10-Q: Star Alliance International Corp. Reports Q3 2024 Results, Cites Going Concern Uncertainty

Star Alliance International Corp.'s Q3 2024 report reveals a net loss and going concern uncertainty amid efforts to commence mining operations and explore acquisitions.

Summary

• Star Alliance International Corp. reported a net loss of $1,835,678 for the nine months ended March 31, 2024, compared to a net loss of $9,943,420 for the same period in 2023.
• The company's accumulated deficit as of March 31, 2024, is $27,383,472.
• The report raises substantial doubt about the company's ability to continue as a going concern, as it used $252,637 of cash in operating activities during the nine months ended March 31, 2024.
• The company is focusing on acquiring and developing gold mining properties and exploring acquisitions in artificial intelligence and fintech.
• Star Alliance International Corp. anticipates starting mining operations in the fourth quarter of 2024.
• The company is negotiating terms for potential acquisitions in the AI and fintech sectors.
• The company's authorized common stock increased to 950,000 shares on January 18, 2024.
• Subsequent to the quarter, the company signed a new convertible note with AES Capital Management, LLC for $400,000 on May 6, 2024, and a $25 million line of credit on May 15, 2024.
• On May 24, 2024, the Company signed a new convertible note with AES Capital Management, LLC in the amount of $300,000 which became effective on June 5, 2024.
• On May 31, 2024, the Company has signed a JV agreement with Lion Works Advertising SA to fund the independent report on the Genesis system and the preparation of the patents.
• On June 4, 2024, the Company filed an amendment with the Secretary of State for Nevada to increase the Authorized capital of the Common shares of the Company to 1,500,000,000 shares of stock.

Sentiment

Score: 3

Explanation: The document presents a concerning financial situation with a going concern warning, despite some improvements in cost management and diversification efforts. The high debt levels and need for further capital raises contribute to a negative outlook.

Positives

• The net loss decreased significantly compared to the same period last year, from $9,943,420 to $1,835,678.
• General and administrative expenses were significantly reduced, indicating improved cost management.
• The company is actively exploring acquisitions in high-growth sectors like AI and fintech.
• The company anticipates starting mining operations in the fourth quarter of 2024.
• Subsequent to the quarter, the company signed a new convertible note with AES Capital Management, LLC for $400,000 on May 6, 2024, and a $25 million line of credit on May 15, 2024.
• On May 24, 2024, the Company signed a new convertible note with AES Capital Management, LLC in the amount of $300,000 which became effective on June 5, 2024.
• On May 31, 2024, the Company has signed a JV agreement with Lion Works Advertising SA to fund the independent report on the Genesis system and the preparation of the patents.
• On June 4, 2024, the Company filed an amendment with the Secretary of State for Nevada to increase the Authorized capital of the Common shares of the Company to 1,500,000,000 shares of stock.

Negatives

• The company has a significant accumulated deficit of $27,383,472.
• The report raises substantial doubt about the company's ability to continue as a going concern.
• The company used $252,637 of cash in operating activities during the nine months ended March 31, 2024.
• Disclosure controls and procedures were deemed ineffective as of March 31, 2024, due to material weaknesses.

Risks

• The company's ability to continue as a going concern is uncertain due to its financial condition.
• The company's success depends on its ability to raise additional funds and implement its business plan.
• The company faces risks associated with commencing mining operations and completing acquisitions.
• Material weaknesses in internal controls over financial reporting could adversely affect the company's ability to report financial information accurately.

Future Outlook

The company anticipates starting mining operations in the fourth quarter of 2024 and is exploring acquisitions of assets or majority interests in companies related to artificial intelligence technology and in the fintech arena acquiring proprietary software technology.

Management Comments

• We are an exploration-stage company that focuses on acquisition and development of gold mining and other mining properties worldwide, environmentally safe technologies both in mining and other business areas.
• We anticipate starting our mining operations in the fourth quarter of 2024.
• We are also exploring acquisitions of assets or majority interests in companies related to artificial intelligence technology and in the fintech arena acquiring proprietary software technology.

Industry Context

The company's focus on gold mining and exploration aligns with the broader mining industry, while its interest in AI and fintech reflects a trend of diversification into technology sectors. Many junior mining companies are exploring ways to leverage technology to improve efficiency and sustainability.

Comparison to Industry Standards

• It is difficult to compare Star Alliance International Corp. to industry standards due to its exploration stage and lack of revenue.
• Many exploration-stage mining companies face similar challenges in securing funding and commencing operations.
• Companies like Golden Minerals Company and Hecla Mining Company are established players in the gold mining industry with significant revenue and operational mines, providing a benchmark for potential future performance if Star Alliance International Corp. successfully commences operations.
• In the AI and fintech sectors, companies like Upstart Holdings and Affirm Holdings are examples of successful fintech companies, while companies like C3.ai and Palantir Technologies are established players in the AI space, offering potential models for Star Alliance International Corp.'s diversification efforts.

Related Party Transactions

• On November 17, 2022, Mr. Carey agreed to give 4 million of his own shares of common stock in exchange for $ 42,000 which was loaned to the Company.
• During the nine months ended March 31, 2024, Ms. Glatman forgave a $ 5,000 accrual for rent expense arising from a prior rental agreement with the company.

Stakeholder Impact

• Shareholders face significant risk due to the company's going concern uncertainty.
• Employees' job security is uncertain due to the company's financial instability.
• The company's ability to fulfill its obligations to suppliers and creditors is at risk.

Next Steps

• The company needs to secure additional funding to continue operations and implement its business plan.
• The company needs to successfully commence mining operations in the fourth quarter of 2024.
• The company needs to finalize and execute agreements for acquisitions in the AI and fintech sectors.
• The company needs to address the material weaknesses in internal controls over financial reporting.

Key Dates

Keywords

financial results, mining operations, going concern, acquisitions, convertible debt, preferred stock, financial statements, net loss, Star Alliance International Corp, AI, Fintech