Note 5 - Stockholders' Deficit

12 Months Ended

Jun. 30, 2023

Notes to Financial Statements

Equity [Text Block]

NOTE 5 - STOCKHOLDERS’ DEFICIT

Common stock

During the years ended June 30, 2023 and year ended June 30, 2022, there were no common share transactions and the Company’s shares remain under a trading halt.

Preferred stock

On December 10, 2018, the Company issued 40 shares of the Series B Preferred Stock (the “Preferred Shares”) at a price of $2,250, for total proceeds of $90,000.

On January 14, 2019, the Company issued 2 Preferred Shares at a price of $2,250, for total proceeds of $4,500.

Each Preferred Share carries an annual 12% dividend compounded annually for three (3) consecutive years. The Company will pay dividends on a quarterly basis at the discretion of the Board to the extent cash or other assets are available. Dividends may be paid in cash or other property. The Shares have no voting rights.

The Shares are convertible into shares of common stock of the Company at the option of the holder on a 1:12,500 basis (subject to adjustments for stock dividends, splits, combinations and similar events) at any time within 12 to 36 months from the date of issuance of the Shares provided that the Company has enough authorized and unissued shares of common stock available for the conversion. Any accrued but unpaid interest or dividends related to the Shares may also be converted into common stock at the discretion of the Board of Directors.

The Company also has the option to call the Shares and purchase some or all of the Series B Preferred Stock owned by investors at any time at on a pro rata, nearest whole share basis. The redemption value of the Shares is $2,500 per Share (subject to adjustments for stock dividends, splits, combinations and similar events) (the “Redemption Value”). On the date 36 months from the issuance date of the Shares, if not already converted to common, the Company shall redeem the Shares at the Redemption Value and pay all accrued but unpaid dividends and interest to the extent assets are available.

The mandatorily redeemable preferred stock liability of $105,000 has been recognized at the issuance date.

During the year ended June 30, 2023, the Company accrued dividends on the preferred stock of $nil (2022 - $6,420) which has been included in interest expense in the statement of operations. During the year ended June 30, 2023, the Company recognized accretion interest on the preferred stock of $nil (2022 - $1,650).

On September 15, 2023, the Company cancelled and returned to treasury, 40 preferred shares.

Stock options and restricted shares

The Company currently has no options or restricted shares issued and outstanding.

Stock purchase warrants

The following summarizes information about the Company’s stock purchase warrants outstanding:

	Number of Warrants			Price Per Share		Weighted Average Exercise Price
Balance, June 30, 2021 and 2022		4,000,000		$	0.05	$	0.05
Expired		(4,000,000	)	$	0.05	$	0.05
		-			-		-

				Number of Warrants
Expiry Date	Exercise Price			June 30, 2023		June 30, 2022
November 16, 2022	$	0.05	*		-		4,000,000
Total outstanding and exercisable			**		-		4,000,000

*The exercise price of the warrants issued on November 16, 2017 is the lower of $0.05 and the lowest trade price in the 10 days previous to exercise.

**On November 16, 2022, these warrants expired unexercised.

Equity portion of convertible debt

On May 7, 2018, the Company and SBI Investments Inc. and L2 Capital entered into amended convertible debt agreements to fix the conversion price of all outstanding convertible debt at $0.0293 per share. There were no adjustments to the carrying values of convertible debt pursuant to the amendments.

Share obligations

(a) Pursuant to a separation agreement with a previous CFO, the Company will issue 36,000 shares of common stock with a due date fair value of $3,600 and settle all unpaid fees from July 1, 2016 to February 10, 2017 (effective date of resignation).

(b) Pursuant to director’s agreements, the Company is obligated to issue 65,000 shares of common stock. As at June 30, 2021, these shares have not been issued and as such, the due date fair value of $37,650 has been recognized in obligation to issue shares within equity.

(c) On February 21, 2019, the Company entered into a promissory note for total proceeds of $80,000. The promissory note bears interest at 2% per month and matures on November 21, 2019. As additional consideration to the holder, the Company must also issue 1,000,000 common shares within 180 days of the promissory note. As at June 30, 2021 and 2020, these shares have not been issued and the due date fair value of $20,000 has been recognized within obligation to issue shares within equity.