Notes
to Condensed Consolidated Financial Statements
(Unaudited)
March
31, 2023
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 March 31, 2023 and December 31, 2022.
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.
At
March 31, 2023 and December 31, 2022 the Company did not have any assets measured at fair value other than cash and deposits. At March
31, 2023 and December 31, 2022 the Company had conversion features embedded in its convertible notes payable.
Going
Concern
As
shown in the accompanying financial statements, the Company has incurred cumulative operating losses since inception. As of March 31,
2023, 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
$35,034,310.
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 its future operations by potential sales of its common stock or by issuing debt securities. However, there is no
assurance that the Company will be able to generate sufficient equity and/or debt capital at terms and conditions satisfactory of the
Company.
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.
New
Accounting Pronouncements
The
Company has evaluated the authoritative guidance issued subsequent to March 31, 2023 and does not expect the adoption of these standards
to have a material effect on its financial position or results of operations.
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 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. 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 December 31, 2021, $312 of regular interest and
$4,318 of debt discount was expensed. During the period ended December 31, 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. 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, $2,811 of regular
interest, $30,499 of debt discount and $4,159 of derivative liability 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 May 27, 2022, 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 May 27, 2023. On or about October 18, 2022, the Company issued a convertible promissory note to an institutional investor for the
principal sum of $111,111.11, together with interest at the rate of 8% per annum, with a maturity date of October 18, 2023. On or
about November 2, 2022, the Company issued a convertible promissory note to an institutional investor for the principal sum of
$111,111.11, together with interest at the rate of 8% per annum, with a maturity date of November 2, 2023.
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, 2023, the Company paid $199,234 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.
Common
Stock
On
February 23, 2020, the Company implemented a 1 for 100 reverse split of its outstanding common stock (the “Reverse Split”).
All issuances for services are valued at market price on the approximate date of service unless otherwise noted.
During
the three-month period ended December 31, 2019, the Company authorized for issuance 66,666 shares of common stock valued at $2,158 for
investor relations, these are disclosed on the balance sheet as shares to be issued.
On
December 5, 2019, the Company issued 7,819 shares of common stock for the conversion of principal of $7,000 and accrued interest of $460
at a conversion price of $0.009541.
During
the three-month period ended March 31, 2020, the Company issued 5,000 shares of stock for services and recorded an additional 5,000 shares
as “to be issued” for a total value of $40,000; 130,094 shares of common stock for the conversion of principal of $68,287,
accrued interest of $13,342 and financing fees of $1,750; 43,750 shares of common stock for the conversion of 50 shares of Series F Preferred
Stock
During
the three-month period ended June 30, 2020, the Company issued 8,970,724 shares of common stock for the conversion of convertible debt;
1,074,302 shares of common stock for conversion of warrants; 3,217,500 shares of common stock for conversion of 11,870 shares of Series
F Preferred Stock and 200,000 shares for services valued at $77,500.
During
the three-month period ended September 30, 2020, the Company issued 2,267,183 shares of common stock for the conversion of convertible
debt valued at $203,180; 3,395,000 shares of common stock for conversion of preferred stock (see above); and 10,000 shares of common
stock for services that had previously been recorded as “stock to be issued” Additionally, 750,000 shares were recorded as
stock to be issued for services in the amount of $255,000.
During
the three-month period ended December 31, 2020, the Company issued 5,276,643 shares of common stock for the conversion of convertible
debt valued at $321,015; 164,155 shares of common stock for the issuance of convertible debt valued at $32,688. The $32,688 was recorded
as debt discount and will be amortized over the life of the notes; 20,000 shares of common stock for financing fees valued at $4,340;
2,881,250 for the conversion of preferred stock (see above); and 2,199,073 for conversion of warrants. Additionally, 230,659 shares of
common stock were authorized for issuance valued at $45,050, the shares are disclosed in “to be issued”.
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 a total of 38,773,121 shares of common stock related to convertible debt,
financing fees, retirement of derivative liability and conversion of preferred stock.
During
the three-month period ended June 30, 2022, the Company issued a total of 26,772,211 shares of common stock related to convertible debt,
financing fees, issuance of warrants and conversion of preferred stock.
During
the three-month period ended September 30, 2022, the Company issued a total of 26,266,934 shares of common stock related to convertible
debt, financing fees, services, and conversion of preferred stock.
During
the three-month period ended December 31, 2022, the Company issued a total of 5,000,000 shares of common stock related to convertible
debt, financing fees, services, and conversion of preferred stock.
The
following warrants were outstanding at March 31, 2023:
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. |
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 September 30, 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.
NOTE
9 – SUBSEQUENT EVENTS
On
or about April 1, 2023, the Company initiated an arbitration proceeding entitled Quad M Solutions, Inc., NuAxess 2, Inc. and Joseph
Frontiere v. TVT 2.0 LLC and Andrew Fellus, seeking damages based on fraud and RICO claims. The action is pending Respondents’
response to the demand for arbitration.