FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended (the
"Securities Act") and Section 21E of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). These forward-looking statements are not
historical facts but rather are based on current expectations, estimates and
projections. We may use words such as "anticipate," "expect," "intend," "plan,"
"believe," "foresee," "estimate" and variations of these words and similar
expressions to identify forward-looking statements. These statements are not
guarantees of future performance and are subject to certain risks, uncertainties
and other factors, some of which are beyond our control, are difficult to
predict and could cause actual results to differ materially from those expressed
or forecasted. You should read this report completely and with the understanding
that actual future results may be materially different from what we expect. The
forward-looking statements included in this report are made as of the date of
this report and should be evaluated with consideration of any changes occurring
after the date of this Report. We will not update forward-looking statements
even though our situation may change in the future and we assume no obligation
to update any forward-looking statements, whether as a result of new
information, future events or otherwise.
Our Business
Earn-In Agreement
On November 23, 2020, the Company entered into an Earn-In Agreement with
American Lithium Minerals, Inc. ("AMLM") under which we agreed to make total
payments of $75,000 to AMLM in exchange for a 10% undivided interest in 63
unpatented placer mining claims comprised of approximately 1,260 acres, and 3
unpatented lode mining claims in Nevada. This $75,000 obligation has been fully
satisfied by the Company ($30,000 paid 12/8/2020 and $45,000 paid 1/5/2021),
resulting in Altair owning a 10% undivided interest in the claims. The Company
has the option to increase its ownership interest by an additional 50% by a
total payment of $1,300,648 for exploration and development costs as follows:
$100,648 within year one for an additional 10/%, $600,000 in year two for an
additional 20% and $600,000 in year three for an additional 20% ownership
interest. The Earn-In Agreement grants Altair the exclusive right to explore the
properties. In July 2021, the Company undertook a sampling and testing program
on the Stonewall lithium project, which returned results showing anomalous
lithium content. During 2022, Altair satisfied payment of the claim fees due to
the Unites States Bureau of Land Management, and in August of 2022, Altair and
AMLM entered into a 2ndAmendment to the original Earn-In Agreement, which, among
other things, detailed that that parties agreed that the 2021 Calendar Year work
commitment had been satisfied, and made certain changes to the required Annual
Work Commitments required to be satisfied by Altair for the '22, '23, and '24
calendar years. Further sampling and testing will be required to advance the
Stonewall project.
License and Royalty Agreement
On February 10, 2021, the Company entered into a License and Royalty Agreement
(the "License Agreement") with St-Georges Eco-Mining Corp. ("SX") and St-Georges
Metallurgy Corp. ("SXM") under which Altair has received a perpetual,
non-exclusive license from SX of its lithium extraction technology for Altair to
develop its lithium bearing prospects in the United States and SXM's EV battery
recycling technology for which Altair has agreed to act as exclusive master
agent to promote the licensing and deployment of the EV battery recycling
technology in North America. Altair has agreed to provide SX with a net revenue
interest royalty on all metals and minerals extracted (the "Products") and sold
from Altair's mineral interests in the United States and SX has agreed to
provide Altair with a 1% trailer fee on any royalty received by SX from the
licensing of the SX EV battery recycling technology to each licensee of the SX
EV battery recycling technology referred by Altair or Altair's sub-agents.
Altair will pay a royalty of 5% of the net revenue received by Altair for sales
of Products using the lithium extraction technology which decreases to 3% of the
net revenue on all payments in excess of US$8,000,000 of production on an
annualized basis.
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Activities of our wholly-owned subsidiary, EV Lithium Solution, Inc. (EVLS)
On March 19, 2021, EVLS acquired a 100% interest in the IP related to a novel,
solid state lithium/graphene battery technology from Cryptosolar Ltd., a Company
domiciled in the United Kingdom. We continue to invest in the research and
development of this technology and such development is moving forward rapidly.
We are currently in the process of patenting the technology and are exploring
options for commercialization. On July 21, 2021, the Company engaged Mr. Matthew
Kiang to assist in our efforts to commercialize our battery technology, and on
August 6, 2021, the Company filed its first patent application for this
technology, which referenced 20 claims. In December 2021, we received a
non-final rejection of the claims on various grounds and we have since
determined that the most prudent course of action will be to file a new patent
application rather than amend the existing application. We do not currently have
an established timeline for our filing of a new patent application. We have
eliminated the use of lithium in our battery platform, resulting in a technology
which does not rely on any electrochemical reactions. This development results
in an energy supply with a cost that will not be affected by the fluctuations in
global lithium prices, and carries no risk of fire as lithium batteries do. We
are currently and actively exploring options for commercialization of this
technology, which we have named our Energy Storage Unit, or ESU.
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. Management intends to finance operating costs over the next twelve
months with existing cash on hand, loans from third parties andor private
placements of common stock. No assurance can be given that such funds will be
available.
Results of operations for the three months ended December 31, 2022 compared to
the three months ended December 31, 2021.
Revenues
The Company has not recognized any revenue to date.
Operating Expenses
Mining and exploration expense for the three months ended December 31, 2022, was
$0 compared to $32,797 for the three months ended December 31, 2021. The
Company's mining and exploration expense has decreased to $0 in the current
period as the Company looks for new opportunities.
Consulting expense for the three months ended December 31, 2022, was $0 compared
to $10,000 for the three months ended December 31, 2021. We incurred additional
expense in the prior period for consultants who are not currently doing any work
for the Company.
Compensation expense - related party, for the three months ended December 31,
2022 was $102,000 compared to $12,000 for the three months ended December 31,
2021. The Company incurs compensation expense for its CEO. In the current period
we recognized $90,000 of stock compensation expense from shares issued in the
prior period for which their value is being amortized over the term of the CEO's
employment agreement.
Director fees for the three months ended December 31, 2022, was $10,000 compared
to $7,500 for the three months ended December 31, 2021.
General and administrative expense for the three months ended December 31, 2022,
was $29,159 compared to $37,822 for the three months ended December 31, 2021. In
the current period are larger expenses were for professional fees of $9,500, and
other outside services of $12,000. In the prior period professional fees were
$11,000 and we had $12,000 of investor relation expense we did not have in the
current period.
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Other Expense
Total other expense for the three months ended December 31, 2022, was $4,609,
consisting of $22,988 of interest expense, which includes $20,331 of debt
discount amortization and a loss on the issuance of convertible debt of $5,328.
We had a gain on the change in the fair value of derivative of $11,692 and a
gain on conversion of debt of $8,317. Total other expense for the three months
ended December 31, 2021, was $302,756, consisting of $289,909 of interest
expense, which includes $278,732 of debt discount amortization, a loss on the
change in the fair value of derivative of $7,520 and a loss on the issuance of
convertible debt of $5,328.
Net Loss
Net loss for the three months ended December 31, 2022, was $145,768 in
comparison to a net loss of $402,875 for the three months ended December 31,
2021. The large decrease to our net loss is largely attributed to our non-cash
debt discount expense we incurred in the prior period.
Results of operations for the nine months ended December 31, 2022 compared to
the nine months ended December 31, 2021.
Revenues
The Company has not recognized any revenue to date.
Operating Expenses
Mining and exploration expense for the nine months ended December 31, 2022 was
$0 compared to $364,327 for the nine months ended December 31, 2021. The
Company's mining and exploration expense has decreased to $0 in the current
period as the Company looks for new opportunities.
Consulting expense for the nine months ended December 31, 2022, was $0 compared
to $1,302,862 for the nine months ended December 31, 2021. In the prior period
we granted 13,950,000 shares of common stock for total non-cash consulting
expense of $1,243,000. In addition to the stock compensation, we incurred
additional expense in the prior period for consultants who are not currently
doing any work for the Company.
Compensation expense - related party, for the nine months ended December 31,
2022 was $306,000 compared to $36,000 for the nine months ended December 31,
2021. The Company incurs compensation expense for its CEO. In the current period
we recognized $270,000 of stock compensation expense from shares issued in the
prior period for which their value is being amortized over the term of the CEO's
employment agreement.
Director fees for the nine months ended December 31, 2022, was $25,000 compared
to $22,500 for the nine months ended December 31, 2021.
General and administrative expense for the nine months ended December 31, 2022,
was $117,399 compared to $162,734 for the nine months ended December 31, 2021.
In the current period are larger expenses were for professional fees of $36,500
and other outside services of $40,000. In the prior period professional fees
were $59,000, and our expenses for OTC fees and the transfer agent were higher
than in the current period. In the prior period we also had $17,382 of investor
relation expense we did not have in the current period.
Other Expense
Total other expense for the nine months ended December 31, 2022, was $216,282,
consisting of $159,291 of interest expense, which includes $149,958 of debt
discount amortization, a loss on the change in the fair value of derivative of
$87,352, a loss on the issuance of convertible debt of $7,779 and a gain on
conversion of debt of $38,140. Total other expense for the nine months ended
December 31, 2021, was $327,913, consisting of $520,571 of interest expense,
which includes $489,689 of debt discount amortization, a gain on the change in
the fair value of derivative of $442,646, a loss on the issuance of convertible
debt of $215,611, a loss on the settlement of debt of $5,647, and impairment
expense of $32,000.
Net Loss
Net loss for the nine months ended December 31, 2022, was $664,681, in
comparison to a net loss of $2,216,336 for the nine months ended December 31,
2021. The large decrease to our net loss is largely attributed to our non-cash
stock-based compensation expense and other non-cash expenses, related to our
convertible debt and derivatives, we incurred in the prior period.
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Liquidity and Capital Resources
Cash flow used in Operating Activities.
We have not generated positive cash flows from operating activities. During the
nine months ended December 31, 2022, the Company used $115,399 of cash for
operating activities compared to $355,640 of cash for operating activities in
the prior period.
Cash flow from Financing Activities
We have financed our operations primarily from either advancements or the
issuance of equity and debt instruments. During the nine months ended December
31, 2022, the Company received $70,000 of cash from the issuance of new
convertible notes and $50,000 from the issuance of a non-convertible note. In
the prior period we received $467,500 of cash from the issuance of convertible
notes, $75,000 from the issuance of a non-convertible notes, which was offset by
payments of $300,000 to repay related party debt.
Going Concern
We have not attained profitable operations and are dependent upon obtaining
financing to pursue any extensive acquisitions and activities. For these
reasons, our auditors stated in their report on our audited financial statements
that they have substantial doubt that we will be able to continue as a going
concern without further financing. The financial statements have been prepared
"assuming that we will continue as a going concern," which contemplates that we
will realize our assets and satisfy our liabilities and commitments in the
ordinary course of business.
Off-Balance Sheet Arrangements
We have no significant 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 that are material to
stockholders.
Future Financings
We will continue to rely on equity sales of our common shares or debt financing
arrangements in order to continue to fund our business operations. Issuances of
additional shares will result in dilution to existing stockholders. There is no
assurance that we will achieve any additional sales of the equity securities or
arrange for debt or other financing to fund our operations and other activities.
Critical Accounting Policies
Our financial statements and accompanying notes have been prepared in accordance
with United States generally accepted accounting principles applied on a
consistent basis. The preparation of financial statements in conformity with
U.S. generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting periods.
We regularly evaluate the accounting policies and estimates that we use to
prepare our financial statements. A complete summary of these policies is
included in the notes to our financial statements. In general, management's
estimates are based on historical experience, on information from third party
professionals, and on various other assumptions that are believed to be
reasonable under the facts and circumstances. Actual results could differ from
those estimates made by management.
Recently Issued Accounting Pronouncements
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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ALTAIR INTERNATIONAL CORP. 
