Notes to Financial Statements
September 30, 2019
(Unaudited)
NOTE 1 – NATURE OF
BUSINESS
Star Alliance International Corp. (“the
Company”, “we”, “us”) was originally incorporated with the name Asteriko Corp. in the State of Nevada
on April 17, 2014 under the laws of the State of Nevada, for the purpose of acquiring and developing gold mines as well as certain
other mining properties worldwide.
NOTE 2 – SIGNIFICANT ACCOUNTING
POLICIES
Basis of Presentation
The accompanying unaudited interim
financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United
States of America and the rules of the Securities and Exchange Commission ("SEC"), and should be read in conjunction
with the audited financial statements and notes thereto contained in the Company's latest Annual Report on Form 10-K filed with
the SEC. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation
of the results of operations for the interim periods presented have been reflected herein. The results of operations for such interim
periods are not necessarily indicative of operations for the full year. Notes to the financial statements which would substantially
duplicate the disclosures contained in the audited financial statements for the most recent fiscal year, as reported in the Form
10-K for the fiscal year ended June 30, 2018, have been omitted.
Use of Estimates
The preparation of the financial
statements in conformity with accounting principles generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of liabilities, and the disclosure of contingent liabilities at the date of the
financial statements, and the reported amounts of expenses during the reporting periods. Management makes these estimates using
the best information available at the time, however, actual results could differ materially from those estimates.
NOTE 3 – GOING CONCERN
The accompanying unaudited financial
statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations,
realization of assets, and liquidation of liabilities in the normal course of business. As shown in the accompanying financial
statements, the Company has an accumulated deficit of $849,205 and negative working capital of $640,136 as of September 30, 2019.
For the three months ended September 30, 2019 the Company had a net loss of $73,751 with $18,621 of cash used in operating activities.
Due to these conditions, it raises substantial doubt about the Company’s ability to continue as a going concern.
The Company is
attempting to commence operations and generate sufficient revenue; however, the Company’s cash position may not be sufficient
to support its daily operations. While the Company believes in the viability of its strategy to commence operations and generate
sufficient revenue and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the
Company to continue as a going concern is dependent upon its ability to further implement its business plan and generate sufficient
revenue and its ability to raise additional funds. The financial statements do not include any adjustments relating to the recoverability
and classification of asset carrying amounts or the amount and classification of liabilities that may result should the Company
be unable to continue as a going concern.
NOTE 4 – RELATED PARTY
TRANSACTIONS
In June 2018, Richard Carey, the Company’s
Chairman, advanced the Company $300 to open a bank account. During the year ended June 30, 2019, Mr. Carey advanced the Company
an additional $72,085, of which $34,005 was repaid. On June 12, 2019, Mr. Carey converted $48,000 of the amount due to him into
48,000,000 shares of common stock. The stock was fair valued at $0.002 per share by an independent valuation firm resulting in
a loss on conversion of $48,000.
As of September 30, 2019 and June 30, 2019,
the balance due to Mr. Carey is $16,351 and $3,980, respectively. The advances are unsecured, non-interest bearing and due on demand.
As of September 30, 2019, the Company owes
Anthony Anish, a board member, $1,736 for expense reimbursement.
Mr. Carey is using his personal office
space at no cost to the Company.
NOTE 5 – NOTES PAYABLE
As of September 30, 2019 and June 30, 2019,
the Company owed Kok Chee Lee, the former CEO and Director of the Company, $42,651 and $42,651, respectively for operating expenses
he paid on behalf of the Company during the year ended June 30, 2018. The borrowing is unsecured, non-interest-bearing and due
on demand.
On June 1, 2018, the Company executed a
promissory note in the amount of $32,000 with the former Secretary of the Board for $30,128 of accrued expenses for services previously
provided and an additional $1,872 for services rendered. The note is unsecured, bears interest at 5% per annum and matures on December
1, 2018. As of September 30, 2019 and June 30, 2019, there is $2,135 and $1,732, respectively, of accrued interest due on the note.
The note is past due and in default.
On
October 15, 2018, the Company executed a promissory note for $20,000, for amounts previously accrued and payable to the Company’s
former attorney. The note bears interest at 8% and is due on October 15, 2019. As of September 30, 2019, and June
30, 2019, there is $1,531 and $1,131, respectively, of accrued interest due on the
note.
On June 11, 2019, the company executed
a promissory note with Troy for $500,000 (Note 6). The Company paid the initial $50,000 due on the note on August 13,
2019.
In order to pay the initial $50,000 required
under the APA and the Purchase Note, the Company obtained funding under a Convertible Promissory Note in the amount of $50,000
issued to a private investor. The Convertible Promissory Note accrues interest at an annual rate of 10% and is due and payable
in full in 60 days. The Convertible Promissory Note is convertible to shares of our common stock at a price of $0.05 per share.
NOTE
6 – ACQUISITION
On
August 13, 2019, The Company closed an Asset Purchase Agreement (the “APA”) with Troy Mining Corporation (“Troy”).
Under the APA, the company acquired 78 gold mining claims consisting of approximately 4,800 acres, located east/southeast of El
Portal, California, in Mariposa County, together with all of Troy’s rights to related equipment and buildings currently located
on the mining claims. In exchange for the mining claims and related assets, the company agreed to issue 1,833,000 shares
of a new class of preferred stock designated Series B Preferred Stock; and agreed to make total cash payments in the amount of
$500,000 under a Promissory Note (the “Purchase Note”).
Under the Purchase Note, we paid $50,000
at the time of the closing, and are required to pay an additional $50,000 within sixty days of the closing, and $25,000 every other
month thereafter, with the entire remaining amount due no later than March 31, 2020. In the event of default under the Purchase
Note, all assets acquired under the APA will be forfeited back to Troy. We are current on all the terms of the agreement.
NOTE 7 – PREFERRED STOCK
Of the 25,000,000 shares of the Company's
authorized Preferred Stock, $0.001 par value per share, 1,900,000 are designated as Series B Preferred Stock. Only one person or
entity, is entitled to be designated as the owner of all of the Series B Preferred Stock (the “Holder”), in whose name
the initial certificates representing the Series B Preferred Stock shall be issued. Any transfer of the Series B Preferred Stock
to a different Holder must be approved in advance by the Corporation; provided, however, the Holder shall have the right to transfer
the Series B Preferred Stock, or any portion thereof, to any affiliate of Holder or nominee of Holder, without the approval of
the Corporation. Each share of Preferred Stock shall have one vote per share. Holder is not entitled to dividends or distributions
and each share of Series B Preferred Stock shall be convertible at the rate of two Common Shares for each one B Preferred stock.
In
conjunction with the APA with Troy, the company issued 1,833,000 shares of Series B Preferred Stock, the shares were valued at
$0.002 or $7,532 as if they had been converted into 3,666,000 shares of common stock. As of September 30, 2019, the preferred
shares have not yet been issued by the transfer agent; accordingly, $7,532 has been credited to preferred stock to be issued.
NOTE 8 – COMMON STOCK
During the three months ended September
30, 2019, the Company granted 1,540,000 shares of common stock for services. The shares were valued at $0.002 per share for total
non-cash expense of $3,080. As of September 30, 2019, 40,000 shares have not yet been issued by the transfer agent; accordingly,
$80 has been credited to common stock to be issued.
During the three months ended September
30, 2019, the Company sold 2,290,000 shares of common stock for total cash proceeds of $56,000. In addition, the Company issued
1,000,000 shares of common stock that had been purchased in the prior period.
During the three months ended September
30, 2019, the Company issued 250,000 shares of common stock in conversion of a $250 loan payable.
During the three months ended September
30, 2019, the Company granted 4,000,000 shares of common stock to an officer and two directors for services rendered. The shares
were valued at $0.002 per share for total non-cash expense of $8,000.
NOTE 9 – SUBSEQUENT EVENT
On October 9, 2019, the parties have agreed
to extend the date for filing the registration statement relating to the preferred shares of the Company to be issued to the Troy
shareholders and that would in turn extend the date that the shares would become free trading. This extension will be for 150 days
for filing the registration statement and obtaining approval for the shares to become free trading. All the remaining terms included
in the contract will remain the same.
On August 1, 2019, employment agreements
for Richard Carey, John Baird and Anthony Anish were signed providing for annual salaries of $120,000 per annum for Richard Carey
and $60,000 for John Baird and Anthony Anish.
On October 7, 2019, a new $250,000 Convertible
Promissory Note with initial funding of $50,000 was issued to a private investor. The Convertible Promissory Note accrues interest
at an annual rate of 10% and is due and payable in full in 60 days. The Convertible Promissory Note is convertible to shares of
our common stock at a price of $0.05 per share. The investor converted the $50,000 and $50,000 from Q1 into 2,260,000 shares of
common stock.
On October 9, 2019, a contract extension
was agreed between Star Alliance International Corp. and Troy Mining Corporation. The agreement gives the Company 150 days to file
an S-1 registration statement and obtain approval for the shares that are to be issued to the Troy shareholders to become free
trading.
Subsequent to September 30, 2019, the transfer
agent issued 1,560,000 (in addition to the 50,000 mentioned above) shares of common stock formerly booked as common stock payable.
Subsequent to September 30, 2019, the Company
granted 100,000 shares of common stock for services.
In February 2020, 1,833,000 Series B Preferred
shares were issued to the shareholders of Troy Mining Corporation at the rate of one Star Alliance Series B Preferred share for
each common share of Troy Mining Corporation stock held. These shares may be converted to Star Alliance common stock at the rate
of two common shares for every one share of Star Alliance Preferred stock.
In February 2020 1,000,000 Series A Preferred
shares were issued to Richard Carey. These shares cannot be converted, are not eligible for dividends but carry a 50% voting preference.