NOTE 12- STOCKHOLDERS' DEFICIT

12 Months Ended

Jun. 30, 2022

Notes

NOTE 12- STOCKHOLDERS' DEFICIT

NOTE 12 - STOCKHOLDERS’ DEFICIT

The Company’s Common Stock was Deregistered and Trading was Halted

In July of 2020, the Company received notice from the SEC that it was seeking to deregister the Company’s common stock pursuant to Section 12(j), based on the Company’s failure to file periodic reports with the Commission and otherwise provide current information to the market.  This failure was based in large part from the need to restate its financial statements and the need to find and engage a PCAOB auditor who was willing to conduct and provide the required audits amid the SEC and DOJ’s investigations. Although we were able to secure a qualified auditor, we were not able to make our filings quickly enough and by the time they were completed, the Commission had already sent a notice under Section 12(k). The Commission takes a hardline position in these situations such that once they have instituted deregistration proceedings, the only options available to the Company were to litigate or settle and consent to the deregistration of the Company’s common stock. Historically, registrants have not been successful in litigating with the Commission over Section 12(j) matters and therefore the Company determined that the best course of action was to consent to deregistration of its common stock and then file a new registration statement on Form 10-12G. On December 17, 2020, the SEC order suspending trading went into effect. At this time, the Company has signed a settlement agreement with the SEC with respect to the registration of its common stock in response to the Commission’s institution of deregistration proceedings under Section 12(j), it is re-registering the same under Section 12(g) by way of filing a Form 10-12G.  

The Company filed the Form 10-12G Registration Statement with the SEC and on August 4, 2022 the SEC declared the Form 10-12G Registration Statement effective. The Company is currently preparing the application to the Over-The-Counter Markets Group (the “OTC”) to trade on OTC-QB tier. Upon going through OTC approval process and receiving our application approval, it will be sent to the Financial Industry Regulatory Authority ( “FINRA”) for their review and approval. The Company’s complete and current effective Form 10-12G meets the information requirements required by Form 15c2-11. Until FINRA has accepted our filing and we have provided any required addition requested information and documentation required, there will not be a publicly quoted market for our stock.  Upon approval by FINRA, they will issue our trading symbol and we will be relisted for trading. Any delay or failure in satisfying FINRA’s requirements would result in our shareholders not having a public market to sell their shares. Further, it would make it more difficult for the Company to obtain the financing it requires.  

Common Stock Transactions

Fiscal year ended June 30, 2022, the Company:

(i) Accepted subscriptions for an aggregate of 8,290,000 shares of restricted common stock s from accredited investors for cash proceeds of $414,500.

Fiscal year ended June 30, 2021:

(i)	Issued an aggregate of 944,165 shares of restricted common stock for consulting services at a value of $59,833 on the dates of issuances;
(ii)	Accepted subscriptions for an aggregate of 15,366,668 shares of restricted common stock from accredited investors for cash proceeds of $929,000; and
(iii)	Issued 750,000 shares of restricted common stock for bonus compensation at a value of $45,000 on the date of issuance.

Warrants

During the fiscal year ended June 30, 2022, the Company issued 3,145,000 three-year warrants at an average strike price of $0.05 as part of private placements to accredited investors. The Black-Scholes fair value of the issued warrants is $132,115.

During the fiscal year ended June 30, 2021, the Company issued 7,783,334 three-year warrants at an average strike price of $0.062 as part of private placements to accredited investors. The Black-Scholes fair value of the issued warrants is $360,237.

Stock Options

During the fiscal year ended June 30, 2022, the Company granted 8,000,000 two-year options at strike price of $0.05 and granted 2,000,000 one-half year options at a strike price of $0.05. The Black-Scholes fair value of the issued options was $269,661.

During our fiscal years ended June 30, 2021 there was no option activity.

The Black-Scholes option-pricing model was used to estimate the fair value of the options and warrants with the following weighted-average assumptions for the fiscal years ending June 30, 2022 and 2021 were as follows:

June 30,  June 30,

	2022		2021
Risk-free interest rate	0.30% - 2.93	%	0.11% - 0.22	%
Expected volatility	0% -119.78	%	123.545% -138.01	%
Expected life (years)	2-3		3-5
Expected dividend yield	0	%	0	%

Stock option and warrant activity for the year ended June 30, 2022 are as follows:

	Options			Warrants
	Number of		Exercise	Number of		Exercise
	Shares		Price	Shares		Price
Outstanding at June 30, 2020	30,000,000	$	0.05	5,082,149	$	0.05
Granted	---		---	7,783,334	$	0.062
Cancelled	---		---	---		---
Expired	---	$	---	---	$	---
Exercised	---		---	---		---
Outstanding at June 30, 2021	30,000,000	$	0.05	12,865,483	$	0.058
Granted	10,000,000	$	0.05	3,145,000	$	0.05
Canceled	---		---	---		---
Expired	---	$	---	---		---
Exercised	---		---	---		---
Outstanding at June 30, 2022	40,000,000	$	0.05	16,010,483	$	0.056

Stock options and warrants outstanding and exercisable at June 30, 2022, are as follows:

	Outstanding and Exercisable Options							Outstanding and Exercisable Warrants
			Weighted							Weighted
			Average							Average
			Contractual		Weighted					Contractual		Weighted
Exercise			Remaining		Average		Exercise			Remaining		Average
Price	Outstanding	Exercisable	Life		Exercise		Price	Outstanding	Exercisable	Life		Exercise
Range	Number	Number	(in Years)		Price		Range	Number	Number	(in Years)		Price
$0.05	30,000,000	30,000,000	1.72			$	0.05	9,877,149	9,879,149	1.30
$0.05	4,000,000	4,000,000	1.27			$	0.06	3,833,334	3,833,334	0.62
$0.05	4,000,000	4,000,000	1.40			$	0.07	2,100,000	2,100,000	0.51
$0.05	2,000,000	2,000,000	0.32			$	0.15	200,000	200,000	1.80
	40,000,000	40,000,000						16,010,483	16,010,483
	Outstanding Options		1.56	$	0.05		Outstanding Warrants			1.04	$	0.056
	Exercisable Options		1.56	$	0.05		Exercisable Warrants			1.04	$	0.056

As of June 30, 2022, the aggregate intrinsic value of all stock options and warrants vested and expected to vest was $488,796 and the aggregate intrinsic value of currently exercisable stock options and warrants was $488,796. The intrinsic value of each option or warrant share is the difference between the fair market value of the common stock and the exercise price of such option or warrant share to the extent it is "in-the-money". Aggregate intrinsic value represents the value that would have been received by the holders of in-the-money options had they exercised their options on the last trading day of the quarter and sold the underlying shares at the closing stock price on such day. The intrinsic value calculation is based on the $0.0589 closing stock price of the common stock on December 17, 2020, the day our stock was delisted. The total number of in-the-money options and warrants vested and exercisable as of June 30, 2022 was 56,010,483.

The total intrinsic value associated with options exercised during the year fiscal ended June 30, 2022 was $0. Intrinsic value of exercised shares is the total value of such shares on the date of exercise less the cash received from the option or warrant holder to exercise the options.

The total grant-date fair value of option and warrant shares vested during the fiscal year ended June 30, 2022 was $401,537.