Notes
to Condensed Consolidated Financial Statements
(Unaudited)
March
31, 2022
NOTE
1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
Quad
M Solutions, Inc. (“the Company”), f/k/a Mineral Mountain Mining & Milling Company, was incorporated under the laws of
the State of Idaho on August 4, 1932 for the purpose of mining and exploring for non-ferrous and precious metals, primarily silver, lead
and copper. Until April 16, 2019, the Company had two wholly owned subsidiaries, Nomadic Gold Mines, Inc., an Alaska corporation, and
Lander Gold Mines, Inc., a Wyoming corporation (the “MMMM Mining Subsidiaries”).
On
March 22, 2019 the Company entered into two separate Share Exchange Agreements pursuant to which it agreed to acquire 100% of the capital
stock of two newly organized private entities, NuAxess 2, Inc., a Delaware corporation, and PR345, Inc., a Texas corporation n/k/a OpenAxess,
Inc., in consideration for the issuance of 400,000 shares of Series C Preferred Stock, issued to the control shareholders of each of
NuAxess and PR345, n/k/a OpenAxess and 400,000 shares of Series D Preferred Stock, issued to the minority, non-control shareholders of
the two entities.
The
closing of the two Share Exchange Agreements occurred on April 16, 2019, at which date NuAxess and PR345 became wholly-owned subsidiaries
of the Company. In addition, on April 16, 2019, the Company sold 75% of its equity interests in the MMMM Mining Subsidiaries for $10,
to Aurum, LLC, a newly organized Nevada corporation (“Aurum”) formed and controlled by Sheldon Karasik, the Company’s
former CEO, Chairman and a principal shareholder, for the purpose of entering into the MBO Agreement and operating the Company’s
formerly wholly-owned Mining Subsidiaries. In addition, Aurum assumed all of the liabilities of the MMMM Mining Subsidiaries. Reference
is made to Recent Developments-Former MMMM Mining Subsidiaries under Note 3 – Former Mining Operations, and Note 6 –
Share Exchange and Assignment Agreement, below.
On
May 13, 2019, the Company filed a Definitive Information Statement on Schedule 14C for the purpose of implementing the following corporate
actions: (i) the increase in the authorized shares of common stock from 100 million shares to 900 million shares (the “Authorized
Common Stock Share Increase”); and (ii) change the name of the Company from Mineral Mountain Mining & Milling Company to Quad
M Solutions, Inc. (the “Name Change”).
On
June 7, 2019, the Company filed Articles of Amendment to its Articles of Incorporation with the Secretary of State of the State of Idaho
effecting the Name Change. On June 14, 2019 the Company filed Articles of Amendment to its Articles of Incorporation with the Secretary
of State of the State of Idaho effecting the Authorized Common Stock Share Increase. In addition, effecting the Authorized Common Stock
Share Increase. In addition, on July 19, 2019, the Company obtained the requisite approval from FINRA for the Name Change.
NOTE
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This
summary of significant accounting policies of Quad M Solutions, Inc and its two wholly owned subsidiaries, NuAxess and Open Axess, is
presented to assist in understanding the Company’s financial statements. The financial statements and notes are representations
of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting
principles generally accepted in the United States and have been consistently applied in the preparation of the financial statements.
Fair
Value of Financial Instruments
The
Company’s financial instruments as defined by ASC 825-10-50, include cash, receivables, accounts payable and accrued expenses.
All instruments are accounted for on a historical cost basis, which, due to the short maturity of these financial instruments, approximates
fair value at September 30, 2020 and December 31, 2020.
The
standards under ASC 820 defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting
principles, and expands disclosures about fair value measurements. FASB ASC 820 establishes a three-tier fair value hierarchy which prioritizes
the inputs used in measuring fair value as follows:
Level
1. Observable inputs such as quoted prices in active markets;
Level
2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and
Level
3. Unobservable inputs in which there is little of no market data, which require the reporting entity to develop its own assumptions.
The
Company has convertible debt of $842,140 measured at fair value at March 31, 2022.
SCHEDULE OF DERIVATIVE LIABILITY
| | |
March
31, 2022 | | |
Quoted
Prices in Active Markets for Identical Assets (Level
1) | | |
Significant
Other Observable Inputs (Level
2) | | |
Significant
Unobservable Inputs (Level
3) | |
| Derivative
liability | |
| - | | |
| - | | |
| - | | |
$ | 1,384,820 | |
| | |
| | | |
| | | |
| | | |
| | |
| Total | |
| - | | |
| - | | |
| - | | |
$ | 1,384,820 | |
Going
Concern
As
shown in the accompanying financial statements, the Company has incurred cumulative operating losses since inception. As of March 31,
2022, the Company has limited financial resources with which to achieve its objectives and attain profitability and positive cash flows
from operations. As shown in the accompanying balance sheets and statements of operations, the Company has an accumulated deficit of
$27,558,433.
The Company’s working capital deficit is $7,925,536.
Achievement
of the Company’s objectives will depend on its ability to obtain additional financing, to generate revenue from current and planned
business operations, and to effectively operating and capital costs.
The
Company plans to fund the operations of its two wholly owned subsidiaries, NuAxess and PR345, by potential sales of its common stock
and/or by issuing debt securities to institutional investors. However, there is no assurance that the Company will be able to achieve
these objectives, therefore substantial doubt about its ability to continue as a going concern exists.
Provision
for Taxes
Income
taxes are provided based upon the liability method of accounting pursuant to ASC 740-10-25 Income Taxes – Recognition. Under
the approach, deferred income taxes are recorded to reflect the tax consequences in future years of differences between the tax basis
of assets and liabilities and their financial reporting amounts at each year-end. A valuation allowance is recorded against deferred
tax assets if management does not believe the Company has met the “more likely than not” standard imposed by ASC 740-10-25-5
to allow recognition of such an asset. See Note 8.
Revenue
Recognition
Sales
revenues are generally recognized in accordance with the SAB 104 Public Company Guidance, when an agreement exists and price is determinable,
the services are rendered, net of discounts, returns and allowance and collectability is reasonably assured. We are often entitled to
bill our customers and receive payment from our customers in advance of recognizing the revenue. In the instances in which we have received
payment from our customers in advance of recognizing revenue, we include the amounts in deferred or unearned revenue on our consolidated
balance sheet.
NOTE
3 – SHARE EXCHANGE AND ASSIGNMENT AGREEMENT
On
April 16, 2019, the Company entered into a Share Exchange and Assignment Agreement (the “MBO Agreement”) with Aurum, LLC
(“Aurum”), a newly formed Nevada corporation organized by Sheldon Karasik, the Company’s former CEO, Chairman and a
principal shareholder for the purpose of acquiring 75% of the capital stock of the MMMM Mining Subsidiaries from the Company for cash
consideration of $10 plus the assumption by Aurum of all of the liabilities of the Mining Subsidiaries. On the date of closing of the
MBO Agreement, the Company made a payment of $100,000 to Aurum, which proceeds were to be used by Aurum to fund the operations of the
MMMM Mining Subsidiaries. The MBO Agreement also required the Company to allocate a portion of the proceeds received by the Company under
the Crown Bridge Equity Line, if any, to pay Aurum for the operations of the MMMM Mining Subsidiaries, among other terms and conditions.
In connection with the MBO Agreement, Aurum assumed all of the liabilities of the MMMM Mining Subsidiaries, which were disclosed to the
Company as totaling approximately $96,673. As a result of this transaction, a loss of $403,327 was recorded.
NOTE
4 – CONVERTIBLE DEBT
Outstanding
Convertible Debt
On
or about November 4, 2021, the Company issued a convertible promissory note to an institutional investor for the principal sum of $25,000,
together with interest at the rate of 8% per annum, with a maturity date of November 4, 2022. During the period ended December 31, 2021,
$312 of regular interest and $3,904 of debt discount was expensed. On or about November 4, 2021, the Company issued a convertible promissory
note to an institutional investor for the principal sum of $50,000, together with interest at the rate of 8% per annum, with a maturity
date of November 4, 2022. During the period ended December 31, 2021, $624 of regular interest and $7,808 of debt discount was expensed.
On or about November 4, 2021, the Company issued a convertible promissory note to an institutional investor for the principal sum of
$25,000, together with interest at the rate of 8% per annum, with a maturity date of November 4, 2022. During the period ended December
31, 2021, $312 of regular interest and $4,318 of debt discount was expensed. On or about November 4, 2021, the Company issued a convertible
promissory note to an institutional investor for the principal sum of $50,000, together with interest at the rate of 8% per annum, with
a maturity date of November 4, 2022. During the period ended December 31, 2021, $624 of regular interest and $8,636 of debt discount
was expensed. On or about November 9, 2021, the Company issued a convertible promissory note to an institutional investor for the principal
sum of $220,000, together with interest at the rate of 8% per annum, with a maturity date of November 9, 2022. During the period ended
December 31, 2021, $2,542 of regular interest and $27,405 of debt discount, and $3,937 in derivative liability discount was expensed.
On or about April 29, 2019, the Company issued a convertible promissory note to another institutional investor for the principal sum
of $66,000, together with interest at the rate of 12% per annum, with a maturity date of April 29, 2020. During the period ended September
30, 2021, $3,993 of regular interest, was expensed. During the period ended December 31, 2021, $3,993 of regular interest was expensed.
On
or about May 7, 2019, the Company issued a convertible promissory note to another institutional investor for the principal sum of $50,000,
together with interest at the rate of 12% per annum, with a maturity date of May 7, 2020.
On
April 5, 2021, the investor converted the outstanding principal into 925,930 shares of common stock, $15,918 of accrued interest remains
outstanding.
On
or about August 4, 2021, the Company issued a convertible promissory note to an institutional investor for the principal sum of $660,000,
together with interest at the rate of 8% per annum, with a maturity date of August 4, 2022. During the period ended December 31, 2021,
$13,308 of regular interest and $166,356 of debt discount was expensed. On or about August 10, 2021, the Company issued a convertible
promissory note to an institutional investor for the principal sum of $150,000, together with interest at the rate of 8% per annum, with
a maturity date of August 10, 2022. During the period ended December 31, 2021, $3,024.66 of regular interest and $37,498.63 of debt discount
was expensed. On or about August 13, 2021, the Company issued a convertible promissory note to an institutional investor for the principal
sum of $137,500, together with interest at the rate of 8% per annum, with a maturity date of August 13, 2022. During the period ended
December 31, 2021, $2,811 of regular interest, $30,499 of debt discount and $4,159 of derivative liability discount was expensed. On
or about August 20, 2021, the Company issued a convertible promissory note to an institutional investor for the principal sum of $50,000,
together with interest at the rate of 8% per annum, with a maturity date of August 20, 2022. During the period ended December31, 2021,
$1,008 of regular interest, $8,241 of debt discount and $4,362 of derivative liability discount was expensed. On or about September 20,
2021, the Company issued a convertible promissory note to an institutional investor for the principal sum of $110,000, together with
interest at the rate of 8% per annum, with a maturity date of September 20, 2022.
NOTE
5 – NOTE PAYABLE
On
April 9, 2021, the Company entered into a Master Senior Loan Agreement (“MSLA”) with BeachStar Partners, LLC as Lender and
Administrative Agent. Pursuant to the MSLA, the Company borrowed the initial sum of $4,200,000,
which sum has been received by the Company in full. A Promissory was issued at closing, the Note bears interest at 18%
per annum based on a 360-day year and is due eighteen months from the funding day. The Company pays interest monthly in the amount greater
of $63,000 or 4% of the collections received
by the Company. The Company has authorized the lender to apply the portion of each collections payment that exceeds the monthly interest
amount to future monthly interest amount scheduled through the maturity date, at which time such excess payments shall be applied to
the principle of the loan The MSLA is not convertible to the Company’s stock unless in the event of a material uncured default
of the MSLA. The MSLA further provides for additional incremental loans in tranches of $1,000,000 per every 500 insured lives
added by the Company, up to a maximum of 65,000 insured lives, or $130,000,000. During the period
ended March 31, 2022, the Company paid $132,822 in interest.
On
February 2, 2022, the Company received an additional $600,000.
NOTE
6 – COMMON AND PREFERRED STOCK
Upon
formation the authorized capital of the Company was 2,000,000 shares of common stock with a par value of $.05, in 1953 the Company increased
the authorized capital to 3,000,000 shares of common stock, in 1985 the authorized capital was again increased to 10,000,000 shares of
common stock, and in 2014 the Company increased the authorized capital to 100,000,000 shares of common stock with a par value of $.001
and 10,000,000 shares of preferred stock with a par value of $.10. On May 13, 2019, the Company filed a DEF 14C approving the increase
in authorized shares of common stock from 100,000,000 shares to 900,000,000 shares.
Preferred
Stock
Series
B Super Voting Preferred Stock
On
March 21, 2019, the Company, while under the control of former CEO, Chairman and principal shareholder, Sheldon Karasik, filed a Certificate
of Designation amending the Articles of Incorporation and designating the rights and restrictions of one (1) share of newly authorized
Series B Super Voting Preferred Stock, par value $0.10 per share (the “Series B Preferred Stock”), pursuant to resolutions
approved by the Board of Directors (the “Board”) on November 5, 2018. On March 21, 2019, the Company issued to Sheldon Karasik,
the Chief Executive Officer, President and Chairman of the Board, the one (1) share of Series B Preferred Stock for $0.16, which price
was based on the closing price of the Company’s Common Stock of $0.16 as of November 5, 2018, the date of the issuance, which was
approved by the Company’s then Board. Sheldon Karasik, as the holder of the Series B Preferred Stock, was entitled to vote together
with the holders of the Company’s Common Stock upon all matters that may be submitted to holders of Common Stock for a vote, and
on all such matters, the share of Series Voting Preferred Stock shall be entitled to that number of votes equal to 51% of the total number
of votes that all issued and outstanding shares of Common Stock and all other securities of the Company are entitled to, as of any such
date of determination, on a fully diluted basis. The Company filed the Certificate of Designation with the Secretary of State of Idaho
on March 21, 2019. In connection with the closing of the SEAs and the MBO Agreement, Mr. Karasik transferred and assigned the Series
B Preferred Stock to Pat Dileo, the Company’s CEO and Chairman. During the period ended December 31, 2021, Pat Dileo transferred
and assigned the Series B Preferred Stock to the current CEO and Chairman, Joseph Frontiere.
Series
C and Series D Convertible Preferred Stock
On
April 2, 2019, the Company filed two Certificates of Designation amending the Articles of Incorporation and the Certificates of Designation
of the rights and restrictions of 400,000 shares of Series C Convertible Preferred Stock par value $0.10 and 400,000 shares of Series
D Convertible Preferred Stock par value $0.10, which were originally issued pursuant to two separate Share Exchange Agreements, see Note
5.
During
the three-month period ended March 31, 2022, the holders of shares of Series C Convertible Preferred Stock and Series D Convertible Preferred
Stock (collectively, the “Series C and Series D Shares”) converted a total of 193,101 Series C and Series D Shares into a
total of 23,396,128 shares of Common Stock.
Series
E Convertible Preferred Stock
On
April 8, 2019, the Company filed a Certificates of Designation amending the Articles of Incorporation and the Certificates of Designation
of the rights and restrictions of 25,000 shares of Series E Convertible Preferred Stock with par value $0.10 and stated value $10.
On
April 8, 2019, the Company issued 18,182 shares of Series E Convertible Preferred Stock (“Series E Preferred”) to an institutional
investor in consideration for funding the $100,000 payment made to Aurum pursuant to the MBO Agreement.
During
the quarter ended March 31, 2021, a total of 1,365 shares of Series E Convertible Preferred stock were converted into 2,150,000 shares
of common stock.
During
the quarter ended June 30, 2021, the Company issued 2,000,000 shares of common stock and 1,000,000 warrants valued at $139,346 for the
extinguishment of the Series E Preferred Stock. A loss on extinguishment was recorded in the amount of $417,655.
Series
F Convertible Preferred Stock
On
March 9, 2019, the Company filed a Certificates of Designation amending the Articles of Incorporation and the Certificates of Designation
of the rights and restrictions of 20,750 shares of Series F Convertible Preferred Stock with par value $0.10 and stated value $10.
During
the period ended March 31, 2020, 50 shares of Series F Preferred Stock were converted into 43,750 shares of common stock. During the
period ended June 30, 2020, 11,870 shares of Series F Preferred Stock were converted into 3,217,500 shares of common stock. During the
period ended September 30, 2020, 5,430 of the outstanding shares of Series F Preferred Stock were converted into 1,420,000 shares of
common stock.
On
October 2, 2020, the 3,400 remaining outstanding shares of Series F Preferred Stock was converted into 881,250 shares of common stock.
13%
Series G Cumulative Redeemable Perpetual Preferred Stock
On
April 27, 2020, the Company filed a Certificate of Designation amending the Articles of Incorporation and designation the rights and
restrictions of 2,000,000 shares of 13% Series G Cumulative Redeemable Perpetual Preferred Stock, par value $0.10 and a stated value
of $25 per share. The Series G Holders will not have any voting rights. To date, no shares of the Series G Cumulative Redeemable Perpetual
Preferred Stock have been issued or are outstanding nor are there any plans to issue any shares of Series G Cumulative Redeemable Perpetual
Preferred Stock.
Series
M Convertible Preferred Stock
On
April 27, 2020, the Company filed a Certificates of Designation amending the Articles of Incorporation and the Certificates of Designation
of the rights and restrictions of 50,000 shares of Series M Convertible Preferred Stock with par value $0.10.
On
May 28, 2020, the Company’s Board of Directors approved the execution of consulting services agreements with six unrelated persons/entities,
none of whom were affiliates of the Company, pursuant to which the Company agreed to the issuance of 11,500 shares of a Series M Convertible
Preferred Stock.
During
the quarter ended September 30, 2020, the Company issued 11,500 shares of Series M Preferred Shares to consultants for services valued
at $691,214. One shareholder converted 1,500 shares into 75,000 shares of common stock.
During
the quarter ended December 31, 2020 the Company issued 4,500 shares of Series M Preferred Shares for 225,000 shares of common shares
that had previously been disclosed as “shares to be issued”.
During
the quarter ended March 31, 2021, a total of 6,000 shares of Series M Convertible Preferred stock were converted into 300,000 shares
of common stock.
During
the quarter ended June 30, 2021, there was no activity.
During
the quarter ended September 30, 2021, the 4,500 shares of Series M Preferred Shares that were previously disclosed as being converted
during the quarter ended December 31, 2020, was reversed as it did not happen.
Series
A Convertible Preferred Stock
On
July 2, 2020, the Company filed a Certificates of Designation amending the Articles of Incorporation and the Certificates of Designation
of the rights and restrictions of 2,851,318 shares of Series A Convertible Preferred Stock with par value $0.10.
During
the quarter ended September 30, 2020, 950,000 shares of Series A Preferred Stock were converted into 950,000 shares of common stock.
Series
H Convertible Preferred Stock
On
August 28, 2020, the Company filed a Certificates of Designation amending the Articles of Incorporation and the Certificates of Designation
of the rights and restrictions of 5,000 shares of Series H Convertible Preferred Stock with par value $0.10 and stated value $10. The
shares were issued for cash of $25,000.
During
the quarter ended March 31, 2021, a total of 1,259 shares of Series H Convertible Preferred stock were converted into 599,733 shares
of common stock.
7%
Series O Cumulative Redeemable Perpetual Preferred Stock
On
September 28, 2020, the Company filed a Certificates of Designation amending the Articles of Incorporation and designation the rights
and restrictions of 1,000,000 shares of Series O 7% Redeemable Cumulative Preferred Stock, par value $0.10 and a stated value of $12.50.
9%
Series N Convertible Preferred Stock
On
November 20, 2020, the Company filed a Certificates of Designation amending the Articles of Incorporation and the Certificates of Designation
of the rights and restrictions of 100,000 shares of Series N Convertible Preferred Stock with par value $0.10.
On
November 27, 2020 the Company issued 10,300 of Series N Preferred Stock for cash of $103,000 and paid $3,000 in fees related to the issuance.
During
the quarter ended June 30, 2021, the Company paid $136,933 to extinguish the Series N Convertible Preferred Stock. A loss on extinguishment
was recorded in the amount of $33,933.
Series
R Convertible Preferred Stock
On
November 19, 2021, the Company filed a Certificates of Designation amending the Articles of Incorporation and the Certificates of Designation
of the rights and restrictions of 100,000 shares of Series R Convertible Preferred Stock with par value $0.10.
On
December 3, 2021, the Company issued 2,000 shares of Series R Preferred Stock for services in the amount of $100,000.
On
February 28, 2022, the holders of shares of Series R Convertible Preferred Stock converted a total of 2,000 Series R Shares into a total
of 2,000,000 shares of Common Stock.
The
shares of Preferred Stock outstanding at March 31, 2022 and December 31, 2021
SCHEDULE OF PREFERRED STOCK OUTSTANDING
| A | |
| A | | |
| A | |
| | |
Period
Ended | |
| Preferred
Stock Series | |
March
31,
2022 | | |
December
31,
2021 | |
| A | |
| 1,901,318 | | |
| 1,901,318 | |
| B | |
| 1 | | |
| 1 | |
| C | |
| 200,000 | | |
| 383,256 | |
| D | |
| 297,122 | | |
| 311,284 | |
| E | |
| - | | |
| - | |
| F | |
| - | | |
| - | |
| H | |
| 3,741 | | |
| 3,741 | |
| M | |
| 13,000 | | |
| 13,000 | |
| N | |
| - | | |
| - | |
| R | |
| - | | |
| 2,000 | |
| Total | |
| 2,415,182 | | |
| 2,614,600 | |
Common
Stock
During
the three-month period ended March 31, 2021, the Company issued 2,004,361 shares of common stock for the conversion of convertible debt
valued at $105,000 and 50,318 for a commitment share adjustment related to convertible debt valued at $11,020
During
the three-month period ended June 30, 2021, the Company issued 6,409,503 shares of common stock for the conversion of convertible debt
valued at $309,750 and 2,000,000 shares of common stock and 1,000,000 warrants for the conversion of 16,902 shares of Series E Preferred
Stock. (See above)
During
the three-month period ended September 30, 2021, the Company issued 7,839,902 shares of common stock for conversion of preferred shares;
8,429,542 shares for conversion of warrants and 2,800,000 shares of common stock for conversion reserved preferred shares for debt due
to preferred shareholders. (See above.)
During
the three-month period ended December 31, 2021, the Company issued 3,100,000 shares of common stock for conversion of preferred shares;
2,962,500 shares for conversion of warrants and 3,200,000 shares of common stock for conversion reserved preferred shares for debt due
to preferred shareholders. (See above.) Additionally, the Company issued 2,000,000 shares of common stock for services valued at $200,000.
During
the three-month period ended March 31, 2022, the Company issued 10,772,364 shares of common stock for conversion of preferred shares;
3,210,326 shares for conversion of convertible debt; 14,623,764 shares of common stock for conversion reserved preferred shares for debt
due to preferred shareholders (see above); 10,000 shares of common stock for an investment valued at $100,000 and 166,667 shares of common
stock for financing fees.
The
following warrants were outstanding at March 31, 2022:
SUMMARY OF WARRANTS OUTSTANDING
| Warrant
Type | |
Warrants Issued
and Unexercised | | |
Exercise Price | | |
Expiration Date |
| Warrants* | |
| 1,666,667 | | |
$ | 0.02 | | |
December
2024 |
| Warrants* | |
| 1,249,995 | | |
$ | 0.60 | | |
July
2023 |
| Warrants | |
| 3,000,000 | | |
$ | 1.00 | | |
June
2024 |
| Warrants | |
| 7,333,333 | | |
$ | 0.09 | | |
August
2026 |
| Warrants | |
| 1,666,667 | | |
| 0.09 | | |
August
2026 |
| Warrants | |
| 550,000 | | |
| 0.09 | | |
August
2026 |
| Warrants | |
| 555,555 | | |
| 0.09 | | |
August
2026 |
| Warrants | |
| 1,222,222 | | |
| 0.09 | | |
August
2026 |
| Warrants | |
| 1,252,526 | | |
| 0.09-0.30 | | |
November
2026 |
| * | Each of these
warrants have a down round feature that have been triggered by certain events resulting in recognition of the down round. The accounting
recognition of the triggered down round features, which have the same accounting effect as a “dividend”, has a cumulatively
reduced retained earnings by $1,575,068 and increased the outstanding number of warrants. |
The
following warrants were outstanding at December 31, 2021:
| Warrant
Type | |
Warrants
Issued and
Unexercised | | |
Exercise
Price | | |
Expiration
Date |
| Warrants | |
| 10,000 | | |
$ | 5.00 | | |
December
2021 |
| Warrants | |
| 5,000 | | |
$ | 10.00 | | |
December
2021 |
| Warrants | |
| 16,666,667 | | |
$ | 0.02 | | |
December
2024 |
| Warrants | |
| 1,249,995 | | |
$ | 0.60 | | |
July
2023 |
| Warrants | |
| 3,000,000 | | |
$ | 1.00 | | |
June
2024 |
| Warrants | |
| 7,333,333 | | |
$ | 0.09 | | |
August
2026 |
| Warrants | |
| 1,666,667 | | |
| 0.09 | | |
August
2026 |
| Warrants | |
| 550,000 | | |
| 0.09 | | |
August
2026 |
| Warrants | |
| 555,555 | | |
| 0.09 | | |
August
2026 |
| Warrants | |
| 1,222,222 | | |
| 00.09 | | |
August
2026 |
| Warrants | |
| 1,252,526 | | |
| .09-0.30 | | |
November
2026 |
NOTE
7 – RELATED PARTY TRANSACTIONS
During
the year ended September 30, 2016 the Company issued a note payable to a family member of a former officer in the amount of $15,000.
$3,000 was converted to 300,000 shares of common stock and $5,000 was repaid in cash. The note bears interest at a rate of 10% beginning
on July 24, 2016, the balance of principal and interest at December 31, 2021 and 2020 was $12,095 and $11,045, respectively.
During
the year ended September 30, 2017 the Company issued two notes payable to Premium Exploration Mining in the amount of $35,000 and $15,000
each having an interest rate of 5%, the balance of principal and interest at December 31, 2021 and 2020 was $70,399 and $65,235, respectively,
the companies had directors in common at the time of the transaction.
NOTE
8 – INCOME TAXES
Topic
740 in the Accounting Standards Codification (ASC 740) prescribes recognition threshold and measurement attribute for the financial statement
recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC 740 also provides guidance on de-recognition,
classification, interest and penalties, accounting in interim periods, disclosure and transition. At December31, 2018 the Company had
taken no tax positions that would require disclosure under ASC 740.
The
Company files income tax returns in the U.S. federal jurisdiction and the State of Idaho. The Company is currently in arrears in filing
their federal and state tax returns, both jurisdictions statute of limitations of three years does not begin until the tax returns are
filed.
Deferred
income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amount used for income tax purposes.
Significant
components of the deferred tax assets at an anticipated tax rate 21% for the period ended March 31, 2022 and December 31,
2021 are as follows:
SUMMARY
OF DEFERRED TAX ASSETS
| | |
March
31, 2022 | | |
December
31, 2021 | |
| Net
operating loss carryforwards | |
| 27,558,443 | | |
| 30,908,777 | |
| Deferred
tax asset | |
| 6,120,480 | | |
| 6,824,052 | |
| Valuation
allowance for deferred asset | |
| (6,120,480 | ) | |
| (6,824,052 | ) |
| Net
deferred tax asset | |
| - | | |
| - | |
At
March 31, 2022 and December 31, 2021, the Company has net operating loss carryforwards of approximately $27,558,443 and $30,908,777 which
will begin to expire in the year 2031. The change in the allowance account from December 31, 2021 to March 31, 2022 was $703,572.
On
December 22, 2017 H.R. 1, originally known as the Tax Cuts and Jobs Act, (the “Tax Act”) was enacted. Among the significant
changes to the U.S. Internal Revenue Code, the Tax Act lowered the U.S. federal corporate income tax rate (“Federal Tax Rate”)
from 35% to 21% effective January 1, 2018. The Company will compute its income tax expense for the December 31, 2017 fiscal year using
a Federal Tax Rate of 21%. The remeasurement of the deferred tax assets resulted in a $68,010 reduction in tax assets to $885,961 from
an estimate of $953,971 that the assets would have been using a 35% effective tax rate.
NOTE
9 – SUBSEQUENT EVENTS
On
May 4, 2022, the Company issued 900,000 shares of common stock related to a note issuance. On May 9, 2022, the Company issued 45,495
shares of common stock related to a note issuance. On May 9, 2022, the Company issued 87,921 shares of common stock related to a note
issuance. On May 12, 2022, the Company issued 5,828,172 shares of common stock for 4,226 shares of Series D Preferred Shares. On May
12, 2022, the Company issued 5,828,173 shares of common stock for 1,892 shares of Series C Preferred Shares.
