Notes to the Consolidated Financial Statements
March 31, 2022
NOTE 1 - ORGANIZATION AND BUSINESS OPERATIONS
Organization and Description of Business
ALTAIR INTERNATIONAL CORP. (the “Company”
“Altair”) was incorporated under the laws of the State of Nevada on December 20, 2012. The Company’s physical address
is 322 North Shore Drive, Building 1B, Suite 200, Pittsburgh, PA 15212.
Mining Lease
The Company is currently engaged in identifying and
assessing new business opportunities. In this regard, the Company entered into a Mining Lease effective August 3, 2020 with Oliver Geoservices
LLC ("OGS") under which the Company received an exclusive lease to mine certain unpatented lode mining claims known as the Walker
Ridge located in Elko County, Nevada for a period of five years. The lease can be extended for an additional twenty years if certain
extension payments are made within the term of the lease. The Company made an initial payment of $25,000
to secure the lease and is required to make advance royalty payments to maintain its exclusivity commencing January 31, 2021,
starting at $25,000 and
increasing in $25,000
increments each year for the initial five-year term to $100,000
as well as issuing common shares to OGS in accordance with the following schedule. No shares have been issued yet.
| On or before December 1, 2021 |
500,000 common shares |
| On or before December 1, 2022 |
500,000 common shares |
| On or before December 1, 2023 |
750,000 common shares |
| On or before December 1, 2024 |
750,000 common shares |
In addition, a 3% net smelter fee royalty is payable
on all mineral production from the leased property.
The foregoing description of the Agreement does not
purport to be complete and is qualified in its entirety by reference to the Agreement which was filed as Exhibit 1.01 to a Form 8-K dated
August 14, 2020. On December 1, 2021, an advanced royalty payment of $50,000
and 500,000 common shares were due
to OGS per the terms of the lease agreement. The Company made the decision to not pursue the Walker Ridge project further, and after
discussions with OGS, mutually agreed to terminate the agreement. To that effect, on April 13, 2022, the Company received a notice of
termination from OGS.
The Company had previously planned to enter into license
and distribution agreements for oral thin film nutraceutical products. This plan was abandoned in the 2017 fiscal year as the Company
was unable to obtain the working capital required to bring the products to market.
Earn-In Agreement
On November 23, 2020, the Company entered into an
Earn-In Agreement with American Lithium Minerals, Inc. ("AMLM") under which we agreed to make total payments of $75,000
to AMLM in exchange for a 10%
undivided interest in 63 unpatented placer mining claims comprised of approximately 1,260 acres, and 3 unpatented lode mining claims
in Nevada. This $75,000 obligation
has been fully satisfied by the Company ($30,000
paid 12/8/2020 and $45,000
paid 1/5/2021), resulting in Altair owning a 10%
undivided interest in the claims. The Company has the option to increase its ownership interest by an additional 50%
by a total payment of $1,300,648
for exploration and development costs as follows: $100,648
within year one for an additional 10/%,
$600,000
in year two for an additional 20%
and $600,000
in year three for an additional 20%
ownership interest. The Earn-In Agreement grants Altair the exclusive right to explore the properties. During the 2021 calendar year,
the Company satisfied roughly $52,000
of the year-one work commitment. The Earn-In Agreement with AMLM remains in good
standing and the Company is exploring further work on the property, namely an secondary sampling program at greater depth, with a focus
on the areas that showed the highest concentrations of Lithium. Although, the Company still holds its 10% interest, it has chosen to
write down the asset to $0, due to the unknown outcome of planned exploration. The Company incurred a $75,000 impairment expense as a
result.
License and Royalty Agreement
On February 10, 2021, the Company entered into a
License and Royalty Agreement (the “License Agreement”) with St-Georges Eco-Mining Corp. (“SX”) and St-Georges
Metallurgy Corp. (“SXM”) under which Altair has received a perpetual, non-exclusive license from SX of its lithium extraction
technology for Altair to develop its lithium bearing prospects in the United States and SXM’s EV battery recycling technology for
which Altair has agreed to act as exclusive master agent to promote the licensing and deployment of the EV battery recycling technology
in North America. Altair has agreed to provide SX with a net revenue interest royalty on all metals and minerals extracted (the “Products”)
and sold from Altair’s mineral interests in the United States and SX has agreed to provide Altair with a 1% trailer fee on any
royalty received by SX from the licensing of the SX EV battery recycling technology to each licensee of the SX EV battery recycling technology
referred by Altair or Altair’s sub-agents. Altair will pay a royalty of 5%
of the net revenue received by Altair for sales of Products using the lithium extraction technology which decreases to 3%
of the net revenue on all payments in excess of US$8,000,000
of production on an annualized basis.
The lithium extraction technology remains under development
by SX and SXM.
EVLS
In August of 2021, the Company filed a patent application
with the USPTO for its carbon nanotube/graphene based battery technology, which was comprised of 20 claims. In late November of 2021,
we received a non-final rejection notice from the USPTO, citing a number of issues with the claims that would require amendment and/or
modification. As we wish to submit a patent application with new ‘artwork,’ or technical drawings, we have decided to file
a new patent application when feasible, as per USPTO policy an applicant cannot submit new artwork with an amended application. The technology
remains viable, under further development, and, in our view, holds great potential to have a disruptive impact in the battery space.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Basis of Presentation
The Company’s financial statements have been
prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”).
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 may differ from those estimates.
Concentrations of Credit Risk
We maintain our cash in bank deposit accounts, the
balances of which at times may exceed federally insured limits. We continually monitor our banking relationships and consequently have
not experienced any losses in our accounts. We believe we are not exposed to any significant credit risk on cash.
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 as of March 31, 2022 and
2021.
Principles of Consolidation
The accompanying consolidated financial statements
for the years ended March 31, 2022 and 2021, include the accounts of the Company and its wholly owned subsidiary, EV Lithium Solutions,
Inc. All significant intercompany transactions have been eliminated in consolidation.
Mining Expenses
The Company records all mining exploration and evaluation
costs as expenses in the period in which they are incurred.
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:
| 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 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
| |
Description | |
Level 1 | |
Level 2 | |
Level 3 |
| | Derivative | | |
$ | — | | |
$ | — | | |
$ | 157,507 | |
| | Total | | |
$ | — | | |
$ | — | | |
$ | 157,507 | |
March 31, 2021
| |
Description | |
Level 1 | |
Level 2 | |
Level 3 |
| | Derivative | | |
$ | — | | |
$ | — | | |
$ | 142,642 | |
| | Total | | |
$ | — | | |
$ | — | | |
$ | 142,642 | |
Income taxes
The Company follows Section 740-10-30 of the FASB
Accounting Standards Codification, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences
of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are
based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for
the fiscal year in which 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 fiscal 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 Income
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”) with regards to uncertainty income taxes. 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 Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of Section
740-10-25.
Stock-based Compensation
In June 2018,
the FASB issued ASU 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment
Accounting. ASU 2018-07 allows companies to account for nonemployee awards in the same manner
as employee awards. The guidance is effective for fiscal years beginning after December 15, 2018, and interim periods within those annual
periods. We adopted this ASU on January 1, 2019. The adoption of ASU 2018-07 did not have a material impact on our consolidated financial
statements.
Basic and Diluted Earnings Per 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 outstanding
shares of common stock during the period. The weighted average number of common shares outstanding and potentially outstanding common
shares assumes that the Company incorporated as of the beginning of the first period presented. As of March 31, 2022 and 2021 the Company
does not have any potentially dilutive shares.
Recent Accounting Pronouncements
In August 2020, the FASB issued ASU 2020-06, Debt—Debt
with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic
815-40)—Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. ASU 2020-06 reduces the number
of accounting models for convertible debt instruments and convertible preferred stock. For convertible instruments with conversion features
that are not required to be accounted for as derivatives under Topic 815, Derivatives and Hedging, or that do not result in
substantial premiums accounted for as paid-in capital, the embedded conversion features no longer are separated from the host contract.
ASU 2020-06 also removes certain conditions that should be considered in the derivatives scope exception evaluation under Subtopic 815-40, Derivatives
and Hedging—Contracts in Entity’s Own Equity, and clarify the scope and certain requirements under Subtopic 815-40. In
addition, ASU 2020-06 improves the guidance related to the disclosures and earnings-per-share (EPS) for convertible instruments and contract
in entity’s own equity. ASU 2020-06 is effective for public business entities that meet the definition of a Securities and Exchange
Commission (SEC) filer, excluding entities eligible to be smaller reporting companies as defined by the SEC, for fiscal years beginning
after December 15, 2021, including interim periods within those fiscal years. For all other entities, the amendments are effective for
fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but
no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Board specified
that an entity should adopt the guidance as of the beginning of its annual fiscal year. The Company has chosen the early adoption of ASU
2020-06. The adoption of this standard did not have a material impact on the Company’s financial statements.
The Company has implemented all new accounting pronouncements
that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed,
and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material
impact on its financial position or results of operations.
NOTE 3 - GOING CONCERN
The Company’s financial statements have been
prepared on a going concern basis, which assumes the Company will be able to realize its assets and discharge its liabilities in the normal
course of business for the foreseeable future. The Company has incurred losses since inception resulting in an accumulated deficit of
$15,366,176 as of March 31, 2022. Further losses are anticipated in the development of its business raising substantial doubt about the
Company’s ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company
generating profitable operations in the future and/or obtaining the necessary financing to meet its obligations and repay its liabilities
arising from normal business operations when they come due. Management intends to finance operating costs over the next twelve months
with existing cash on hand, loans from third parties and/or private placement of common stock. The financial statements of the Company
do not include any adjustments that may result from the outcome of these uncertainties.
NOTE 4 – ASSET PURCHASE
On March 19, 2021, the Company, through its newly
formed Nevada subsidiary, EV Lithium Solutions, Inc., entered into an Asset Purchase Agreement with CryptoSolar LTD, a company formed
under the laws of the United Kingdom, that has energy storage technology for a variety of industries, including electric vehicles, to
be used in place of traditional batteries that rely upon chemical reactions rather than an electric field for higher energy output and
a longer life than traditional batteries. Under the terms of the Asset Purchase Agreement, CryptoSolar received 2,500,000 shares of Altair's
common stock at the closing of the transaction and will receive up to 900,000 additional shares of common stock in connection with the
successful commercial development of the scaled-up EV battery prototype and 20% of the net profits from all products sold by Altair incorporating
or based upon the assets acquired from CryptoSolar. In addition, Altair International entered into a five-year Consulting Agreement with
the sole founder of CryptoSolar LTD, Andreas Tapakoudes, under which he will receive a consulting fee of $4,000 per month to develop a
commercial lithium battery and a manufacturing facility for its commercial production.
The 2,500,000 shares
issued were valued at $0.18 per
share, the closing stock price on the date of grant, for total non-cash expense of $450,000.
On August 23, 2021, the Company issued another 400,000 shares
of common stock per the terms of the agreement. The shares issued were valued at $0.08 per
share, the closing stock price on the date of grant, for total non-cash expense of $32,000.
The Company determined that it was unable to substantiate the actual fair value of the technology that was acquired so has chosen to
impair the full amount of $450,000
as of the year ended May 31, 2021 and the $32,000 as of the year ended May 31, 2022.
NOTE 5 – CONVERTIBLE NOTES PAYABLE
A summary of the Company’s convertible notes
as of March 31, 2022 is presented below:
| Note
Holder | |
Date | |
Maturity
Date | |
Interest | |
Balance
March 31,
2021 | |
Additions | |
Conversions | |
Balance
March 31,
2022 |
| Thirty
05, LLC (1) | |
| 5/18/2020 | | |
5/18/2021 | |
| 8 | % | |
$ | 17,500 | | |
$ | — | | |
$ | (17,500 | ) | |
$ | — | |
| Thirty
05, LLC (3) | |
| 8/14/2020 | | |
8/14/2021 | |
| 8 | % | |
| 12,500 | | |
| — | | |
| (12,500 | ) | |
| — | |
| Thirty
05, LLC (3) | |
| 12/31/2020 | | |
12/20/2021 | |
| 8 | % | |
| 75,000 | | |
| — | | |
| (75,000 | ) | |
| — | |
| EROP
Enterprises(4) | |
| 4/23/2021 | | |
4/23/2022 | |
| 8 | % | |
| — | | |
| 400,000 | | |
| (400,000 | ) | |
| — | |
| EROP
Enterprises(5) | |
| 9/9/2021 | | |
9/9/2022 | |
| 8 | % | |
| — | | |
| 25,000 | | |
| — | | |
| 25,000 | |
| Thirty
05, LLC (5) | |
| 9/22/2021 | | |
9/22/2022 | |
| 8 | % | |
| — | | |
| 5,000 | | |
| (5,000 | ) | |
| — | |
| Thirty 05, LLC
(5) | |
| 10/12/2021 | | |
10/12/2022 | |
| 8 | % | |
| — | | |
| 2,500 | | |
| (2,500 | ) | |
| — | |
| Thirty 05, LLC
(5) | |
| 11/12/2021 | | |
11/12/2022 | |
| 8 | % | |
| — | | |
| 5,000 | | |
| (5,000 | ) | |
| — | |
| EROP Enterprises
(5) | |
| 11/12/2021 | | |
11/12/2022 | |
| 8 | % | |
| — | | |
| 30,000 | | |
| — | | |
| 30,000 | |
| EROP Enterprises (6) |
|
|
1/12/2022 |
|
|
1/12/2023 |
|
|
8 |
% |
|
|
— |
|
|
|
77,783 |
|
|
|
— |
|
|
|
77,783 |
|
| EROP Enterprises (6) |
|
|
1/13/2022 |
|
|
1/13/2023 |
|
|
8 |
% |
|
|
— |
|
|
|
25,000 |
|
|
|
— |
|
|
|
25,000 |
|
| Thirty 05, LLC (6) |
|
|
1/25/2022 |
|
|
1/25/2023 |
|
|
8 |
% |
|
|
— |
|
|
|
5,000 |
|
|
|
— |
|
|
|
5,000 |
|
| EROP Enterprises (7) |
|
|
3/4/2022 |
|
|
3/4/2023 |
|
|
8 |
% |
|
|
— |
|
|
|
20,000 |
|
|
|
— |
|
|
|
20,000 |
|
| Thirty 05, LLC (7) |
|
|
3/7/2022 |
|
|
3/7/2023 |
|
|
8 |
% |
|
|
— |
|
|
|
2,500 |
|
|
|
— |
|
|
|
2,500 |
|
| | |
| | | |
Total | | |
$ | 105,000 | | |
$ | 597,783 | | |
$ | (517,500 | ) | |
$ | 185,283 | |
| | |
| | | |
Less Discount | | |
$ | (63,023 | ) | |
| | | |
| | | |
$ | (129,180 | ) |
| | |
| | | |
Total | | |
$ | 41,977 | | |
| | | |
| | | |
$ | 56,103 | |
Total accrued interest on the above Notes as of March 31, 2022
and 2021, is $4,780
and $3,339, respectively.
| |
(1) |
the Note holder has the right to convert all or a portion of the outstanding balance of the Note into common shares of the Company at a rate of the lesser of (i) $0.25 or (ii) 80% of the lowest closing bid price of the common stock in the 15 days prior to conversion. |
| |
|
|
| |
(2) |
On notice, the Note holder has the right to convert all or a portion of the outstanding balance of the Note into common shares of the Company at a rate of the lesser of (i) $0.25 or (ii) 70% of the lowest closing bid over the prior five trading days prior to conversion. |
|
| |
(3) |
On notice, the Note holder has the right to convert all or a portion of the outstanding balance of the Note into common shares of the Company at a rate of the lesser of (i)$0.25 or 70% of the lowest closing bid price of the common stock in the 15 days prior to conversion. |
| |
|
|
| |
(4) |
On notice, the Note holder has the right to convert all or a portion of the outstanding balance of the Note into common shares of the Company at a rate of the lesser of (i)$0.25 or 80% of the lowest closing bid price of the common stock in the 5 days prior to conversion. |
| |
|
|
| |
(5) |
On notice, the Note holder has the right to convert all or a portion of the outstanding balance of the Note into common shares of the Company at a rate of the lesser of (i)$0.10 or 70% of the lowest closing bid price of the common stock in the 5 days prior to conversion. |
| |
|
|
| |
(6) |
On notice, the Note holder has the right to convert all or a portion of the outstanding balance of the Note into common shares of the Company at a rate of the lesser of (i)$0.04 or 70% of the lowest closing bid price of the common stock in the 5 days prior to conversion. |
| |
|
|
| |
(7) |
On notice, the Note holder has the right to convert all or a portion of the outstanding balance of the Note into common shares of the Company at a rate of the lesser of (i)$0.02 or 70% of the lowest closing bid price of the common stock in the 5 days prior to conversion. |
A summary of the activity
of the derivative liability for the notes above is as follows:
| Balance at March 31, 2020 | |
$ | — | |
| Increase to derivative due to new issuances | |
| 198,322 | |
| Decrease to derivative due to conversion/repayments | |
| (199,366 | ) |
| Derivative gain due to mark to market adjustment | |
| 143,686 | |
| Balance at March 31, 2021 | |
| 142,642 | |
| Increase to derivative due to new issuances | |
| 809,212 | |
| Decrease to derivative due to conversion/repayments | |
| (339,324 | ) |
| Derivative gain due to mark to market adjustment | |
| (455,023 | ) |
| Balance at March 31, 2022 | |
$ | 157,507 | |
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:
| Inputs | |
March 31, 2022 |
|
|
March 31, 2021 |
| Stock price | |
$ | 0.0255 | |
|
$ |
0.1547 |
| Conversion price | |
$ | .0172 | |
|
$ |
.0973 |
| Volatility (annual) | |
| 122.88% - 146.18% | |
|
|
518.04% - 159.93% |
| Risk-free rate | |
| .44 - 1.63 | |
|
|
.01 - .06 |
| Dividend rate | |
| — | |
|
|
— |
| Years to maturity | |
| .44 - .93 | |
|
|
.13 - .75 |
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 at the time of conversion is as follows:
| Inputs | |
| | |
|
|
|
| Stock price | |
$ | 0.047
- 0.058 | |
|
$ |
0.4112
- 0.43 |
| Conversion price | |
$ | 0.0291
- 0.0452 | |
|
$ |
0.145
- 0.147 |
| Volatility (annual) | |
| 91.3%
– 141.8% | |
|
|
183.27%
– 470.97% |
| Risk-free rate | |
| .05%
- .17% | |
|
|
.05% |
| Dividend rate | |
| — | |
|
|
— |
| Years to maturity | |
| .25
– 1.0 | |
|
|
.27
– .89 |
The development and
determination of the unobservable inputs for Level 3 fair value measurements and fair value calculations are the responsibility of the
Company’s management.
NOTE 6 – LOANS PAYABLE
A summary of the Company’s loans payable as
of March 31, 2022 is presented below:
| Note Holder | |
Date | |
Maturity Date | |
Interest | |
Balance
March 31,
2021 | |
Additions | |
Repayments | |
Balance
March 31,
2022 |
| Third party | |
| 8/24/2020 | | |
8/24/2021 | |
| 0 | % | |
| 14,165 | | |
$ | — | | |
$ | — | | |
$ | 14,165 | |
| Byron Hampton | |
| 8/24/2020 | | |
8/24/2021 | |
| 8 | % | |
| 9,990 | | |
| — | | |
| — | | |
| 9,990 | |
| Byron Hampton | |
| 12/22/2020 | | |
12/22/2021 | |
| 8 | % | |
| 5,000 | | |
| — | | |
| — | | |
| 5,000 | |
| Byron Hampton | |
| 12/30/2020 | | |
12/30/2021 | |
| 8 | % | |
| 20,000 | | |
| — | | |
| — | | |
| 20,000 | |
| EROP Enterprises, LLC | |
| 12/29/2020 | | |
12/29/2022 | |
| 6 | % | |
| 100,000 | | |
| — | | |
| (100,000 | ) | |
| — | |
| EROP Enterprises, LLC | |
| 2/1/2021 | | |
12/29/2022 | |
| 6 | % | |
| 100,000 | | |
| — | | |
| (100,000 | ) | |
| — | |
| EROP Enterprises, LLC | |
| 3/8/2021 | | |
3/8/2022 | |
| 6 | % | |
| 100,000 | | |
| — | | |
| (100,000 | ) | |
| — | |
| EROP
Enterprises, LLC | |
| 7/29/2021 | | |
7/29/2022 | |
| 8 | % | |
| — | | |
| 75,000 | | |
| (75,000 | ) | (1) |
| — | |
| | |
| | | |
| |
| Total | | |
$ | 349,155 | | |
$ | 75,000 | | |
$ | (375,000 | ) | |
$ | 49,155 | |
| (1) | – Note was exchange for the EROP convertible Note dated January 12,
2022. |
Total accrued interest on the above notes
payable as of March 31, 2022 and 2021 was $3,991
and $4,356, respectively.
NOTE 7 – COMMON STOCK
On October 1, 2021, the Company filed a Certificate
of Amendment of its Articles of Incorporation increasing its authorized common stock to 5,000,000,000 shares (5 billion) and its preferred
stock to 10,000,000 shares (10 million).
Shares issued for services
On September 1, 2020, the Company entered into a
service agreement with Oliver Goeservices LLC for a term of one year. Per the terms of the agreement the Company will issue them 300,000
shares of common stock per month. As of March 31, 2021, 300,000
shares had not yet been issued by the transfer agent and were disclosed on the balance sheet as common stock to be issued of $72,000.
During the year ended March 31, 2022, the Company issued the 2,500,000
shares for total non-cash compensation of $240,000.
All shares were valued at the closing stock price on the date of grant.
On December 9, 2020, the Company entered into two
separate service agreements with Paul Pelosi to be a member of the Company's advisory board. Both agreements are for a term of one
year. Per the terms of the agreements the Company will issue Mr. Pelosi a total of 6,000,000
shares of common stock. 50% of the shares are to be issued and earned immediately with the other 50% issued and earned on June
30, 2021. The 3,000,000
shares issued on December 29, 2020, were valued at the closing stock price on the date of grant for total non-cash expense of
$870,000.
The 3,000,000 shares issued on June 30, 2021, were valued at the closing stock price on the date of grant for total non-cash expense
of $330,000.
On December 14, 2020, the Company entered into a service
agreement with Adam Fishman to be a member of the Company’s advisory board for a term of one year. Per the terms of the agreements
the Company will issue Mr. Fishman 5,000,000 shares of common stock. 50% of the shares are to be issued and earned immediately with the
other 50% issued and earned on June 30, 2021. The 2,500,000 shares issued on December 14, 2020, were valued at the closing stock price
on the date of grant for total non-cash expense of $750,000. The 2,500,000 shares to be issued on June 30, 2021 was increased to 3,000,000
and were valued at the closing stock price on the date of grant for total non-cash expense of $330,000.
On February 6, 2021, the Company issued 2,000,000
shares of common stock to a service provider. The shares were valued at $0.47, the closing stock price on the date of grant, for total
non-cash stock compensation expense of $940,000.
On February 11, 2021, the Company issued 2,000,000
shares of common stock to St. Georges Eco-Mining Corp pursuant to the terms of its binding term sheet with St. Georges Eco-Mining Corp.
The shares were valued at $0.38, the closing stock price on the date of grant, for total non-cash stock compensation expense of $760,000.
On March 19, 2021, the Company granted 2,500,000 shares
of common stock for services for total non-cash expense of $450,000. As of March 31, 2021, the shares had not yet been issued by the transfer
agent and were disclosed on the balance sheet as common stock to be issued of $450,000. The shares were issued on April 6, 2021.
On April 6, 2022, 2,500,000 shares of common stock were issued by
the transfer agent that were disclosed as common stock to be issued of $450,000, on March 31, 2021.
During the year ended March 31, 2022, the Company
issued 4,950,000 shares of common stock at $0.08 per share for total non-cash stock compensation of $388,000.
During the year ended March 31, 2022, the Company
issued 241,500 shares of common stock at $0.12 per share for total non-cash stock compensation of $28,980.
During the year ended March 31, 2022, the Company
issued 50,000 shares of common stock at $0.11 per share for total non-cash stock compensation of $5,500.
During the year ended March 31, 2022, the Company
issued 100,000 shares of common stock at $0.09 per share for total non-cash stock compensation of $9,000.
During the year ended March 31, 2022, the Company
issued 50,000 shares of common stock at $0.06 per share for total non-cash stock compensation of $3,000.
Shares issued for conversion of liabilities
During the year ended March 31, 2021, EROP Enterprises
LLC, converted $104,500 and $3,579 of principal and interest, respectively, into 734,820 shares of common stock.
During the year ended March 31, 2021, Williams Ten,
LLC, converted $15,000 and $930 of principal and interest, respectively, into 109,862 shares of common stock.
During the year ended March 31, 2022, the Company
issued 241,500 shares of common stock at $0.12 per share for accounts payable due of $24,150. A $4,830 loss was recognized
on the issuance.
During the year ended March 31, 2022, the Company
issued 250,000 shares of common stock at $0.08 per share for accounts payable due of $20,000.
During the year ended
March 31, 2022, the Company issued 50,000 shares of common stock at $0.11 per share for accounts payable due of $5,000. A
$3,269 gain was recognized on the issuance.
During the year ended March 31, 2022, the Company
issued 100,000 shares of common stock at $0.09 per share for settlement of accounts payable of $8,412.
During the year ended March 31, 2022, the Company
issued 14,522,767 shares of common stock for conversion of $517,500 and $27,579 of principal and interest, respectively.
Refer to Note 9 for shares issued to related parties.
NOTE 8 – WARRANTS
On October 15, 2020, the Company entered into a service
agreement with a third party for a term of six months. Per the terms of the agreement the party was granted 1,000,000
warrants to purchase shares of common stock. The warrant vest on April 15, 2021.
The warrants have an exercise price of $0.25
and expire in three years. The aggregate fair value of the warrants totaled $180,000
based on the Black Scholes Merton pricing model using the following estimates: stock price of $0.18,
exercise price of $0.25, 1.57%
risk free rate, 735.46% volatility
and expected life of the warrants of 3
years. The value of the warrants is being amortized to expense over the six-month term of the agreement. During the years ended March 31, 2022 and 2021, the Company recognized
$15,000 and $165,000 of the expense, respectively.
A summary of the status
of the Company’s outstanding stock warrants and changes during the year is presented below:
| | |
Number of Warrants | |
Weighted
Average
Price | |
Weighted
Average
Fair Value | |
Aggregate
Intrinsic Value |
| | Outstanding, March 31, 2020 | | |
| — | | |
$ | — | | |
$ | — | | |
$ | — | |
| | Issued | | |
| 1,000,000 | | |
$ | 0.25 | | |
$ | 0.18 | | |
| — | |
| | Exercised | | |
| — | | |
$ | — | | |
$ | — | | |
| — | |
| | Expired | | |
| — | | |
$ | — | | |
$ | — | | |
| — | |
| | Outstanding, March 31, 2021 | | |
| 1,000,000 | | |
$ | 0.25 | | |
$ | 0.18 | | |
$ | — | |
| | Issued | | |
| — | | |
$ | — | | |
$ | — | | |
| — | |
| | Exercised | | |
| — | | |
$ | — | | |
$ | — | | |
| — | |
| | Expired | | |
| — | | |
$ | — | | |
$ | — | | |
| — | |
| | Outstanding, March 31, 2022 | | |
| 1,000,000 | | |
$ | 0.25 | | |
$ | 0.18 | | |
$ | — | |
| | | | |
| | | |
| | | |
| | | |
| | |
| | Exercisable, March 31, 2022 | | |
| 1,000,00 | | |
$ | 0.25 | | |
$ | 0.18 | | |
$ | — | |
| Range of Exercise Prices | |
Number Outstanding 3/31/2022 | |
Weighted Average Remaining Contractual Life | |
Weighted Average Exercise Price |
| $0.25 | | |
| 1,000,000 | | |
| 1.54 years | | |
| $0.25 | |
| | | | |
| | | |
| | | |
| | |
The aggregate intrinsic
value represents the total pretax intrinsic value, based on warrants with an exercise price less than the Company’s stock price
as of March 31, 2022, which would have been received by the warrant holder had the warrant holder exercised their warrants as of that
date.
NOTE 9 – RELATED PARTY TRANSACTIONS
During the year ended March 31, 2021, Company issued
4,000,000 common shares to Mr. Leonard Lovallo for his role as an independent member of the Company’s Board of Directors. The shares
were valued at $0.005, the closing stock price on the date of grant, for total non-cash stock compensation expense of $20,000. Mr. Lovallo
was also issued 26,000,000 common shares for his role as Chief Executive Office and President of the Company. The shares were valued at
$0.26, the closing stock price on the date of grant, for total non-cash stock compensation expense of $6,760,000.
During the year ended March 31, 2022, Company
paid Mr. Leonard Lovallo $40,000 for his role as Chief Executive Office and President of the Company.
During the year ended March 31, 2022, the Company
issued 3,000,000 shares
of common stock to Matthew Kiang, COO of EV Lithium. The shares were issued at $0.08 per
share for total non-cash stock compensation of $240,000.
On January 8, 2022, the Company renewed and extended
its contract with its CEO for a term of one year. As a signing bonus, Mr. Lovallo was granted 10,000,000 shares of the Company’s
common stock. The shares were valued at $0.036, for total expense of $360,000, which is being amortized over the one-year term.
NOTE 10 - 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 of the deferred tax assets will not be realized. 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 is 21%.
The provision for Federal income tax consists of the
following March 31:
| | |
2022 | |
2021 |
| Federal income tax benefit attributable to: | |
| | | |
| | |
| Current Operations | |
$ | 503,000 | | |
$ | 3,118,600 | |
| Less: valuation allowance | |
| (503,000 | ) | |
| (3,118,600 | ) |
| Net provision for Federal income taxes | |
$ | — | | |
$ | — | |
The cumulative tax effect at the expected rate of
21% of significant items comprising our net deferred tax amount is as follows:
| | |
2022 | |
2021 |
| Deferred tax asset attributable to: | |
| | | |
| | |
| Net operating loss carryover | |
$ | 3,211,000 | | |
$ | 1,965,000 | |
| Less: valuation allowance | |
| (3,211,000 | ) | |
| (1,965,000 | ) |
| Net deferred tax asset | |
$ | — | | |
$ | — | |
At March 31, 2022, the Company had net operating
loss carry forwards of approximately $3,211,000
that may be offset against future taxable income. No tax benefit has been reported in the March 31, 2022 or 2021
financial statements since the potential tax benefit is offset by a valuation allowance of the same amount.
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 March 31, 2022, the Company
had no accrued interest or penalties related to uncertain tax positions.
NOTE 11 – SUBSEQUENT EVENTS
In accordance with SFAS 165 (ASC 855-10) management
has performed an evaluation of subsequent events through the date that the financial statements were issued and has determined that it
does not have any material subsequent events to disclose in these financial statements other than the following.
On May 19, 2022, the Company issued a convertible
promissory to Thirty 05, LLC, in the amount of $15,000. The note accrues interest at 8% and matures in one year. The note is convertible
at the lower of $0.02 or a 30% discount.
On May 24, 2022, the
Company issued a convertible promissory to EROP Enterprises, LLC,
in the amount of $15,000. The note accrues interest at 8% and matures in one year. The note is convertible at the lower of $0.02 or a
30% discount.