Star Alliance International Corp. - Quarter Report: 2022 March (Form 10-Q)

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended March 31, 2022

or

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

Commission File Number: 333-197692

833-443-7827

(Registrant’s telephone number)

___________________________________

(Former name, former address and former fiscal year, if changed since last report)

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ No ☒

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes    ☐ No ☒

No Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Securities registered pursuant to Section 12(b) of the Act: None.

Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date: 159,013,028 shares of common stock par value $0.001, were outstanding as at as of May 23, 2022.

STAR ALLIANCE INTERNATIONAL CORP.

FORM 10-Q

Quarterly Period Ended December 31, 2021

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION

 Item 1 Financial Statements

STAR ALLIANCE INTERNATIONAL CORP.

CONDENSED BALANCE SHEETS

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

STAR ALLIANCE INTERNATIONAL CORP.

CONDENSED STATEMENTS OF OPERATIONS

(UNAUDITED)  

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

STAR ALLIANCE INTERNATIONAL CORP.

CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2021

(Unaudited)

STAR ALLIANCE INTERNATIONAL CORP.

CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2022

(Unaudited)  

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

STAR ALLIANCE INTERNATIONAL CORP.

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

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

Star Alliance International Corp.

Notes to Unaudited Condensed Financial Statements

March 31, 2022

NOTE 1 – NATURE OF BUSINESS

Star Alliance International Corp. (“the Company”, “we”, “us”) was originally incorporated with the name Asteriko Corp. in the State of Nevada on April 17, 2014 under the laws of the state of Nevada, for the purpose of acquiring and developing gold mining as well as certain other mining properties worldwide and is now acquiring new environmentally safe technology to extract gold and other rare earth minerals form oxide rock.

NOTE 2 – SIGNIFICANT AND CRITICAL ACCOUNTING POLICIES AND PRACTICES

Basis of Presentation

The accompanying unaudited interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission ("SEC"), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company's latest Annual Report on Form 10-K filed with the SEC. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of operations for the full year. Notes to the financial statements which would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal year, as reported in the Form 10-K for the fiscal year ended June 30, 2021, have been omitted.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting 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 of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

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”) 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 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 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 levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:

The carrying amount of the Company’s financial assets and liabilities, such as cash, prepaid expenses and accrued expenses approximate their fair value because of the short maturity of those instruments. The Company’s notes payable approximates the fair value of such instruments as the notes bear interest rates that are consistent with current market rates.

The following table classifies the Company’s liabilities measured at fair value on a recurring basis into the fair value hierarchy as of March 31, 2022:

March 31, 2022:

NOTE 3 – GOING CONCERN

The unaudited 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 unaudited financial statements, the Company has an accumulated deficit of $12,593,705 as of March 31, 2022. For the nine months ended March 31, 2022 the Company had a net loss of $9,420,914, with $1,398,871 of cash used in operating activities. Due to these conditions, it raises substantial doubt about the Company’s ability to continue as a going concern.

The Company is attempting to commence operations and generate sufficient revenue; however, the Company’s cash position may not be sufficient to support its daily operations. While the Company believes in the viability of its strategy to commence operations and generate sufficient revenue and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon its ability to further implement its business plan and generate sufficient revenue and its ability to raise additional funds. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that may result should the Company be unable to continue as a going concern.

NOTE 4 – ACQUISITION

On August 13, 2019, The Company closed an Asset Purchase Agreement (the “APA”) with Troy Mining Corporation (“Troy”). Under the APA, the company acquired 78 gold mining claims consisting of approximately 4,800 acres, located east/southeast of El Portal, California, in Mariposa County, together with all of Troy’s rights to related equipment and buildings currently located on the mining claims. In exchange for the mining claims and related assets, the company agreed to issue 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. A payment of $40,000 was made by Star Alliance that reduces the final amount due to Troy Mining Corporation to $330,000 as of December 31, 2021.

On October 21, 2021, a contract extension for ninety (90) days was signed between Troy Mining Corporation and Star Alliance International Corporation. A payment of $20,000 was made by Star Alliance that reduces the final amount due to Troy Mining Corporation to $310,000.

On January 2, 2022 The Company acquired a 51% interest in Compania Minera Metalurgica Centro Americana S.A. (“Commsa”) which owns 5 gold mines in Honduras. The purchase price is $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.

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 March 31, 2022, the Company has accrued compensation due to Mr. Carey of $114,862 and Mr. Anish of $128,778. 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 no cost to the Company.

As of December 31, 2021, the Company owes Mr. Anish $4,550 for cash advances to pay for certain operating expenses.

As of December 31, 2021, the Company owes Mr. Carey $20,000 for a cash advance that was paid to Troy Mining Corporation (Note 4).

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 a 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.

NOTE 6 – NOTES PAYABLE

As of December 31, 2021, and June 30, 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 ended June 30, 2018. The borrowing is unsecured, non-interest-bearing and due on demand.

On June 1, 2018, the Company executed a promissory note in the amount of $32,000 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, 2022 and June 30, 2021, there is $6,159 and $4,949, 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 (Note 7). The Company paid the initial $50,000 due on the note on August 13, 2019, $35,000 as of December 31, 2019 and $20,000 on October 21, 2021. As March 31, 2022 there is $310,000 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 comm on stock. As of March 31, 2022, there is $25,000 and $10,734 of principal and interest due on this loan, respectively.

As of March 31, 2022, the Company owes various other individuals and entities a total of $190,804. All the loans are non-interest bearing and due on demand.

NOTE 6 - CONVERTIBLE NOTE

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 at 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. 

A summary of the activity of the derivative liability for the notes above is as follows:

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, 2022 is as follows:

NOTE 7 – 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 and 1,900,000 shares are designated as Series B Preferred Stock.

Series A Preferred Stock

Each Share of Series A preferred stock shall have 500 votes per share and each share can be converted into 500 shares of common stock. The holders of the Series A preferred stock are not entitled to dividends.

On July 2, 2020, the Board granted all 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.

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

One Million shares of Series C Preferred Stock at $1.00 per share was authorized on March 30, 2022. No shares were issued prior to March 31, 2022. Series C Preferred shares have no voting rights on any matters with the exception of any matters relating to the Series C Preferred stock. In any vote on the preferred stock the shareholders have a one vote per share.

NOTE 8 – 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.

During the six months ended December 31, 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.

During the six months ended December 31, 2021, the Company granted 4,000,000 shares of common stock for services. The shares were valued at $0.50 per share, based on the value of the services as provided by the services provider’s invoice, for total non-cash expense of $2,000,000. The $2,000,000 is being amortized over the one-year service term for the services being provided.

During the six months ended December 31, 2021, the Company granted 10,000 shares of common stock for services. The shares were valued at $1.12 per share, the closing stock price on the date of grant, for total non-cash expense of $11,200.

During the six months ended December 31, 2021, the Company granted 52,000 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 $80,600.

During the six months ended December 31, 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 six months ended December 31, 2021, the Company granted 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 $775,500.

During the three months ended March 31, 2022, the Company granted 6,600,000 shares of common stock for services. The shares were valued at the closing stock price on the date of grant, for total non-cash expense of $2,980,700.

During the three months ended March 31, 2022, the Company issued 300,000 shares of common stock in conversion of $52,180 of debt. A loss of $343,120 was recognized on the conversion.

During the nine months ended March 31, 2022, the Company sold 16,885,000 shares of common stock for total cash proceeds of $1,634,000. Of the stock sold $160,000 is still to be received. Of the shares issued it has been determined that $500,000 will not be received. The Company is in the process of having the 5,000,000 shares returned. The Company also issued 4,770,000 shares that were sold in the prior year.

NOTE 9 – SUBSEQUENT EVENTS

Management has evaluated subsequent events pursuant to the requirements of ASC Topic 855, from the balance sheet date through the date the financial statements were available to be issued and has determined that no material subsequent events exist other than the following.

1/. In April, 2022 Star paid the remaining balance due for purchase of the assets and mining leases of the Troy Mine.

2/. In April, 2022 there were changes to the Board of Director. Bryan Cappeilli was appointed to the Board and Alexei Tchernov was removed from the Board.

3/. In April 2022 Star issued 153,750 Series C Preferred shares at $1.00 per share in a convertible note that is due for repayment 180 days from the date of issuance. These shares may be converted into common stock of Star or the note can be paid in full with interest at 25%.

3/. In May 2022, Star acquired 51% of NSM USA, a Wyoming corporation that owns the rights to 4 lithium mines located in Africa. Star has agreed to invest $2 million to pay for equipment and some infrastructure to speed up the mining process.

4/. In May 2022, Star acquired 51% of NGM USA, a Wyoming corporation that owns the rights to 3 Gold mines located in Africa. Star has agreed to invest $2 million to pay for equipment and some infrastructure to speed up the mining process.

5/. In May 2022, Star completed its due diligence on the Genesis, gold extraction process and is now moving forward to close the acquisition of 51% of assets of the Guatemala corporation that owns the technology

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 are expected to be producing gold in the second quarter of 2022 and will be expanded during the year. Gold resources are estimated to be in excess of 1 million oz. This estimate came from a limited appraisal of the area in which the mines are located.

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.

Upon close, STAR will, once mining operations begin, start to generate significant revenues and of utmost importance the mine will be able to gain all the benefits of our Green, Environmentally Safe Genesis ore extraction process. 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.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

FORWARD-LOOKING STATEMENTS

This document contains “forward-looking statements”. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to, any projections of earnings, revenue or other financial items; any statements of the plans, strategies and objections of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; any statements or belief; and any statements of assumptions underlying any of the foregoing.

Forward-looking statements may include the words “may”, “could”, “estimate”, “intend”, “continue”, “believe”, “expect” or “anticipate” or other similar words. These forward-looking statements present our estimates and assumptions only as of the date of this report. Accordingly, readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the dates on which they are made. Except for our ongoing securities laws, we do not intend, and undertake no obligation, to update any forward-looking statement. Additionally, the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 most likely do not apply to our forward-looking statements as a result of being a penny stock issuer. You should, however, consult further disclosures we make in future filings of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

Although we believe the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and inherent risks and uncertainties.

BUSINESS

Star Alliance International Corp. (“the Company”, “we”, “us”) was originally incorporated with the name Asteriko Corp. in the State of Nevada on April 17, 2014 under the laws of the state of Nevada. Our prior business plans, which generated limited or no earnings, included interior decorating products, and a travel and tourism service.

On May 14, 2018, Richard Carey our President and Chairman of the Board, acquired 22,000,000 shares of common stock of the Company, representing 62.15% ownership of the Company which constitutes control. Mr. Carey accepted the positions of President and Chairman of the Board on the same day.

Current officers and directors are as follows:

On October 25, 2018, Star entered into a Letter of Intent (the “LOI”) with Troy Mining Corporation, a Nevada corporation (“Troy”) and its two majority shareholders and on March 25, 2019 and on August 5th this LOI was extended. Troy is the owner of 78 gold mining claims consisting of approximately 4800 acres, located east/southeast of El Portal, California, in Mariposa County. Troy also owns a production processing mill together with related equipment and buildings. On August 13, 2019, the Company closed the transaction making the first payment on the acquisition of all the assets of Troy Mining Corporation. Further payments have been made since that date and the Company is current on all its obligations.

The Company’s business focus will be the pursuit of mining and mining technology businesses. The Company acquired the assets of Troy Mining Corporation, its first mining assets, on August 13, 2019.

On November 22, 2021, STAL entered into a binding Letter of Intent to acquire 49% of Lions Works Advertising, SA, a Guatamala Corporation that owns the “Genesis” ore extraction process. Since the letter of Intent was signed STAR has renegotiated and STAR is now acquiring a controlling interest of 51% of the Company. The purchase requires STAL to invest up to $3 million to be used to grow the business, building a number of Genesis plants that can be placed in customer mining sites including our own Troy mining site. The green, environmentally friendly process, extracts up to 98% of the gold ore from the rock.

In January 2022, Star completed the acquisition of 51% of Compania Minera Metalurgica Centro Americana S.A. (“Commsa”) which owns 5 gold mines in Honduras.

Results of Operations for the Three Months Ended March 31, 2022 as Compared to the Three Months Ended March 31, 2021

Operating expenses

General and administrative expenses (“G&A”) were $199,558 for the three months ended March 31, 2022, compared to $23,212 for the three months ended March 31, 2021, an increase of $176,346. In the current period we recognized $10,000 of non-cash expense for stock issued to a related party for work performed for the Company.

Mine Development Fees were $788,500 for the three months ended march 31, 2022 compared to $0 for the three months ended March 31, 2021. In the current period we recognized $772,500 of non-cash expenses for stock issued for work performed at the Troy mine.

Professional fees were $93,500 for the three months ended March 31, 2022, compared to $2,500 for the three months ended December 31, 2020, an increase of $8,520. Professional fees consist mainly of legal, accounting and audit expense. The increase in the current period is due to an increase in legal fees. In the current period we recognized $48,000 of non- cash legal expenses.

Consulting fees were $3,827,475 for the three months ended March 31, 2022, compared to $5,000 for the three months ended March 31, 2021. In the current period we issued shares of common stock for $3,807,475 for non-cash consulting expense.

Director compensation was $1,469,000 and $30,000 for the three months ended March 31, 2022 and 2021, respectively. In the current period we recognized $1,439,000 of non- cash compensation to two Directors. .Monthly compensation to our director was increased in January 2021.

Officer compensation was $817,500 and $45,000 for the three months ended March 31, 2022 and 2021, respectively. In the current period we recognized $772,500 of non- cash officer compensation for our CEO. Monthly compensation for our Chairman was increased in January 2021.

Other income (expense)

Interest Expense was $6,780 and $882 for the three months ended March 31, 2022 and 2021, respectively.

Net Loss

Net loss for the three months ended March 31, 2022 was $8,016,068 compared to $121,933 for the three months ended March 31, 2021. The large increase in our net loss is due to non-cash stock compensation expense.

Results of Operations for the Nine Months Ended March 31, 2022 as compared to the nine Months Ended March 31, 2021

Operating expenses

General and administrative expenses (“G&A”) were $1,250,958 for the nine months ended March 31, 2022, compared to $70,011 for the nine months ended March 31, 2021, an increase of $1,180,947. In the current period we recognized $268,334 of non-cash expense for stock issued for investor relation services.

Professional fees were $106,250 for the nine months ended March 31, 2022, compared to $46,029 for the nine months ended March 31, 2021, an increase of $60,221. Professional fees consist mainly of legal, accounting and audit expense. The increase in the current period is due to an increase in legal fees. In the current period we recognized $48,000 of non- cash legal expenses.

Consulting fees were $4,015,837 for the nine months ended March 31, 2022, compared to $38,350 for the nine months ended March 31, 2021 an increase of $3,977,487. In the current period we issued shares of common stock for $3,995,837 on non-cash consulting expense. In the prior period we issued shares of common stock for $30,000 on non-cash consulting expense.

Director compensation was $1,529,000 and $60,000 for the nine months ended March 31, 2022 and 2021, respectively. In the current period we recognized $1,439,000 of non- cash compensation to two Directors. Monthly compensation to our director was increased in January 2021.

Officer compensation for our CEO was $907,500 and $110,000 for the nine months ended March 31, 2022 and 2021, respectively. In the current period we recognized $772,500 of non-cash officer compensation for our CEO. Monthly compensation to our Chairman was increased in January 2021.

Other income (expense)

For the nine months ended March 31, 2022 and 2021, we had interest expense of $8,844 and $9,918, respectively. In the prior period we also had $46,200 loss on the conversion of accrued salary and a $3,870 gain on the forgiveness of debt.

Net Loss

Net loss for the nine months ended March 31, 2022 was $9,420,914 compared to $376,638 for the nine months ended March 31, 2021. The large increase in our net loss is due to non-cash stock compensation expense.

LIQUIDITY AND CAPITAL RESOURCES

The accompanying unaudited financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. As shown in the accompanying financial statements, the Company has an accumulated deficit of $12,593,705. For the nine months ended March 31, 2022 the Company had a net loss of $9,420,914 with $1,398,871 of cash used in operating activities. Due to these conditions, it raises substantial doubt about the Company’s ability to continue as a going concern.

Net cash used in operating activities was $1,398,871 during the nine months ended March 31, 2022 compared to $216,974 in the prior period.

Net cash provided by financing activities was $1,589,315 and $201,449 for the nine months ended March 31, 2022 and 2021, respectively. In the current period we received $1,084,000 from the sale of common stock and $4,550 from a cash advance from a director. In the prior period we received $121,500 from loans, $42,500 from the sale of common stock and $23,582 from loans from our CEO. This was offset by $18,280 paid back to our CEO and $58,000 paid on other loans.

Over the next twelve months, we expect our principal source of liquidity will be dependent on borrowings from related parties.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Critical Accounting Policies

We have identified the policies outlined below as critical to our business operations and an understanding of our results of operations. The list is not intended to be a comprehensive list of all of our accounting policies. In many cases, the accounting treatment of a particular transaction is specifically dictated by accounting principles generally accepted in the United States, with no need for management's judgment in their application. The impact and any associated risks related to these policies on our business operations is discussed throughout management's Discussion and Analysis or Plan of Operation where such policies affect our reported and expected financial results. Note that our preparation of the financial statements requires us to make estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities at the date of our financial statements, and the reported amounts of revenue and expenses during the reporting period. There can be no assurance that actual results will not differ from those estimates.

Item 3. Quantitative and Qualitative Disclosure about Market Risk

This item is not applicable as we are currently considered a smaller reporting company.

Item 4. Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed by us in reports that we file or submit under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission (SEC) rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate, to allow timely decisions regarding required disclosure.

Limitations on the Effectiveness of Disclosure Controls

In designing and evaluating the Company's disclosure controls and procedures, management recognized that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Additionally, in designing disclosure controls and procedures, Company management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Evaluation of Disclosure Controls and Procedures

Our CEO and CFO, have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on the evaluation, they have concluded that our disclosure controls and procedures are not effective in timely alerting them to material information relating to us that is required to be included in our periodic SEC filings and ensuring that information required to be disclosed by us in the reports we file or submit under the Act is accumulated and communicated to our management, including our chief financial officer, or person performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Our disclosure controls and procedures were not effective as of December 31, 2021 due to the material weaknesses as disclosed in the Company’s Annual Report on Form 10-K filed with the SEC.

Changes in Internal Control over Financial Reporting

Such officers also confirmed that there was no change in our internal control over financial reporting during the nine months ended March 31, 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

We know of no material pending legal proceedings to which our company or subsidiary is a party or of which any of their property is the subject. In addition, we do not know of any such proceedings contemplated by any governmental authorities.

We know of no material proceedings in which any director, officer or affiliate of our company, or any registered or beneficial stockholder of our company, or any associate of any such director, officer, affiliate, or stockholder is a party adverse to our company or subsidiary or has a material interest adverse to our company or subsidiary.

Item 1A. Risk Factors.

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

None.

Item 5. Other Information.

None.

Item 6. Exhibits.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.