizations.
Preferred Stock
The Articles of Incorporation also authorizes 25,000,000 shares of preferred stock. As the date of this prospectus, 1,000,000 shares are designated as Series A Preferred Stock, all of which are issued and outstanding; 1,900,000 shares are designated as Series B Preferred Stock, of which 1,883,000 shares are issued and outstanding and 1,000,000 shares are designated as Series C Preferred Stock, out of which 221,700 shares are issued and outstanding.
Series A Preferred Stock
On July 27, 2020, the Company created and designated Series A Preferred Stock by amending its Articles of Incorporation. Series A Stock has the following rights, limitations, qualifications, and restrictions:
Rank. Shares of Series A Preferred Stock is pari passu to the Common Stock.
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Voting Rights. The Holder of outstanding shares of Series A Preferred Stock shall be entitled to notice of any shareholders' meeting and to vote as a single class with the Common Stock upon any matter submitted for approval by the Holder of the Common Stock. Each share of Preferred Stock shall have 500 votes per share.
Dividends. The Holder of the Series A Preferred Stock shall not be entitled to participate with the holders of common stock in any dividends or distributions.
Liquidation Rights/Cancellation/Redemption. Upon any liquidation, dissolution or winding up of a Corporation, the Holder of outstanding shares of Series A Preferred Stock will be entitled to be paid the "Liquidation Preference", which is defined and calculated as follows: $1,000,000 in aggregate (not on a share basis), less any and all gross proceeds in cash from the sale or other conversion of the Series A Preferred Stock and/or common stock into which shares of Series A Preferred Stock shall have been converted and less any payments in redemption of shares of Series A Preferred Stock.
Conversion Rights: Each share of Series A Preferred Stock is convertible after 60 days from the date of the issuance to 500 shares of the Company’s common stock and is not subject to dilution.
On July 2, 2020, the Board granted all 1,000,000 shares of the Series A Preferred stock to the Company’s Chairman and CEO, Richard Carey, in conversion of $68,556 of accrued compensation.
Series B Preferred Stock
On August 13, 2019, the Company filed the Amendment to its Articles of Incorporation, designating 1,900,000 shares of Series B Preferred Stock, $0.01 par value per share, having the following rights, limitations, qualifications and restrictions:
Rank. The Series B Preferred Stock is pari passu, to the Common Stock.
Voting Rights. Holders of outstanding shares of Series B Preferred Stock shall be entitled to notice of any shareholders' meeting and to vote as a single class with the Common Stock upon any matter submitted for approval by the Holder of the Common Stock. Each share of Preferred Stock shall have one vote per share.
Dividends. Holders of the Series B Preferred Stock shall not be entitled to participate with the holders of common stock in any dividends or distributions.
Liquidation Rights/Cancellation/Redemption: Upon any liquidation, dissolution or winding up of a Corporation, the holders of outstanding shares of Series B Preferred Stock will be entitled to be paid the "Liquidation Preference", which is defined and calculated as follows: $1,900,000 in aggregate (not on a share basis), less any and all gross proceeds in cash from the sale or other conversion of the Series B Preferred Stock and/or common stock into which shares of Series B Preferred Stock shall have been converted and less any payments in redemption of shares of Series Preferred Stock.
Conversion:
Each share of Series B Preferred Stock shall be convertible into two shares of common stock. Common Shares for and will not be subject to dilution.
Transfer of Shares: Only one person or entity is entitled to be designated as the owner of all of the Series B Preferred Stock (the “Holder”), in whose name the initial certificates representing the Series B Preferred Stock shall be issued. Any transfer of the Series B Preferred Stock to a different Holder must be approved in advance by the Company; provided, however, the Holder shall have the right to transfer the Series B Preferred Stock, or any portion thereof, to any affiliate of Holder or nominee of Holder, without the approval of the Corporation.
In connection with the Troy Asset Acquisition, and in consideration thereof, the Company issued an aggregate of 1,883,000 shares of Series B Preferred Stock to Troy’s shareholders.
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Series C Preferred Stock
On March 30, 2022, the Company created and designated 1,000,000 shares of Series C Preferred Stock (“Series C”) with a stated value of $1.00.
Rank: pari passu to the Common Stock
Voting Rights: holders of Series C Preferred Stock do not have voting rights.
Dividend: Holders of Series C Preferred Stock have annual cumulative dividend of 8% and has no voting rights.
Conversion: Series C is convertible into shares of common stock at 65% of the lowest trading price for the ten days prior to the conversion date.
On March 28, 2022, the Company sold 154,750 shares of Series C to Geneva Roth Remark Holdings Inc. On January 3, 2023, the Company sold 57,750 shares of Series C Preferred shares to Geneva Roth Remark Holdings Inc. On January 17, 2023, the Company sold 56,950 shares of Series C Preferred shares to Geneva Roth Remark Holdings Inc. Geneva Roth converted 153,750 shares of Series C preferred stock into 4,447,781 shares of common stock.
Limitations on Stockholder Actions
Title 7 of the Nevada Revised Statutes (“NRS”) provides that a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he is not liable or acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. Title 7 of the NRS further provides that a corporation similarly may indemnify any such person serving in any such capacity who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee or agent of the corporation or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees) actually and reasonably incurred in connection with the defense or settlement of such action or suit if he is not liable pursuant to Title 7 of the Washington Revised Statutes or acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the court or other court of competent jurisdiction in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all of the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the court or other court of competent jurisdiction shall deem proper.
Our bylaws provide as follows:
(a) Any person made a party to any action, suit or proceeding, by reason of the fact that he, his testator or interstate representative is or was a director, officer or employee of the Corporation or of any corporation in which he served as such at the request of the Corporation shall be indemnified by the Corporation against the reasonable expenses, including attorney’s fees, actually and necessarily incurred by him in connection with the defense of such action, suit or proceeding, or in connection with any appeal therein, except in relation to matters as to which it shall be adjudged in such action, suit or proceeding, or in connection with any appeal therein that such officer, director or employee is liable for gross negligence or misconduct in the performance of his duties.
(b) The foregoing right of indemnification shall not be deemed exclusive of any other rights to which any officer, director or employee may be entitled apart from the provisions of this section.
(c) The amount of indemnity to which any officer or any director may be entitled shall be fixed by the Board of Directors, except that in any case in which there is no disinterested majority of the Board available, the amount shall be fixed by arbitration pursuant to the then existing rules of the American Arbitration Association.
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Transfer Agent
The transfer agent of our Common and Preferred stock is Vstock Transfer, LLC.
Penny Stock Regulation
Penny stocks generally are equity securities with a price of less than $5.00 per share other than securities registered on national securities exchanges or listed on the Nasdaq Stock Market, provided that current price and volume information with respect to transactions in such securities are provided by the exchange or system. The penny stock rules impose additional sales practice requirements on broker-dealers who sell such securities to persons other than established customers and accredited investors (generally those with assets in excess of $1,000,000 or annual income exceeding $200,000, or $300,000 together with atheir spouse). For transactions covered by these rules, the broker-dealer must make a special suitability determination for the purchase of such securities and have received the purchaser'spurchaser’s written consent to the transaction prior to the purchase. Additionally, for any transaction involving a penny stock, unless exempt, the rules require the delivery, prior to the transaction, of a disclosure schedule prescribed by the CommissionSEC relating to the penny stock market. The broker-dealer also must disclose the commissions payable to both the broker-dealer and the registered representative and current quotations for the securities. Finally, monthly statements must be sent disclosing recent price information on the limited market in penny stocks. Consequently, the "penny
stock"Because of these penny stock rules, broker-dealers may restrict thebe restricted in their ability of broker-dealers to sell our shares of
common stock.the Company’s Common Stock. The foregoing required penny stock restrictions will not apply to the Company’s Common Stock if such stock reaches and maintains a market price of our shares would likely suffer as a result.
FINRA SALES REQUIREMENTS MAY LIMIT A STOCKHOLDER'S ABILITY TO BUY AND SELL OUR
STOCK
FINRA has adopted rules that require that in recommending an investment to a
customer, a broker-dealer must have reasonable grounds for believing that the
investment is suitable for that customer. Prior to recommending speculative low
priced securities to their non-institutional customers, broker-dealers must make
reasonable efforts to obtain information about the customer's financial status,
tax status, investment objectives and other information. Under interpretations$5.00 per share or greater.
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SHARES ELIGIBLE FOR FUTURE SALE
Market sales of these rules, FINRA believes that there is a high probability that speculative
low priced securities will not be suitable for certain customers. FINRA
requirements will likely make it more difficult for broker-dealers to recommend
that their customers buy our common stock, which may have the effect of reducing
the level of trading activity in our common stock. As a result, fewer
broker-dealers may be willing to make a market in our common stock, reducing a
stockholder's ability to resell shares of our common stock.
STATE SECURITIES LAWS MAY LIMIT SECONDARY TRADING, RESTRICTING THE STATES WHERE
YOU CAN RESELL THE SHARES OFFERED BY THIS PROSPECTUS
If you purchaseCommon Stock after this Offering and from time to time, and the availability of shares of our common stock sold pursuant to this offering, youfor future sale, may not be able to resell the shares in a certain state unless and until the
shares of our common stock are qualified for secondary trading under the
applicable securities laws of such state or there is confirmation that an
exemption, such as listing in certain recognized securities manuals, is
available for secondary trading in such state. There can be no assurance that we
will be successful in registering or qualifying our common stock for secondary
trading, or identifying an available exemption for secondary trading in our
common stock in every state. If we fail to register or qualify, or to obtain or
verify an exemption for the secondary trading of our common stock in any
particular state, the shares of common stock could not be offered or sold to, or
purchased by, a resident of that state. In the event that a significant number
of states refuse to permit secondary trading in our common stock, the market for
the common stock will be limited, which could drive downreduce the market price of our common stock and reduce the liquidityCommon Stock. Sales of the sharessubstantial amounts of our common stockCommon Stock, or the perception that these sales could occur, could adversely affect prevailing market prices for our Common Stock and a
stockholder'scould impair our future ability to resell sharesobtain capital, especially through an offering of our common stock at all or at current
market prices, which could increase a stockholder's risk of losing some or all
of her investment.
IF QUOTED, THE PRICE OF OUR COMMON STOCK MAY BE VOLATILE; YOU MAY NOT BE ABLE TO
SELL YOUR SHARES AT OR ABOVE THE ACQUISITION PRICE
Even if our shares are quoted for trading onequity securities. After the Over-the-Counter Bulletin Board
following this offering and a public market develops for our common stock, the
market price of our common stock may be volatile. It may fluctuate significantly
in response to the following factors:
9
* variations in quarterly operating results;
* our announcements of significant commissions and achievement of
milestones;
* our relationships with other companies or capital commitments;
* additions or departures of key personnel;
* sales of common stock or termination of stock transfer restrictions;
* changes in financial estimates by securities analysts, if any; and
* fluctuations in stock market price and volume.
Your inability to sell your shares during a decline in the price of our stock
may increase losses that you may suffer as a result of your investment.
SINCE WE DO NOT INTEND TO PAY ANY DIVIDENDS ON OUR COMMON SHARES, STOCKHOLDERS
SHOULD RELY ON STOCK APPRECIATION FOR ANY RETURN ON THEIR INVESTMENT
We have not declared or paid any dividends on our common stock since inception;
we do not anticipate paying any such dividends for the foreseeable future.
Accordingly, holders of our common stock will have to rely on capital
appreciation, if any, to earn a return on their investment in our common stock.
ADDITIONAL ISSUANCES OF OUR SECURITIES MAY RESULT IN IMMEDIATE DILUTION TO
EXISTING SHAREHOLDERS
We must raise additional capital in order for our business plan to succeed. Our
most likely source of additional capital will be through the sale of additional
shares of common stock. We are authorized to issue up to 75,000,000 shares of
common stock, of which 5,000,000 shares of common stock are currently issued and
outstanding. Our Board of Directors has the authority over issuing additional
shares of common, and to determine the rights, preferences and privilege of such
shares, without consent of any of our stockholders. We may issue shares in
connection with financing arrangements or otherwise. Any such issuances will
result in immediate dilution to our existing shareholders' interests, which will
negatively affect the value of your shares.
WE MAY BE EXPOSED TO POTENTIAL RISKS RESULTING FROM NEW REQUIREMENTS UNDER
SECTION 404 OF THE SARBANES-OXLEY ACT OF 2002
Pursuant to Section 404 of the SOX Act, we will be required to include in our
annual report our assessment of the effectiveness of our internal control over
financial reporting once this registration statement becomes effective and we
commence filing financial reports with the Securities & Exchange Commission. We
expect to incur additional expenses and diversion of management's time as a
result of performing the system and process evaluation, testing and remediation
required in order to comply with the management certification and auditor
attestation requirements.
We currently do not have a sufficient number of employees to segregate
responsibilities and may be unable to afford increasing our staff or engaging
outside consultants. During the course of our testing, we may identify other
deficiencies that we may not be able to remediate in time to meet the deadline
imposed by the SOX Act Section 404. As such standards are modified, supplemented
or amended; it may be difficult to ensure effective internal controls over
financial reporting. Effective internal controls, particularly those related to
revenue recognition, are necessary for us to produce reliable financial reports
and are important to help prevent financial fraud. If we cannot provide reliable
financial reports or prevent fraud, our business and operating results could be
harmed, investors could lose confidence in our reported financial information,
and the trading price of our common stock, if a market ever develops, could drop
significantly.
THE OFFERING PRICE HAS BEEN ARBITRARILY SET BY COMPANY; YOU MAY NOT REALIZE A
RETURN ON YOUR INVESTMENT UPON RESALE OF YOUR SHARES
The offering price and other terms and conditions relative to the Company's
shares have been arbitrarily determined by us and do not bear any relationship
to assets, earnings, book value or any other objective criteria of value.
Additionally, as the Company was formed on April 17, 2014 and has only a limited
operating history and nominal earnings, the price of the offered shares is not
based on its past earnings and no investment banker, appraiser or other
independent third party has been consulted concerning the offering price for the
shares or the fairness of the offering price used for the shares, as such our
stockholders may not be able to receive a return on their investment when they
sell their shares of common stock.
10
CAUTIONARY DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This Prospectus contains forward-looking statements and information relating to
our business that are based on our beliefs as well as assumptions made by us or
based upon information currently available to us. These statements reflect our
current views and assumptions with respect to future events and are subject to
risks and uncertainties. Forward-looking statements are often identified by
words like: "believe," "expect," "estimate," "anticipate," "intend," "project"
and similar expressions or words which, by their nature, refer to future events.
In some cases, you can also identify forward-looking statements by terminology
such as "may", "will", "should", "plans", "predicts", "potential" or "continue"
or the negative of these terms or other comparable terminology. These statements
are only predictions and involve known and unknown risks, uncertainties and
other factors, including the risks in the section entitled "Risk Factors" that
may cause our or our industry's actual results, levels of activity, performance
or achievements to be materially different from any future results, levels of
activity, performance or achievements expressed or implied by these
forward-looking statements. In addition, you are directed to factors discussed
in the "Management's Discussion and Analysis of Financial Condition and Results
of Operation" section, and the section entitled "Description of Our Business",
as well as those discussed elsewhere in this Prospectus. Other factors include,
among others: general economic and business conditions; industry capacity;
industry trends; competition; changes in business strategy or development plans;
project performance; availability, terms, and deployment of capital; and
availability of qualified personnel.
These forward-looking statements are relevant as of the date of this Prospectus.
We believe that the expectations reflected in the forward-looking statements are
reasonable; however we cannot guarantee future results, levels of activity, or
achievements. Except as required by applicable law, including the securities
laws of the United States, we expressly disclaim any obligation or undertaking
to disseminate any update or revisions of any of the forward-looking statements
to reflect any change in our expectations with regard thereto or to conform
these statements to actual results.
USE OF PROCEEDS
Our offering is being made on a self-underwritten basis: no minimum number of
shares must be sold in order for the offering to proceed. The offering price per
share is $0.01. The following table sets forth the uses of proceeds assuming the
sale of either 25%, 50%, 75% and 100%, respectively, of the securities offered
for sale by the Company. There is no assurance that we will raise the full
$100,000 as anticipated.
Scenario 1 Scenario 2 Scenario 3 Scenario 4
Expense Category $25,000 $50,000 $75,000 $100,000
---------------- ------- ------- ------- --------
Legal and Professional $ 9,500 $ 9,500 $ 9,500 $ 9,500
Administration $ 1,650 $ 4,000 $ 6,000 $ 9,000
Design $ 1,650 $ 4,000 $ 6,000 $ 9,000
Salaries $ 3,000 $11,000 $18,000 $23,000
Advertising $ 3,700 $11,000 $20,000 $26,000
Production $ 5,500 $10,500 $15,500 $23,500
The amounts actually spent for any specific purpose may vary and will depend on
a number of factors. Non-fixed cost, sales and marketing and general and
administrative costs may vary with business progress and development efforts,
general business conditions and market reception. Accordingly, our management
has broad discretion to allocate the net proceeds to non-fixed costs.
An example of changes to this spending allocation for non-fixed costs include
management deciding to spend less of the allotment on product development and
more on sales and marketing.
If necessary, Ilia Tomski, our President and Director has verbally agreed to
loan the company funds to complete the registration process. We will require
full funding to implement our complete business plan. If insufficient funds are
raised we plan to borrow funds from our management.
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DETERMINATION OF OFFERING PRICE
There is no established market for our stock. The offering price of the shares
has been determined arbitrarily by us. The price does not bear any relationship
to our assets, book value, earnings, or other established criteria for valuing a
privately held company. In determining the number of shares to be offered and
the offering price, we took into consideration our capital structure and the
amount of money we would need to implement our business plans. Accordingly, the
offering price should not be considered an indication of the actual value of our
securities.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Upon the effectiveness of the registration statement of which this Prospectus formsis a part, we intend to seek a market maker to file an application withall of the FINRA to have our stock quoted on the OTC Bulletin Board. However, we cannot
assure you that our shares registered in this Offering will be quoted onfreely tradable without restrictions or further registration under the OTC Bulletin Board or, if
quoted,Securities Act of 1933, unless the shares are purchased by our affiliates, as that term is defined in Rule 144 under the Securities Act. The balance of shares which are not being registered will be eligible for sale pursuant to exemptions from registration. However, these shares not being registered are held by our management and other affiliates who are limited to selling only 1% of our issued and outstanding shares every 90 days.
Our Common Stock is considered a public market“penny stock” and will materialize.
The Securities and Exchange Commission has adopted rules that regulate
broker-dealer practices in connection with transactions in penny stocks. Penny
stocks are generally equity securities with a price of less than $5.00, other
than securities registered on certain national securities exchanges or quoted on
the NASDAQ system, provided that current price and volume information with
respectcontinue to transactions in such securities is provided by the exchange or
quotation system. The penny stock rules require a broker-dealer, prior to a
transaction inbe considered a penny stock so long as it trades below $5.00 per share and, as such, trading in our Common Stock is subject to deliver a standardized risk disclosure document
prepared bythe requirements of Rule 15g-9 under the Securities Exchange Act of 1934. Under this rule, broker/dealers who recommend low-priced securities to persons other than established customers and Exchange Commission, that:
a. contains a description of the nature and level of risk in the market
for penny stocks in both public offerings and secondary trading;
b. contains a description of the broker's or dealer's duties to the
customer and of the rights and remedies available to the customer with
respect to a violation of such duties or other requirements of the
securities laws;
c. contains a brief, clear, narrative description of a dealer market,
including bid and ask prices for penny stocks and the significance of
the spread between the bid and ask price;
d. contains a toll-free telephone number for inquiries on disciplinary
actions;
e. defines significant terms in the disclosure document or in the conduct
of trading in penny stocks; and
f. contains such other information and is in such form, including
language, type, size and format, as the Securities and Exchange
Commission shall require by rule or regulation.accredited investors must satisfy special sales practice requirements. The broker or broker/dealer also must provide, prior to effecting any transaction in a
penny stock, the customer with:
(a) bid and offer quotations for the penny stock;
(b) the compensation of the broker-dealer and its salesperson in the
transaction;
(c) the number of shares to which such bid and ask prices apply, or other
comparable information relating to the depth and liquidity of the
market for such stock; and
(d) a monthly account statement showing the market value of each penny
stock held in the customer's account.
In addition, the penny stock rules require that prior to a transaction in a
penny stock not otherwise exempt from those rules; the broker-dealer must make a
specialan individualized written suitability determination that the penny stock is a suitable investment for the purchaser and receive the purchaser'spurchaser’s written acknowledgment of the receipt
of a risk disclosure statement, a written agreement to transactions involving
penny stocks, and a signed and dated copy of a suitably written statement.
These disclosure requirements may have the effect of reducing the trading
activity in the secondary market for our stock. Therefore, if our common stock
becomes subject to the penny stock rules, stockholders may have difficulty
selling those securities.
HOLDERS
We had one holder of record of our common stock as of November 21, 2014.
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
We do not have any securities authorized for issuance under any equity
compensation plans.
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PENNY STOCK REGULATION
The SEC has adopted regulations which generally define "penny stock" to be any
equity security that has a market price (as defined) of less than $5.00 per
share or an exercise price of less than $5.00 per share. Such securities are
subject to rules that impose additional sales practice requirements on
broker-dealers who sell them. For transactions covered by these rules, the
broker-dealer must make a special suitability determination for the purchaser of
such securities and have received the purchaser's written consent to the
transaction prior to the purchase. Additionally, fortransaction.
SEC regulations also require additional disclosure in connection with any transactiontrades involving a penny“penny stock, unless exempt, the rules require” including the delivery, prior to theany penny stock transaction, of a disclosure schedule prepared by the SEC relating toexplaining the penny stock market. The broker-dealer alsomarket and its associated risks. In addition, broker-dealers must disclose the commissions payable to both the broker-dealer and the registered representative and current quotations for the securities and, ifthey offer. The additional burdens imposed upon broker-dealers by such requirements may discourage broker-dealers from recommending transactions in our securities, which could severely limit the broker-dealer is the sole market-maker, the
broker-dealer must disclose this fact and the broker-dealer presumed control
over the market. Finally, among other requirements, monthly statements must be
sent disclosing recent price information for the penny stock held in the account
and information on the limited market in penny stocks. As the Shares immediately
following this Offering will likely be subject to such penny stock rules,
purchasers in this Offering will in all likelihood find it more difficult to
sell their Shares in the secondary market.
DIVIDENT POLICY
We have not paid any cash dividends to shareholders. The declaration of any
future cash dividends is at the discretionliquidity of our board of Directorssecurities and depends
uponconsequently adversely affect the market price for our earnings, if any, our capital requirements and financial position,
general economic conditions, and other pertinent conditions. It is our present
intention not to pay any cash dividends in the foreseeable future, but rather to
reinvest earnings, if any, in our business operations.
DILUTION
Dilution represents the difference between the offering price and the net
tangible book value per share immediately after completion of this offering. Net
tangible book value is the amount that results from subtracting total
liabilities and intangible assets from total assets. Dilution arises mainly as a
result of our arbitrary determination of the offering price of the shares being
offered. Dilution of the value of the shares you purchase is also a result of
the lower book value of the shares held by our existing stockholders.securities. In this offering, the level of dilution is increased as a result of the
relatively low book value of Asteriko's presently issued and outstanding stock.
This is due to the shares of common stock issued to the Company's founder
totaling 5,000,000 shares at $0.001 per share for $5,000 cash versus the current
offering price of $0.01 per share.
The Company's net tangible book value on September 30, 2014 was ($834) or
approximately $0.000 per share, based upon 5,000,000 shares outstanding. Upon
completion of this offering, but without taking into account any change in the
net tangible book value after completion of this offering other than that
resulting from the sale of the shares and receipt of the total proceeds of
$100,000, the net tangible book value of the 15,000,000 shares to be outstanding
will be $99,166 or approximately $0.0066 per share.
DILUTION TABLE
The price of the current offering is fixed at $0.01 per common share. This price
is significantly higher than the price paid by our Director and Officer for
common equity since the Company's inception on April 17, 2014.
Mr. Tomski, our Officer and Director, paid $0.001 per share for the 5,000,000
common shares
Assuming completion of the offering, there will be up to 15,000,000 common
shares outstanding. The following table illustrates the per common share
dilution that may be experienced by investors at various funding levels based on
stockholders' equity of ($834) as of September 30, 2014.
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Percentage of funding 100% 75% 50% 25%
--------------------- ----------- ----------- ----------- -----------
Offering price $ 0.01 $ 0.01 $ 0.01 $ 0.01
Shares after offering 15,000,000 12,500,000 10,000,000 7,500,000
Amount of new funding $ 100,000 $ 75,000 $ 50,000 $ 25,000
Book value before offering (per share) $ 0.0002 $ 0.0002 $ 0.0002 $ 0.0002
Book value after offering (per share) $ 0.0066 $ 0.0059 $ 0.0049 $ 0.0032
Increase per share $ 0.0068 $ 0.0061 $ 0.0051 $ 0.0034
Dilution to investors $ 0.0034 $ 0.0041 $ 0.0051 $ 0.0068
Dilution as percentage 34% 41% 51% 68%
The following table summarizes the number and percentage of shares purchased,
the amount and percentage of consideration paid and the average price per share
paid by our existing stockholder and by new investors in this offering:
Percentage of
Price per Shares Total Number Consideration
Share Held of Ownership Paid
----- ---- ------------ ----
Existing Stockholder $0.001 5,000,000 33.3% $ 5,000
Investors in This Offering $ 0.01 10,000,000 66.7% $10,000
PLAN OF DISTRIBUTION
This is a self-underwritten offering. There are no plans or arrangements to
enter into any contracts or agreements to sell the Shares with aaddition, few broker or dealer. Mr. Tomski, our President and Director will sell the shares and intendsdealers are likely to offer them to friends, family members and business acquaintances with no
commission or other remuneration payable to him for any Shares he sells. In
offering the securities on our behalf, he will rely on the safe harbor from
broker-dealer registration set out in Rule 3a4-1 under the Securities Exchange
Act of 1934.
He will not register as a broker-dealer pursuant to Section 15 of the Securities
Exchange Act of 1934, in reliance upon Rule 3a4-1, which sets forth those
conditions under which a personundertake these compliance activities. Other risks associated with an issuer, may participate in
the offering of the issuer's securities and not be deemed to be a broker-dealer.
Our President and Director satisfies the requirements of Rule 3a4-1, because he:
(a) is not subject to a statutory disqualification, as that term is
defined in Section 3(a)(39)of the Act, at the time of his
participation; and
(b) will not be compensated in connection with his participation by the
payment of commissions or other remuneration based either directly or
indirectly on transactions in securities neither he will be
compensated in any other forms with the proceeds of this offering; and
(c) is not, nor will he be at the time of his participation in the
offering, an associated person of a broker-dealer; and
(d) meets the conditions of paragraph (a)(4)(ii) of Rule 3a4-1 of the
Exchange Act, in that he (A) primarily performs, or is intended
primarily to perform at the end of the offering, substantial duties
for or on behalf of our company, other than in connection with
transactions in securities; and (B) is not a broker or dealer, or been
associated person of a broker or dealer, within the preceding twelve
months; and (C) has not participated in selling and offering
securities for any Issuer more than once every twelve months other
than in reliance on Paragraphs (a)(4)(i) or (a)(4)(iii).
We will not utilize the internet to advertise our offering. We intend to
advertise our products and services through our website. Mr. Tomski will also
distribute the Prospectus to potential investors at the meetings, to business
associates and to his friends and relatives who are interested in us and a
possible investment in the offering. No shares purchased in this offering will
be subject to any kind of lock-up agreement.
Our President and Director does not intend to purchase any shares in this
offering.
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SECTION 15(G) OF THE EXCHANGE ACT
Section 15(g) of the Securities Exchange Act of 1934, as amended, and Rules
15g-1 through 15g-6 and Rule 15g-9 promulgated there under, impose additional
sales practice requirements on broker/dealers who sell our securities to persons
other than established customers and accredited investors (generally
institutions with assets in excess of $5,000,000 or individuals with net worth
in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly
with their spouses). While Section 15(g) and Rules 15g-1 through 15g-6 apply to
brokers-dealers, they do not apply to us.
Rule 15g-1 exempts a number of specific transactions from the scope of the penny
stock rules. Rule 15g-2 declares unlawful broker/dealer transactionstrading in penny stocks unlesscould also be price fluctuations and the broker/dealer has first provided to the customerlack of a standardized disclosure document.
Rule 15g-3 provides that it is unlawful for a broker/dealer to engage in a penny
stock transaction unless the broker/dealer first discloses and subsequently
confirms to the customer current quotation prices or similar market information
concerning the penny stock in question.
Rule 15g-4 prohibits broker/dealers from completing penny stock transactions for
a customer unless the broker/dealer first discloses to the customer the amount
of compensation or other remuneration received as a result of the penny stock
transaction.
Rule 15g-5 requires that a broker/dealer executing a penny stock transaction,
other than one exemptliquid market. See “Risk Factors.”
RULE 144
In general, under Rule 15g-1, disclose144, a person who has beneficially owned restricted shares for at least six months would be entitled to its customer,sell those securities provided that (1) such person is not deemed to have been one of our affiliates at the time of, or priorat any time during the 90 days preceding, a sale and (2) we have been subject to the transaction, information about the sales persons compensation.
Rule 15g-6 requires broker/dealers selling penny stocks to provide their
customers with monthly account statements.
Rule 15g-9 requires broker/dealers to approve the transactionExchange Act periodic reporting requirements for the customer's
account; obtain a written agreement from the customer setting forth the identity
and quantity of the stock being purchased; obtain from the customer information
regarding her investment experience; make a determination that the investment is
suitable for the investor; deliver to the customer a written statement for the
basis for the suitability determination; notify the customer of her rights and
remedies in cases of fraud in penny stock transactions; and, the FINRA's toll
free telephone number and the central number of the North American Securities
Administrators Association, for information on the disciplinary history of
broker/dealers and their associated persons.
The application of the penny stock rules may affect your ability to resell your
shares.
TERMS OF THE OFFERING
The shares will be sold at the fixed price of $0.01 per share until the
completion of this offering. There is no minimum amount of subscription required
per investor, and subscriptions, once received, are irrevocable.
This offering will commence on the date of this Prospectus is effective and
continue for a period not to exceed 180least 90 days (the "Expiration Date").
PROCEDURES AND REQUIREMENTS FOR SUBSCRIPTION
If you decide to subscribe for any shares in this offering, you will be required
to execute a Subscription Agreement and tender it, together with a check or
certified funds to us. Subscriptions, once received by the company, are
irrevocable.
RIGHT TO REJECT SUBSCRIPTIONS
We maintain the right to accept or reject subscriptions in whole or in part, for
any reason or for no reason. All monies from rejected subscriptions will be
returned immediately by us to the subscriber, without interest or deductions.
Subscriptions for securities will be accepted or rejected within 48 hours of our
having received them.
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DESCRIPTION OF SECURITIES TO BE REGISTERED
CAPITAL STOCK
Our authorized capital stock consists of 75,000,000 shares of common stock with
a par value of $0.001 per share.
COMMON STOCK
The holders of our common stock currently have (i) equal ratable rights to
dividends from funds legally available therefore, when, as and if declared by
the Board of Directors of the Company; (ii) are entitled to share ratably in all
of the assets of the Company available for distribution to holders of common
stock upon liquidation, dissolution or winding up of the affairs of the Company
(iii) do not have preemptive, subscription or conversion rights and there are no
redemption or sinking fund provisions or rights applicable thereto; and (iv) are
entitled to one non-cumulative vote per share on all matters on which stock
holders may vote.
NON-CUMULATIVE VOTING
Holders of shares of our common stock do not have cumulative voting rights,
which means that the holders of more than 50% of the outstanding shares, voting
for the election of Directors, can elect all of the Directors to be elected, if
they so choose, and, in that event, the holders of the remaining shares will not
be able to elect any of our Directors. After this offering is completed,
assumingbefore the sale of all of the shares of common stock,and are current in filing our present stockholder
will own approximately 33% of our outstanding shares.
Please refer to the Company's Articles of Incorporation, Bylaws and the
applicable statutes of the State of Nevada for a more complete description of
the rights and liabilities of holders of the Company's securities.
PREFERRED STOCK
We do notperiodic reports. Persons who have an authorized class of preferred stock.
OPTIONS, WARRANTS AND RIGHTS
There are no outstanding options, warrants, or similar rights to purchase any of
our securities.
SHARES ELIGIBLE FOR FUTURE RESALE
GENERAL
There is no public market for our common stock. We cannot predict the effect, if
any, that market sales of shares of our common stock or the availability of
shares of our common stock for sale will have on the market price of our common
stock. Sales of substantial amounts of our common stock in the public market
could adversely affect the market prices of our common stock and could impair
our future ability to raise capital through the sale of our equity securities.
Upon completion of this offering, based on our outstanding shares as of November
21, 2014, we will have outstanding an aggregate of 15,000,000 shares of our
common stock. Of these shares, upon effectiveness of the registration statement
of which this Prospectus forms a part, the 10,000,000 shares covered hereby will
be freely transferable without restriction or further registration under the
Securities Act.
The remaining 5,000,000beneficially owned restricted shares of common stock for at least six months but who are our affiliates at the time of, or any time during the 90 days preceding, a sale, would be subject to additional restrictions, by which such person would be outstanding are
ownedentitled to sell within any three-month period only a number of securities that does not exceed 1% of the number of shares of common stock outstanding. Such sales by our President and Director, known as our "affiliate," and may not be
resold in the public market except in complianceaffiliates must also comply with the registration
requirementsmanner of the Securities Act or under an exemption undersale and notice provisions of Rule 144 under
the Securities Act, if available, or otherwise.
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INTERESTS OF NAMED EXPERTS AND COUNSEL
No expert or counsel named in this Prospectus as having prepared or certified
any part of this Prospectus or having given an opinion upon the validity of the
securities being registered or upon other legal matters in connection with the
registration or offering of the common stock was employed on a contingency
basis, or had, or is to receive, in connection with the offering, a substantial
interest exceeding $50,000 directly or indirectly, in the Company or any of its
parents or subsidiaries nor was any such person connected with Asteriko Corp. or
any of its parents or subsidiaries as a promoter, managing or principal
underwriter, voting trustee, Director, Officer, or employee.
EXPERTS
Li and Company, PC, our independent registered public accounting firm, has
audited our financial statements included in this Prospectus and registration
statement to the extent and for the periods set forth in their audit report.
availability of current public information about us.
| 83 |
LEGAL MATTERS
RULE 144 SHARES
Currently, none of our securities may be resold pursuant to Rule 144.
The securities sold in this offering can only be resold through registration
under Section 5 of the Securities Act of 1933, Section 4(1), if available, for
non-affiliates or by meeting the conditions of Rule 144(i). A holder of our
securities may not rely on the safe harbor from being deemed statutory
underwriter under Section 2(11) of the Securities Act, as provided by Rule 144,
to resell his or her securities. "Form 10 information" is, generally speaking,
the same type of information as we are required to disclose in this Prospectus,
but without an offering of securities.
Matheau J. W. Stout, Esq. has opined on the validity of the shares of common stock being offered hereby.
Instruction 1 to Item 509 of Regulation S-K requires disclosing whether the
interest of any expert or counsel namedby this prospectus has been passed upon for us by The Crone Law Group, P.C.
EXPERTS
The consolidated financial statements included in this prospectus and in the Prospectus exceeds $50,000. The
interestregistration statement for the years ended June 30, 2022 and June 30, 2021 have been audited by Gries and Associates, LLC, an independent registered public accounting firm, and are included in reliance upon such report given upon the authority of any expert or counsel namedsaid firm as experts in auditing and accounting.
DISCLOSURE OF COMMISSION POSITION ON
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
In the Prospectus does not exceed
$50,000 according to Instruction 1 Item 509 of Regulation S-K.
DESCRIPTION OF OUR BUSINESS
OVERVIEW
We were incorporated on April 17, 2014 in the State of Nevada. We have never
been involved in any reclassification, merger, consolidation or purchase or sale
of a significant amount of assets nor have we ever declared bankruptcy, been in
receivership, or been involved in any legal action or proceedings.
Our independent auditor has issued an audit opinion which includes a statement
expressing substantial doubt as to our ability to continue as a going concern.
EMERGING GROWTH COMPANY STATUS
Because we generated less than $1 billion in total annual gross revenues during
our most recently completed fiscal year, we qualify as an "emerging growth
company" under the Jumpstart Our Business Startups ("JOBS") Act.
We will lose our emerging growth company status on the earliest occurrence of
any of the following events:
1. on the last day of any fiscal year in which we earn at least $1
billion in total annual gross revenues, which amount is adjusted for
inflation every five years;
2. on the last day of the fiscal year of the issuer following the fifth
anniversary of the date of our first sale of common equity securities
pursuant to an effective registration statement;
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3. on the date on which we have, during the previous 3-year period,
issued more than $1 billion in non-convertible debt; or
4. the date on which such issuer is deemed to be a `large accelerated
filer', as defined in section 240.12b-2 of title 17, Code of Federal
Regulations, or any successor thereto."
A "large accelerated filer" is an issuer that, at the end of its fiscal year,
meets the following conditions:
1. it has an aggregate worldwide market value of the voting and
non-voting common equity held by its non-affiliates of $700 million or
more as of the last business day of the issuer's most recently
completed second fiscal quarter;
2. It has been subject to the requirements of section 13(a) or 15(d) of
the Act for a period of at least twelve calendar months; and
3. It has filed at least one annual report pursuant to section 13(a) or
15(d) of the Act.
As an emerging growth company, exemptions from the following provisions are
available to us:
1. Section 404(b) of the Sarbanes-Oxley Act of 2002, which requires
auditor attestation of internal controls;
2. Section 14A(a) and (b) of the Securities and Exchange Commission, indemnification for liabilities arising under the Securities Act of 1934, which
require companiesis against public policy as expressed in the Securities Act and is, therefore, unenforceable. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to hold shareholder advisory votes on executive
compensation and golden parachute compensation;
3. Section 14(i)directors, officers or persons controlling the registrant pursuant to the foregoing provisions, the registrant has been informed that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act (which has not yet been
implemented), which requires companies to disclose the relationship
between executive compensation actually paid and the financial
performanceis therefore unenforceable.
WHERE YOU CAN FIND MORE INFORMATION
This prospectus is part of the company;
4. Section 953(b)(1) of the Dodd-Frank Act (which has not yet been
implemented), which requires companies to disclose the ratio between
the annual total compensation of the CEO and the median of the annual
total compensation of all employees of the companies; and
5. The requirement to provide certain other executive compensation
disclosure under Item 402 of Regulation S-K. Instead, an emerging
growth company must only complya Registration Statement on Form S-1 we have filed with the more limited provisions of
Item 402 applicable to smaller reporting companies, regardless of the
issuer's size.
Pursuant to Section 107 of the JOBS Act, an emerging growth company may choose
to forgo such exemption and instead comply with the requirements that apply to
an issuer that is not an emerging growth company. We have elected under this
section of the JOBS Act to maintain our status as an emerging growth company and
take advantage of the JOBS Act provisions relating to complying with new or
revised accounting standards under Section 102(b)(1) of the JOBS Act.
BUSINESS OF ISSUER
INDUSTRY
According to the Occupational Outlook Handbook, the overall employment of
designers and decorators is expected to grow about as fast as the average for
all occupations.
The color-shifting technology is currently used in paint systems, primarily for
automobiles, but there is an increased market demand to extend these color
effects to the new product markets beyond auto market.
Exterior and Interior designers start using color-shifting effects in innovative
ways on areas not traditionally associated with dramatic treatments, e.g. walls,
ceilings and floor coverings of building surfaces. The statement surface
coverings can be used in both residential and commercial environments.
Our company will be designing color-shifting materials for decorative purposes.
Our company proposes the new solution for color-shifting effects that will work
on a number of surfaces used for interior and exterior decoration. This will
include ceiling panels, tiled wall surfaces, and floor decorations.
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Our main market segments are:
* Small and medium size businesses - corporate customers, e.g. shops,
hotels, fitness clubs and night clubs owners
* Building contractors and industrial design and architecture companies
* Individuals - home owners
DESCRIPTION OF PRODUCT OR SERVICES
Our initial product will be color changing lattice panels designed for suspended
ceiling.
The idea of color changing surfaces is not new. Color decomposition of reflected
light also known as refraction combined with light interference is a known
effect and is used in automotive industry for development of special paints.
Our approach is to achieve similar results using different and more cost
effective technology. This approach is based on ability of an average human eye
to blend reflected lights and view them as a single color. The type of color
depends on combination of base colors (red, blue, and green) in the reflection.
All color TVs use similar principle to achieve multicolor effect. The main
difference with our proposal is that TV generates light whereas we use the
surface reflection. Only select material can be used to achieve this effect the
surface of the material should have special geometrical figures on a small level
and each painted with at least 3 different colors.
Prior to creating Asteriko Corp. our President has done many experiments and
discovered that simple 3D transparent rectangular grid structure could act as a
color changing decorative element by simply applying different colors to
different faces of the 3D grid. Viewed from different angles, such structure
appears to have not only different but also dynamically changing color depending
of the viewpoint of the observer.
The grid density and the height of each individual rectangular cell defines the
light transparency of the element, if back lit, as well as the sensitivity of
the color shifting to a different viewing angle. Desired color changing effects
can also be achieved through the application of directional spray painting to
randomly oriented micro-surfaces.
We are beginning to experiment with rigid and soft foam. It is our understanding
that foam sheets of 0.5" to 1.0" thick, rigid or soft, could be made as 3D
lattices of adjacent polygons, much like certain types of packing foam. Having
painted each face of the polygon into different color will create desired color
changing illusion if viewed from different directions.
Our plan is to carry out a phased approach in establishing and developing
Asteriko Corp. The first phase will focus on developing and refining design
solutions and producing samples The second phase will be production and
manufacturing.
Phase one:
a) select the most effective way to make a given surface to change its
color
b) identify the materials to be used
c) manufacture and sell small batches of different materials such as
ceiling panels as a proof of concept to see if our products generate
interest
d) enhance directional spray painting process to achieve better quality
e) document the technological process and our "know how"
Phase two:
a) advertise our product and technology
b) negotiate with suppliers and manufacturers of the foam panels of
desired geometry. Currently suppliers such as Clark Foam Products
Corp. and several others all capable of manufacturing an initial
monochromatic 3D foam lattices
c) establish distribution network
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d) expand our technology to other materials used for surface decorations
capitalizing the basic working principle of the 3D rectangular color
changing grid
In case of successful growth of our business, necessary funds will be available
through operating profits to further optimize present technique for making color
changing rectangular lattices and foam panels as well as establishing proper
manufacturing. It will also be possible to start producing samples of color
changing ceramic or stamped metal tiles.
TARGET MARKET AND CLIENTS
The main target market for our products and services will include retail and
commercial establishments where unique and original appearance is an integral
part of their success. We will also provide design solutions and materials to
the residential sector.
Our potential customers will be in the following potential sectors:
First Phase:
* Building contractors and industrial design and architecture companies
* Home owners for new builds or renovations
Future phases:
* Retail establishments e.g. boutique and specialty stores
* Commercial establishments including restaurants, night clubs,
theaters, hotels and fitness clubs
* Geographically at the initial stage of our development we'll target
the North American markets
SOURCE OF REVENUE
Our main of source of revenue will initially be the sales of design solutions to
the house and building designers and constructors i.e.:
1. Design of color-shifting suspended ceiling panels to customer-provided
specifications
2. Consulting on application and integration of our panels into customer
interior or exterior design.
Additional revenue stream expected to come from manufacturing of color-shifting
suspended ceiling surfaces for home owners as well as retail and commercial
establishments in the future.
MARKETING STRATEGY
In order to attract customers and promote products, our company has created the
website. We will also market through online advertisements. For online and
website advertising we will use the following methods:
* Link our site to free web Directories
* Use shared online advertisement facilities
* Distribute online banners to attract more attention from the customers
and provide credibility to the product by including customer feedback
* Advertise through classified ads and blogs
* Add our website address to the relevant search engines
We will also advertise through local and global classified ads and social
networking. Sales brochures will be printed to provide necessary company product
and service information. We will organize onsite presentations for perspective
clients with sample demonstrations.
COMPETITION AND COMPETITIVE STRATEGY
There is a small number of potential competitors that provide some elements of
what Asteriko Corp., will offer to its customers. However, no direct competition
exists since the product that our company develops is unique to design and
construction industry. It uses innovative technological solution that is low
cost and economical.
20
Several differences in application arise when comparing our technology to color
changing paint technology as well as some colored light arrangements. The main
difference in application is simplicity as one can imagine the installation of a
ceiling panel or wall panel compared to painting or running electricity. No
major surface preparation is required. Another significant difference is
flexibility of installation in terms of design and final appearance. Taking
rectangular grid ceiling panel as example, not only various ornamental
combinations could be applied right at the customer site but also customer is
left with the ability to adjust and even entirely change the appearance of the
ceiling by rotating and relocating individual panels.
There is also a difference in application of our innovative technology. Once we
fully launch operations we expect to compete successfully on a basis of price,
quality and novelty of our product.
Currently, our competitive position within the industry is negligible in light
of the fact that we have just recently started our operations.
SOURCES AND AVAILABILITY OF PRODUCTS AND SUPPLIES
We believe that our President's industry experience and connections will enable
us to develop the various aspects of the business. Mr. Tomski has experience
with design and engineering of products and creating promotion and marketing
packages. While working as Research Scientist and Industrial Post Doctoral
Fellow for Ionics Mass Spectrometry Group Inc., Mr. Tomski (in addition to his
main duties as research scientist) has been actively involved in promoting the
company products through installations, demonstrations and training provided to
existing and potential customers around the world. He also promoted company's
products through onsite and offsite presentations and industrial conferences.
Throughout his career Mr. Tomski has been involved in design and manufacturing
of hi-tech industrial equipment such as high vacuum systems for utilization in
particle accelerator applications in general and for Accelerator Mass
Spectrometry application in particular. Mr. Tomski has hands on experience in
design, manufacturing and operation of ion optical elements such as atmospheric
pressure to vacuum sampling interface, ion guides, ion collision cells that are
vital components of commercial mass spectrometers for bio-medical applications.
Mr. Tomski has also been involved in design and manufacturing of cryogenic
systems for commercial superconducting gravity gradiometer; this includes design
and manufacturing of superconducting electrical circuits and gradiometer sensor
components.
Currently he oversees design and manufacturing of superconducting gravity
gradiometer sensor in the start-up company targeting major land exploration and
natural resources surveying.
We believe there are no constraints on the sources or availability of products,
materials and supplies related to the production of suspended panels.
DEPENDENCE ON ONE OR A FEW MAJOR CUSTOMERS
At this stage we sell small number of panels as a proof of concept to test the
market reaction to our product.
We currently have only 4 customers (generated $3,808 in revenue to date) we plan
to extend our market in the near future.
Our products are applicable to a wide range of customers from individual home
owners to commercial construction companies. We believe because of the
potentially broad base of customers for our services, we will not rely on one or
few major customers. Our initial contract with "Glik-Art" was created to attract
new customer with 20% discount for a period of 6 months. Due to different needs
of the clients we cannot in advance include in the contract specific materials
or design. For each specific order we disclose the type of materials to be used,
design specifications and labor rates. Currently we don't have special
relationships with these customers, other than contract with "Glik-Art" offering
20% discount for 6 month. Any customer may purchase our product based on their
needs.
PATENT, TRADEMARK, LICENSE & FRANCHISE RESTRICTIONS AND CONTRACTUAL OBLIGATIONS
& CONCESSIONS
There are no inherent factors or circumstances associated with this industry, or
any of the products or services that we expect to be providing that would give
rise to any patent, trademark or license infringements or violations.SEC. We have not entered into any franchise agreements or other contracts that have given, or
could give riseincluded in this prospectus all of the information contained in the Registration Statement and you should refer to obligations or concessions. Out web domainour Registration Statement and IP addressits exhibits for further information. You can obtain a copy of the Registration Statement, including the exhibits filed with it, from the SEC as well as company information will be protected by our domain host.
We do not own, either legally or beneficially, any patents or trademarks.
21
GOVERNMENTAL AND INDUSTRY REGULATIONS
indicated below.
We will be subject to federalfile annual, quarterly and state lawscurrent reports, proxy statements and regulations that relate
directly or indirectly to our operations including federal securities laws. We
will also be subject to common businessother information with the SEC. You may read and tax rules and regulations pertaining
to the normal business operations.
RESEARCH AND DEVELOPMENT ACTIVITIES AND COSTS
We are capitalizing on prior scientific research and development that was done
by our President and Director and have not yet spentcopy any money on R&D. Once this
offering is completedmaterials we will have resource to continue our R&D program.
COMPLIANCE WITH ENVIRONMENTAL LAWS
Our operations are not subject to any environmental laws.
FACILITIES
We do not own or rent facilities of any kind. We plan to conduct our operations
from the facilities that our President provides to us free of charge. These
facilities located at 353 Bathurst Glen Dr. Thornhill, ON Canada and used
primary for manufacturing small batches of 3D lattice panel as a proof of
concept and market testing.
EMPLOYEES
We have commenced only limited operations, and currently have two employees -
our President and Director Mr. Tomski, who spends approximately fifteen hours a
week on our business and our treasurer Ms. Tomskaia, who devotes up to five
hours a week to company's operations.
REPORTS TO STOCKHOLDERS
We are not currently a reporting company, but upon effectiveness of the
registration statement, of which this Prospectus forms a part, we will be
required to file reports with the SEC pursuant to the Securities Exchange Act of
1934, as amended. These reports include annual reports on Form 10-K, quarterly
reports on Form 10-Q and current reports on Form 8-K. Copies of these reports
from the SEC'sat their Public Reference Room at 100 F Street, NE.,NE, Washington, DC 20549, on official business days during the hours of 10 a.m. to 3 p.m. or on the SEC's
website, at www.sec.gov. You may obtain information onabout the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. We willOur filings are also make these reports available on our website-www.asteriko.com
DESCRIPTION OF PROPERTY
We do not currently own any property. We are currently operating out ofto the premises of our Presidentpublic from commercial document retrieval services and Director, on a rent-free basis during our
development stage. We consider our current principal office space arrangement
adequate.
LEGAL MATTERS
We know of no existing or pending legal proceedings against us, nor are we
involved as a plaintiff in any proceeding or pending litigation. There are no
proceedings in which any of our Directors, Officer or any of their respective
affiliates, or any beneficial stockholder, is an adverse party, or has a
material interest adverse to our interest. Our address for service of process in
Nevada is 2360 Corporate Circle, Suite 400, Henderson NV 89074-7722
MANAGEMENT
Data concerning company executives as of the date of this Prospectus:
Name Age Position
---- --- --------
Ilia Tomski 43 President, Secretary, Chief Executive Officer
and member of the Board of Directors.
Ksenia Tomskaia 43 Treasurer
The persons named above have held their offices/positions since the inception of
our company and are expected to hold their offices/positions until the next
annual meeting of our stockholders.
22
BIOGRAPHICAL INFORMATION
Set forth below is a brief description of the background and business experience
of our executive Officers:
ILIA TOMSKI - PRESIDENT AND DIRECTOR
Ilia Tomski has been our President, Secretary, and a member of the Board of
Directors since our inception on April 17, 2014.
Throughout his career Mr. Tomski has been involved with design and manufacturing
of hi-tech industrial equipment such as high vacuum systems for utilization in
particle accelerator applications in general and for Accelerator Mass
Spectrometry application in particular. Mr. Tomski has been actively involved in
design, manufacturing and operation of ion optical elements such as atmospheric
pressure to vacuum sampling interface, ion guides, ion collision cells that are
vital components of commercial mass spectrometers for bio-medical applications.
Mr. Tomski has also been involved in design and manufacturing of cryogenic
systems for commercial superconducting gravity gradiometer this also includes
design and manufacturing of superconducting electrical circuits and gradiometer
sensor components.
Mr. Tomski currently he oversees design and manufacturing of superconducting
gravity gradiometer sensor at the start-up company targeting major land
exploration and natural resources surveying.
INTERNATIONAL EXPERIENCE:
2008-present. Senior research scientist in Gedex Technologies Inc., Mississauga,
Ontario, Canada. Mr. Tomski is in charge of development and implementation of
superconducting gravity gradiometer for use by major mining companies for
enhanced land surveying.
2007-2008. Research scientist with the University Of Maryland, Department Of
Physics, Gravitation Laboratory, Maryland, USA
2003-2007. Research scientist and Industrial Post Doctoral Fellow in Ionics Mass
Spectrometry Group Inc., Concord, Ontario, Canada. Ionics Mass Spectrometry
Group Inc. was the start-up company developing performance enhancement equipment
upgrades to extend existing commercial mass-spectrometer lifetime for major
pharmaceutical companies around the world.
2003-2005. Mr. Tomski was recipient of NSERC Industrial Fellowship. He is author
and co-author of a number of industrial patents. Author and co-author of several
scientific publications in internationally renowned journals. Member of American
Society for Mass Spectrometry (ASMS).
2002-2003. Research scientist position in R&D department of Analytica of
Branford Inc., Branford, Connecticut, USA. Analytica of Branford Inc. is
high-tech industrial company developing analytical tools for major
pharmaceutical and bio-medical companies.
In 2002 Mr. Tomski obtained his Ph.D. in Physics from the University of Toronto.
Mr. Tomski's schedule currently allows him to spend up to fifteen hours a week
on the operations of our company. He is willing to spend more time with the
business as it grows. We anticipate him eventually spending about 30 hours a
week on matters related to our company's operations.
The specific experience, qualifications, attributes, and skills in design and
project management led to the appointment of Mr. Tomski as our President and
Director.
KSENIA TOMSKAIA - TREASURER
Ksenia Tomskaia has been our Treasurer since inception date of April 17, 2014.
Ms. Tomskaia's schedule currently allows her to spend up to five hours a week on
company's operations. She indicates willingness to devote more of her business
time as our business grows and her services are needed.
EDUCATION AND QUALIFICATIONS:
Software Programming Diploma, PrimeTech Institute, Toronto, Canada, 1998
BMO Financial Business Analysis Professional Accreditation Program, Toronto,
Canada 2011
PROFESSIONAL CAREER HIGHLIGHTS:
2005-present Senior Business Analyst, BMO Financial Group, Toronto Canada
1999-2005 Programmer Analyst and Quality Assurance Analyst, Canada Life
Assurance Company, Toronto, Canada
23
During the past ten years, Mr. Tomski & Ms. Tomskaia have not been the subject
of any the following events:
1. Any bankruptcy petition filed by or against any business of which
either were a general partner or executive Officer either at the time
of the bankruptcy or within two years prior to that time.
2. Any conviction in a criminal proceeding or being subject to a pending
criminal proceeding.
3. An order, judgment, or decree, not subsequently reversed, suspended or
vacated, or any court of competent jurisdiction, permanently or
temporarily enjoining, barring, suspending or otherwise limiting
either Mr. Tomski or Ms. Tomskaia involvement in any type of business,
securities or banking activities.
4. Found by a court of competent jurisdiction (in a civil action), the
Securities and Exchange Commission or the Commodity Future Trading
Commission to have violated a federal or state securities or
commodities law, and the judgment has not been reversed, suspended or
vacated.
BOARD COMPOSITION
Our Bylaws provide that the Board of Directors shall consist of at least one
member, and that our shareholders shall determine the number of Directors from
time to time. Each Director serves a term expiring at the next annual
shareholders meeting and until his successor is elected and qualified, or until
his resignation, removal from office, or death.
COMMITTEES OF THE BOARD OF DIRECTORS
We do not presently have a separately constituted audit committee, compensation
committee, nominating committee, executive committee or any other committees of
our Board of Directors. Nor do we have an audit committee "financial expert." As
such, our entire Board of Directors acts as our audit committee and handles
matters related to compensation and nominations of Directors.
POTENTIAL CONFLICTS OF INTEREST
Since we do not have an audit or compensation committee comprised of independent
Directors, such functions that would have been performed by such committees are
performed by our President and Director. Thus, there is an inherent conflict of
interest.
DIRECTOR INDEPENDENCE
As of the date of this Registration Statement filed on Form S-1, we have no
independent Directors.
SIGNIFICANT EMPLOYEES
We have no significant employees other than the executive Officers described
earlier.
INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS
No Director, person nominated to become a Director, Executive Officer, promoter
or control person of our company has, during the last ten years: (i) been
convicted in or is currently subject to a pending a criminal proceeding
(excluding traffic violations and other minor offenses); (ii) been a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
and as a result of such proceeding was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or mandating
activities subject to any federal or state securities or banking or commodities
laws including, without limitation, in any way limiting involvement in any
business activity, or finding any violation with respect to such law, nor (iii)
any bankruptcy petition been filed by or against the business of which such
person was an executive Officer or a general partner, whether at the time of the
bankruptcy or for the two years prior thereto.
STOCKHOLDER COMMUNICATIONS WITH THE BOARD
We have not implemented a formal policy or procedure by which our stockholders
can communicate directly with our Board of Directors. Nevertheless, every effort
will be made to ensure that the views of stockholders are heardwebsite maintained by the Board of
Directors, and that appropriate responses are provided to stockholders in a
timely manner. During the upcoming year, our Board will continue to monitor
whether it would be appropriate to adopt such a process.
24
EXECUTIVE COMPENSATION
Since our incorporation on April 17, 2014, we have not compensated and have no
arrangements to compensate our President and Director Mr. Tomski for his
services. However, we anticipate that Mr. Tomski will receive compensation from
the Company once cash flow that we generate from operations significantly
exceeds our total expenses. We have not granted any stock options to Mr. Tomski;
there are no stock option, retirement, pension, or profit sharing plans for the
benefit of Mr. Tomski; we have not entered into any employment or consulting
agreements with Mr. Tomski. However, as President and Director of the company
Mr. Tomski has the power to set his own compensation.
The following table sets forth the compensation paid by us for the period from
inception until September 30, 2014 and subsequent thereto, for our President
and Treasurer. This information includes the dollar value of base salaries,
bonus awards and number of stock options granted, and certain other
compensation, if any. The compensation addresses all compensation awarded to,
earned by, or paid to our named executive Officers.
Change in
Pension
Value and
Non-Equity Nonqualified
Name and Incentive Deferred
Principal Stock Option Plan Compensation All Other
Position Year Salary($) Bonus($) Awards($) Awards($) Compensation($) Earnings($) Compensation($) Totals($)
-------- ---- --------- -------- --------- --------- --------------- ----------- --------------- ---------
Ilia Tomski 2014 Nil Nil Nil Nil Nil Nil Nil Nil
President,
Chief Executive
Officer and
Director
Ksenia Tomskaia 2014 Nil Nil Nil Nil Nil Nil Nil Nil
Treasurer
OUTSTANDING EQUITY AWARDS AT SEPTEMBER 30, 2014
We do not currently have a stock option plan or any other long-term incentive
plans that intend to serve as an incentive for performance. No individual grants
of stock options or other equity incentive awards have been made to our
Executive Officers since inception; accordingly, none were outstandingSEC at September 30, 2014.
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT, CHANGE-IN-CONTROL ARRANGEMENTS
There are currently no employment or other contracts or arrangements with our
Executive Officers. There are no compensation plans or arrangements, including
payments to be made by us, with respect to our Officers or Directors that would
result from the resignation, retirement or any other termination of such person.
There are no arrangements for our Directors or Officers that would result from
a change-in-control.
LONG-TERM INCENTIVE PLAN AWARDS
We do not have any long-term incentive plans that provide compensation intended
to serve as incentive for performance.
DIRECTORS COMPENSATION
The members of our Board of Directors are not compensated for their services.
The Board has not implemented a plan to award options to any Directors. There
are no contractual arrangements with any member of the Board of Directors. We
have no Director's service contracts in place.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Other than the transactions discussed below, none of the following parties have,
since the date of incorporation, had any material interest, direct or indirect,
in any transaction with us or in any presently proposed transaction that has or
will materially affect us:
- The Officers and Directors;
- Any Person proposed as a nominee for election as a Director;
25
- Any person who beneficially owns, directly or indirectly, shares
carrying more than 5% of the voting rights attached to the outstanding
shares of common stock;
- Any relative or spouse of any of the foregoing persons who have the
same house as such person.
On May 12, 2014, we have issued an aggregate of 5,000,000 shares of our common
stock to our President and Director, Ilia Tomski, for a purchase price of $0.001
per share or for aggregate consideration of $5,000. The shares were issued under
Regulation S of the Securities Act of 1933.
Since inception date of April 17, 2014 until September 30, 2014, we have
received $5,000 in shareholders advances from our President Mr. Tomski. This
loan is secured and non-interest bearing loan with no fixed terms of repayment.
Our business plan contemplates eventually entering into a formal employment
agreement with Mr. Tomski in regards his management services for set monthly
consideration. However, we do not anticipate entering into such an agreement
with Mr. Tomski until our cash flow from operations justifies such an agreement.
We have not entered into any other transaction, nor are there any proposed
transactions, in which our President and Director, or any significant
stockholder, or any member of the immediate family of any of the foregoing, had
or is to have a direct or indirect material interest.
Our President and Director may be considered a promoter of the Company due to
his participation in and management of the business since our incorporation.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
On May 12, 2014, we issued an aggregate of 5,000,000 shares of our common stock
to our Director for aggregate consideration of $5,000.
The following table sets forth the information regarding the beneficial
ownership of our common stock as of November 21, 2014 for our Director. There is
no other person or group of affiliated persons, known by us to beneficially own
more than 5% of our common stock.
We have determined beneficial ownership in accordance with the rules of the
Securities and Exchange Commission. These rules generally attribute beneficial
ownership of securities to persons who possess sole or shared voting power or
investment power with respect to those securities. The person is also deemed to
be a beneficial owner of any security of which that person has a right to
acquire beneficial ownership within 60 days. Unless otherwise indicated, the
person identified in this table has sole voting and investment power with
respect to all shares shown as beneficially owned by him, subject to applicable
community property laws, and the address for each person listed in the table is
Asteriko Corp., 616 Corporate Way, Suite 2-6834, Valley Cottage, NY 10989.
The percentage ownership information shown in the table below is calculated
based on 5,000,000 shares of our common stock issued and outstanding as of
November 21, 2014. We do not have any outstanding options, warrants or other
securities exercisable for or convertible into shares of our common stock.
No. of No. of Percentage of
Name and Address Common Stock Common Stock Ownership
of Beneficial Owner Before Offering After Offering Before Offering
------------------- --------------- -------------- ---------------
Ilia Tomski 5,000,000 5,000,000 100%
Ksenia Tomskaia 0 0 0
Officers and Directors
(2 persons) 5,000,000 5,000,000 100%
Section 16(a) of the Securities Exchange Act of 1934 requires our Directors and
Executive Officers, and persons who own more than ten percent of our common
stock, to file with the Securities and Exchange Commission initial reports of
ownership and reports of changes of ownership of our common stock. Officers,
Directors and greater than ten percent stockholders are required by SEC
regulation to furnish us with copies of all Section 16(a) forms they file.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
Insofar as indemnification for liabilities arising under the Securities Act of
1933, as amended, may be permitted to our Directors, Officers or persons
controlling us, we have been advised that it is the Securities and Exchange
Commission's opinion that such indemnification is against public policy as
expressed in such act and is, therefore, unenforceable.
26
MANAGEMENT'S DISCUSSION AND ANALYSIS
www.sec.gov.
You should read the following discussion and analysis of our financial condition
and results of operations together with our consolidated financial statements
and the related notes and other financial information included elsewhere in this
Prospectus. Some ofrely only on the information contained in this discussion and analysis or
set forth elsewhere in this Prospectus, including information with respect to
our plans and strategy for our business and related financing, includes
forward-looking statements that involve risks and uncertainties. You should
review the "Risk Factors" section of this Prospectus for a discussion of
important factors that could cause actual results to differ materially from the
results described in or implied by the forward-looking statements contained in
the following discussion and analysis.
Our cash balance was $5,773 as of September 30, 2014. We believe our cash
balance is not sufficient to fund our limited levels of operations for any
period of time. We have been utilizing funds received from our President and
Director from the purchase of shares. He has no commitment, arrangement or legal
obligation to advance or loan funds to the company. In order to implement our
plan of operations for the next twelve month period, we require a minimum of
$25,000 (approximately $9,500 of which are legal and registration fees for a
public company) of funding from this offering. Being a development stage
company, we have very limited operating history. After twelve months period we
may need additional financing, for which we currently don't have any
arrangements. Our US office is located at 616 Corporate Way, Suite 2-6834,
Valley Cottage, NY 10989. Our principal executive office is located at 353
Bathurst Glen Dr., Thornhill, ON L4J 9A3 Canada. Our phone number is (845)
512-5020.
Our independent registered public accountant has issued a going concern opinion.
This means that there is substantial doubt that we can continue as an on-going
business for the next twelve months unless we obtain additional capital to pay
our bills. We have generated revenues of $3,808 up to September 30, 2014; no
significant additional revenue is anticipated until we complete our initial
business development. There is no assurance we will ever reach that stage.
To meet our need for cash we are attempting to raise money from this offering.
We believe that we will be able to raise enough money through this offering to
expand our proposed operations, however there is no guarantee that we will stay
in business after doing so. At the present time, we have not made any
arrangements to raise additional cash, other than through this offering.
We are an "emerging growth company" as defined in the JOBS Act, and we may take
advantage of certain exemptions from various reporting requirements that are
applicable to other public companies that are not "emerging growth companies"
including, but not limited to: not required to comply with the auditor
attestation requirements of Section 404 of the Sarbanes-Oxley Act; reduced
disclosure obligations regarding executive compensation in our periodic reports
and proxy statements; exemptions from the requirements of holding an annual
non-binding advisory vote on executive compensation and nonbinding stockholder
approval of any golden parachute payments not previously approved. In addition,
Section 107 of the JOBS Act also provides that an "emerging growth company" can
take advantage of the extended transition period provided in Section 7(a)(2)(B)
of the Securities Act for complying with new or revised accounting standards. In
other words, an "emerging growth company" can delay the adoption of certain
accounting standards until those standards would otherwise apply to private
companies. We are choosing to "opt out" of such extended transition period, and
as a result, we will comply with new or revised accounting standards on the
relevant dates on which adoption of such standards is required for non-emerging
growth companies. Section 107 of the JOBS Act provides that our decision to opt
out of the extended transition period for complying with new or revised
accounting standards is irrevocable.
RESULTS OF OPERATIONS FROM INCEPTION ON APRIL 17, 2014 TO SEPTEMBER 30, 2014
From inception to September 30, 2014, our operating expenses were comprised of
professional fees of $6,748 and general and administrative expenses of $2,896.
We have generated revenue of $3,808 from sales of color changing ceiling panels
to the following customers:
* $890 from Glik-Art;
* $1,636 from Xan Systems Inc.;
* $713 from Artline Engraving Design.
* $596 from Precision Landscaping @ Lawn Care Inc.
27
The contract with Glik-Art does not include specific price, rather offering six
months product discount. Customer may choose different materials and different
design of the ceiling panels based on their current needs. Purchase price will
vary. There is an invoice from June 13, 2014 to the Glik-Art that does specify
the purchase price. There could be a multiple purchases from the same company.
Contract is not limited to a single purchase and is valid for 6 months since the
signing date. The full amount received from Glik-Art includes payment for
materials and labor to date is $890 dollars.
Invoice #0001
Customer: Glik-Art
Sales date : June 13, 2014
Invoice Date: June 13, 2014
Types of goods sold: Color Shifting decorative ceiling panels. Transparent Grid
Panels 2'X2'. Four (4) standard colors. Suspended
Ceiling System hardware components.
Materials used: ceiling panels, paint, hardware materials
Source of Materials: Home Depot
Total amount due: $889.73
Invoice #0002
Customer: Xan Systems, Inc
Sales date : June 19, 2014
Invoice Date: June 19, 2014
Types of goods sold: Color Shifting decorative ceiling panels. Transparent Grid
Panels 2'X2'. Four (4) standard colors. Suspended
Ceiling System hardware components.
Materials used: ceiling panels, paint, hardware materials
Source of Materials: Home Depot
Total amount due: $1635.75
Invoice #0003
Customer: Artline Engraving Design
Sales date : June 27, 2014
Invoice Date: June 27, 2014
Types of goods sold: Color Shifting decorative ceiling panels. Transparent Grid
Panels 2'X2'. Four (4) custom colors.
Materials used: ceiling panels, paint
Source of Materials: Home Depot
Total amount due: $713.44
Invoice #0004
Customer: Precision Landscaping @ Lawn Care Inc.
Sales date : September 18, 2014
Invoice Date: September 18, 2014
Types of goods sold: Color Shifting decorative ceiling panels. Transparent Grid
Panels 2'X2'. Four (4) custom colors.
Materials used: ceiling panels, paint
Source of Materials: Home Depot
Total amount due: $569.10
We anticipate a substantial increase in our legal and accounting fees over the
course of the next 12 months as a result of becoming a reporting company with
the SEC up to $9,500.
Since inception, we sold 5,000,000 shares of common stock to our President and
Director for $5,000.
ACTIVITIES TO DATE
A substantial portion of our activities to date has involved developing a
business plan. Our President has also developed Plan of Operations. We have
established the company office and provided information session and consulting
about our services to one prospective customer.
PLAN OF OPERATIONS
We anticipate that our legal and accounting fees will increase to $9,500 over
the next 12 months as a result of becoming a reporting company with the SEC.
28
We have completed few small projects as a proof of concept to verify that our
products can generate customer interest.
Below is the summary of our business plan (Scenario 1 - 25% of our offering is
sold) that includes the following activities and expenditures:
Month 1
1. Prepare high level solution design for three different types suspended
ceiling panels - $500.
a. Grid type transparent panel
b. Foam base panel and semitransparent LED backlit foam color shifting
panel
c. 3D lattice panel
2. Purchase accounting software - $1,000
3. Develop company website - $800
Month 2
1. Purchase design software - $1,000
2. Prepare detailed design for the 1st type of suspended ceiling panel: grid
type - $500
a. Low density grid
b. High density grid
c. Variable density grid
d. Develop color pallets for grid type panel
3. Finalize variable angle spray-painting process
4. Start online and website advertisement
a. Promote the new grid panel on the website
b. Distribute online banners and add our website URL to search engines,
e.g. Google - $200
Month 3
1. Initiate detailed design for the 2nd type of suspended ceiling panels: foam
base - $500
a. Finalize conceptual designs for semitransparent LED back-lit
color-shifting ceiling panels.
b. Start sourcing adhesives and clamps for foam board attachments.
c. Finalize multi-angle spray painting process for foam application
d. Start preparing engineering drawings.
2. Continue web advertisement
a. Update website with the foam base panel $100
b. Continue Google advertisement $200
Total 1st quarter: $4,800
Month 4
1. Initiate detailed design for the 3rd type of suspended ceiling panels: 3D
lattice - $500
a. Select different materials for potential application to manufacturing
of 3D lattice color -shifting ceiling panels: high-density foam and
molded plastic
b. Adopt panel design to existing commercially available mounting
systems.
c. Start preparing detailed engineering drawings
2. Continue marketing campaign online and on the Company website $100
3. Prepare promotional printed materials and advertisements: marketing
brochures - $300
29
Month 5
1. Continue detailed design 3rd type of suspended ceiling panels: 3D lattice -
$500
a. Finalize material selection for the initial set of panels
b. Color-shifting interlocking panels, start developing patterns and
color pallets
2. Continue marketing campaign on the website and online - $100
3. Print and distribute advertisement materials to prospective customers $300
4. Prepare presentation for prospective customers - $500
Month 6
1. Acquire sample paint and necessary tools to produce product samples: grid
type panels - $1,000
2. Using our own premises, setup workshop for producing samples: grid type
panels $1,000
3. Print more sales literature : marketing brochures $200
4. Contact prospective clients and distribute targeted advertisement
materials: $300
Total 2nd quarter: $4,800
Month 7
1. Produce first samples of the ceiling panels: grid type $500
2. Organize onside presentation for perspective clients and demonstrate
samples: grid type color-shifting panels $200
3. Continue marketing campaign online and on the company website $200
Month 8
1. Add/update advertisement on the company website and online: grid, foam base
and 3D lattice panels $200
2. Continue marketing campaign: distribute marketing materials to prospective
clients $200
3. Continue onsite and offsite presentations to potential clients $300
Month 9
1. Collect and document requirements from customers to start on
custom-designed whole ceiling solutions using available grid type stock
panels $300
2. Start design and engineering of color-shifting ceiling panels to
customer-provided specifications $500
3. Continue marketing campaign for all types of panel $200
Total 3rd quarter: $2,600
Month 10
1. Continue collecting and documenting customer provided information and
design preferences in order to generate the initial set of color-shifting
ceiling designs for the most common and demanded applications using foam
and 3D-latice panels $300
2. Finalize material and color selection for the initial set of designs
proposed for foam color-shifting ceiling panel sample production - $300.
3. Start online and website advertisement for the new type of ceiling tiles:
foam and 3D-latice $200
4. Promote new ceiling panels on the company website $100
5. Distribute online banners for new ceiling panel types and add our website
URL to search engines, e.g. Google $100
30
Month 11
1. Buy tools and materials for producing samples of color-shifting ceiling
panels of the foam and the 3D lattice type $620
2. Continue design work to customer-provided specifications for existing and
new clients: ceiling panels $300
3. Continue marketing campaign online and on the company website $100
Month 12
1. Produce first samples of ceiling panels of the foam and the 3D lattice
tiles $680
2. Continue marketing campaign: distribute marketing materials to prospective
clients $400
3. Continue marketing campaign through online banners and on the company
website $200
4. Start looking for available contractors to manufacture ceiling panels
Total 4th quarter: $3,300
Legal and Professional $9,500
Total Cost for 12 months $25,000
As per our Plan of Operation we have made the following estimates (based on 15
hours per week business engagement):
DESIGN
1. Prepare high level solution design for three different
types suspended ceiling panels $ 500 55 Hrs
2. Purchase design software $1,000 2 Hrs
3. Prepare detailed design for the 1st type of suspended
ceiling panel: grid type $ 500 55 Hrs
4. Initiate detailed design for the 2nd type of suspended
ceiling panels: foam base $ 500 55 Hrs
5. Initiate detailed design for the 3rd type of suspended
ceiling panels: 3D lattice $ 500 50 Hrs
6. Start design and engineering of color-shifting ceiling
panels to customer-provided specifications $ 500 25 Hrs
7. Finalize material and color selection for the initial
set of designs proposed for foam color-shifting ceiling
panel sample production $ 300 25 Hrs
TOTAL DESIGN: $3,800 265 Hrs
ENHANCEMENTS
1. Continue detailed design 3rd type of suspended ceiling
panels: 3D lattice
a. Finalize material selection for the initial set of
panels $ 100 5 Hrs
b. Color-shifting interlocking panels, start developing
patterns and color pallets $ 400 45 Hrs
2. Collect and document requirements from customers to
start on custom-designed whole ceiling solutions using
available grid type stock panels $ 300 25 Hrs
3. Continue collecting and documenting customer provided
information and design preferences in order to generate
the initial set of color-shifting ceiling designs for the
most common and demanded applications using foam and
3D-latice panels $ 300 25 Hrs
4. Continue design work to customer-provided specifications
for existing and new clients $ 300 50 Hrs
TOTAL ENHANCEMENTS $1,400 150 Hrs
All the work will be performed by our President Mr. Ilia Tomski. We may choose
to hire contractors for some operations if it will be deemed necessary.
31
OFF BALANCE SHEET ARRANGEMENTS
We have no off-balance sheet arrangements that have or are reasonably likely to
have a current or future effect on our financial condition, changes in financial
condition, revenues or expenses, results of operations, liquidity, capital
expenditures or capital resources.
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 2014, the Company had $5,773 cash and liabilities of $7,249.
The available capital reserves of the Company are sufficient for the Company to
remain operational.
Our negative cash flow per month is: $3,809/3=$1,270 (estimated based on the
current period expenses). Based on this estimate and on current cash on hand we
can sustain operations until February 2015 ($5,773/$1,270 = 4.5 months).
Since inception, we have sold 5,000,000 shares of common stocks to our President
and Director, at a price of $0.001 per share, for aggregate proceeds of $5,000.
Our President and Director also provided $5,000 long term loan to the company.
We are attempting to raise funds to proceed with our plan of operation. Our
current cash on hand will be used to pay the fees and expenses of this offering.
We will have to utilize funds from our President and Director. However, he has
no formal commitment, arrangement or legal obligation to loan funds to the
company. To proceed with our operations for 12 months, we need a minimum of
$25,000. We cannot guarantee that we will be able to sell all the shares
required to satisfy our 12 months financial requirement. If we are successful,
all funds raised will be applied to the items set forth in the Use of Proceeds
section of this Prospectus. In the long term we may need additional financing.
We do not currently have any arrangements for obtaining such additional
financing. Obtaining additional funding will be subject to a number of factors,
including general market conditions, investor acceptance of our business plan
and initial results from our business operations. These factors may impact the
timing, amount, terms or conditions of additional financing available. There is
no assurance that any additional financing will be available or if available, on
terms that will be acceptable to us.
GOING CONCERN CONSIDERATION
Our auditors have issued a "going concern" opinion, meaning that there is
substantial doubt for the company to continue as an on-going business for the
next twelve months unless we obtain additional capital. No substantial revenues
are anticipated until we have completed the financing from this offering and
implemented our plan of operations. Our only source for cash at this time is
investments by others in this offering. We must raise cash to implement our
strategy and stay in business. If we sell at least 25% of the shares in the
offering we believe that we will have the resources to operate for the next 12
months, including for the costs associated with becoming a publicly reporting
company. The company anticipates to incur approximately $9,500 in legal and
registration cost over the next 12 months.
LIMITED OPERATING HISTORY AND NEED FOR ADDITIONAL CAPITAL
We have no historical financial information upon which to base an evaluation of
our performance. We are in a start-up operation stages and have generated
revenues of $3,808 from the several clients as of the date of this Prospectus
(Glik-Art - graphic design and service, Artline Engraving Design, Xan Systems
Inc, and Precision Landscaping @ Lawn Care Inc. ). We cannot guarantee we will
be successful in our business operations. Our business is subject to risks
inherent in the establishment of a new business enterprise, including limited
capital resources and possible cost overruns due to price and cost increases in
services and products.
32
AVAILABLE INFORMATION
We do not plan to register our common stock under Section 12(g) of the
Securities Exchange Act of 1934 ("Exchange Act") by filing a Form 8-A on a
pre-effective basis. The consequences to investors with the company being a
Section 15(d) registrant vs. Section 12(g) registrant are as follows: Under
Section 15(d) of the Exchange Act, we are not required to file periodic reports
if we have less than 300 holders of record for the fiscal year after the year of
effectiveness. If we do not register our securities under Section 12 of the
Exchange Act, we may not have an ongoing periodic reporting obligation and will
not be subject to the Commission's proxy rules and Section 16 of the Exchange
Act.prospectus. We have not previously been requiredauthorized anyone to complyprovide you with different information. Therefore, if anyone gives you different or additional information, you should not rely on it. The information contained in this prospectus is correct as of its date. It may not continue to be correct after this date.
| 84 |
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
| 85 |
STAR ALLIANCE INTERNATIONAL CORP.
BALANCE SHEETS
March 31, 2023 | June 30, 2022 | |||||||
| (Unaudited) | (Audited) | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash | $ | 3,607 | $ | 71,724 | ||||
| Prepaids and other assets | 507,500 | 547,350 | ||||||
| Prepaid stock for services | – | 1,813,854 | ||||||
| Total current assets | 511,107 | 2,432,928 | ||||||
| Property and equipment | 450,000 | 450,000 | ||||||
| Mining claims | 57,532 | 57,532 | ||||||
| Total other assets | 507,532 | 507,532 | ||||||
| Total Assets | $ | 1,018,639 | $ | 2,940,460 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 61,037 | $ | 52,760 | ||||
| Accrued expenses | 73,485 | 25,961 | ||||||
| Accrued expenses–related party | 8,043 | – | ||||||
| Loan payable – related party | 42,000 | – | ||||||
| Accrued compensation | 298,637 | 212,428 | ||||||
| Notes payable | 91,312 | 119,215 | ||||||
| Convertible notes payable, net of discount of $81,753 and $191,248, respectively | 401,803 | 323,752 | ||||||
| Derivative liability | 943,821 | 689,231 | ||||||
| Note payable – former related party | 32,000 | 32,000 | ||||||
| Due to former related party | 42,651 | 42,651 | ||||||
| Total current liabilities | 1,994,789 | 1,497,998 | ||||||
| Total Liabilities | 1,994,789 | 1,497,998 | ||||||
| COMMITMENTS AND CONTINGENCIES (see footnotes) | ||||||||
| Stockholders’ Equity (Deficit): | ||||||||
| Preferred stock, $par value, authorized: | – | – | ||||||
| Series A preferred stock, $ par value, authorized, shares issued and outstanding | 1,000 | 1,000 | ||||||
| Series B preferred stock, $ par value, authorized, issued and outstanding | 1,883 | 1,883 | ||||||
| Series C preferred stock, $ par value, shares authorized, and shares issued and outstanding, respectively | 223 | 208 | ||||||
| Common stock, $ par value, shares authorized, and shares issued and outstanding, respectively | 209,520 | 162,788 | ||||||
| Additional paid-in capital | 23,869,294 | 16,384,983 | ||||||
| Stock subscription receivable | (56,250 | ) | (50,000 | ) | ||||
| Accumulated deficit | (25,001,820 | ) | (15,058,400 | ) | ||||
| Total stockholders’ equity (deficit) | (976,150 | ) | 1,442,462 | |||||
| Total liabilities and stockholders’ deficit | $ | 1,018,639 | $ | 2,940,460 | ||||
The accompanying notes are an integral part of these unaudited financial statements.
| F-1 |
STAR ALLIANCE INTERNATIONAL CORP.
STATEMENTS OF OPERATIONS (UNAUDITED)
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
| March 31, | March 31, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Operating expenses: | ||||||||||||||||
| General and administrative | $ | 80,556 | $ | 189,558 | $ | 959,158 | $ | 1,237,958 | ||||||||
| General and administrative – related party | – | 10,000 | – | 13,000 | ||||||||||||
| Mine development | – | 788,500 | – | 788,500 | ||||||||||||
| Professional fees | 22,130 | 93,500 | 89,130 | 106,520 | ||||||||||||
| Consulting | 16,500 | 3,827,475 | 1,110,593 | 4,015,837 | ||||||||||||
| Director compensation | 60,000 | 1,469,000 | 3,207,400 | 1,529,000 | ||||||||||||
| Officer compensation | 45,000 | 817,500 | 2,995,000 | 907,500 | ||||||||||||
| Total operating expenses | 224,186 | 7,195,533 | 8,361,281 | 8,598,315 | ||||||||||||
| Loss from operations | (224,186 | ) | (7,195,533 | ) | (8,361,281 | ) | (8,598,315 | ) | ||||||||
| Other expense: | ||||||||||||||||
| Interest expense | (56,151 | ) | (6,780 | ) | (259,661 | ) | (8,844 | ) | ||||||||
| Loss on conversion of preferred stock | (152,985 | ) | – | (911,109 | ) | – | ||||||||||
| Loss on conversion of debt | (97,249 | ) | (343,120 | ) | (97,249 | ) | (343,120 | ) | ||||||||
| Change in fair value of derivative | 146,562 | (470,635 | ) | (314,120 | ) | (470,635 | ) | |||||||||
| Total other expense | (159,823 | ) | (820,535 | ) | (1,582,139 | ) | (822,599 | ) | ||||||||
| Loss before provision for income taxes | (384,009 | ) | (8,016,068 | ) | (9,943,420 | ) | (9,420,914 | ) | ||||||||
| Provision for income taxes | – | – | – | – | ||||||||||||
| Net loss | $ | (384,009 | ) | $ | (8,016,068 | $ | (9,943,420 | ) | $ | (9,420,914 | ) | |||||
| Net loss per common share - basic and diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Weighted average common shares outstanding – basic and diluted | ||||||||||||||||
The accompanying notes are an integral part of these unaudited financial statements.
| F-2 |
STAR ALLIANCE INTERNATIONAL CORP.
STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIT
FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2023
(Unaudited)
| Preferred Stock Series A | Preferred Stock Series B | Preferred Stock Series C | ||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||
| Balance, June 30, 2022 | 1,000,000 | $ | 1,000 | 1,833,000 | $ | 1,883 | 207,500 | $ | 208 | |||||||||||||||
| Preferred stock sold for cash | — | — | — | — | 46,500 | 47 | ||||||||||||||||||
| Stock sold for cash | — | — | — | — | — | — | ||||||||||||||||||
| Stock issued for services – related party | — | — | — | — | — | — | ||||||||||||||||||
| Net loss | — | — | — | — | — | — | ||||||||||||||||||
| Balance, September 30, 2022 | 1,000,000 | 1,000 | 1,833,000 | 1,883 | 254,000 | 255 | ||||||||||||||||||
| Preferred stock sold for cash | — | — | — | — | 57,750 | 58 | ||||||||||||||||||
| Preferred stock converted to common stock | — | — | — | — | (153,750 | ) | (154 | ) | ||||||||||||||||
| Stock issued for conversion of debt | — | — | — | — | — | — | ||||||||||||||||||
| Stock issued for services – related party | — | — | — | — | — | — | ||||||||||||||||||
| Stock issued for services | — | — | — | — | — | — | ||||||||||||||||||
| Preferred stock issued for asset acquisitions | — | — | — | — | — | — | ||||||||||||||||||
| Net loss | — | — | — | — | — | — | ||||||||||||||||||
| Balance, December 31, 2022 | 1,000,000 | 1,000 | 1,833,000 | 1,883 | 158,000 | 159 | ||||||||||||||||||
| Preferred stock sold for cash | — | — | — | — | 163,950 | 164 | ||||||||||||||||||
| Preferred stock converted to common stock | — | — | — | — | (100,250 | ) | (100 | ) | ||||||||||||||||
| Stock issued for conversion of debt | — | — | — | — | — | — | ||||||||||||||||||
| Stock issued for services | — | — | — | — | — | — | ||||||||||||||||||
| Warrants issued | — | — | — | — | — | — | ||||||||||||||||||
| Preferred dividends | — | — | — | — | — | — | ||||||||||||||||||
| Net loss | — | — | — | — | — | — | ||||||||||||||||||
| Balance, March 31, 2023 | 1,000,000 | $ | 1,000 | 1,833,000 | $ | 1,883 | 221,700 | $ | 223 | |||||||||||||||
| Common Stock | Additional Paid-in | Stock Subscription | Accumulated | |||||||||||||||||||||
| Shares | Amount | Capital | Receivable | Deficit | Total | |||||||||||||||||||
| Balance, June 30, 2022 | 162,788,028 | $ | 162,788 | $ | 16,384,983 | – | $ | (50,000 | ) | $ | (15,058,400 | ) | $ | 1,442,462 | ) | |||||||||
| Preferred stock sold for cash | – | – | 46,453 | – | – | 46,500 | ||||||||||||||||||
| Stock sold for cash | 50,000 | 50 | 6,200 | (6,250 | ) | – | – | |||||||||||||||||
| Stock issued for services – related party | 20,000,000 | 20,000 | 5,730,000 | – | – | 5,750,000 | ||||||||||||||||||
| Net loss | – | – | – | – | – | (7,376,679 | ) | (7,376,679 | ) | |||||||||||||||
| Balance, September 30, 2022 | 182,838,028 | 182,838 | 22,167,636 | – | (56,250 | ) | (22,435,079 | ) | (137,717 | ) | ||||||||||||||
| Preferred stock sold for cash | – | – | 50,692 | – | – | 50,750 | ||||||||||||||||||
| Preferred stock converted to common stock | 4,447,871 | 4,448 | 762,251 | – | – | 766,545 | ||||||||||||||||||
| Stock issued for conversion of debt | 1,538,461 | 1,538 | 102,385 | – | – | 103,923 | ||||||||||||||||||
| Stock issued for services – related party | 1,000,000 | 1,000 | 164,000 | – | – | 165,000 | ||||||||||||||||||
| Stock issued for services | 2,025,000 | 2,025 | 67,880 | – | – | 69,905 | ||||||||||||||||||
| Preferred stock issued for asset acquisitions | – | – | – | – | 400,000 | |||||||||||||||||||
| Net loss | – | – | – | – | – | (2,182,732 | ) | (2,182,732 | ) | |||||||||||||||
| Balance, December 31, 2022 | 191,849,360 | 191,849 | 23,314,844 | – | (56,250 | ) | (24,617,811 | ) | (764,326 | ) | ||||||||||||||
| Preferred stock sold for cash | – | – | 163,786 | – | – | 163,950 | ||||||||||||||||||
| Preferred stock converted to common stock | 9,157,912 | 9,159 | 143,927 | – | – | 152,986 | ||||||||||||||||||
| Stock issued for conversion of debt | 7,512,157 | 7,512 | 221,020 | – | – | 228,532 | ||||||||||||||||||
| Stock issued for services | 1,000,000 | 1,000 | 15,000 | – | – | 16,000 | ||||||||||||||||||
| Warrants issued | – | – | 24,092 | – | – | 24,092 | ||||||||||||||||||
| Preferred dividends | – | – | (13,375 | ) | – | – | (13,375 | ) | ||||||||||||||||
| Net loss | – | – | – | – | – | (384,009 | ) | (384,009 | ) | |||||||||||||||
| Balance, March 31, 2023 | 209,519,429 | $ | 209,520 | $ | 23,869,294 | – | $ | (56,250 | ) | $ | (25,001,820 | ) | $ | (976,150 | ) | |||||||||
| F-3 |
STAR ALLIANCE INTERNATIONAL CORP.
STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIT
FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2022
(Unaudited)
| Preferred Stock Series A | Preferred Stock Series B | Common Stock | |||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | ||||||||||||||||||
| Balance, June 30, 2021 | 1,000,000 | $ | 1,000 | 1,833,000 | $ | 1,883 | – | - | 124,319,584 | $ | 124,320 | ||||||||||||
| Stock issued for services | – | – | – | – | 4,444 | 4 | |||||||||||||||||
| Stock sold for cash | – | – | – | – | 10,790,000 | 10,790 | |||||||||||||||||
| Net loss | – | – | – | – | – | – | – | ||||||||||||||||
| Balance, September 30, 2021 | 1,000,000 | 1,000 | 1,833,000 | 1,883 | – | - | 135,114,028 | 135,114 | |||||||||||||||
| Stock sold for cash | – | – | – | – | 300,000 | 300 | |||||||||||||||||
| Cash not collectible | – | – | – | – | – | – | |||||||||||||||||
| Stock issued for services | – | – | – | – | 2,562,000 | 2,562 | |||||||||||||||||
| Net loss | – | – | – | – | – | – | – | ||||||||||||||||
| Balance, December 31, 2021 | 1,000,000 | 1,000 | 1,833,000 | 1,883 | – | - | 137,976,029 | 137,976 | |||||||||||||||
| Stock sold for cash | – | – | – | – | 10,565,000 | 10,565 | |||||||||||||||||
| Stock issued for services | – | – | – | – | 8,100,000 | 8,100 | |||||||||||||||||
| Stock issued for debt | – | – | – | – | 672,000 | 672 | |||||||||||||||||
| Stock issued for investment | – | – | – | – | 200,000 | 200 | |||||||||||||||||
| Net loss | – | – | – | – | – | – | – | ||||||||||||||||
| Balance, March 31, 2022 | 1,000,000 | $ | 1,000 | 1,833,000 | $ | 1,883 | – | - | 157,513,029 | $ | 157,513 | ||||||||||||
| Additional Paid-in | Common Stock To Be | Stock Subscription | Accumulated | |||||||||||||||||
| Capital | Issued | Receivable | Deficit | Total | ||||||||||||||||
| Balance, June 30, 2021 | $ | 2,793,609 | $ | 41,633 | $ | (20,000 | ) | $ | (3,172,791 | ) | $ | (230,346 | ) | |||||||
| Stock issued for services | 19,996 | — | — | — | 20,000 | |||||||||||||||
| Stock sold for cash | 574,210 | (35,000 | ) | (550,000 | ) | — | — | |||||||||||||
| Net loss | — | — | — | (88,444 | ) | (88,444 | ) | |||||||||||||
| Balance, September 30, 2021 | 3,387,815 | 6,633 | (570,000 | ) | (3,261,235 | ) | (298,790 | ) | ||||||||||||
| Stock sold for cash | 29,700 | 19,000 | (10,000 | ) | — | 39,000 | ||||||||||||||
| Cash not collectible | (520,000 | ) | — | 520,000 | — | — | ||||||||||||||
| Stock issued for services | 3,951,738 | 2,000,000 | — | — | 5,954,300 | |||||||||||||||
| Net loss | — | — | — | (1,316,402 | ) | (1,316,402 | ) | |||||||||||||
| Balance, December 31, 2021 | 6,849,253 | 2,025,633 | (60,000 | ) | (4,577,637 | ) | 4,378,108 | |||||||||||||
| Stock sold for cash | 1,150,435 | (22,633 | ) | (100,000 | ) | — | 1,038,367 | |||||||||||||
| Stock issued for services | 6,414,600 | (2,003,000 | ) | — | — | 4,419,700 | ||||||||||||||
| Stock issued for debt | 394,628 | — | — | — | 395,300 | |||||||||||||||
| Stock issued for investment | 299,800 | — | — | — | 300,000 | |||||||||||||||
| Net loss | — | — | — | (8,016,068 | ) | (8,016,068 | ) | |||||||||||||
| Balance, March 31, 2022 | $ | 15,108,716 | $ | — | $ | (160,000 | ) | $ | (12,593,705 | ) | $ | 2,515,407 | ||||||||
The accompanying notes are an integral part of these unaudited financial statements.
| F-4 |
STAR ALLIANCE INTERNATIONAL CORP.
STATEMENTS OF CASH FLOWS
(Unaudited)
| For the Nine Months Ended March 31, | ||||||||
| 2023 | 2022 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net loss | $ | (9,943,420 | ) | $ | (9,420,914 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Prepaid stock issued for services | 1,813,853 | – | ||||||
| Common stock issued for services - related party | 5,915,000 | – | ||||||
| Common stock issued for services | 85,905 | 7,495,770 | ||||||
| Change in fair value of derivative | 314,120 | 470,635 | ||||||
| Debt discount amortization | 208,050 | 5,698 | ||||||
| Loss on conversion of debt | 97,249 | 343,120 | ||||||
| Loss on conversion of preferred stock | 911,109 | – | ||||||
| Changes in assets and liabilities: | ||||||||
| Prepaids and other assets | 39,850 | (364,061 | ) | |||||
| Accounts payable | 8,277 | (6,795 | ) | |||||
| Accrued expenses | 49,985 | 13,640 | ||||||
| Accrued expenses – related party | 8,043 | – | ||||||
| Accrued compensation | 86,209 | 38,036 | ||||||
| Net cash used in operating activities | (405,769 | ) | (1,424,871 | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | – | – | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Proceeds of borrowings from a related party | 42,000 | 6,344 | ||||||
| Proceeds from the sale of common stock | – | 1,084,000 | ||||||
| Proceeds from convertible notes payable | 77,355 | 400,000 | ||||||
| Repayment of convertible note payable | (15,000 | ) | – | |||||
| Proceeds from the sale of preferred stock | 261,200 | – | ||||||
| Proceeds from notes payable | – | 118,971 | ||||||
| Payment on notes payable | (27,903 | ) | (20,000 | ) | ||||
| Net cash provided by financing activities | 337,652 | 1,589,315 | ||||||
| Net change in cash | (68,117 | ) | 164,444 | |||||
| Cash at the beginning of period | 71,724 | 6,789 | ||||||
| Cash at the end of period | $ | 3,607 | $ | 171,233 | ||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||
| Interest paid | $ | – | $ | – | ||||
| Income taxes paid | $ | – | $ | – | ||||
| NON-CASH TRANSACTIONS: | ||||||||
| Common stock issued for prepaid services | $ | 1,813,854 | $ | 4,755,104 | ||||
| Common stock issued for investment | $ | – | $ | 300,000 | ||||
| Common stock issued for conversion of debt | $ | – | $ | 395,300 | ||||
The accompanying notes are an integral part of these unaudited financial statements.
| F-5 |
STAR ALLIANCE INTERNATIONAL CORP.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
MARCH 31, 2023
NOTE 1 – NATURE OF BUSINESS
Star Alliance International Corp. (“the Company”, “we”, “us”) was originally incorporated with the reporting requirements
of the Securities Exchange Act. We have filed with the SEC a registration
statement on Form S-1 to register the securities offered by this Prospectus. For
future information about us and the securities offered under this Prospectus,
you may refer to the registration statement and to the exhibits filed as a part
of the registration statement. In addition, after the effective date of this
Prospectus, we will be required to file annual, quarterly and current reports,
or other information with the SEC as provided by the Securities Exchange Act.
You may read and copy any reports, statements or other information we file at
the SEC's public reference facility maintained by the SEC at 100 F Street, N.E.,
Washington, D.C. 20549. Our SEC filings are available to the public through the
SEC Internet site at www.sec.gov.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
The Nevada General Corporation Law requires to indemnify Officers and Directors
for any expenses incurred by any Officer or Director in connection with any
actions or proceedings, whether civil, criminal, administrative, or
investigative, brought against such Officer or Director because of his or her
status as an Officer or Director, to the extent that the Director or Officer has
been successful on the merits or otherwise in defense of the action or
proceeding. The Nevada General Corporation Law permits a corporation to
indemnify an Officer or Director, evenname Asteriko Corp. in the absenceState of an agreement to do so,
for expenses incurred in connection with any action or proceeding if such
Officer or Director acted in good faith and in a manner in which he or she
reasonably believed to be in or not opposed to the best interests of the
corporation and such indemnification is authorized by the stockholders, by a
quorum of disinterested Directors, by independent legal counsel in a written
opinion authorized by a majority vote of a quorum of Directors consisting of
disinterested Directors, or by independent legal counsel in a written opinion if
a quorum of disinterested Directors cannot be obtained.
The Nevada General Corporation Law prohibits indemnification of a Director or
Officer if a final adjudication establishes that the Officer's or Director's
acts or omissions involved intentional misconduct, fraud, or a knowing violation
of the law and were material to the cause of action. Despite the foregoing
limitations on indemnification, the Nevada General Corporation Law may permit an
Officer or Director to apply to the court for approval of indemnification even
if the Officer or Director is adjudged to have committed intentional misconduct,
fraud, or a knowing violation of the law.
The Nevada General Corporation Law also provides that indemnification of
Directors is not permitted for the unlawful payment of distributions, except for
those Directors registering their dissent to the payment of the distribution.
According to Article 11 of our Bylaws, we are authorized to indemnify our
Directors to the fullest extent authorized under Nevada law subject to certain
specified limitations.
33
Insofar as indemnification for liabilities arising under the Securities Act may
be provided to Directors, Officers or persons controlling us pursuant to the
foregoing provisions, we have been informed that, in the opinion of the SEC,
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable.
WHERE YOU CAN GET MORE INFORMATION
We have filed with the SEC a Registration Statement on Form S-1 (including
exhibits) under the Securities Act with respect to the shares to be sold in this
Offering. This Prospectus, which forms part of the Registration Statement, does
not contain all the information set forth in the Registration Statement as some
portions have been omitted in accordance with the rules and regulations of the
SEC. For further information with respect to our Company and the Shares offered
in this Prospectus, reference is made to the Registration Statement, including
the exhibits filed thereto, and the financial statements and notes filed as a
part thereof. With respect to each such document filed with the SEC as an
exhibit to the Registration Statement, reference is made to the exhibit for a
more complete description of the matter involved. We are not currently subject
to the informational requirements of the Securities Exchange Act of 1934 (the
"Exchange Act"). As a result of the offering of the Shares of our common stock,
we will become subject to the informational requirements of the Exchange Act,
and, in accordance therewith, we will file quarterly and annual reports and
other information with the SEC and send a copy of our annual report together
with audited consolidated financial statements to each of our shareholders. The
Registration Statement, such reports and other information may be inspected and
copied at the Public Reference Room of the SEC located at 100 F Street, N. E.,
Washington, D. C. 20549. Copies of such materials, including copies of all or
any portion of the Registration Statement, may be obtained from the Public
Reference Room of the SEC at prescribed rates. You may call the SEC at
1-800-SEC-0330 to obtain information on the operation of the Public Reference
Room. Such materials may also be accessed electronically by means of the SEC's
home page on the internet (http://www.sec.gov).
34
Asteriko Corp
June 30 2014
Index to the Financial Statements
Contents Page(s)
-------- -------
Report of Independent Registered Public Accounting Firm ................ F-2
Balance Sheet as of June 30, 2014....................................... F-3
Statement of Operations for the period from April 17, 2014
(Inception) through June 30, 2014....................................... F-4
Statement of Stockholder's Equity for the period from April 17, 2014
(Inception) through June 30, 2014....................................... F-5
Statement of Cash Flows for the period from April 17, 2014
(Inception) through June 30, 2014....................................... F-6
Notes to the Financial Statements ...................................... F-7
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
Asteriko Corp.
We have audited the accompanying balance sheet of Asteriko Corp. (the "Company")
as of June 30, 2014 and the related statements of operations, stockholders'
equity and cash flows for the period from April 17, 2014 (inception) through
June 30, 2014. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Company as of June 30, 2014
and the results of its operations and its cash flows for the period from April
17, 2014 (inception) through June 30, 2014 in conformity with accounting
principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 3 to the
financial statements, the Company had a deficit at June 30, 2014, a net loss and
net cash used in operating activities for the period from April 17, 2014
(inception) through June 30, 2014. These factors raise substantial doubt about
the Company's ability to continue as a going concern. Management's plans in
regards to these matters are also described in Note 3. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.
/s/ Li and Company, PC
-------------------------------------
Li and Company, PC
Skillman, New Jersey
July 25, 2014
F-2
Asteriko Corp.
Balance Sheet
June 30, 2014
-------------
ASSETS
CURRENT ASSETS
Cash $ 10,000
Accounts receivable 713
--------
Total current assets 10,713
--------
TOOLS AND EQUIPMENT
Tools and equipment 688
Accumulated depreciation (11)
--------
Tools and equipment, net 677
--------
Total assets $ 11,390
========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 2,500
Advances from stockholder 6,484
--------
Total current liabilities 8,984
--------
STOCKHOLDERS' EQUITY
Common stock par value $0.001: 75,000,000 shares authorized;
5,000,000 shares issued and outstanding 5,000
Accumulated deficit (2,594)
--------
Total stockholders' equity 2,406
--------
Total liabilities and stockholders' equity $ 11,390
========
See accompanying notes to the financial statements.
F-3
Asteriko Corp.
Statement of Operations
For the Period from
April 17, 2014
(inception)
through
June 30, 2014
-------------
Revenue $ 3,239
Operating Expenses
Professional fees 3,078
General and administrative expenses 2,755
----------
Total operating expenses 5,833
----------
Loss before Income Tax Provision (2,594)
Income Tax Provision --
----------
Net Loss $ (2,594)
==========
Net loss per common share
- Basic and Diluted $ (0.00)
==========
Weighted average common shares outstanding
- Basic and Diluted 5,000,000
==========
See accompanying notes to the financial statements.
F-4
Asteriko Corp.
Statement of Stockholders' Equity
For the period from April 17, 2014 (inception) through June 30, 2014
Common stock
par value $0.001
----------------------- Total
Number of Accumulated Stockholders'
Shares Amount Deficit Equity
------ ------ ------- ------
April 17, 2014 (inception) -- $ -- $ -- $ --
Issuance of common shares for cash
at $0.001 per share upon formation 5,000,000 5,000 5,000
Net loss (2,594) (2,594)
--------- -------- -------- --------
Balance, June 30, 2014 5,000,000 $ 5,000 $ (2,594) $ 2,406
========= ======== ======== ========
See accompanying notes to the financial statements.
F-5
Asteriko Corp.
Statement of Cash Flows
For the Period from
April 17, 2014
(inception)
through
June 30, 2014
-------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (2,594)
Adjustments to reconcile net loss to net
cash used in operating activities:
Amortization expense 11
Changes in operating assets and liabilities:
Accounts receivable (713)
Accounts payable 2,500
Accrued expenses --
--------
NET CASH USED IN OPERATING ACTIVITIES (796)
--------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment (688)
--------
NET CASH USED IN INVESTING ACTIVITIES (688)
--------
CASH FLOWS FROM FINANCING ACTIVITIES
Advances from stockholder 6,484
Proceeds from sale of common shares 5,000
--------
NET CASH PROVIDED BY FINANCING ACTIVITIES 11,484
--------
NET CHANGE IN CASH 10,000
CASH - BEGINNING OF REPORTING PERIOD --
--------
CASH - END OF REPORTING PERIOD $ 10,000
========
Supplemental disclosure of cash flow information:
Interest paid $ --
========
Income tax paid $ --
========
See accompanying notes to the financial statements.
F-6
Asteriko Corp
June 30, 2014
Notes to the Financial Statements
NOTE 1 - ORGANIZATION AND OPERATIONS
ASTERIKO CORP.
Asteriko Corp. (the "Company") was incorporated on April 17, 2014 under the laws of the Statestate of Nevada. The Company provides customers with uniqueNevada, for the purpose of acquiring and innovative solutions for their decorative needs. The company's initial product
is lattice panels designed for suspended ceiling.
developing gold mining as well as certain other mining properties worldwide.
NOTE 2 - SUMMARY OF – SIGNIFICANT AND CRITICAL ACCOUNTING POLICIES AND PRACTICES
Basis of Presentation
The Managementaccompanying unaudited interim financial statements of the Company is responsible for the selection and use of
appropriate accounting policies and the appropriateness of accounting policies
and their application. Critical accounting policies and practices are those that
are both most important to the portrayal of the Company's financial condition
and results and require management's most difficult, subjective, or complex
judgments, often as a result of the need to make estimates about the effects of
matters that are inherently uncertain. The Company's significant and critical
accounting policies and practices are disclosed below as required by generally
accepted accounting principles.
BASIS OF PRESENTATION
The Company's financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S.
GAAP").
DEVELOPMENT STAGE COMPANY
The Company is a development stage company as defined by section 915-10-20and the rules of the FASB Accounting Standards Codification. The Company is devoting
substantiallySecurities and Exchange Commission ("SEC"), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company's latest Annual Report on Form 10-K filed with the SEC. In the opinion of management, all adjustments, consisting of its efforts on establishingnormal recurring adjustments, necessary for a fair presentation of the business and its planned
principalresults of operations have not commenced. All losses accumulated since inceptionfor the interim periods presented have been consideredreflected herein. The results of operations for interim periods are not necessarily indicative of operations for the full year. Notes to the financial statements which would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal year, as part ofreported in the Company's development stage activities.
The Company has elected to adopt early application of Accounting Standards
Update No. 2014-10, Development Stage Entities (Topic 915): Elimination of
Certain Financial Reporting Requirements. Upon adoption,Form 10-K for the Company no longer
presents or discloses inception-to-date information and other remaining
disclosure requirements of Topic 915.
FISCAL YEAR-END
The Company electedfiscal year ended June 30, as its fiscal year ending date.
USE OF ESTIMATES AND ASSUMPTIONS AND CRITICAL ACCOUNTING ESTIMATES AND
ASSUMPTIONS
2022, have been omitted.
Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of Americaaccounting principles 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(s)date of the financial statements and the reported amounts of revenues and expenses during the reporting period(s).
Critical accounting estimates are estimates for which (a) the nature of the
estimate is material due to the levels of subjectivity and judgment necessary to
account for highly uncertain matters or the susceptibility of such matters to
change and (b) the impact of the estimate on financial condition or operating
performance is material. The Company's critical accounting estimates and
assumptions affecting the financial statements were as follows:
(i) ASSUMPTION AS A GOING CONCERN: Management assumes that the Company
will continue as a going concern, which contemplates continuity of
operations, realization of assets, and liquidation of liabilities in
the normal course of business;
F-7
(ii) VALUATION ALLOWANCE FOR DEFERRED TAX ASSETS: Management assumes that
the realization of the Company's net deferred tax assets resulting
from its net operating loss ("NOL") carry-forwards for Federal income
tax purposes that may be offset against future taxable income was not
considered more likely than not and accordingly, the potential tax
benefits of the net loss carry-forwards are offset by a full valuation
allowance. Management made this assumption based on (a) the Company
has incurred recurring losses, (b) general economic conditions, and
(c) its ability to raise additional funds to support its daily
operations by way of a public or private offering, among other
factors.
These significant accounting estimates or assumptions bear the risk of change
due to the fact that there are uncertainties attached to these estimates or
assumptions, and certain estimates or assumptions are difficult to measure or
value.
Management bases its estimates on historical experience and on various
assumptions that are believed to be reasonable in relation to the financial
statements taken as a whole under the circumstances, the results of which form
the basis for making judgments about the carrying values of assets and
liabilities that are not readily apparent from other sources.
Management regularly evaluates the key factors and assumptions used to develop
the estimates utilizing currently available information, changes in facts and
circumstances, historical experience and reasonable assumptions. After such
evaluations, if deemed appropriate, those estimates are adjusted accordingly.period. Actual results could differ from those estimates.
FAIR VALUE OF FINANCIAL INSTRUMENTS
Fair Value of Financial Instruments
The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification ("(“Paragraph 820-10-35-37"820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted accounting principles ("GAAP"),in the United States of America (U.S. GAAP) and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 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 Paragraph 820-10-35-37 are described below:
Level 1
| Level 1: | Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. |
| Level 2: | Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. |
| Level 3: | Pricing inputs that are generally unobservable inputs and not corroborated by market data. |
The carrying amount of the reporting date.
Level 2 Pricing inputs other than quoted prices in active markets included in
Level 1, which are either directly or indirectly observable as of the
reporting date.
Level 3 Pricing inputs that are generally observable inputs and not
corroborated by market data.
Financial assets are considered Level 3 when their fair values are determined
using pricing models, discounted cash flow methodologies or similar techniques
and at least one significant model assumption or input is unobservable.
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. If the inputs used to measure the
financial assets and liabilities fall within more than one level described
above, the categorization is based on the lowest level input that is significant
to the fair value measurement of the instrument.
The carrying amounts of the Company'sCompany’s financial assets and liabilities, such as cash, prepaid expenses and accounts payableaccrued expenses approximate their fair valuesvalue because of the short maturity of thesethose instruments. Transactions involving related parties cannot be presumed to be carried out on
an arm's-length basis, as the requisite conditions of competitive, free-market
dealings may not exist. Representations about transactions with related parties,
if made, shall not imply that the related party transactions were consummated on
terms equivalent to those that prevail in arm's-length transactions unless such
representations can be substantiated.
F-8
CARRYING VALUE, RECOVERABILITY AND IMPAIRMENT OF LONG-LIVED ASSETS
The Company has adopted paragraph 360-10-35-17 of the FASB Accounting Standards
Codification for its long-lived assets. The Company's long-lived assets, which
include property and equipment are reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset may not
be recoverable.
The Company assesses the recoverability of its long-lived assets by comparing
the projected undiscounted net cash flows associated with the related long-lived
asset or group of long-lived assets over their remaining estimated useful lives
against their respective carrying amounts. Impairment, if any, is based on the
excess of the carrying amount overCompany’s notes payable approximates the fair value of those assets. Fairsuch instruments as the notes bear interest rates that are consistent with current market rates.
| F-6 |
The following table classifies the Company’s liabilities measured at fair value is
generally determined using the asset's expected future discounted cash flows or
market value, if readily determinable. If long-lived assets are determined to be
recoverable, but the newly determined remaining estimated useful lives are
shorter than originally estimated, the net book values of the long-lived assets
are depreciated over the newly determined remaining estimated useful lives.
The Company considers the following to be some examples of important indicators
that may trigger an impairment review: (i) significant under-performance or
losses of assets relative to expected historical or projected future operating
results; (ii) significant changes in the manner or use of assets or in the
Company's overall strategy with respect to the manner or use of the acquired
assets or changes in the Company's overall business strategy; (iii) significant
negative industry or economic trends; (iv) increased competitive pressures; and
(v) regulatory changes. The Company evaluates acquired assets for potential
impairment indicators at least annually and more frequently upon the occurrence
of such events.
The impairment charges, if any, is included in operating expenses in the
accompanying statements of operations.
CASH EQUIVALENTS
The Company considers all highly liquid investments with maturities of three
months or less at the time of purchase to be cash equivalents.
PROPERTY AND EQUIPMENT
Property and equipment is recorded at cost. Expenditures for major additions and
betterments are capitalized. Maintenance and repairs are charged to operations
as incurred. Depreciation of property and equipment is computed by the
straight-line method (after takingon a recurring basis into account their respective estimated
residual values) over the assets estimated useful life of five (5) to seven (7)
years. Upon sale or retirement of property and equipment, the related cost and
accumulated depreciation are removed from the accounts and any gain or loss is
reflected in the statements of operations.
RELATED PARTIES
The Company follows subtopic 850-10 of the FASB Accounting Standards
Codification for the identification of related parties and disclosure of related
party transactions.
Pursuant to Section 850-10-20 the related parties include (a) affiliates of the
Company; (b) entities for which investments in their equity securities would be
required, absent the election of the fair value option under the Fair Value
Option Subsection of Section 825-10-15, to be accounted for by the equity method
by the investing entity; (c) trusts for the benefit of employees, such as
pension and profit-sharing trusts that are managed by or under the trusteeship
of management; (d) principal owners of the Company; (e) management of the
Company; (f) other parties with which the Company may deal if one party controls
or can significantly influence the management or operating policies of the other
to an extent that one of the transacting parties might be prevented from fully
pursuing its own separate interests; and (g) other parties that can
significantly influence the management or operating policies of the transacting
parties or that have an ownership interest in one of the transacting parties and
can significantly influence the other to an extent that one or more of the
transacting parties might be prevented from fully pursuing its own separate
interests.
The financial statements shall include disclosures of material related party
transactions, other than compensation arrangements, expense allowances, and
other similar items in the ordinary course of business. However, disclosure of
transactions that are eliminated in the preparation of consolidated or combined
financial statements is not required in those statements. The disclosures shall
include: (a) the nature of the relationship(s) involved; (b) a description of
the transactions, including transactions to which no amounts or nominal amounts
were ascribed, for each of the periods for which income statements are
presented, and such other information deemed necessary to an understanding of
the effects of the transactions on the financial statements; (c) the dollar
amounts of transactions for each of the periods for which income statements are
F-9
presented and the effects of any change in the method of establishing the terms
from that used in the preceding period; and (d) amounts due from or to related
partieshierarchy as of the date of each balance sheet presented and, if not otherwise
apparent, the terms and manner of settlement.
COMMITMENT AND CONTINGENCIES
The Company follows subtopic 450-20 of the FASB Accounting Standards
Codification to report accounting for contingencies. Certain conditions may
exist as of the date the financial statements are issued, which may result in a
loss to the Company but which will only be resolved when one or more future
events occur or fail to occur. The Company assesses such contingent liabilities,
and such assessment inherently involves an exercise of judgment. In assessing
loss contingencies related to legal proceedings that are pending against the
Company or unasserted claims that may result in such proceedings, the Company
evaluates the perceived merits of any legal proceedings or unasserted claims as
well as the perceived merits of the amount of relief sought or expected to be
sought therein.
If the assessment of a contingency indicates that it is probable that a material
loss has been incurred and the amount of the liability can be estimated, then
the estimated liability would be accrued in the Company's financial statements.
If the assessment indicates that a potential material loss contingency is not
probable but is reasonably possible, or is probable but cannot be estimated,
then the nature of the contingent liability, and an estimate of the range of
possible losses, if determinable and material, would be disclosed.
Loss contingencies considered remote are generally not disclosed unless they
involve guarantees, in which case the guarantees would be disclosed. Management
does not believe, based upon information available at this time, that these
matters will have a material adverse effect on the Company's financial position,
results of operations or cash flows. However, there is no assurance that such
matters will not materially and adversely affect the Company's business,
financial position, and results of operations or cash flows.
REVENUE RECOGNITION
The Company follows paragraph 605-10-S99-1 of the FASB Accounting Standards
Codification for revenue recognition. The Company recognizes revenue when it is
realized or realizable and earned. The Company considers revenue realized or
realizable and earned when all of the following criteria are met: (i) persuasive
evidence of an arrangement exists, (ii) the product has been shipped or the
services have been rendered to the customer, (iii) the sales price is fixed or
determinable and (iv) collectability is reasonably assured.
INCOME TAX PROVISION
The Company accounts for income taxes under Section 740-10-30 of the FASB
Accounting Standards Codification. Deferred income tax assets and liabilities
are determined based upon differences between the financial reporting and tax
bases of assets and liabilities and are measured using the enacted tax rates and
laws that will be in effect when the differences are expected to reverse.
Deferred tax assets are reduced by a valuation allowance to the extent
management concludes it is more likely than not that the assets will not be
realized. Deferred tax assets and liabilities are measured using enacted tax
rates expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in the statements
of operations in the period that includes the enactment date.
The Company adopted section 740-10-25 of the FASB Accounting Standards
Codification ("Section 740-10-25"). Section 740-10-25 addresses the
determination of whether tax benefits claimed or expected to be claimed on a tax
return should be recorded in the financial statements. Under Section 740-10-25,
the Company may recognize the tax benefit from an uncertain tax position only if
it is more likely than not that the tax position will be sustained on
examination by the taxing authorities, based on the technical merits of the
position. The tax benefits recognized in the financial statements from such a
position should be measured based on the largest benefit that has a greater than
fifty percent (50%) likelihood of being realized upon ultimate settlement.
Section 740-10-25 also provides guidance on de-recognition, classification,
interest and penalties on income taxes, accounting in interim periods and
requires increased disclosures.
The estimated future tax effects of temporary differences between the tax basis
of assets and liabilities are reported in the accompanying balance sheets, as
well as tax credit carry-backs and carry-forwards. The Company periodically
reviews the recoverability of deferred tax assets recorded on its balance sheets
and provides valuation allowances as management deems necessary.
Management makes judgments as to the interpretation of the tax laws that might
be challenged upon an audit and cause changes to previous estimates of tax
liability. In addition, the Company operates within multiple taxing
jurisdictions and is subject to audit in these jurisdictions. In management's
opinion, adequate provisions for income taxes have been made for all years. If
actual taxable income by tax jurisdiction varies from estimates, additional
allowances or reversals of reserves may be necessary.
F-10
UNCERTAIN TAX POSITIONS
The Company did not take any uncertain tax positions and had no adjustments to
its income tax liabilities or benefits pursuant to the provisions of Section
740-10-25 for the period from March 12, 2014 (inception) through May 31, 2014.
NET INCOME (LOSS) PER COMMON SHARE
Net income (loss) per common share is computed pursuant to section 260-10-45 of
the FASB Accounting Standards Codification. Basic net income (loss) per common
share is computed by dividing net income (loss) by the weighted average number
of shares of common stock outstanding during the period. Diluted net income
(loss) per common share is computed by dividing net income (loss) by the
weighted average number of shares of common stock and potentially dilutive
outstanding shares of common stock during the period to reflect the potential
dilution that could occur from common shares issuable through contingent share
arrangements, stock options and warrants.
There were no potentially dilutive common shares outstanding for the period from
March 12, 2014 (inception) through May 31, 2014.
CASH FLOWS REPORTING
The Company adopted paragraph 230-10-45-24 of the FASB Accounting Standards
Codification for cash flows reporting, classifies cash receipts and payments
according to whether they stem from operating, investing, or financing
activities and provides definitions of each category, and uses the indirect or
reconciliation method ("Indirect method") as defined by paragraph 230-10-45-25
of the FASB Accounting Standards Codification to report net cash flow from
operating activities by adjusting net income to reconcile it to net cash flow
from operating activities by removing the effects of (a) all deferrals of past
operating cash receipts and payments and all accruals of expected future
operating cash receipts and payments and (b) all items that are included in net
income that do not affect operating cash receipts and payments. The Company
reports the reporting currency equivalent of foreign currency cash flows, using
the current exchange rate at the time of the cash flows and the effect of
exchange rate changes on cash held in foreign currencies is reported as a
separate item in the reconciliation of beginning and ending balances of cash and
cash equivalents and separately provides information about investing and
financing activities not resulting in cash receipts or payments in the period
pursuant to paragraph 830-230-45-1 of the FASB Accounting Standards
Codification.
SUBSEQUENT EVENTS
The Company follows the guidance in Section 855-10-50 of the FASB Accounting
Standards Codification for the disclosure of subsequent events. The Company will
evaluate subsequent events through the date when the financial statements were
issued. Pursuant to ASU 2010-09 of the FASB Accounting Standards Codification,
the Company as an SEC filer considers its financial statements issued when they
are widely distributed to users, such as through filing them on EDGAR.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In April 2014, the FASB issued ASU No. 2014-08, Presentation of Financial
Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting
Discontinued Operations and Disclosures of Disposals of Components of an Entity.
The amendments in this Update change the requirements for reporting discontinued
operations in Subtopic 205-20.
Under the new guidance, a discontinued operation is defined as a disposal of a
component or group of components that is disposed of or is classified as held
for sale and "represents a strategic shift that has (or will have) a major
effect on an entity's operations and financial results." The ASU states that a
strategic shift could include a disposal of (i) a major geographical area of
operations, (ii) a major line of business, (iii) a major equity method
investment, or (iv) other major parts of an entity. Although "major" is not
defined, the standard provides examples of when a disposal qualifies as a
discontinued operation.
The ASU also requires additional disclosures about discontinued operations that
will provide more information about the assets, liabilities, income and expenses
of discontinued operations. In addition, the ASU requires disclosure of the
pre-tax profit or loss attributable to a disposal of an individually significant
component of an entity that does not qualify for discontinued operations
presentation in the financial statements.
The ASU is effective for public business entities for annual periods beginning
on or after December 15, 2014, and interim periods within those years.
F-11
In May 2014, the FASB issued the FASB Accounting Standards Update No. 2014-09
"REVENUE FROM CONTRACTS WITH CUSTOMERS (TOPIC 606)" ("ASU 2014-09")
This guidance amends the existing FASB Accounting Standards Codification,
creating a new Topic 606, REVENUE FROM CONTRACTS WITH CUSTOMER. The core
principle of the guidance is that an entity should recognize revenue to depict
the transfer of promised goods or services to customers in an amount that
reflects the consideration to which the entity expects to be entitled in
exchange for those goods or services.
To achieve that core principle, an entity should apply the following steps:
1. Identify the contract(s) with the customer
2. Identify the performance obligations in the contract
3. Determine the transaction price
4. Allocate the transaction price to the performance obligations in the
contract
5. Recognize revenue when (or as) the entity satisfies a performance
obligations
The ASU also provides guidance on disclosures that should be provided to enable
financial statement users to understand the nature, amount, timing, and
uncertainty of revenue recognition and cash flows arising from contracts with
customers. Qualitative and quantitative information is required about the
following:
1. Contracts with customers - including revenue and impairments
recognized, disaggregation of revenue, and information about contract
balances and performance obligations (including the transaction price
allocated to the remaining performance obligations)
2. Significant judgments and changes in judgments - determining the
timing of satisfaction of performance obligations (over time or at a
point in time), and determining the transaction price and amounts
allocated to performance obligations
3. Assets recognized from the costs to obtain or fulfill a contract.
ASU 2014-09 is effective for periods beginning after December 15, 2016,
including interim reporting periods within that reporting period for all public
entities. Early application is not permitted.
In June 2014, the FASB issued ASU No. 2014-10, Development Stage Entities (Topic
915): Elimination of Certain Financial Reporting Requirements, Including an
Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation.
The amendments in this Update remove the definition of a development stage
entity from the Master Glossary of the Accounting Standards Codification,
thereby removing the financial reporting distinction between development stage
entities and other reporting entities from U.S. GAAP. In addition, the
amendments eliminate the requirements for development stage entities to (1)
present inception-to-date information in the statements of income, cash flows,
and shareholder equity, (2) label the financial statements as those of a
development stage entity, (3) disclose a description of the development stage
activities in which the entity is engaged, and (4) disclose in the first year in
which the entity is no longer a development stage entity that in prior years it
had been in the development stage.
The amendments also clarify that the guidance in Topic 275, Risks and
Uncertainties, is applicable to entities that have not commenced planned
principal operations.
Finally, the amendments remove paragraph 810-10-15-16. Paragraph 810-10-15-16
states that a development stage entity does not meet the condition in paragraph
810-10-15-14(a) to be a variable interest entity if (1) the entity can
demonstrate that the equity invested in the legal entity is sufficient to permit
it to finance the activities that it is currently engaged in and (2) the
entity's governing documents and contractual arrangements allow additional
equity investments.
The amendments in this Update also eliminate an exception provided to
development stage entities in Topic 810, Consolidation, for determining whether
an entity is a variable interest entity on the basis of the amount of investment
equity that is at risk. The amendments to eliminate that exception simplify U.S.
GAAP by reducing avoidable complexity in existing accounting literature and
improve the relevance of information provided to financial statement users by
F-12
requiring the application of the same consolidation guidance by all reporting
entities. The elimination of the exception may change the consolidation
analysis, consolidation decision, and disclosure requirements for a reporting
entity that has an interest in an entity in the development stage.
The amendments related to the elimination of inception-to-date information and
the other remaining disclosure requirements of Topic 915 should be applied
retrospectively except for the clarification to Topic 275, which shall be
applied prospectively. For public business entities, those amendments are
effective for annual reporting periods beginning after December 15, 2014, and
interim periods therein.
Early application of each of the amendments is permitted for any annual
reporting period or interim period for which the entity's financial statements
have not yet been issued (public business entities) or made available for
issuance (other entities). Upon adoption, entities will no longer present or
disclose any information required by Topic 915.
In June 2014, the FASB issued the FASB Accounting Standards Update No. 2014-12
"COMPENSATION--STOCK COMPENSATION (TOPIC 718) : ACCOUNTING FOR SHARE-BASED
PAYMENTS WHEN THE TERMS OF AN AWARD PROVIDE THAT A PERFORMANCE TARGET COULD BE
ACHIEVED AFTER THE REQUISITE SERVICE PERIOD" ("ASU 2014-12").
The amendments clarify the proper method of accounting for share-based payments
when the terms of an award provide that a performance target could be achieved
after the requisite service period. The Update requires that a performance
target that affects vesting and that could be achieved after the requisite
service period be treated as a performance condition. The performance target
should not be reflected in estimating the grant-date fair value of the award.
Compensation cost should be recognized in the period in which it becomes
probable that the performance target will be achieved and should represent the
compensation cost attributable to the period(s) for which the requisite service
has already been rendered.
The amendments in this Update are effective for annual periods and interim
periods within those annual periods beginning after December 15, 2015. Earlier
adoption is permitted.
Management does not believe that any recently issued, but not yet effective
accounting pronouncements, if adopted, would have a material effect on the
accompanying financial statements.
2023:
| Schedule Of Fair Value, Liabilities Measured on Recurring Basis | ||||||||||||
| At March 31, 2023 | ||||||||||||
| Description | Level 1 | Level 2 | Level 3 | |||||||||
| Derivative | $ | – | $ | – | $ | 943,821 | ||||||
| Total | $ | – | $ | – | $ | 943,821 | ||||||
| At June 30, 2022 | ||||||||||||
| Description | Level 1 | Level 2 | Level 3 | |||||||||
| Derivative | $ | – | $ | – | $ | 689,231 | ||||||
| Total | $ | – | $ | – | $ | 689,231 | ||||||
NOTE 3 - – GOING CONCERN
The accompanying unaudited financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. As reflectedshown in the accompanying unaudited financial statements, the Company had ahas an accumulated deficit at June 30,
2014,of $25,001,820 as of March 31, 2023. For the nine months ended March 31, 2023, the Company had a net loss of $9,943,420, which did include $9,345,287 of non-cash expense incurred for the issuance of common stock for services, loss on conversion of preferred stock and netderivatives associated with convertible debt. We used $405,769 of cash used in operating activities for the reporting
period from April 17, 2014 (inception) through June 30, 2014. These factors
raiseactivities. Due to these conditions, it raises substantial doubt about the Company'sCompany’s ability to continue as a going concern.
The Company is attempting to commence operations and generate sufficient revenue,revenue; however, the Company'sCompany’s cash position may not be sufficient to support the Company'sits daily operations. Management intends to raise additional funds by
way of a private or public offering. While the Company believes in the viability of its strategy to commence operations and generate sufficient revenue and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company'sits ability to further implement its business plan and generate sufficient revenue and its ability to raise additional funds by way of a public
or private offering.funds. The financial statements do not include any adjustments relatedrelating to the recoverability and classification of recorded asset carrying amounts or the amountsamount and classification of liabilities that might be necessarymay result should the Company be unable to continue as a going concern.
NOTE 4 - – ACQUISITIONS
On January 1, 2022, the Company acquired 51% of the capital stock of Compania Minera Metalurgica Centro Americana (Commsa), a Honduran Corporation, pursuant to the share exchange agreement dated December 15, 2021 between the Company and Commsa’s sole shareholder, Juan Lemus (the “Share Exchange Agreement”), in consideration for $1,000,000 in cash and the issuance of 5,000,000 shares of the Company’s common stock to Mr. Lemus. In addition, the Company has agreed to provide up to $7,500,000 working capital to expand the mining operations in a gold mining project (Rio Jalan Project) in Olancho state in the highlands of Central Honduras. As the result of this acquisition, the Company now owns the mining rights to five operating mines that run along a 12.5-mile stretch of the Rio Jalan River that are being prepared for production. As of the date of this report, the Company is not in compliance with its obligations under the Share Exchange Agreement, since it issued to Mr. Lemus only shares of Common Stock of the Company and paid $75,000 toward $1,000,000 cash payment.
On May 9, 2022, a binding letter of intent was signed for the acquisition of 51% of NSM USA a Wyoming corporation that owns 100% of four lithium mines in West Africa. The cost of these mines is $2 million, most of which was to be used for the growth of the four mines. This transaction was due to close early 2023 and full production was expected to start in the second quarter of 2023. This transaction was cancelled on March 10, 2023, due to insufficient ability to complete the due diligence and the lack of necessary funding for the project
| F-7 |
On May 11, 2022, a binding letter of intent was signed for the acquisition of 51% of NGM USA a Wyoming corporation that owns 100% of three gold mines in West Africa. The cost of this acquisition is $2 million, most of which will be used for equipment and growth of the mines. This transaction was due to close early 2023. All exploration work has been completed and production was anticipated to start in the second quarter of 2023. This transaction was cancelled on March 10, 2023, due to insufficient ability to complete the due diligence and the lack of funding for the project.
On March 19, 2023, the Company entered into and executed a share purchase agreement (the “Share Purchase Agreement”) with Lion Works Advertising, SA, a Guatemalan corporation (“Lion Works”) and Juan Lemus, the sole shareholder of Lion Works, pursuant to which it acquired from Mr. Lemus % of the capital stock of Lion Works, including % of the intellectual property rights and know-how related to the Genesis extraction system (“Genesis”), The Share Purchase Agreement superseded the terms of the binding Letter of Intent that the parties entered into and executed by the parties on November 21, 2021. Pursuant to the terms of the Share Purchase Agreement, Genesis will be managed by a new company, in which the Company will own % interest, with the remaining % interest to be owned by Juan Lemus. The Company’s title and rights to Genesis are subject to the satisfaction of the following obligations:
| · | The Company shall pay the total purchase price of $ in cash, with the first minimum payment in the amount of $ to be paid by September 30, 2023, and the remaining outstanding balance of $ to be paid by September 30, 2024, within 12 months of the first payment. | |
| · | The Company will invest an additional as a working capital toward development of the Genesis plants, with $ to be paid by July 31, 2023 and the remaining $ to be paid by July 31, 2024, within 12 months of the first payment. | |
| · | The Company will engage a patent attorney and pay for the cost of that patent attorney to prepare the patent application related to Genesis and to register that patent, provided that Lion Works will engage an expert to prepare a report on the Genesis system, to be used in this patent application. for the acquisition of Genesis |
To secure the Company’s obligations under the Share Purchase Agreement, Juan Lemus placed the lien on the Company’s 51% ownership in Lion Works, and, upon formation of a new company, that lien will be placed on the Company’s ownership in that newly formed subsidiary. Such lien shall continue until the Company performs all its obligations under the Share Purchase Agreement, which subjects the Company to the risk of losing its title to Genesis in the event of breach of its obligations set forth in the Share Purchase Agreement.
NOTE 5 – PROPERTY AND EQUIPMENT
(i) IMPAIRMENT
The Company completed its annual impairment testing of
Long lived assets, including property and equipment assets to be held and determinedused by the Company are reviewed for impairment whenever events or changes in circumstances indicate that there was nothe carrying value of the assets may not be recoverable. Impairment losses are recognized if expected future cash flows of the related assets are less than their carrying values. Measurement of an impairment asloss is based on the fair value of the asset. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less cost to sell.
Property and equipment are first recorded at cost. Depreciation and is computed using the straight-line method over the estimated useful lives of the various classes of assets.
Maintenance and repair expenses, as incurred, are charged to expense. Betterments and renewals are capitalized in plant and equipment accounts. Cost and accumulated depreciation applicable to items replaced or retired are eliminated from the related accounts with any gain or loss on the disposition included as income.
| F-8 |
Assets stated at cost, less accumulated depreciation consisted of the following:
| Schedule of property, plant and equipment | ||||||||
| March 31 2023 | June 30, 2022 | |||||||
| Mine Assets | $ | 450,000 | $ | 450,000 | ||||
| Total | $ | 450,000 | $ | 450,000 | ||||
Once operations utilizing the property and equipment exceededhave begun, the Company will begin depreciation of the assets.
NOTE 6 – RELATED PARTY TRANSACTIONS
On January 1, 2021, the Company amended employment agreements for Richard Carey and Anthony Anish, which increased their carrying values atbase annual salary for Mr. Carey from $120,000 to $180,000 and for Mr. Anish from $60,000 to $120,000 per annum respectively.
On March 14, 2023, the Company renewed the employment agreements with Mr. Carey and Mr. Anish (the “New Employment Agreements”), stating that the effective date of the New Employment Agreement is August 1, 2022 and that they have a term of 36 months, the same as the terms of the initial employment agreements. The new employment agreements, except for the compensation provisions, contain the same provisions as the initial employment agreement for each executive.
Under the terms of the New Employment Agreement, Mr. Carey is entitled to receive the following compensation:
| · | For the period from August 1, 2022 to December 31, 2022, Mr. Carey received a base salary equal to $180,000; | |
| · | For the period from January 1, 2023 to July 31, 2024, Mr. Carey will receive a base salary equal to $240,000; and | |
| · | For the period from August 1, 2024 to July 31, 2025, Mr. Carey will receive a base salary equal to $270,000. In addition, Mr. Carey is entitled to receive equity compensation, as to be determined by the Board of Directors of the Company. |
Under the terms of the New Employment Agreement, Mr. Anish is entitled to receive s the following compensation:
| · | For the period from August 1, 2022 to December 31, 2022, Mr. Anish received a base salary equal to $120,000; | |
| · | For the period from January 1, 2023 to July 31, 2024, Mr. Anish will receive a base salary equal to $180,000; and | |
| · | For the period from August 1, 2024 to July 31, 2025, Mr. Anish will receive a base salary equal to $210,000. In addition, Mr. Anish is entitled to receive equity compensation, as to be determined by the Board of Directors of the Company. |
As of March 31, 2023, the Company has accrued compensation due to Mr. Carey of $86,263 and Mr. Anish of $152,375. As of June 30, 2014.
F-13
(ii) DEPRECIATION EXPENSE
The2022, the Company acquired property has accrued compensation due to Mr. Carey of $52,600 and equipmentMr. Anish of $99,828. In addition, the Company has accrued salary to Mr. Baird (a former officer) of $60,000. Mr. Baird resigned his position on May 25, 2014 and startedAugust 12, 2020.
Mr. Carey is using his personal office space at no cost to depreciate as of June 1, 2014. Depreciation expense was $11 for the reporting
period ended May 31, 2014.
NOTE 5 - STOCKHOLDERS' EQUITY
SHARES AUTHORIZED
Upon formationCompany.
| F-9 |
On August 15, 2022, the total number ofCompany issued shares of all classescommon stock Fernando Godina, Director, for services. The shares were valued at $ per share, the closing stock price on the date of stock whichgrant, for total non-cash expense of $1,445,000.
On August 15, 2022, the Company is authorized to issue is Seventy-Five Million (75,000,000)issued shares of Common Stock, par value $0.001common stock Bryan Cappelli, Director, for services. The shares were valued at $ per share.
COMMON STOCK
Upon formationshare, the closing stock price on the date of grant, for total non-cash expense of $1,445,000.
On August 15, 2022, the Company sold issued shares of common stock to Weverson Correia, CEO and Director, for his services as the officerCEO. The shares were valued at $ per share, the closing stock price on the date of grant, for total non-cash expense of $1,445,000.
On August 15, 2022, the Company issued shares of common stock to Anthony Anish, CFO and director, for services as CFO. The shares were valued at $ per share, the closing stock price on the date of grant, for total non-cash expense of $1,445,000.
On November 17, 2022, Mr. Carey agreed to give 4 million of his own shares of common stock in exchange for $42,000 which was loaned to the Company. The loan is non-interest bearing and due on demand.
On December 5, 2022, the Company issued shares of common stock Themis Caldwell, Director, for services. The shares were valued at $ per share, the closing stock price on the date of grant, for total non-cash expense of $165,000.
NOTE 7 – NOTES PAYABLE
As of March 31, 2023 and June 30, 2022, the Company owed Kok Chee Lee, the former CEO and Director of the Company, at $0.001 per share, or $5,000 in aggregate$42,651 and $42,651, respectively for cash.
All shares were issued in accordance with the exemption from the registration
provisions of the Securities Act of 1933, as amended, provided by Section 4(2)
of such Act for issuances not involving any public offering and Rule 506 of
Regulation D promulgated thereunder.
NOTE 6 - RELATED PARTY TRANSACTIONS
RELATED PARTIES
Related parties with whom the Company had transactions are:
Related Parties Relationship
--------------- ------------
Ilia Tomaski President and Director
FREE OFFICE SPACE
The Company has been provided office space by its President at no cost.
Management determined that such cost is nominal and did not recognize the rent
expense in its financial statement.
NOTE 7 - INCOME TAX PROVISION
DEFERRED TAX ASSETS
As of June 30, 2014, the Company had net operating loss ("NOL") carry-forwards
for Federal income tax purposes of $2,594 that may be available to reduce future
years' taxable income through 2034. No tax benefit has been recorded with
respect to these net operating loss carry-forwards in the accompanying
consolidated financial statements as the managementexpenses he paid on behalf of the Company believes thatduring the realization of the Company's net deferred tax assets of approximately $882
was not considered more likely than not and accordingly, the potential tax
benefits of the net loss carry-forwards are offset by the full valuation
allowance.
Deferred tax assets consist primarily of the tax effect of NOL carry-forwards.
The Company has provided a full valuation allowance on the deferred tax assets
because of the uncertainty regarding its realization. The valuation allowance
increased approximately $882 for the period from April 17, 2014 (inception)
through June 30, 2014.
F-14
Components of deferred tax assets are as follows:
June 30, 2014
-------------
Net deferred tax assets - Non-current:
Expected income tax benefit from NOL carry-forwards $ 882
Less valuation allowance (882)
--------
Deferred tax assets, net of valuation allowance $ --
========
INCOME TAX PROVISION IN THE STATEMENT OF OPERATIONS
A reconciliation of the federal statutory income tax rate and the effective
income tax rate as a percentage of income before income taxes is as follows:
For the
Reporting
Period Ended
June 30, 2014
Federal statutory income tax rate 34.0%
Increase (reduction) in income tax provision resulting from:
Net operating loss ("NOL") carry-forwards (34.0)
--------
Effective income tax rate 0.0%
========
TAX RETURNS REMAINING SUBJECT TO IRS AUDITS
The Company has not yet filed its corporation income tax return for the
reporting periodyear ended June 30, 2014, which will remain subject2018. The borrowing is unsecured, non-interest-bearing and due on demand.
On June 1, 2018, the Company executed a promissory note in the amount of $32,000 with the former Secretary of the Board for $30,128 of accrued expenses for services previously provided and an additional $1,872 for services rendered. The note is unsecured, bears interest at 5% per annum and matures on December 1, 2018. As of March 31, 2023 and June 30, 2022, there is $7,762 and $6,562, respectively, of accrued interest due on the note. The note is past due and in default.
| F-10 |
As of March 31, 2023 and June 30, 2022, the Company owes various other individuals and entities $77,400 and $119,215, respectively. All the loans are non-interest bearing and due on demand.
NOTE 8 - CONVERTIBLE NOTES
On March 28, 2022, we received short term financing from a private investor under a 10% Fixed Convertible Secured Promissory Note in the principal amount of $400,000 (the “Note”). The Note bears interest at a fixed rate of 10% per annum with all principal and interest due at maturity on July 31, 2022. The Note is secured by a security interest and lien on all equipment located at our Troy mine in Mariposa County, California. At the option of the investor, and at any time prior to examination
by the Internal Revenue Servicematurity date, the principal and interest owing under the statuteNote may be converted into shares of limitationsour common stock at a conversion price equal to 50% of the lowest closing market price for our common stock during the five trading days preceding the conversion.
On June 8, 2022, the Company executed a period10% convertible promissory note with Fast Capital LLC (“Fast Capital”). The note is convertible at a price per share equal to the 65% of three (3)the lowest trading price of the Company’s common stock during the 20 consecutive trading days up to the date on which lender elects to convert all or part of the Note.
On February 7, 2023, the Company executed a 12% convertible promissory note with Quick Capital LLC (“Quick Capital”). The note is convertible at the lessor of 1) $0.05, or a price per share equal to the 65% of the lowest trading price of the Company’s common stock during the 20 consecutive trading days prior to the date on which lender elects to convert all or part of the Note. In addition the Company issued Quick Capital warrants to purchase up to 1,211,111 shares of common stock. The Warrants are exercisable for shares of the Company’s common stock at a price of $0.05 per share and expire 5 five years from the date itof issuance.
On February 8, 2023, the Company executed a 10% convertible promissory note with AES Capital Management, LLC (“AES”). The note is filed.
convertible at the lessor of 1) $0.02, or a price per share equal to the 65% of the lowest trading price of the Company’s common stock during the 20 consecutive trading days prior to the date on which lender elects to convert all or part of the Note.
The following table summarizes the convertible notes outstanding as of March 31, 2023:
| Schedule of convertible notes | ||||||||||||||||||||||||
| Note Holder | Date | Maturity Date | Interest | Balance June 30, 2022 | Additions | Payments / Conversions | Balance March 31, 2023 | |||||||||||||||||
| Private investor | 3/28/2022 | 7/31/2022 | 14% | $ | 400,000 | $ | – | $ | (15,000 | ) | $ | 385,000 | ||||||||||||
| Fast Capital LLC | 6/8/2022 | 6/8/2023 | 10% | 115,000 | – | (115,000 | ) | – | ||||||||||||||||
| Quick Capital LLC | 2/7/2023 | 11/8/2023 | 12% | – | 60,556 | – | 60,556 | |||||||||||||||||
| AES Capital Management, LLC | 2/8/2023 | 2/7/2024 | 10% | – | 38,000 | – | 38,000 | |||||||||||||||||
| Total | $ | 515,000 | $ | 98,556 | $ | (130,000 | ) | $ | 483,556 | |||||||||||||||
| Less debt discount | $ | (191,248 | ) | $ | (81,753 | ) | ||||||||||||||||||
| Convertible notes payable, net | $ | 323,752 | $ | 401,803 | ||||||||||||||||||||
| F-11 |
A summary of the activity of the derivative liability for the notes above is as follows:
| Schedule of derivative liabilities | ||||
| Balance at June 30, 2021 | $ | – | ||
| Increase to derivative due to new issuances | 552,517 | |||
| Derivative loss due to mark to market adjustment | 136,714 | |||
| Balance at June 30, 2022 | 689,231 | |||
| Increase to derivative due to new issuances | 150,512 | |||
| Decrease to derivative due to conversion | (210,042 | ) | ||
| Derivative loss due to mark to market adjustment | 314,120 | |||
| Balance at March 31, 2023 | $ | 943,821 |
A summary of quantitative information about significant unobservable inputs (Level 3 inputs) used in measuring the Company’s derivative liability that are categorized within Level 3 of the fair value hierarchy as of March 31, 2023, is as follows:
| Schedule of fair value assumptions | ||||||||
| Inputs | March 31, 2023 | Initial Valuation | ||||||
| Stock price | $ | $ | ||||||
| Conversion price | $ | 0.0066 - 0.0086 | $ | 0.015 - 0.2995 | ||||
| Volatility (annual) | 184.54% - 299.51% | 299.13% - 381.28% | ||||||
| Risk-free rate | 4.74% – 4.93% | 0.59% - 4.93% | ||||||
| Dividend rate | – | – | ||||||
| Years to maturity | 0 - .86 | .34 - 1 | ||||||
NOTE 8 - SUBSEQUENT EVENTS9 – PREFERRED STOCK
Of the shares of the Company's authorized Preferred Stock, $ par value per share, are designated Series A preferred stock, shares are designated as Series B Preferred Stock and shares are designated Series C preferred stock.
Series A Preferred Stock
Each Share of Series A preferred stock has 500 votes per share and each share can be converted into 500 shares of common stock. The holders of the Series A preferred stock are not entitled to dividends.
On July 2, 2020, the Board granted all shares of the Series A preferred stock to the Company’s Chairman and CEO, Richard Carey, in conversion of $ of accrued compensation.
Series B Preferred Stock
Only one person or entity, is entitled to be designated as the owner of all of the Series B Preferred Stock (the “Holder”), in whose name the initial certificates representing the Series B Preferred Stock shall be issued. Any transfer of the Series B Preferred Stock to a different Holder must be approved in advance by the Corporation; provided, however, the Holder shall have the right to transfer the Series B Preferred Stock, or any portion thereof, to any affiliate of Holder or nominee of Holder, without the approval of the Corporation. Each share of Preferred Stock has one vote per share. Holder is not entitled to dividends or distributions and each share of Series B Preferred Stock shall be convertible at the rate of two Common Shares for each one B Preferred stock.
In conjunction with the APA with Troy, the company issued shares of Series B Preferred Stock, the shares were valued at $0.002 or $7,532 as if they had been converted into 3,666,000 shares of common stock.
| F-12 |
On October 9, 2019, the parties have agreed to extend the date for filing the registration statement relating to the preferred shares of the Company to be issued to the Troy shareholders and that would in turn extend the date that the shares would become free trading. This extension will be for 150 days for filing the registration statement and obtaining approval for the shares to become free trading. All the remaining terms included in the contract will remain the same.
Series C Preferred Stock
On March 30, 2022, the Company created and designated shares of Series C Preferred Stock (“Series C”) with a stated value of $. The Series C has an annual cumulative dividend of 8%, has no voting rights. The Series C is convertible into shares of common stock at 65% of the lowest trading price for the ten days prior to the conversion date.
During the nine months ended March 31, 2023, the Company sold shares of Series C to Geneva Roth Remark Holdings Inc for total proceeds of $268,200.
During the nine months ended March 31, 2023, Geneva Roth converted shares of Series C preferred stock into shares of common stock. The Company recognized a loss on conversion of $911,109.
NOTE 10 – COMMON STOCK
During the nine months ended March 31, 2023, the Company sold shares of common stock for total cash proceeds of $6,250. The funds have not been received as of March 31, 2023.
During the nine months ended March 31, 2023, Fast Capital converted $115,000 of its note payable along with $7,414 of accrued interest into shares of common stock.
During the nine months ended March 31, 2023, the Company issued shares of common stock for services. The shares were valued at the closing price on the date of grant, for total non-cash expense of $69,905.
On March 15, 2023, pursuant to the terms Common Stock Purchase Agreement and a Registration Rights Agreement with Keystone Capital Partners, LLC (“Keystone”) the Company issued commitment shares to Keystone. The shares were valued at $, the price on the date of grant, for total non-cash expense of $16,000.
Refer to Note 5 for shares issued to related parties.
NOTE 11 – SUBSEQUENT EVENTS
Management has evaluated allsubsequent events that occur afterpursuant to the requirements of ASC Topic 855, from the balance sheet date through October 22, 2014 the date when the unaudited financial statements were issued and has determined that no material subsequent events exist other than the following.
The Company is discussing the terms of the purchase of certain assets with The Mepe Trust and the LBZNESS Trust related to determine if they must be reported.“Barotex” proprietary technology. At the time of this report, the Company has not yet entered into definitive agreements. The Managementdefinitive agreements will supersede the terms of the Letter of Intent dated May 23, 2022, between the Company and the Mepe Trust.
| F-13 |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders
Star Alliance International Corp.
Opinion on the Financial Statements
We have audited the accompanying balance sheets of Star Alliance International Corp. (the Company) as of June 30, 2022 and the related statement of operations, stockholders’ deficit and cash flows for the period then ended and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company determined
that there were no reportable subsequent eventsas of June 30, 2022, and the results of its operations and its cash flows for each of the period then ended in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be disclosed.
F-15
Asteriko Corp.
September 30, 2014
Indexindependent with respect to the Financial Statements
Contents Page(s)
-------- -------
Balance Sheets asCompany in accordance with the U.S. federal securities laws and the applicable rules and regulations of September 30, 2014 (Unaudited)the Securities and June 30, 2014 .......................................................... F-17
StatementExchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of Operationsthe PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the Three Months Ended
September 30, 2014 (Unaudited) ......................................... F-18
Statementpurpose of Changesexpressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in Stockholder's Equity (Deficit)the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion
.
Going Concern Uncertainty
The accompanying financial statements have been prepared assuming that the Period from April 17, 2014 (inception) through
September 30, 2014 (Unaudited) ......................................... F-19
Statement of Cash Flows for the Three Months Ended
September 30, 2014 (Unaudited) ......................................... F-20
Notes to the Financial Statements (Unaudited) .......................... F-21
F-16
Asteriko Corp.
Balance Sheets
September 30, 2014 June 30, 2014
------------------ -------------
(Unaudited)
ASSETS
CURRENT ASSETS
Cash $ 5,773 $ 10,000
Accounts receivable -- 713
-------- --------
Total current assets 5,773 10,713
-------- --------
TOOLS AND EQUIPMENT
Tools and equipment 688 688
Accumulated depreciation (46) (11)
-------- --------
Tools and equipment, net 642 677
-------- --------
Total assets $ 6,415 $ 11,390
======== ========
LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 725 $ 2,500
Advances from stockholder 6,524 6,484
-------- --------
Total current liabilities 7,249 8,984
-------- --------
STOCKHOLDER'S EQUITY (DEFICIT)
Common stock par value $0.001: 75,000,000 shares authorized;
5,000,000 shares issued and outstanding 5,000 5,000
Accumulated deficit (5,834) (2,594)
-------- --------
Total stockholder's equity (deficit) (834) 2,406
-------- --------
Total liabilities and stockholder's equity (deficit) $ 6,415 $ 11,390
======== ========
See accompanying notesCompany will continue as a going concern. As discussed in note 3 to the financial statements.
F-17
Asteriko Corp.
Statementstatements, the Company has incurred losses since inception of Operations$15,058,400. For the Three Months
Ended
Septemberyear ended June 30, 2014
------------------
(Unaudited)
Revenue $ 569
Operating Expenses
Professional fees 3,668
General2022, the Company had a net loss of $11,885,609. These factors create an uncertainty as to the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Emphasis of Matters-Risks and administrative expenses 141
----------
Total operating expenses 3,809
----------
Loss before Income Tax Provision (3,240)
Income Tax Provision --
----------
Net Loss $ (3,240)
==========
Earnings per share
- BasicUncertainties
The Company is not able to predict the ultimate impact that COVID -19 will have on its business. However, if the current economic conditions continue, the pandemic could have an adverse impact on the economies and Diluted $ (0.00)
==========
Weighted average common shares outstanding
- Basicfinancial markets of many countries, including the geographical area in which the Company plans to operate.
Emphasis of Matters-Risks and Diluted 5,000,000
==========
See accompanying notes toUncertainties
The Company has had significant transactions and relationships with related parties, including the Company’s Co-Chairman, which are described in the financial statements. F-18
/s/ Gries & Associates, LLC
We have served as the Company’s auditor since 2021.
Denver, Colorado
November 22, 2022
PCAOB# 6778
| F-14 |
STAR ALLIANCE INTERNATIONAL CORP.
BALANCE SHEETS
June 30, 2022 | June 30, 2021 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash | $ | 71,724 | $ | 6,789 | ||||
| Prepaids and other assets | 547,350 | – | ||||||
| Prepaid stock for services | 1,813,854 | – | ||||||
| Total current assets | 2,432,928 | 6,789 | ||||||
| Property and equipment | 450,000 | 450,000 | ||||||
| Mining claims | 57,532 | 57,532 | ||||||
| Total other assets | 507,532 | 507,532 | ||||||
| Total Assets | $ | 2,940,460 | $ | 514,321 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 52,760 | $ | 18,378 | ||||
| Accrued expenses | 25,961 | 12,888 | ||||||
| Accrued compensation | 212,428 | 171,370 | ||||||
| Notes payable | 119,215 | 467,380 | ||||||
| Convertible notes payable, net of discount of $191,248 | 323,752 | – | ||||||
| Derivative liability | 689,231 | – | ||||||
| Note payable – former related party | 32,000 | 32,000 | ||||||
| Due to former related party | 42,651 | 42,651 | ||||||
| Total current liabilities | 1,497,998 | 744,667 | ||||||
| Total liabilities | 1,497,998 | 744,667 | ||||||
| COMMITMENTS AND CONTINGENCIES (see footnotes) | – | – | ||||||
| Stockholders’ Equity (Deficit): | ||||||||
| Preferred stock, $0.001 par value, 25,000,000 authorized, none issued and outstanding | – | – | ||||||
| Series A preferred stock, $0.001 par value, 1,000,000 authorized, 1,000,000 shares issued and outstanding | 1,000 | 1,000 | ||||||
| Series B preferred stock, $0.001 par value, 1,900,000 authorized, 1,833,000 issued and outstanding | 1,883 | 1,883 | ||||||
| Series C preferred stock, $0.001 par value, 1,000,000 shares authorized, 207,500 and 0 shares issued and outstanding, respectively | 208 | – | ||||||
| Common stock, $0.001 par value, 500,000,000 shares authorized, 162,788,028 and 124,319,584 shares issued and outstanding, respectively | 162,788 | 124,320 | ||||||
| Additional paid-in capital | 16,384,983 | 2,793,609 | ||||||
| Common stock to be issued | – | 41,633 | ||||||
| Stock subscription receivable | (50,000 | ) | (20,000 | ) | ||||
| Accumulated deficit | (15,058,400 | ) | (3,172,791 | ) | ||||
| Total stockholders’ equity (deficit) | 1,442,462 | (230,346 | ) | |||||
| Total liabilities and stockholders’ deficit | $ | 2,940,460 | $ | 514,321 | ||||
The accompanying notes are an integral part of these financial statements.
| F-15 |
STAR ALLIANCE INTERNATIONAL CORP.
STATEMENTS OF OPERATIONS
| For the Years Ended June 30, | ||||||||
| 2022 | 2021 | |||||||
| Operating expenses: | ||||||||
| General and administrative | $ | 1,897,581 | $ | 94,508 | ||||
| General and administrative – related party | 12,000 | 15,000 | ||||||
| Mine development | 791,500 | – | ||||||
| Professional fees | 144,763 | 57,029 | ||||||
| Consulting | 4,843,835 | 38,350 | ||||||
| Director compensation | 2,111,500 | 90,000 | ||||||
| Officer compensation | 952,500 | 155,000 | ||||||
| Total operating expenses | 10,753,679 | 449,887 | ||||||
| Loss from operations | (10,753,679 | ) | (449,887 | ) | ||||
| Other expense: | ||||||||
| Interest expense | (297,417 | ) | (10,800 | ) | ||||
| Change in fair value of derivative | (136,714 | ) | – | |||||
| Loss on conversion of debt | (102,403 | ) | (46,200 | ) | ||||
| Loss on issuance of convertible debt | (575,396 | ) | – | |||||
| Other expense | (20,000 | ) | – | |||||
| Gain on forgiveness of debt | – | 3,870 | ||||||
| Total other expense | (1,131,930 | ) | (53,130 | ) | ||||
| Loss before provision for income taxes | (11,885,609 | ) | (503,017 | ) | ||||
| Provision for income taxes | – | – | ||||||
| Net loss | $ | (11,885,609 | ) | $ | (503,017 | ) | ||
| Net loss per common share - basic and diluted | $ | (0.08 | ) | $ | (0.00 | ) | ||
| Weighted average common shares outstanding – basic and diluted | 145,317,205 | 114,938,142 | ||||||
The accompanying notes are an integral part of these financial statements.
| F-16 |
STAR ALLIANCE INTERNATIONAL CORP.
STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIT
FOR THE YEARS ENDED JUNE 30, 2022 AND 2021
| Preferred Stock Series A | Preferred Stock Series B | Preferred Stock Series C | Common Stock | Additional Paid-in | Common Stock To Be | Stock Subscription | Accumulated | |||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Capital | Issued | Receivable | Deficit | Total | ||||||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2020 | – | $ | – | 1,833,000 | $ | 1,883 | – | $ | – | 107,313,334 | $ | 107,314 | $ | 2,382,859 | $ | 8,633 | $ | (9,900 | ) | $ | (2,669,774 | ) | $ | (178,985 | ) | |||||||||||||||||||||||||||
| Stock issued for services | – | – | – | – | – | – | 1,250,000 | 1,250 | 23,750 | – | – | – | 25,000 | |||||||||||||||||||||||||||||||||||||||
| Stock issued for debt | – | – | – | – | – | – | 6,375,000 | 6,375 | 222,325 | – | – | – | 228,700 | |||||||||||||||||||||||||||||||||||||||
| Stock sold for cash | – | – | – | – | – | – | 9,381,250 | 9,381 | 97,119 | 33,000 | (10,100 | ) | – | 129,400 | ||||||||||||||||||||||||||||||||||||||
| Stock issued for accrued officer compensation | 1,000,000 | 1,000 | – | – | – | – | – | – | 67,556 | – | – | – | 68,556 | |||||||||||||||||||||||||||||||||||||||
| Net loss | – | – | – | – | – | – | – | – | – | – | – | (503,017 | ) | (503,017 | ) | |||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2021 | 1,000,000 | 1,000 | 1,833,000 | 1,883 | – | – | 124,319,584 | 124,320 | 2,793,609 | 41,633 | (20,000 | ) | (3,172,791 | ) | (230,346 | ) | ||||||||||||||||||||||||||||||||||||
| Stock sold for cash | – | – | – | – | – | – | 21,955,000 | 21,955 | 604,045 | (32,000 | ) | (30,000 | ) | – | 564,000 | |||||||||||||||||||||||||||||||||||||
| Preferred Stock sold for cash | – | – | – | – | 207,500 | 208 | – | – | 207,292 | – | – | – | 207,500 | |||||||||||||||||||||||||||||||||||||||
| Stock issued for services | – | – | – | – | – | – | 9,866,444 | 9,866 | 9,042,634 | (3,000 | ) | – | – | 9,049,500 | ||||||||||||||||||||||||||||||||||||||
| Stock issued for services – related party | – | – | – | – | – | – | 4,500,000 | 4,500 | 2,757,000 | – | – | – | 2,761,500 | |||||||||||||||||||||||||||||||||||||||
| Stock issued for debt | – | – | – | – | – | – | 1,947,000 | 1,947 | 680,603 | (6,633 | ) | – | – | 675,917 | ||||||||||||||||||||||||||||||||||||||
| Stock issued for acquisition | – | – | – | – | – | – | 200,000 | 200 | 299,800 | – | – | – | 300,000 | |||||||||||||||||||||||||||||||||||||||
| Net loss | – | – | – | – | – | – | – | – | – | – | – | (11,885,609 | ) | (11,885,609 | ) | |||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2022 | 1,000,000 | $ | 1,000 | 1,833,000 | $ | 1,883 | 207,500 | $ | 208 | 162,788,028 | $ | 162,788 | $ | 16,384,983 | $ | – | $ | (50,000 | ) | $ | (15,058,400 | ) | $ | 1,442,462 | ||||||||||||||||||||||||||||
The accompanying notes are an integral part of these financial statements.
| F-17 |
STAR ALLIANCE INTERNATIONAL CORP.
STATEMENTS OF CASH FLOWS
| For the Years Ended June 30, | ||||||||
| 2022 | 2021 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net loss | $ | (11,885,609 | ) | $ | (503,017 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Common stock issued for services | 7,235,646 | 25,000 | ||||||
| Common stock issued for services - related party | 2,761,500 | – | ||||||
| Loss on conversion of debt | 102,403 | 46,200 | ||||||
| Loss on issuance of convertible debt | 575,396 | – | ||||||
| Other expense | 20,000 | – | ||||||
| Change in fair value of derivative | 136,714 | – | ||||||
| Debt discount amortization | 272,616 | – | ||||||
| Gain of forgiveness of debt | – | (3,870 | ) | |||||
| Changes in assets and liabilities: | ||||||||
| Prepaids and other assets | (47,350 | ) | – | |||||
| Accounts payable | 34,382 | (22,253 | ) | |||||
| Accrued expenses | 20,247 | 6,800 | ||||||
| Accrued compensation | 34,425 | 95,566 | ||||||
| Net cash used in operating activities | (739,630 | ) | (355,574 | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Prepaids and other assets | (200,000 | ) | – | |||||
| Net cash used in investing activities | (200,000 | ) | – | |||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Proceeds of borrowings from a related party | – | 53,433 | ||||||
| Repayment to related party | – | (31,008 | ) | |||||
| Proceeds from the sale of common stock | 544,000 | 129,400 | ||||||
| Proceeds from the sale of preferred stock | 207,500 | – | ||||||
| Proceeds from convertible note payable | 501,250 | – | ||||||
| Proceeds from notes payable | 138,971 | 288,500 | ||||||
| Payment on notes payable | (387,156 | ) | (98,020 | ) | ||||
| Net cash provided by financing activities | 1,004,565 | 342,305 | ||||||
| Net change in cash | 64,935 | (13,269 | ) | |||||
| Cash at the beginning of period | 6,789 | 20,058 | ||||||
| Cash at the end of period | $ | 71,724 | $ | 6,789 | ||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||
| Interest paid | $ | – | $ | – | ||||
| Income taxes paid | $ | – | $ | – | ||||
| NON-CASH TRANSACTIONS: | ||||||||
| Conversion of debt | $ | 97,154 | $ | 182,500 | ||||
| Accrued compensation converted to common shares | $ | – | $ | 68,556 | ||||
| Common stock issued for investment | $ | 300,000 | $ | – | ||||
| Common stock issued for prepaid services | $ | 1,813,854 | $ | – | ||||
The accompanying notes are an integral part of these financial statements.
| F-18 |
STAR ALLIANCE INTERNATIONAL CORP.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2022
NOTE 1 – NATURE OF BUSINESS
Star Alliance International Corp. (“the Company”, “we”, “us”) was originally incorporated with the name Asteriko Corp. Statementin the State of Changes in Stockholder's Equity (Deficit)
For the period from April 17, 2014 (inception) through Sept 30, 2014
(Unaudited)
Common stock
par value $0.001 Total
----------------------- Stockholders'
Number of Accumulated Equity
Shares Amount Deficit (Deficit)
------ ------ ------- ---------
April 17, 2014 (inception) -- $ -- $ -- $ --
Issuance of common shares for cash
at $0.001 per share upon formation 5,000,000 5,000 5,000
Net loss (2,594) (2,594)
--------- -------- -------- --------
Balance, June 30, 2014 5,000,000 5,000 (2,594) 2,406
Net loss (3,240) (3,240)
--------- -------- -------- --------
Balance, September 30, 2014 5,000,000 $ 5,000 $ (5,834) $ (834)
========= ======== ======== ========
See accompanying notes to the financial statements.
F-19
Asteriko Corp.
Statement of Cash Flows
For the Three Months
Ended
September 30, 2014
------------------
(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (3,240)
Adjustments to reconcile net loss to net
cash used in operating activities:
Amortization expense 35
Changes in operating assets and liabilities:
Accounts receivable 713
Accounts payable (1,775)
--------
NET CASH USED IN OPERATING ACTIVITIES (4,267)
--------
CASH FLOWS FROM FINANCING ACTIVITIES
Advances from stockholder 40
--------
NET CASH PROVIDED BY FINANCING ACTIVITIES 40
--------
NET CHANGE IN CASH (4,227)
CASH - BEGINNING OF REPORTING PERIOD 10,000
--------
CASH - END OF REPORTING PERIOD $ 5,773
========
Supplemental disclosure of cash flow information:
Interest paid $ --
========
Income tax paid $ --
========
See accompanying notes to the financial statements.
F-20
Asteriko Corp.
September 30, 2014
Notes to the Financial Statements
(UNAUDITED)
NOTE 1 - ORGANIZATION AND OPERATIONS
ASTERIKO CORP.
Asteriko Corp. (the "Company") was incorporatedNevada on April 17, 2014 under the laws of the Statestate of Nevada. The Company provides customers with uniqueNevada, for the purpose of acquiring and innovative solutions for their decorative needs. The company's initial product
is lattice panels designed for suspended ceilings.
developing gold mining as well as certain other mining properties worldwide.
NOTE 2 -– SIGNIFICANT AND CRITICAL ACCOUNTING POLICIES AND PRACTICES
Basis of Presentation
The Managementaccompanying financial statements of the Company is responsible for the selection and use of
appropriate accounting policies and the appropriateness of accounting policies
and their application. Critical accounting policies and practices are those that
are both most important to the portrayal of the Company's financial condition
and results and require management's most difficult, subjective, or complex
judgments, often as a result of the need to make estimates about the effects of
matters that are inherently uncertain. The Company's significant and critical
accounting policies and practices are disclosed below as required by generally
accepted accounting principles.
BASIS OF PRESENTATION - UNAUDITED INTERIM FINANCIAL INFORMATION
The accompanying unaudited interim financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America ("(“U.S. GAAP"GAAP”) for the interim financial information,
and with the rules and regulations of the United States Securities and Exchange Commission ("SEC"(“SEC”) to Form 10-Q and Article 8.
Use of Regulation S-X. Accordingly,
they do not include all of the information and footnotes required by U.S. GAAP
for complete financial statements. The unaudited interim financial statements
furnished reflect all adjustments (consisting of normal recurring accruals)
which are, in the opinion of management, necessary to a fair statement of the
results for the interim period presented. Unaudited interim results are not
necessarily indicative of the results for the full fiscal year. These financial
statements should be read in conjunction with the audited financial statements
of the Company for the reporting period ended June 30, 2014 and notes thereto
contained in the Company's Registration Statement on Form S-1, of which this is
a part.
DEVELOPMENT STAGE COMPANY
The Company is a development stage company as defined by section 915-10-20 of
the FASB Accounting Standards Codification. The Company is devoting
substantially all of its efforts on establishing the business and its planned
principal operations have not commenced. All losses accumulated since inception
have been considered as part of the Company's development stage activities.
The Company has elected to adopt early application of Accounting Standards
Update No. 2014-10, Development Stage Entities (Topic 915): Elimination of
Certain Financial Reporting Requirements. Upon adoption, the Company no longer
presents or discloses inception-to-date information and other remaining
disclosure requirements of Topic 915.
FISCAL YEAR-END
The Company elected June 30 as its fiscal year ending date.
USE OF ESTIMATES AND ASSUMPTIONS AND CRITICAL ACCOUNTING ESTIMATES AND
ASSUMPTIONS
Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of Americaaccounting principles 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(s)date of the financial statements and the reported amounts of revenues and expenses during the reporting period(s).
F-21
Critical accounting estimates are estimates for which (a) the nature of the
estimate is material due to the levels of subjectivity and judgment necessary to
account for highly uncertain matters or the susceptibility of such matters to
change and (b) the impact of the estimate on financial condition or operating
performance is material. The Company's critical accounting estimates and
assumptions affecting the financial statements were as follows:
(i) ASSUMPTION AS A GOING CONCERN: Management assumes that the Company
will continue as a going concern, which contemplates continuity of
operations, realization of assets, and liquidation of liabilities in
the normal course of business.
(ii) FAIR VALUE OF LONG-LIVED ASSETS: Fair value is generally determined
using the asset's expected future discounted cash flows or market
value, if readily determinable. If long-lived assets are determined to
be recoverable, but the newly determined remaining estimated useful
lives are shorter than originally estimated, the net book values of
the long-lived assets are depreciated over the newly determined
remaining estimated useful lives. The Company considers the following
to be some examples of important indicators that may trigger an
impairment review: (i) significant under-performance or losses of
assets relative to expected historical or projected future operating
results; (ii) significant changes in the manner or use of assets or in
the Company's overall strategy with respect to the manner or use of
the acquired assets or changes in the Company's overall business
strategy; (iii) significant negative industry or economic trends; (iv)
increased competitive pressures; (v) a significant decline in the
Company's stock price for a sustained period of time; and (vi)
regulatory changes. The Company evaluates acquired assets for
potential impairment indicators at least annually and more frequently
upon the occurrence of such events.
(iii)VALUATION ALLOWANCE FOR DEFERRED TAX ASSETS: Management assumes that
the realization of the Company's net deferred tax assets resulting
from its net operating loss ("NOL") carry-forwards for Federal income
tax purposes that may be offset against future taxable income was not
considered more likely than not and accordingly, the potential tax
benefits of the net loss carry-forwards are offset by a full valuation
allowance. Management made this assumption based on (a) the Company
has incurred recurring losses, (b) general economic conditions, and
(c) its ability to raise additional funds to support its daily
operations by way of a public or private offering, among other
factors.
These significant accounting estimates or assumptions bear the risk of change
due to the fact that there are uncertainties attached to these estimates or
assumptions, and certain estimates or assumptions are difficult to measure or
value.
Management bases its estimates on historical experience and on various
assumptions that are believed to be reasonable in relation to the financial
statements taken as a whole under the circumstances, the results of which form
the basis for making judgments about the carrying values of assets and
liabilities that are not readily apparent from other sources.
Management regularly evaluates the key factors and assumptions used to develop
the estimates utilizing currently available information, changes in facts and
circumstances, historical experience and reasonable assumptions. After such
evaluations, if deemed appropriate, those estimates are adjusted accordingly.period. Actual results could differ from those estimates.
FAIR VALUE OF FINANCIAL INSTRUMENTS
Cash equivalents
The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. There were no cash equivalents for the years ended June 30, 2022 or 2021.
Long Lived Assets
Property consists of mining equipment not yet used. Our company assesses the impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying value may not be recoverable. When we determine that the carrying value of long-lived assets may not be recoverable based upon the existence of one or more indicators of impairment and the carrying value of the asset cannot be recovered from projected undiscounted cash flows, we record an impairment charge. Our company measures any impairment based on a projected discounted cash flow method using a discount rate determined by management to be commensurate with the risk inherent in the current business model. Significant management judgment is required in determining whether an indicator of impairment exists and in projecting cash flows.
Stock-based Compensation
The Company records stock-based compensation in accordance with FASB ASC Topic 718, “Compensation – Stock Compensation.” FASB ASC Topic 718 requires companies to measure compensation cost for stock-based employee compensation at fair value at the grant date and recognize the expense over the employee’s requisite service period. The Company recognizes in the statement of operations the grant-date fair value of stock options and other equity-based compensation issued to employees and non-employees. The Company accounts for stock-based compensation in accordance with the provision of ASC 505-50, Equity Based Payments to Non-Employees, which requires that such equity instruments are recorded at their fair value on the measurement date. The measurement of stock-based compensation is subject to periodic adjustment as the underlying equity instruments vest.
Net income (loss) per common share
Net loss per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock and potentially dilutive outstanding shares of common stock during the period to reflect the potential dilution that could occur from common shares issuable through contingent share arrangements, stock options and warrants. The diluted loss per share is the same as the basic loss per share for the years ended July 31, 2022 and 2021, as the inclusion of any potential shares would have had an antidilutive effect due to our loss from operations.
| F-19 |
Fair Value of Financial Instruments
The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification ("(“Paragraph 820-10-35-37"820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted accounting principles ("GAAP"),in the United States of America (U.S. GAAP) and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 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 Paragraph 820-10-35-37 are described below:
F-22
Level 1
| Level 1: | Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. |
| Level 2: | Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. |
| Level 3: | Pricing inputs that are generally unobservable inputs and not corroborated by market data. |
The carrying amount of the reporting date.
Level 2 Pricing inputs other than quoted prices in active markets included in
Level 1, which are either directly or indirectly observable as of the
reporting date.
Level 3 Pricing inputs that are generally observable inputs and not
corroborated by market data.
Financial assets are considered Level 3 when their fair values are determined
using pricing models, discounted cash flow methodologies or similar techniques
and at least one significant model assumption or input is unobservable.
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. If the inputs used to measure the
financial assets and liabilities fall within more than one level described
above, the categorization is based on the lowest level input that is significant
to the fair value measurement of the instrument.
The carrying amounts of the Company'sCompany’s financial assets and liabilities, such as cash, prepaid expenses and accounts payableaccrued expenses approximate their fair valuesvalue because of the short maturity of thesethose instruments. Transactions involving related parties cannot be presumed to be carried out on
an arm's-length basis, as the requisite conditions of competitive, free-market
dealings may not exist. Representations about transactions with related parties,
if made, shall not imply that the related party transactions were consummated on
terms equivalent to those that prevail in arm's-length transactions unless such
representations can be substantiated.
CARRYING VALUE, RECOVERABILITY AND IMPAIRMENT OF LONG-LIVED ASSETS
The Company has adopted Section 360-10-35 of the FASB Accounting Standards
Codification for its long-lived assets. Pursuant to ASC Paragraph 360-10-35-17
an impairment loss shall be recognized only if the carrying amount of a
long-lived asset (asset group) is not recoverable and exceeds its fair value.
The carrying amount of a long-lived asset (asset group) is not recoverable if it
exceeds the sum of the undiscounted cash flows expected to result from the use
and eventual disposition of the asset (asset group). That assessment shall be
based on the carrying amount of the asset (asset group) at the date it is tested
for recoverability. An impairment loss shall be measured as the amount by which
the carrying amount of a long-lived asset (asset group) exceeds its fair value.
Pursuant to ASC Paragraph 360-10-35-20 if an impairment loss is recognized, the
adjusted carrying amount of a long-lived asset shall be its new cost basis. For
a depreciable long-lived asset, the new cost basis shall be depreciated
(amortized) over the remaining useful life of that asset. Restoration of a
previously recognized impairment loss is prohibited.
Pursuant to ASC Paragraph 360-10-35-21 the Company's long-lived asset (asset
group) is tested for recoverability whenever events or changes in circumstances
indicate that its carrying amount may not be recoverable. The Company considers
the following to be some examples of such events or changes in circumstances
that may trigger an impairment review: (a) significant decrease in the market
price of a long-lived asset (asset group); (b) A significant adverse change in
the extent or manner in which a long-lived asset (asset group) is being used or
in its physical condition; (c) A significant adverse change in legal factors or
in the business climate that could affect the value of a long-lived asset (asset
group), including an adverse action or assessment by a regulator; (d) An
accumulation of costs significantly in excess of the amount originally expected
for the acquisition or construction of a long-lived asset (asset group); (e) A
current-period operating or cash flow loss combined with a history of operating
or cash flow losses or a projection or forecast that demonstrates continuing
losses associated with the use of a long-lived asset (asset group); and (f) A
current expectation that, more likely than not, a long-lived asset (asset group)
will be sold or otherwise disposed of significantly before the end of its
previously estimated useful life. The Company tests its long-lived assets for
potential impairment indicators at least annually and more frequently upon the
occurrence of such events.
Pursuant to ASC Paragraphs 360-10-45-4 and 360-10-45-5 an impairment loss
recognized for a long-lived asset (asset group) to be held and used shall be
included in income from continuing operations before income taxes in the income
statement of a business entity. If a subtotal such as income from operations is
presented, it shall include the amount of that loss. A gain or loss recognized
on the sale of a long-lived asset (disposal group) that is not a component of an
entity shall be included in income from continuing operations before income
taxes in the income statement of a business entity. If a subtotal such as income
from operations is presented, it shall include the amounts of those gains or
losses.
F-23
CASH EQUIVALENTS
The Company considers all highly liquid investments with maturities of three
months or less at the time of purchase to be cash equivalents.
TOOLS AND EQUIPMENT
Tools and equipment are recorded at cost. Expenditures for major additions and
betterments are capitalized. Maintenance and repairs are charged to operations
as incurred. Depreciation of property and equipment is computed by the
straight-line method (after taking into account their respective estimated
residual values) over the assets estimated useful life of five (5) to seven (7)
years. Upon sale or retirement of property and equipment, the related cost and
accumulated depreciation are removed from the accounts and any gain or loss is
reflected in the statements of operations.
RELATED PARTIES
The Company follows subtopic 850-10 of the FASB Accounting Standards
Codification for the identification of related parties and disclosure of related
party transactions.
Pursuant to Section 850-10-20 the related parties include (a) affiliates
("Affiliate" means, with respect to any specified Person, any other Person that,
directly or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with such Person, as such terms are
used in and construed under Rule 405 under the Securities Act) of the Company;
(b) entities for which investments in their equity securities would be required,
absent the election ofCompany’s notes payable approximates the fair value option underof such instruments as the Fair Value Option
Subsection of Section 825-10-15, to be accounted for by the equity method by the
investing entity; (c) trusts for the benefit of employees, such as pension and
profit-sharing trustsnotes bear interest rates that are managed by or underconsistent with current market rates.
The following table classifies the trusteeship of
management; (d) principal owners ofCompany’s liabilities measured at fair value on a recurring basis into the Company; (e) management of the Company;
(f) other parties with which the Company may deal if one party controls or can
significantly influence the management or operating policies of the other to an
extent that one of the transacting parties might be prevented from fully
pursuing its own separate interests; and (g) other parties that can
significantly influence the management or operating policies of the transacting
parties or that have an ownership interest in one of the transacting parties and
can significantly influence the other to an extent that one or more of the
transacting parties might be prevented from fully pursuing its own separate
interests.
The financial statements shall include disclosures of material related party
transactions, other than compensation arrangements, expense allowances, and
other similar items in the ordinary course of business. However, disclosure of
transactions that are eliminated in the preparation of consolidated or combined
financial statements is not required in those statements. The disclosures shall
include: (a) the nature of the relationship(s) involved; (b) a description of
the transactions, including transactions to which no amounts or nominal amounts
were ascribed, for each of the periods for which income statements are
presented, and such other information deemed necessary to an understanding of
the effects of the transactions on the financial statements; (c) the dollar
amounts of transactions for each of the periods for which income statements are
presented and the effects of any change in the method of establishing the terms
from that used in the preceding period; and (d) amounts due from or to related
partiesfair value hierarchy as of the date of each balance sheet presented and, if not otherwise
apparent, the terms and manner of settlement.
COMMITMENT AND CONTINGENCIES
The Company follows subtopic 450-20 of the FASB Accounting Standards
Codification to report accounting for contingencies. Certain conditions may
exist as of the date the financial statements are issued, which may result in a
loss to the Company but which will only be resolved when one or more future
events occur or fail to occur. The Company assesses such contingent liabilities,
and such assessment inherently involves an exercise of judgment. In assessing
loss contingencies related to legal proceedings that are pending against the
Company or un-asserted claims that may result in such proceedings, the Company
evaluates the perceived merits of any legal proceedings or un-asserted claims as
well as the perceived merits of the amount of relief sought or expected to be
sought therein.
If the assessment of a contingency indicates that it is probable that a material
loss has been incurred and the amount of the liability can be estimated, then
the estimated liability would be accrued in the Company's financial statements.
If the assessment indicates that a potential material loss contingency is not
F-24
probable but is reasonably possible, or is probable but cannot be estimated,
then the nature of the contingent liability, and an estimate of the range of
possible losses, if determinable and material, would be disclosed.
Loss contingencies considered remote are generally not disclosed unless they
involve guarantees, in which case the guarantees would be disclosed.
REVENUE RECOGNITION
The Company follows paragraph 605-10-S99-1 of the FASB Accounting Standards
Codification for revenue recognition. The Company recognizes revenue when it is
realized or realizable and earned. The Company considers revenue realized or
realizable and earned when all of the following criteria are met: (i) persuasive
evidence of an arrangement exists, (ii) the product has been shipped or the
services have been rendered to the customer, (iii) the sales price is fixed or
determinable and (iv) collectability is reasonably assured.
DEFERRED TAX ASSETS AND INCOME TAX PROVISION
The Company accounts for income taxes under Section 740-10-30 of the FASB
Accounting Standards Codification. Deferred income tax assets and liabilities
are determined based upon differences between the financial reporting and tax
bases of assets and liabilities and are measured using the enacted tax rates and
laws that will be in effect when the differences are expected to reverse.
Deferred tax assets are reduced by a valuation allowance to the extent
management concludes it is more likely than not that the assets will not be
realized. Deferred tax assets and liabilities are measured using enacted tax
rates expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in the statements
of operations in the period that includes the enactment date.
The Company adopted section 740-10-25 of the FASB Accounting Standards
Codification ("Section 740-10-25"). Section 740-10-25 addresses the
determination of whether tax benefits claimed or expected to be claimed on a tax
return should be recorded in the financial statements. Under Section 740-10-25,
the Company may recognize the tax benefit from an uncertain tax position only if
it is more likely than not that the tax position will be sustained on
examination by the taxing authorities, based on the technical merits of the
position. The tax benefits recognized in the financial statements from such a
position should be measured based on the largest benefit that has a greater than
fifty percent (50%) likelihood of being realized upon ultimate settlement.
Section 740-10-25 also provides guidance on de-recognition, classification,
interest and penalties on income taxes, accounting in interim periods and
requires increased disclosures.
The estimated future tax effects of temporary differences between the tax basis
of assets and liabilities are reported in the accompanying balance sheets, as
well as tax credit carry-backs and carry-forwards. The Company periodically
reviews the recoverability of deferred tax assets recorded on its balance sheets
and provides valuation allowances as management deems necessary.
Management makes judgments as to the interpretation of the tax laws that might
be challenged upon an audit and cause changes to previous estimates of tax
liability. In addition, the Company operates within multiple taxing
jurisdictions and is subject to audit in these jurisdictions. In management's
opinion, adequate provisions for income taxes have been made for all years. If
actual taxable income by tax jurisdiction varies from estimates, additional
allowances or reversals of reserves may be necessary.
TAX YEARS THAT REMAIN SUBJECT TO EXAMINATION BY MAJOR TAX JURISDICTIONS
The Company discloses tax years that remain subject to examination by major tax
jurisdictions pursuant to the ASC Paragraph 740-10-50-15.
EARNINGS PER SHARE
Earnings per share ("EPS") is the amount of earnings attributable to each share
of common stock. For convenience, the term is used to refer to either earnings
or loss per share. EPS is computed pursuant to section 260-10-45 of the FASB
Accounting Standards Codification. Pursuant to ASC Paragraphs 260-10-45-10
through 260-10-45-16 Basic EPS shall be computed by dividing income available to
F-25
common stockholders (the numerator) by the weighted-average number of common
shares outstanding (the denominator) during the period. Income available to
common stockholders shall be computed by deducting both the dividends declared
in the period on preferred stock (whether or not paid) and the dividends
accumulated for the period on cumulative preferred stock (whether or not earned)
from income from continuing operations (if that amount appears in the income
statement) and also from net income. The computation of diluted EPS is similar
to the computation of basic EPS except that the denominator is increased to
include the number of additional common shares that would have been outstanding
if the dilutive potential common shares had been issued during the period to
reflect the potential dilution that could occur from common shares issuable
through contingent shares issuance arrangement, stock options or warrants.
Pursuant to ASC Paragraphs 260-10-45-45-21 through 260-10-45-45-23 Diluted EPS
shall be based on the most advantageous conversion rate or exercise price from
the standpoint of the security holder. The dilutive effect of outstanding call
options and warrants (and their equivalents) issued by the reporting entity
shall be reflected in diluted EPS by application of the treasury stock method
unless the provisions of paragraphs 260-10-45-35 through 45-36 and 260-10-55-8
through 55-11 require that another method be applied. Equivalents of options and
warrants include non-vested stock granted to employees, stock purchase
contracts, and partially paid stock subscriptions (see paragraph 260-10-55-23).
Anti-dilutive contracts, such as purchased put options and purchased call
options, shall be excluded from diluted EPS. Under the treasury stock method: a.
Exercise of options and warrants shall be assumed at the beginning of the period
(or at time of issuance, if later) and common shares shall be assumed to be
issued. b. The proceeds from exercise shall be assumed to be used to purchase
common stock at the average market price during the period. (See paragraphs
260-10-45-29 and 260-10-55-4 through 55-5.) c. The incremental shares (the
difference between the number of shares assumed issued and the number of shares
assumed purchased) shall be included in the denominator of the diluted EPS
computation.
There were no contingent shares issuance arrangement, stock options or warrants
which were issuable and could have potential dilutive effect to the earnings per
share at SeptemberJune 30, 2014.
CASH FLOWS REPORTING
The Company adopted paragraph 230-10-45-24 of the FASB Accounting Standards
Codification for cash flows reporting, classifies cash receipts and payments
according to whether they stem from operating, investing, or financing
activities and provides definitions of each category, and uses the indirect or
reconciliation method ("Indirect method") as defined by paragraph 230-10-45-25
of the FASB Accounting Standards Codification to report net cash flow from
operating activities by adjusting net income to reconcile it to net cash flow
from operating activities by removing the effects of (a) all deferrals of past
operating cash receipts and payments and all accruals of expected future
operating cash receipts and payments and (b) all items that are included in net
income that do not affect operating cash receipts and payments. The Company
reports the reporting currency equivalent of foreign currency cash flows, using
the current exchange rate at the time of the cash flows and the effect of
exchange rate changes on cash held in foreign currencies is reported as a
separate item in the reconciliation of beginning and ending balances of cash and
cash equivalents and separately provides information about investing and
financing activities not resulting in cash receipts or payments in the period
pursuant to paragraph 830-230-45-1 of the FASB Accounting Standards
Codification.
SUBSEQUENT EVENTS
The Company follows the guidance in Section 855-10-50 of the FASB Accounting
Standards Codification for the disclosure of subsequent events. The Company will
evaluate subsequent events through the date when the financial statements were
issued. Pursuant to ASU 2010-09 of the FASB Accounting Standards Codification,
the Company as an SEC filer considers its financial statements issued when they
are widely distributed to users, such as through filing them on EDGAR.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In April 2014, the FASB issued ASU No. 2014-08, Presentation of Financial
Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting
Discontinued Operations and Disclosures of Disposals of Components of an Entity.
The amendments in this Update change the requirements for reporting discontinued
operations in Subtopic 205-20.
F-26
Under the new guidance, a discontinued operation is defined as a disposal of a
component or group of components that is disposed of or is classified as held
for sale and "represents a strategic shift that has (or will have) a major
effect on an entity's operations and financial results." The ASU states that a
strategic shift could include a disposal of (i) a major geographical area of
operations, (ii) a major line of business, (iii) a major equity method
investment, or (iv) other major parts of an entity. Although "major" is not
defined, the standard provides examples of when a disposal qualifies as a
discontinued operation.
The ASU also requires additional disclosures about discontinued operations that
will provide more information about the assets, liabilities, income and expenses
of discontinued operations. In addition, the ASU requires disclosure of the
pre-tax profit or loss attributable to a disposal of an individually significant
component of an entity that does not qualify for discontinued operations
presentation in the financial statements.
The ASU is effective for public business entities for annual periods beginning
on or after December 15, 2014, and interim periods within those years.
In May 2014, the FASB issued the FASB Accounting Standards Update No. 2014-09
"REVENUE FROM CONTRACTS WITH CUSTOMERS (TOPIC 606)" ("ASU 2014-09")
This guidance amends the existing FASB Accounting Standards Codification,
creating a new Topic 606, REVENUE FROM CONTRACTS WITH CUSTOMER. The core
principle of the guidance is that an entity should recognize revenue to depict
the transfer of promised goods or services to customers in an amount that
reflects the consideration to which the entity expects to be entitled in
exchange for those goods or services.
To achieve that core principle, an entity should apply the following steps:
1. Identify the contract(s) with the customer
2. Identify the performance obligations in the contract
3. Determine the transaction price
4. Allocate the transaction price to the performance obligations in the
contract
5. Recognize revenue when (or as) the entity satisfies a performance
obligations
The ASU also provides guidance on disclosures that should be provided to enable
financial statement users to understand the nature, amount, timing, and
uncertainty of revenue recognition and cash flows arising from contracts with
customers. Qualitative and quantitative information is required about the
following:
1. Contracts with customers - including revenue and impairments
recognized, disaggregation of revenue, and information about contract
balances and performance obligations (including the transaction price
allocated to the remaining performance obligations)
2. Significant judgments and changes in judgments - determining the
timing of satisfaction of performance obligations (over time or at a
point in time), and determining the transaction price and amounts
allocated to performance obligations
3. Assets recognized from the costs to obtain or fulfill a contract.
ASU 2014-09 is effective for periods beginning after December 15, 2016,
including interim reporting periods within that reporting period for all public
entities. Early application is not permitted.
In June 2014, the FASB issued ASU No. 2014-10, Development Stage Entities (Topic
915): Elimination of Certain Financial Reporting Requirements, Including an
Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation.
The amendments in this Update remove the definition of a development stage
entity from the Master Glossary of the Accounting Standards Codification,
thereby removing the financial reporting distinction between development stage
entities and other reporting entities from U.S. GAAP. In addition, the
amendments eliminate the requirements for development stage entities to (1)
present inception-to-date information in the statements of income, cash flows,
and shareholder equity, (2) label the financial statements as those of a
development stage entity, (3) disclose a description of the development stage
activities in which the entity is engaged, and (4) disclose in the first year in
which the entity is no longer a development stage entity that in prior years it
had been in the development stage.
The amendments also clarify that the guidance in Topic 275, Risks and
Uncertainties, is applicable to entities that have not commenced planned
principal operations.
Finally, the amendments remove paragraph 810-10-15-16. Paragraph 810-10-15-16
states that a development stage entity does not meet the condition in paragraph
810-10-15-14(a) to be a variable interest entity if (1) the entity can
demonstrate that the equity invested in the legal entity is sufficient to permit
it to finance the activities that it is currently engaged in and (2) the
entity's governing documents and contractual arrangements allow additional
equity investments.
The amendments in this Update also eliminate an exception provided to
development stage entities in Topic 810, Consolidation, for determining whether
an entity is a variable interest entity on the basis of the amount of investment
equity that is at risk. The amendments to eliminate that exception simplify U.S.
GAAP by reducing avoidable complexity in existing accounting literature and
improve the relevance of information provided to financial statement users by
requiring the application of the same consolidation guidance by all reporting
entities. The elimination of the exception may change the consolidation
analysis, consolidation decision, and disclosure requirements for a reporting
entity that has an interest in an entity in the development stage.
F-27
The amendments related to the elimination of inception-to-date information and
the other remaining disclosure requirements of Topic 915 should be applied
retrospectively except for the clarification to Topic 275, which shall be
applied prospectively. For public business entities, those amendments are
effective for annual reporting periods beginning after December 15, 2014, and
interim periods therein.
Early application of each of the amendments is permitted for any annual
reporting period or interim period for which the entity's financial statements
have not yet been issued (public business entities) or made available for
issuance (other entities). Upon adoption, entities will no longer present or
disclose any information required by Topic 915.
In August 2014, the FASB issued the FASB Accounting Standards Update No. 2014-15
"PRESENTATION OF FINANCIAL STATEMENTS--GOING CONCERN (SUBTOPIC 205-40):
DISCLOSURE OF UNCERTAINTIES ABOUT AN ENTITY'S ABILITY TO CONTINUE AS A2022:
| Description | Level 1 | Level 2 | Level 3 | |||||||||
| Derivative | $ | – | $ | – | $ | 689,231 | ||||||
| Total | $ | – | $ | – | $ | 689,231 | ||||||
NOTE 3 – GOING CONCERN ("ASU 2014-15").
In connection with preparing financial statements for each annual and interim
reporting period, an entity's management should evaluate whether there are
conditions or events, considered in the aggregate, that raise substantial doubt
about the entity's ability to continue as a going concern within one year after
the date that the FINANCIAL STATEMENTS ARE ISSUED (or within one year after the
date that the FINANCIAL STATEMENTS ARE AVAILABLE TO BE ISSUED when applicable).
Management's evaluation should be based on relevant conditions and events that
are known and reasonably knowable at the date that the FINANCIAL STATEMENTS ARE
ISSUED (or at the date that the FINANCIAL STATEMENTS ARE AVAILABLE TO BE ISSUED
when applicable). Substantial doubt about an entity's ability to continue as a
going concern exists when relevant conditions and events, considered in the
aggregate, indicate that it is probable that the entity will be unable to meet
its obligations as they become due within one year after the date that the
financial statements are issued (or available to be issued).
The term PROBABLE
is used consistently with its use in Topic 450, Contingencies.
When management identifies conditions or events that raise substantial doubt
about an entity's ability to continue as a going concern, management should
consider whether its plans that are intended to mitigate those relevant
conditions or events will alleviate the substantial doubt. The mitigating effect
of management's plans should be considered only to the extent that (1) it is
probable that the plans will be effectively implemented and, if so, (2) it is
probable that the plans will mitigate the conditions or events that raise
substantial doubt about the entity's ability to continue as a going concern.
If conditions or events raise substantial doubt about an entity's ability to
continue as a going concern, but the substantial doubt is alleviated as a result
of consideration of management's plans, the entity should disclose information
that enables users of the financial statements to understand all of the
following (or refer to similar information disclosed elsewhere in the
footnotes):
a. Principal conditions or events that raised substantial doubt about the
entity's ability to continue as a going concern (before consideration
of management's plans)
b. Management's evaluation of the significance of those conditions or
events in relation to the entity's ability to meet its obligations
c. Management's plans that alleviated substantial doubt about the
entity's ability to continue as a going concern.
F-28
If conditions or events raise substantial doubt about an entity's ability to
continue as a going concern, and substantial doubt is not alleviated after
consideration of management's plans, an entity should include a statement in the
footnotes indicating that there is SUBSTANTIAL DOUBT ABOUT THE ENTITY'S ABILITY
TO CONTINUE AS A GOING CONCERN within one year after the date that the financial
statements are issued (or available to be issued). Additionally, the entity
should disclose information that enables users of the financial statements to
understand all of the following:
a. Principal conditions or events that raise substantial doubt about the
entity's ability to continue as a going concern
b. Management's evaluation of the significance of those conditions or
events in relation to the entity's ability to meet its obligations
c. Management's plans that are intended to mitigate the conditions or
events that raise substantial doubt about the entity's ability to
continue as a going concern.
The amendments in this Update are effective for the annual period ending after
December 15, 2016, and for annual periods and interim periods thereafter. Early
application is permitted.
Management does not believe that any recently issued, but not yet effective
accounting pronouncements, when adopted, will have a material effect on the
accompanying financial statements.
NOTE 3 - GOING CONCERN
The Company has elected to adopt early application of Accounting Standards
Update No. 2014-15, "PRESENTATION OF FINANCIAL STATEMENTS--GOING CONCERN
(SUBTOPIC 205-40): DISCLOSURE OF UNCERTAINTIES ABOUT AN ENTITY'S ABILITY TO
CONTINUE AS A GOING CONCERN ("ASU 2014-15").
The Company's financial statements have been prepared assuming that itthe Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. As reflectedshown in the accompanying financial statements, the Company hadhas an accumulated deficit at Septemberof $15,058,400 as of June 30, 2014,2022. For the year ended June 30, 2022, the Company had a net loss of $11,885,609, which did include $11,104,275 of non-cash expense incurred for the issuance of common stock for services and netderivatives associated with convertible debt. We used $739,630 of cash used in operating activities for
the reporting period then ended. These factors raiseactivities. Due to these conditions, it raises substantial doubt about the Company'sCompany’s ability to continue as a going concern.
The Company is attempting to commence operations and generate sufficient revenue; however, the Company'sCompany’s cash position may not be sufficient to support the Company'sits daily operations. Management intends to raise additional funds by
way of a private or public offering. While the Company believes in the viability of its strategy to commence operations and generate sufficient revenue and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company'sits ability to further implement its business plan and generate sufficient revenue and its ability to raise additional funds by way of a public
or private offering.funds. The financial statements do not include any adjustments relatedrelating to the recoverability and classification of recorded asset carrying amounts or the amountsamount and classification of liabilities that might be necessarymay result should the Company be unable to continue as a going concern.
| F-20 |
NOTE 4 - TOOLS AND EQUIPMENT
(I) IMPAIRMENT– ACQUISITION
On August 13, 2019, The Company closed an Asset Purchase Agreement (the “APA”) with Troy Mining Corporation (“Troy”). Under the APA, the company acquired 78 gold mining claims consisting of approximately 4,800 acres, located east/southeast of El Portal, California, in Mariposa County, together with all of Troy’s rights to related equipment and buildings currently located on the mining claims. In exchange for the mining claims and related assets, the company agreed to issue 1,883,000 shares of a new class of preferred stock designated Series B Preferred Stock; and agreed to make total cash payments in the amount of $500,000 under a Promissory Note (the “Purchase Note”).
Under the Purchase Note, we paid $50,000 at the time of the closing, and are required to pay an additional $50,000 within sixty days of the closing, and $25,000 every other month thereafter, with the entire remaining amount due no later than March 31, 2020. In the event of default under the Purchase Note, all assets acquired under the APA will be forfeited back to Troy. We are current on all the terms of the agreement.
On October 9, 2019, a contract extension was agreed between Star Alliance International Corporation and Troy Mining Corporation. The agreement gives the Company 150 days to file an S-1 registration statement and obtain approval for the shares that are to be issued to the Troy shareholders to become free trading. The S-1 registration was filed on August 14, 2020.
On July 14, 2020 a contract extension was agreed between Star Alliance International Corporation and Troy Mining Corporation. The agreement provides for a sixty-day extension on the loan agreement with Troy mining Corporation and also an extension to file the S-1 registration.
On February 16, 2021, a contract extension for ninety (90) days was signed between Troy Mining Corporation and Star Alliance International Corporation.
On October 21, 2021, a contract extension for ninety (90) days was signed between Troy Mining Corporation and Star Alliance International Corporation and the remaining balance due under the note was paid.
On November 22, 2021, a binding Letter of Intent was signed for the acquisition of 49% of “Genesis”. Genesis is a patented technology for extracting gold from Oxide and other complex ore, in a sustainable method, that also yields a vastly improved recovery rate even where the presence of gold is as little as 0.25 parts per million. This is a clean, green and ecofriendly method with up to a 98% recovery rate. This project will be owned by a newly formed wholly owned subsidiary of Star Alliance International Corp. Since the original letter of Intent was signed the terms have now been renegotiated and Star’s new subsidiary will acquire 51% of Genesis. This is expected to close early in 2023.
On December 17, 2021, the Company agreed to purchase 51% of Compania Minera Metalurgica Centro Americana (“Commsa”), a Honduran Corporation. Commsa owns the mining rights to five operating mines that run along a 12.5 mile stretch of the Rio Jalan River. This acquisition becomes effective in January, 2022. The Company has issued to date 250,000 shares of Common stock and paid $75,000 towards the purchase price.
On May 9, 2022, a binding letter of intent was signed for the acquisition of 51% of NSM USA a Wyoming corporation that owns 100% of four lithium mines in West Africa. The cost of these mines is $2 million, most of which is to be used for the growth of the four mines. These mines that are already producing small amounts of Lithium will be greatly expanded with the purchase of equipment. This transaction is due to close early 2023 with full production expected in the second quarter of 2023.
On May 11, 2022, a binding letter of intent was signed for the acquisition of 51% of NGM USA a Wyoming corporation that owns 100% of three gold mines in West Africa. The cost of this acquisition is $2 million, most of which will be used for equipment and growth of the mines. This transaction is due to close early 2023. All exploration work has been completed its annual impairment testingand production is anticipated to start in the second quarter of 2023.
On May 23, 2022, a binding letter of intent was signed for the acquisition of 75% of Magma International Inc. (“MII”). This acquisition for stock and cash will result in MII owning the Intellectual property, Building, equipment and significant inventory as well as the know how to produce Barotex. Mr. Lilo Benzicron the original inventor of this product will join Barotex as CEO and will be driving the innovation of new products for MII. This transaction is expected to close early 2023.
| F-21 |
NOTE 5 – RELATED PARTY TRANSACTIONS
On January 1, 2021, the employment agreements for Richard Carey and Anthony Anish were updated to include salaries of $180,000 and $120,000 per annum respectively. As of June 30, 2022, the Company has accrued compensation due to Mr. Carey of $52,600 and Mr. Anish of $99,828. As of June 30, 2021, the Company has accrued compensation due to Mr. Carey of $48,628 and Mr. Anish of $126,778. In addition, the Company has accrued salary to Mr. Baird (a former officer) of $60,000. Mr. Baird resigned his position on August 12, 2020.
Mr. Carey is using his personal office space at its fiscalno cost to the Company.
On January 10, 2022, the Company issued 1,000,000 shares of common stock to Themis Glatman, director, for services. The shares were valued at $1.40 per share, the closing stock price on the date of grant, for total non-cash expense of $1,400,000.
On January 24, 2022, the Board of Directors appointed Mr. Weverson Correia as the Chief Executive Officer and Director of the Company. Mr. Correia was issued 500,000 shares of common stock on December 16, 2021. The shares were valued at $1.55 per share, the closing stock price on the date of grant, for total non-cash expense of $772,500.
On June 3, 2022, the Company issued 2,500,000 shares of common stock to Anthony Anish, CFO and director, for services. The shares were valued at $0.22 per share, the closing stock price on the date of grant, for total non-cash expense of $550,000.
NOTE 6 – NOTES PAYABLE
As of June 30, 2022 and 2021, the Company owed Kok Chee Lee, the former CEO and Director of the Company, $42,651 and $42,651, respectively for operating expenses he paid on behalf of the Company during the year endended June 30, 2018. The borrowing is unsecured, non-interest-bearing and determineddue on demand.
On June 1, 2018, the Company executed a promissory note in the amount of $32,000 with the former Secretary of the Board for $30,128 of accrued expenses for services previously provided and an additional $1,872 for services rendered. The note is unsecured, bears interest at 5% per annum and matures on December 1, 2018. As of June 30, 2022 and 2021, there is $6,562 and $6,159, respectively, of accrued interest due on the note. The note is past due and in default.
On June 11, 2019, the company executed a promissory note with Troy for $500,000. The Company paid the initial $50,000 due on the note on August 13, 2019. As of June 30, 2022, there is $0 due on this note (Note 4).
On June 26, 2020, an individual loaned the Company $25,000, $6,000 of which was converted into 600,000 shares of common stock on July 27, 2020. On February 24, 2021, he loaned an additional $20,000 to the Company. During April 2021, another $14,000 was converted into 1,400,000 shares of common stock. On June 3, 2022, the remaining balance of principal and interest was fully converted into 750,000 shares of common stock.
As of June 30, 2022 and 2021, the Company owes various other individuals and entities $119,215 and $467,380, respectively. All the loans are non-interest bearing and due on demand.
NOTE 7 - CONVERTIBLE NOTES
On March 28, 2022, we received short term financing from a private investor under a 10% Fixed Convertible Secured Promissory Note in the principal amount of $400,000 (the “Note”). The Note bears interest at a fixed rate of 10% per annum with all principal and interest due at maturity on July 31, 2022. The Note is secured by a security interest and lien on all equipment located at our Troy mine in Mariposa County, California. At the option of the investor, and at any time prior to the maturity date, the principal and interest owing under the Note may be converted into shares of our common stock at a conversion price equal to 50% of the lowest closing market price for our common stock during the five trading days preceding the conversion.
| F-22 |
On June 8, 2022, the Company executed a 10% convertible promissory note with Fast Capital LLC. The note is convertible at a price per share equal to the 65% of the lowest trading price of the Company’s common stock during the 20 consecutive trading days up to the date on which lender elects to convert all or part of the Note.
A summary of the activity of the derivative liability for the notes above is as follows:
| Balance at June 30, 2021 | $ | – | ||
| Increase to derivative due to new issuances | 552,517 | |||
| Derivative loss due to mark to market adjustment | 136,714 | |||
| Balance at June 30, 2022 | $ | 689,231 |
A summary of quantitative information about significant unobservable inputs (Level 3 inputs) used in measuring the Company’s derivative liability that there was no impairment asare categorized within Level 3 of the fair value of tools and
equipment, exceeded their carrying values at June 30, 2014.
(II) DEPRECIATION EXPENSE
The Company acquired tools and equipment on May 25, 2014 and started to
depreciatehierarchy as of June 1, 2014. Depreciation expense was $3530, 2022, is as follows:
| Inputs | June 30, 2022 | Initial Valuation | ||||||
| Stock price | $ | .1791 | $ | .24 - .42 | ||||
| Conversion price | $ | .1061 - .0816 | $ | .03 - .2995 | ||||
| Volatility (annual) | 199.87% - 369.39% | 256.36% - 381.28% | ||||||
| Risk-free rate | 1.28 - 2.8% | 0.59% - 2.29% | ||||||
| Dividend rate | – | – | ||||||
| Years to maturity | .08 - .94 | .34 - 1 | ||||||
NOTE 8 – PREFERRED STOCK
Of the 25,000,000 shares of the Company's authorized Preferred Stock, $0.001 par value per share, 1,000,000 are designated Series A preferred stock, 1,900,000 shares are designated as Series B Preferred Stock and 1,000,000 shares are designated Series C preferred stock.
Series A Preferred Stock
Each Share of Series A preferred stock shall have 500 votes per share and each share can be converted into 500 shares of common stock. The holders of the Series A preferred stock are not entitled to dividends.
On July 2, 2020, the Board granted all 1,000,000 shares of the Series A preferred stock to the Company’s Chairman and CEO, Richard Carey, in conversion of $68,556 of accrued compensation.
Series B Preferred Stock
Only one person or entity, is entitled to be designated as the owner of all of the Series B Preferred Stock (the “Holder”), in whose name the initial certificates representing the Series B Preferred Stock shall be issued. Any transfer of the Series B Preferred Stock to a different Holder must be approved in advance by the Corporation; provided, however, the Holder shall have the right to transfer the Series B Preferred Stock, or any portion thereof, to any affiliate of Holder or nominee of Holder, without the approval of the Corporation. Each share of Preferred Stock shall have one vote per share. Holder is not entitled to dividends or distributions and each share of Series B Preferred Stock shall be convertible at the rate of two Common Shares for each one B Preferred stock.
In conjunction with the APA with Troy, the company issued 1,883,000 shares of Series B Preferred Stock, the shares were valued at $0.002 or $7,532 as if they had been converted into 3,666,000 shares of common stock.
| F-23 |
On October 9, 2019, the parties have agreed to extend the date for filing the registration statement relating to the preferred shares of the Company to be issued to the Troy shareholders and that would in turn extend the date that the shares would become free trading. This extension will be for 150 days for filing the registration statement and obtaining approval for the reporting
period ended Septembershares to become free trading. All the remaining terms included in the contract will remain the same.
Series C Preferred Stock
On March 30, 2014.
F-29
NOTE 5 - STOCKHOLDER'S EQUITY
SHARES AUTHORIZED
Upon formation2022, the total number ofCompany created and designated 1,000,000 shares of Series C Preferred Stock (“Series C”) with a stated value of $1.00. The Series C has an annual cumulative dividend of 8%, has no voting rights. The Series C is convertible into shares of common stock at 65% of the lowest trading price for the ten days prior to the conversion date.
During the quarter ended June 30, 2022, the Company sold 207,500 shares of Series C to Geneva Roth Remark Holdings Inc for total proceeds of $207,500.
NOTE 9 – COMMON STOCK
During the year ended June 30, 2021, the Company granted 1,250,000 shares of common stock for services. The shares were valued at $0.02 per share for total non-cash expense of $25,000.
During the year ended June 30, 2021, the Company issued 1,375,000 shares of common stock in conversion of a $83,500 of principal. The Company recognized a $46,200 loss on the conversion.
During the year ended June 30, 2021, the Company sold 9,381,000 shares of common stock for total cash proceeds of $129,400, $20,000 of which is a receivable as of June 30, 2021. In addition, the Company has common stock be issued from the sale of $41,633.
On August 1,2021, the Company granted 4,444 shares of common stock for services. The shares were valued at $4.50 per share, based on the value of the services as provided by the services provider’s invoice, for total non-cash expense of $20,000. The $20,000 is being amortized over the one-year service term for the services being provided.
On November 11, 2021, the Company granted 4,000,000 shares of common stock for services. The shares were valued at $0.50 per share, based on the value of the services as provided by the services provider’s invoice, for total non-cash expense of $2,000,000. The $2,000,000 is being amortized over the one-year service term for the services being provided.
On December 16, 2021, the Company granted 1,500,000 shares of common stock for services. The shares were valued at $1.55 per share, the closing stock price on the date of grant, for total non-cash expense of $2,317,500. The $2,317,500 is being amortized over the one-year service term for the services being provided.
During the year ended June 30, 2022, the Company issued 4,362,000 shares of common stock for various consulting and professional fees. The shares were issued at the closing stock price on the date of grant for total non-cash expense of $4,712,000.
During the year ended June 30, 2022, the Company issued 1,947,000 shares of common stock in conversion of $97,154 of debt. A loss of $575,396 was recognized on the conversions. The shares were valued on the closing stock price on the date of grant for total non-cash expense of
During the year ended June 30, 2022, the Company sold 21,955,000 shares of common stock for total cash proceeds of $564,000. Of the stock sold $50,000 is still to be received. The Company also issued 4,770,000 shares that were sold in the prior year.
Refer to Note 5 for shares issued to related parties.
| F-24 |
NOTE 10 – SIGNIFICANT TRANSACTIONS
On December 15, 2021, the Company signed a definitive agreement to purchase 51% of Compania Minera Metalurgica Centro Americana SA. (“Commsa”) for $1,000,000 in cash and 5,000,000 in restricted shares of common stock. In addition, the Company has agreed to provide up to $7,500,000 working capital to expand the mining operations in a gold mining project (Rio Jalan Project) in Olancho state in the highlands of Central Honduras. This transaction has become effective as of January 1, 2022.
This project, that runs along a 12.5 mile stretch of the Rio Jalan River, is a peaceful agrarian area, with only farmers and ranchers in the nearby five villages.
The environmental licenses have been obtained and exploration is ongoing. The mines will be producing gold early in 2022 and will be expanded early next year. Local small mining operations are producing a minimum of 250 to 300 oz of gold per site per month while losing approximately 50% of the recoverable gold particles. Our expanded operations, using modern equipment and our new Genesis program, should result in up to a 98% rate of recoverable gold, leading to significantly higher quantities of gold per site.
As an important part of this transaction, STAR has agreed to continue the distribution of aid to the five local villages with 2% of mining profits per village to be used for expanded school facilities, a medical center, college scholarships and a community center to be used by adults and kids alike. Additional projects, beneficial to the community, may be considered in the future.
Gold resources are in excess of 1 million oz. This estimate came from a limited appraisal of the area in which the mines are located.
This acquisition become effective in January, 2022. The Company has issued to date 250,000 shares of Common stock and paid $75,000 towards the purchase price.
On May 9, 2022, a binding letter of intent was signed for the acquisition of 51% of NSM USA a Wyoming corporation that owns 100% of four lithium mines in West Africa. The cost of these mines is $2 million, most of which is to be used for the growth of the four mines. These mines that are already producing small amounts of Lithium will be greatly expanded with the purchase of equipment. This transaction is due to close early 2023 with full production expected in the second quarter of 2023.
On May 11, 2022, a binding letter of intent was signed for the acquisition of 51% of NGM USA a Wyoming corporation that owns 100% of three gold mines in West Africa. The cost of this acquisition is $2 million, most of which will be used for equipment and growth of the mines. This transaction is due to close early 2023. All exploration work has been completed and production is anticipated to start in the second quarter of 2023.
On May 23, 2022, a binding letter of intent was signed for the acquisition of 75% of Magma International Inc. (“MII”). This acquisition for stock and cash will result in MII owning the Intellectual property, Building, equipment and significant inventory as well as the know how to produce Barotex. Mr. Lilo Benzicron the original inventor of this product will join Barotex as CEO and will be driving the innovation of new products for MII. This transaction is expected to close early 2023.
NOTE 11 – INCOME TAX
Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all classes of stock whichthe deferred tax assets will not be realized. The Company has evaluated Staff Accounting Bulletin No. 118 regarding the impact of the decreased tax rates of the Tax Cuts & Jobs Act. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. The U.S. federal income tax rate of 21% is being used due to the new tax law recently enacted.
| F-25 |
Net deferred tax assets consist of the following components as of June 30:
| 2022 | 2021 | |||||||
| Deferred Tax Assets: | ||||||||
| NOL Carryover | $ | 830,300 | $ | 666,300 | ||||
| Less valuation allowance | (830,300 | ) | (666,300 | ) | ||||
| Net deferred tax assets | $ | – | $ | – | ||||
At June 30, 2022, the Company had net operating loss carry forwards of approximately $830,300 that may be offset against future taxable income. No tax benefit has been reported in the June 30, 2022 or 2021 financial statements; any tax benefit is offset by a valuation allowance of the same amount.
On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cut and Jobs Act (the “Tax Act”). The Tax Act establishes new tax laws that affects 2018 and future years, including a reduction in the U.S. federal corporate income tax rate to 21% effective January 1, 2018.
Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards for federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carry forwards may be limited as to use in future years.
ASC Topic 740 provides guidance on the accounting for uncertainty in income taxes recognized in a company’s financial statements. Topic 740 requires a company to determine whether it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the position. If the more-likely-than-not threshold is met, a company must measure the tax position to determine the amount to recognize in the financial statements.
The Company includes interest and penalties arising from the underpayment of income taxes in the statements of operations in the provision for income taxes. As of June 30, 2022, the Company had no accrued interest or penalties related to uncertain tax positions.
With few exceptions, the Company is authorizedno longer subject to issue is Seventy-Five Million (75,000,000)U.S. federal, state and local income tax examinations by tax authorities for years before 2015.
NOTE 12 – SUBSEQUENT EVENTS
Management has evaluated subsequent events pursuant to the requirements of ASC Topic 855, from the balance sheet date through the date the financial statements were available to be issued, and has determined that no material subsequent events exist other than the following.
Subsequent to June 30, 2022, the Company issued 20,050,000 shares of Common Stock, par value $0.001 per share.
COMMON STOCK
Upon formationcommon stock for services.
On August 31, 2022, the Company sold 46,500 shares of Series C Preferred shares to Geneva Roth Remark Holdings Inc.
On November 17, 2022, the Chairman, Richard Carey agreed to give 4 million of his own shares of common stock in exchange for $42,000 which was loaned to the Company
| F-26 |
PART II — INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution
The following table sets forth the expenses expected to be incurred in connection with the issuance and distribution of the securities being registered (also included in the Use of Proceeds table).
| SEC Registration* | $ | |||
| Legal Fees and Expenses | ||||
| Accounting Fees* | ||||
| Miscellaneous* | ||||
| Total | $ |
* Estimated
The Issuer will pay all fees and expenses associated with this offering with the Selling Shareholders paying none of the expenses.
Item 14. Indemnification of Directors and Officers
Our bylaws contain provisions which require that the company indemnify its officers, directors, employees and agents, in substantially the same language as Title 7 of the Nevada Revised Statutes. Section 7 of the Company’s Articles of Incorporation and Article IX of our bylaws provides for the Company’s ability to indemnify its officers, directors, employees and agents, subject to the limitations provided in NRS, for expenses actually and reasonably incurred. No indemnification shall be made in relation to matters as to which it shall be adjudged in such action, suit or proceeding, or in connection with any appeal therein that such officer, director or employee is liable for gross negligence or misconduct in the performance of his duties.
The foregoing right of indemnification shall not be deemed exclusive of any other rights to which any officer, director or employee may be entitled apart from the provisions of this section.
The amount of indemnity to which any officer or any director may be entitled shall be fixed by the Board of Directors, except that in any case in which there is no disinterested majority of the Board available, the amount shall be fixed by arbitration pursuant to the then existing rules of the American Arbitration Association.
Item 15. Recent Sales of Unregistered Securities
Since June 29, 2020, we have issued the following securities which were not registered under the Securities Act:
Securities issued to Officers, Directors and Consultants
On December 16, 2021, we issued 500,000 shares of common stock to Weverson Correia, for his services as CEO.
On January 10, 2022, we issued 1,000,000 shares of common stock to Themis Glatman, for his services as a director .
On February 25, 2022, we issued 500,000 shares of common stock to Fernando Godina for his services as a director.
On June 3, 2022, we issued 2,500,000 shares of common stock to Anthony Anish for his services as CFO.
On August 15, 2022, we issued 5,000,000 shares of common stock to Anthony Anish for his services as CFO.
On February 25, 2022, the officerCompany issued 500,000 shares of common stock to Fernando Godina for his services as a director.
On August 15, 2022, the Company issued 5,000,000 shares of common stock to Fernando Godina, for services as a director.
| II-1 |
On August 15, 2022, the Company issued 5,000,000 shares of common stock to Bryan Cappelli for his services as a director.
On August 15, 2022, the Company issued 5,000,000 shares of common stock to Weverson Correia for this services as CEO.
On August 3, 2020, we issued 1,250,000 shares of common stock as consulting fees to investment bank, for consulting fees.
On July 5, 2021, we issued 4,770,000 shares of common stock to a consultant for business and directorIR services.
On August 31, 2021, we issued 4,444 shares of common stock to SRAX for investor relations services.
On December 16, 2021, we issued 1,000,000 shares of common stock as legal and business consulting fees and 500,000 shares of common stock to a consultant for business and investor relations services.
On December 20, 2021, we issued 52,000 shares of common stock to a consultant for business and marketing services.
On January 10, 2022, we issued 1,500,000 shares of common stock to, a consultant for business and marketing services.
On January 4, 2022, we issued 4,000,000 shares of common stock to SRAX for investor relations services.
On January 28, 2022, we issued 277,000 shares of common stock to 2 consultants for business advice.
On March 11, 2022, we issued 60,000 shares of common stock to Arnold Sock as legal fees.
On June 3, 2022, we issued 100,000 shares of common stock to our bookkeeper for accounting services.
On December 5, 2022, we issued 100,000 shares of common stock to a consultant for accounting services.
On December 26, 2022, we issued 1,000,000 shares of common stock to attorneys for legal services.
On March 7, 2023, we issued 190,114 shares of common stock to investment bankers as retaining fees.
On April 11, 2023, we issued 250,000 shares of common stock to a consultant for marketing advice.
On June 2, 2023, we issued 1,358,341 shares of common stock to an investment banker for services.
Shares issued in connection with the Private Offerings
Between June 29, 2020, and December 31, 2020, the Company sold an aggregate of 5,231,250 Shares of common stock to 20 accredited investors and one non-accredited investor at various prices per share for a total purchase price of $194,000.
Between March 24, 2021, and December 31, 2021, the Company sold an aggregate of 19,975,000 shares of common stock to 20 accredited investors and one non-accredited investor at various prices per share for a total purchase price of $642,350.
Between January 4, 2022, to December 31, 2022, the Company sold an aggregate of 14,050,000 Shares of common stock to 19 accredited investors for a total purchase price of $642,350.
| II-2 |
On June 2, the Company sold 285,714 Shares of common stock to an investor at the purchase price of $5,000.
Securities issued in connection with Convertible Notes
On November 30, 2022, the Company issued 2,518,892 shares of common stock to Geneva Roth Holdings, Inc. as a conversion of the $100,000 convertible promissory note.
On December 6, 2022, the Company at $0.001 per share, or $5,000 in aggregate for
cash.
Allissued 1,928,979 Shares of common stock to Geneva Roth Holdings, Inc. as a conversion of the $139,851 convertible promissory note.
On December 21, 2022, the Company issued 1,538,461 Shares of common stock to Fast Capital, LLC upon conversion of the $40,000 convertible promissory note.
On January 5, 2023, the Company issued 1,539,385 Shares of common stock to Geneva Roth Holdings, Inc. as a conversion of the $30,018 convertible promissory note.
On January 11, 2023, the Company issued 2,012,821 Shares of common stock to Geneva Roth Holdings, Inc. as a conversion of the $31,400 convertible promissory note.
On January 17, 2023, the Company issued 1,472,372 Shares of common stock were converted to Geneva Roth Holdings, Inc. as a conversion of the $22,969 convertible promissory note.
On January 19, 2023, the Company issued 3,424,657 Shares of common stock to Fast Capital, LLC as a conversion of the $50,000 convertible promissory note.
On March 3, 2023, the Company issued 1,777,778 Shares of common stock to Geneva Roth Holdings, Inc. as a conversion of the $20,800 convertible promissory note.
On March 9, 2023, the Company issued 2,355,556 Shares of common stock to Geneva Roth Holdings, Inc. as a conversion of the $27,560 convertible promissory note.
On March 21, 2023, the Company issued 4,087,500 shares wereof common stock to Fast Capital, LLC as a conversion of the $32,500 convertible promissory note.
Shares issued in accordanceconnection with the exemptionacquisitions.
On March 21, 2022, we issued 200,000 shares of common stock to Juan Lemus as downpayment in connection with the acquisition of 51% of the capital stock of Compania Minera Metalurgica Centro Americana (Commsa).
Shares issued to the Selling Stockholder
On March 16, 2023, we issued 1,000,000 shares of common stock as commitment shares to Keystone, pursuant to the Purchase Agreement.
The above issuances did not involve any underwriters, underwriting discounts or commissions, or any public offering and are exempt from the registration provisionsrequirements of the Securities Act of 1933 as amended, provided by virtue of Section 4(2) of such Act for issuances not involving any public offering and Rule 506 ofthereof and/or Regulation D promulgated thereunder.
NOTE 6 - RELATED PARTY TRANSACTIONS
RELATED PARTIES
Related parties
| II-3 |
EXHIBITS
Item 16. Exhibits and Financial Statement Schedules.
(a) Exhibits.
Certain exhibits listed below are incorporated by reference as so marked with whom the Company had transactions are:
Related Parties Relationship
--------------- ------------
Ilia Tomaski President and Director
FREE OFFICE SPACE
The Company has been provided office space by its President at no cost.
Management determined that such cost is nominal and did not recognize the rent
expense in its financial statement.
NOTE 7 - SUBSEQUENT EVENTS
The Company has evaluated all events that occur after the balance sheet date
through November xx, 2014, the date when the financial statementsand filing with which such exhibits were issued to
determine if they must be reported. The Management of the Company determined
that there were no reportable subsequent events to be disclosed.
F-30
Until _________________, all dealers effecting transactions in these securities,
whether or not participating in this offering, may be required to deliver a
Prospectus. This is in addition to the dealer's obligation to deliver a
Prospectus when acting as underwriters andfiled with respect to their unsold
allotments or subscriptions.
You should rely only on the information contained in this Prospectus. We have
not authorized any dealer, salesperson or other person to give you different
information. This Prospectus does not constitute an offer to sell nor are they
seeking an offer to buy the securities referred to in this Prospectus in any
jurisdiction where the offer or sale is not permitted. The information contained
in this are correct only as of the date shown on the cover page of these
documents, regardless of the time of the delivery of these documents or any sale
of the securities referred to in this Prospectus.
ASTERIKO CORP.
10,000,000 SHARES OF COMMON STOCK
PROSPECTUS
PART II
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated costs of this offering (assuming all shares are sold) are as
follows:
SEC Registration Fee $ 13
Auditor Fees $ 5,000
Legal Fees $ 2,500
EDGAR Fees $ 1,000
Transfer Agent Fees $ 1,000
-------
TOTAL $ 9,513
=======
(1) All amounts are estimates, other than the SEC's registration fee.
INDEMNIFICATION OF DIRECTOR AND OFFICERS
Asteriko Corp.'s Bylaws allow for the indemnification of the Officer and/or
Director in regards each such person carrying out the duties of his or her
office. The Board of Directors will make determination regarding the
indemnification of the Director, Officer or employee as is proper under the
circumstances if she has met the applicable standard of conduct set forth under
the Nevada Revised Statutes.
As to indemnification for liabilities arising under the Securities Act of 1933,
as amended, for a Director, Officer and/or person controlling Asteriko Corp., we
have been informed that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy and unenforceable.
RECENT SALES OF UNREGISTERED SECURITIES
Since inception, the Registrant has sold the following securities that were not
registered under the Securities Act of 1933, as amended.
Name and Address Date Shares Consideration
---------------- ---- ------ -------------
Ilia Tomski May 12, 2014 5,000,000 $5,000.00
We issued the foregoing restricted shares of common stock to our sole Officer
and Director pursuant to Section 4(2) of the Securities Act of 1933. Ilia Tomski
is a sophisticated investor, he is our sole Officer and Director, and is in
possession of all material information relating to us. Further, no commissions
were paid to anyone in connection with the sale of the shares and general
solicitation was not made to anyone.
EXHIBITS
Exhibit
Number Description of Exhibit
------ ----------------------
3.1 Articles of Incorporation of the Registrant *
3.2 Bylaws of the Registrant *
5.1 Opinion of MATHEAU J. W. STOUT, ESQ. *
10.1 Customer Contract, Glick-Art., dated May 22, 2014 *
10.2 Form of subscription agreement *
10.3 Verbal agreement confirmation letter to finance business plan *
10.4 Verbal agreement confirmation letter to finance the registration
process *
23.1 Consent of Li and Company, PC.
23.2 Consent of MATHEAU J. W. STOUT, ESQ. (contained in exhibit 5.1)
----------
* Previously filed.
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UNDERTAKINGS
Commission)
______________
| * | Filed herewith |
| ** | To be filed by amendment. |
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Item 17. Undertakings
The undersigned Registrant hereby undertakes:
(a)
(1) Toto file, during any period in which offers or sales of securities are being made, a post-effective amendment to this registration statementRegistration Statement to:
(i) Include any Prospectus required by Section 10(a)(3) of the Securities
Act of 1933;
(ii) To reflect in the Prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate,
| (i) | include any prospectus required by section 10(a)(3) of the Securities Act of 1933; |
| (ii) | reflect in the prospectus any facts or events which, individually or together, represent a fundamental change in the information in the information |
| (iii) | include any additional or changed material information on the plan of distribution. |
(2) that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
Prospectus filed with the Commission pursuant to Rule 383(b)
(ss.230.383(b) of this chapter) if, in the aggregate, the changes in
volume and price represent no more than 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement.
(iii)To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
(2) That, for the purpose of determining any liability under the Securities Act, of 1933,to treat each such post-effective amendment shall be deemed to beas a new registration statement relating toof the securities offered, therein, and the offering of suchthe securities at that time shall be deemed to be the initial bona fide offering thereof.
offering.
(3) Toto file a post-effective amendment to remove from registration by means of a post-effective amendment any of the securities being registered whichthat remain unsold at the terminationend of the offering.
(4) That,that for the purpose of determining liability of the undersigned small business issuer under the Securities Act of
1933 to any purchaser:
(i) If the registrant is subject to Rule 430C, each Prospectus filed
pursuant to Rule 383(b) as part of a registration statement relating
to an offering, other than registration statements relying on Rule
430B or other than Prospectuses filed in reliance on Rule 430A, shall
be deemed to be part of and included in the registration statement as
of the date it is first used after effectiveness. Provided, however,
that no statement made in a registration statement or Prospectus that
is part of the registration statement or made in a document
incorporated or deemed incorporated by reference into the registration
statement or Prospectus that is part of the registration statement
will, as to a purchaser with a time of contract of sale prior to such
first use, supersede or modify any statement that was made in the
registration statement or Prospectus that was part of the registration
statement or made in any such document immediately prior to such date
of first use.
(5) That, for the purpose of determining liability of the registrant under the
Securities Act of 1933 to any purchaser in the initial distribution of the securities: Thesecurities, the undersigned registrantsmall business issuer undertakes that in a primary offering of securities of the undersigned registrantsmall business issuer pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrantsmall business issuer will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
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(i) Any preliminary Prospectus or Prospectus of the undersigned registrant
| (i) | Any preliminary prospectus or prospectus of the undersigned small business issuer relating to the offering required to be filed pursuant to Rule 424; |
| (ii) | Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned small business issuer or used or referred to by the undersigned small business issuer; |
| (iii) | The portion of any other free writing prospectus relating to the offering containing material information about the undersigned small business issuer or its securities provided by or on behalf of the undersigned small business issuer; and |
| (iv) | Any other communication that is an offer in the offering made by the undersigned small business issuer to the purchaser |
(5) Each prospectus filed pursuant to Rule 383;
(ii) Any free writing Prospectus424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A shall be deemed to be part of and included in the offering prepared by or on
behalfregistration statement as of the undersigned registrantdate it is first used after effectiveness. Provided, however, that no statement made in a registration statement or used or referred to by the
undersigned registrant;
(iii)The portion of any other free writing Prospectus relating to the
offering containing material information about the undersigned
registrant or our securities provided by or on behalfprospectus that is part of the undersigned registrant; and
(iv) Any other communicationregistration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is an offerpart of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the offeringregistration statement or prospectus that was part of the registration statement or made by the
undersigned registrantin any such document immediately prior to the purchaser.
such date of first use.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the "Act") may be permitted to our Directors, Officersthe directors, officers, and controlling persons of the registrant pursuant to the foregoing provisions, above, or otherwise, we havethe registrant has been advised that in the opinion of the SECCommission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities other(other than the payment by usthe registrant of expenses incurred or paid by one of our Directors,
Officers,a directors, officers or controlling personsperson of the registrant in the successful defense of any action, suit or proceeding,proceeding) is asserted by one of our Directors, Officers,such director, officer, or controlling personsperson in connection with the securities being registered, wethe registrant will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and we will be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Valley Cottage, NYWestlake Village, California on November 21, 2014.
ASTERIKO CORP.
By: /s/ Ilia Tomski
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Name: Ilia Tomski
Title: President, SecretaryJune 15th, 2023.
| STAR ALLIANCE INTERNATIONAL INC. | |
| /s/ Richard Carey | |
| Richard Carey | |
| President and Chairman (Principal Executive Officer) |
We, the undersigned officers and Director
(Principal Executive, Financialdirectors of Star Alliance International Inc. hereby severally constitute and Accounting Officer)
In accordanceappoint Richard Carey as our true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution in for him or her and in his or her name, place and stead, and in any and all capacities, to sign any and all amendments (including post-effective amendments) to this registration statement (or any other registration statement for the same offering that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933), and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as full to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement washas been signed below by the following persons in the capacities and on the dates stated.
indicated.
| Signature | Capacity | Date | ||
| /s/ Richard Carey | President, Chairman and Director | June 15, 2023 | ||
| Richard Carey | (Principal Executive Officer) | |||
| /s/ Anthony Anish | Chief Financial Officer, Corporate Secretary and Director | June 15, 2023 | ||
| Anthony Anish | (Principal Financial | |||
| /s/ Weverson Correia | Chief Executive Officer and Director | June 15, 2023 | ||
| Weverson Correia | ||||
/s/ Franz Allmayer | Vice President Finance and Director | June 15, 2023 | ||
| Franz Allmayer | ||||
| /s/ Themis Glatman | Treasurer and Director | June 15, 2023 | ||
Themis Glatman | ||||
| /s/ Fernando Godina | Vice President and Director | June 15, 2023 | ||
Fernando Godina | ||||
| /s/ Bryan Cappelli | Director | June 15, 2023 | ||
| Bryan Cappelli |
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