The following discussion should be read in conjunction with our financial
statements, including the notes thereto, appearing elsewhere in this annual
report. The following discussion contains forward-looking statements that
reflect our plans, estimates and beliefs. Our actual results could differ
materially from those discussed in the forward-looking statements. Our audited
financial statements are stated in United States Dollars and are prepared in
accordance with United States Generally Accepted Accounting Principles.
RESULTS OF OPERATIONS
We have incurred recurring losses to date. Our financial statements have been
prepared assuming that we will continue as a going concern and, accordingly, do
not include adjustments relating to the recoverability and realization of assets
and classification of liabilities that might be necessary should we be unable to
continue in operation.
We expect we will require additional capital to meet our long term operating
requirements. We expect to raise additional funds through, among other things,
the sale of equity or debt securities although no assurance can be given as to
availability of funds or the terms thereof.
FISCAL YEAR ENDED MARCH 31, 2021 COMPARED TO FISCAL YEAR ENDED MARCH 31, 2020
The Company has not recognized any revenue to date.
Mining and exploration expense for the year ended March 31, 2021 was $215,786
compared to $0 for the year ended March 31, 2020. The Company's mining and
exploration expense has increased in the current period as it pursues its new
Consulting expense for the year ended March 31, 2021 was $3,913,870 compared to
$0 for the year ended March 31, 2020. In the current year we issued 11,450,000
shares of common stock for total non-cash compensation expense of $3,721,250.
Compensation expense - related party for the year ended March 31, 2021 was
$6,806,000 compared to $0 for the year ended March 31, 2020. In the current year
we issued 30,000,000 shares of common stock for total non-cash compensation
expense of $6,780,000.
Director expense for the year ended March 31, 2021 was $2,400 compared to $0 for
the year ended March 31, 2020.
General and administrative expense ("G&A") for the year ended March 31, 2021 was
$171,504 compared to $3,451 for the year ended March 31, 2020. The increase can
be attributed to an increase in professional fees, investor relation expense,
filing fees and a general increase in other expenses for the year. G&A expense
has increased in the current year as a result of the change of our business to
focus on mining operations.
Total other expense for the year ended March 31, 2021, was $884,964, consisting
of $170,462 of interest expense, which includes $158,119 of debt discount
amortization, a loss on the change in the fair value of derivative of $143,686,
a loss on the issuance of convertible debt of $79,130, a loss on the settlement
of debt of $41,686 and $450,000 of impairment expense, compared to $1,805 of
interest expense in the prior year.
Net loss for the year ended March 31, 2021 was $11,994,524, in comparison to a
net loss of $5,256 for the year ended March 31, 2020. The large increase to our
net loss is largely attributed to our non-cash stock-based compensation expense.
LIQUIDITY AND CAPITAL RESOURCES
Cash flow used in Operating Activities.
We have not generated positive cash flows from operating activities. During the
year ended March 31, 2021, the Company used $342,361 of cash for operating
activities compared to $110 of cash for operating activities in the prior
Cash flow used in Investing Activities.
During the year ended March 31, 2021, we paid $75,000 as part of our Earn-In
Agreement with American Lithium Minerals, Inc.
Cash flow from Financing Activities
We have financed our operations primarily from either advancements or the
issuance of equity and debt instruments. During the year ended March 31, 2021
the Company received $559,490 of cash from financing activities offset by
payments of $20,000 to settle loans payable to related parties.
PLAN OF OPERATION AND FUNDING
We expect that working capital requirements will continue to be funded through a
combination of our existing funds, advances from shareholders and further
issuances of securities. Our working capital requirements are expected to
increase in line with the growth of our business.
Existing working capital, further advances and debt instruments, and anticipated
cash flow are expected to be adequate to fund our operations over the next six
months. We have no lines of credit or other bank financing arrangements.
Generally, we have financed operations to date through the proceeds of the
private placement of equity and debt instruments. In connection with our
business plan, management anticipates additional increases in operating expenses
and capital expenditures relating to: (i) developmental expenses associated with
a start-up business); (ii) acquisition of assets; and (iii) sales and marketing
expenses. We intend to finance these expenses with further issuances of
securities and debt issuances. Thereafter, we expect we will need to raise
additional capital and generate revenues to meet long-term operating
requirements. Additional issuances of equity or convertible debt securities will
result in dilution to our current shareholders. Further, such securities might
have rights, preferences or privileges senior to our common stock. Additional
financing may not be available upon acceptable terms, or at all. If adequate
funds are not available or are not available on acceptable terms, we may not be
able to take advantage of prospective new business endeavors or opportunities,
which could significantly and materially restrict our business operations.
Critical Accounting Estimates and Policies
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities of the date
of the financial statements and the reported amounts of revenues and expenses
during the reporting period. Note 1 to the Financial Statements describes the
significant accounting policies and methods used in the preparation of the
Financial Statements. Estimates are used for, but not limited to, contingencies
and taxes. Actual results could differ materially from those estimates. The
following critical accounting policies are impacted significantly by judgments,
assumptions, and estimates used in the preparation of the Financial Statements.
We are subject to various loss contingencies arising in the ordinary course of
business. We consider the likelihood of loss or impairment of an asset or the
incurrence of a liability, as well as our ability to reasonably estimate the
amount of loss in determining loss contingencies. An estimated loss contingency
is accrued when management concludes that it is probable that an asset has been
impaired, or a liability has been incurred and the amount of the loss can be
reasonably estimated. We regularly evaluate current information available to us
to determine whether such accruals should be adjusted.
We recognize deferred tax assets (future tax benefits) and liabilities for the
expected future tax consequences of temporary differences between the book
carrying amounts and the tax basis of assets and liabilities. The deferred tax
assets and liabilities represent the expected future tax return consequences of
those differences, which are expected to be either deductible or taxable when
the assets and liabilities are recovered or settled. Future tax benefits have
been fully offset by a 100% valuation allowance as management is unable to
determine that it is more likely than not that this deferred tax asset will be
Off-Balance Sheet Arrangements
We have not entered into any off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on our financial condition,
changes in financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources and would be considered
material to investors.
Recent Accounting Pronouncements
On June 20, 2018, the Financial Accounting Standards Board (FASB) issued
Accounting Standards Update (ASU) 2018-07, Compensation-Stock Compensation
(Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. ASU
2018-07 is intended to reduce cost and complexity and to improve financial
reporting for share-based payments to nonemployees (for example, service
providers, external legal counsel, suppliers, etc.). Under the new standard,
companies will no longer be required to value non-employee awards differently
from employee awards. Meaning that companies will value all equity classified
awards at their grant-date under ASC718 and forgo revaluing the award after this
date. The Company has chosen to early adopt this standard. There has been no
material impact on our financial statements as a result of adopting this
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.
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