10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒  Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended December 31, 2019

☐  Transition Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from __________ to __________

Commission File Number: 333-174194

GRAPHENE & SOLAR TECHNOLOGIES LIMITED

(Exact name of registrant as specified in its charter)

COLORADO	27-2888719
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

433 N. Camden Drive, Ste. 600

Beverly Hills, CA 90210

(Address of principal executive offices, including Zip Code)

(310) 887-9966

(Issuer’s telephone number, including area code)

(formally known as Solar Quartz Technologies Corporation)

(Former name or former address if changed since last report)

Check whether the issuer (1) filed all reports required to be filed by section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  ☐  No  ☒

Indicate by check mark whether the registrant has submitted electronically , every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes  ☐  No  ☒

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “non-accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☒
		Emerging growth company	☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  ☐  No  ☒

As of July 6, 2020, the registrant had 242,803,100 outstanding shares of common stock.

GRAPHENE & SOLAR TECHNOLOGIES LIMITED

FORM 10-Q

TABLE OF CONTENTS

PART I	FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Balance Sheets	3
Item 2.	Condensed Consolidated Statements of Operations	4
Item 3.	Condensed Consolidated Statement of Stockholders’ Equity (Deficiency) (Unaudited) – Three Months	5
Item 4.	Ended December 31, 2019 and 2018 Condensed Consolidated Statements of Cash Flows	6
Item 5.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	9
Item 6.	Controls and Procedures.	11
PART II OTHER INFORMATION
Item 1	Legal Proceedings	12
Item 1A	Risk Factors	12
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	12
Item 3	Defaults on Senior Securities	12
Item 4	Mine Safety Disclosures	12
Item 5	Other Information	12
Item 6.	Exhibits.	12
SIGNATURES		13

2 

GRAPHENE & SOLAR TECHNOLOGIES LIMITED

CONDENSED CONSOLIDATED BALANCE SHEETS

	December 31,			September 30,
	2019 (Unaudited)			2019 (Audited)
ASSETS
Current Assets:
Cash and cash equivalents	$	39,166		$	74,241
Prepaid expenses		12,605			11,684
Other receivables		5,395			5,197
Total Current Assets		57,166			91,122
Other Assets:
Furniture & Equipment, net of depreciation, $4,130 and $51,946		24,696			27,869
Quartz Deposits		29,497			28,415
Total Other Assets		54,193			56,284
Total Assets	$	111,359		$	147,406
Current Liabilities:
Accounts payable	$	449,857		$	402,599
Accrued interest & other payables		135,046			110,738
Short term notes payable		60,000			60,000
Due to related parties		486,071			455,577
Convertible notes payable-, net of discount $65,794 and $0		103,173			100,747
Total Current Liabilities		1,234,147			1,129,661
Total Liabilities	$	1,234,147		$	1,129,661
Stockholders’ Deficit:
Preferred stock, $0.00001 par value; 5,000,000 shares authorized; none issued or outstanding
Common stock, $0.00001 par value; 500,000,000 and 500,000,000 shares authorized; 242,603,100 and 242,449,767 shares issued and outstanding		2,427			2,424
Additional paid-in capital		9,168,358			9,047,139
Accumulated other comprehensive income		79,616			100,717
Accumulated deficit		(10,373,189	)		(10,132,535	)
Total stockholders’ deficit		(1,122,788	)		(982,255	)
Total liabilities and stockholders’ deficit	$	111,359		$	147,406

The accompanying notes are an integral part of these consolidated financial statements.

3 

GRAPHENE & SOLAR TECHNOLOGIES Limited

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME

(Unaudited)

	Three Months Ending December 31,
	2019			2018
Revenues	$	—		$	—
Operating expenses
Professional Services		179,487			100,200
General and administrative		55,851			172,117
Total operating expenses		235,338			272,317
Loss from operations		(235,338	)		(272,317	)
Other income (expense)
Other income		2,050			1,434
Interest expense		(7,366	)		(7,761	)
Total other income (expense)		(5,316	)		(6,327	)
Net Income (Loss)		(240,654	)		(278,644	)
Other Comprehensive Income		(21,101	)		36,894
Net Comprehensive Loss	$	(261,755	)	$	(241,750	)
Income (Loss) per share:
Basic and diluted	$	(0.00	)	$	(0.00	)
Weighted average shares outstanding		242,567,545			234,301,260

The accompanying notes are an integral part of these consolidated financial statements.

4 

GRAPHENE & SOLAR TECHNOLOGIES LIMITED

(Formerly Solar Quartz Technologies Corporation)

AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIENCY

(Unaudited)

Three Months Ended December 31, 2019 and 2018  

							Accumulated
	Common Stock				Additional		Other						Total
			Par		Paid-in		Comprehensive			Accumulated			Stockholders’
	Shares		Value		Capital		Income			Deficit			Deficiency
Balance, September 30, 2019		242,499,767	$	2,424	$	9,047,139	$	100,717		$	(10,132,535	)	$	(982,255	)
Shares issued in connection with the sale of common stock		153,333		3		52,999		—			—			53,002
Debt discount						68,220								68,220
Foreign currency translation adjustment		—		—		—		(21,101	)		—			(21,101	)
Net loss		—		—				—			(240,654	)		(240,654	)
Balance, December 31, 2019		242,603,100	$	2,427	$	9,168,358	$	79,616		$	(10,373,189	)	$	(1,122,788	)

							Accumulated
	Common Stock				Additional		Other					Total
			Par		Paid-in		Comprehensive		Accumulated			Stockholders’
	Shares		Value		Capital		Income		Deficit			Deficiency
Balance, September 30, 2018		236,046,151	$	2,360	$	7,972,361	$	92,046	$	(8,885,981	)	$	(819,214	)
Shares issued in connection with the sale of common stock		2,070,333		21		341,073							341,094
Stock-based compensation expense		600,000		6		100,194							100,200
Foreign currency translation adjustment								36,894					36,894
Net loss										(278,643	)		(278,643	)
Balance, December 31, 2018		238,716,484	$	2,387	$	8,393,701	$	128,940	$	(9,164,624	)	$	(639,596	)

The accompanying notes are an integral part of these consolidated financial statements.

5 

GRAPHENE & SOLAR TECHNOLOGIES Limited

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

For the Three-Month Period Ended December 31, 2019 and 2018

(Unaudited)

	2019			2018
Cash flows from operating activities
Net Income (loss)	$	(240,654	)	$	(278,644	)
Adjustments to reconcile net income/(loss) to net cash from operating activities:
Stock-based compensation		—			100,200
Depreciation expense		4,130			4,335
Amortization of discount		2,426			952
Change in operating assets and liabilities:
Accounts payable		59,665			(30,868	)
Accrued interest payable		4,943			2,653
Accrued liabilities					4,156
Receivables		(198	)
Pre-Payments		(921	)
Due to related parties		51,245			(63,837	)
Net cash used in operating activities		(119,364	)		(261,053	)
Cash flows from financing activities
Due to Affiliates		—
Proceeds from issuance of common stock		53,002			345,000
Repayments to related party		(36,933	)
Issuance of short term note payable		68,220
Net cash from financing activities		84,289			345,000
Effect of currency translations to cash flow		—			3,180
Net change in cash and cash equivalents		(35,075	)		87,127
Beginning of period		74,241			6,704
End of period	$	39,166		$	93,831

Supplemental cash flow information	Quarter ended December 31,
	2019		2018
Interest paid	$	—	$	—
Noncash investing and financing activities:
Debt discount	$	68,220	$	—

The accompanying notes are an integral part of these consolidated financial statements.

6 

GRAPHENE & SOLAR TECHNOLOGIES Limited

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1 – BASIS OF PRESENTATION

These consolidated financial statements of Graphene &Solar Technologies Limited (GSTX or the Company) have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). In the opinion of management, these financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results for the interim periods. Certain information, accounting policies and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been omitted pursuant to Securities and Exchange Commission (SEC) rules and regulations. These financial statements should be read along with Solar Quartz’s audited financial statements as of September 30, 2019.

Going Concern   – The Company has incurred cumulative net losses throughout 2018 and 2019 financial periods and currently in 2020 periods. Accordingly, it requires capital to fund working capital deficits and for future operating activities to take place. The Company’s ability to raise new funds through the future issuances of debt or common stock is unknown. The obtainment of additional financing, the successful development of a plan of operations, and its transition, ultimately, to the attainment of profitable operations are necessary for the Company to continue operations. The ability to successfully resolve these factors raise substantial doubt about the Company’s ability to continue as a going concern.

Future issuances of the Company’s equity or debt securities will be required for the Company to finance operations and continue as a going concern. The financial statements do not include any adjustments that may result from the outcome of these uncertainties.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION  

Principles of Consolidation and Basis of Presentation — The consolidated financial statements include the accounts of Graphene & Solar Technologies Limited and its subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation.

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the accounting and disclosure rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). A summary of the significant accounting policies applied in the preparation of the accompanying financial statements can be found in the Company’s Annual Report in form 10-K for the year ended September 30, 2019.

Use of Estimates - The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Significant estimates include but are not limited to the estimated useful lives of equipment for purposes of depreciation and the valuation of common shares issued for services, equipment and the liquidation of liabilities.

Cash and Cash Equivalents-Cash and cash equivalents are carried at cost and represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less as of the purchase date of such investments. As of December 31, 2019 and September 30,2018 the Company had $39,166 and $74,241 in cash, respectively, and no cash equivalents.

Derivative Financial Instruments - The Company accounts for freestanding contracts that are settled in a company’s own stock, including common stock warrants, to be designated as an equity instrument or generally as a liability. A contract so designated is carried at fair value on a company’s balance sheet, with any changes in fair value recorded as a gain or loss in a company’s results of operations.

The Company records all derivatives on the balance sheet at fair value, adjusted at the end of each reporting period to reflect any material changes in fair value, with any such changes classified as changes in derivatives valuation in the statement of operations. The calculation of the fair value of derivatives utilizes highly subjective and theoretical assumptions that can materially affect fair values from period to period. The recognition of these derivative amounts does not have any impact on cash flows.

At the date of the conversion of any convertible debt, the pro rata fair value of the related embedded derivative liability is transferred to additional paid-in capital.

The Company determined our derivative liabilities to be a Level 3 fair value measurement and uses the Binomial pricing model to calculate the fair value. The Binomial model requires six basic data inputs: the exercise or strike price, time to expiration, the risk free interest rate, the current stock price, the estimated volatility of the stock price in the future, and the dividend rate. Changes to these inputs could produce a significantly higher or lower fair value measurement. The fair value of each convertible note is estimated using the Binomial valuation model.

Stock-Based Compensation - The Company accounts for employee stock-based compensation using the fair value method. However, the Company did not evaluate employee-based compensation as the Company has no employees. The Company did issue stock to vendors/consultants for services performed. The fair value attributable to stock options is calculated based on the Black-Scholes option pricing model and is amortized to expense over the service period which is equivalent to the time required to vest the stock options.

Foreign Currency Translations – The functional currency of the Company’s foreign subsidiary is primarily the respective local currency. Assets and liabilities of the Company’s foreign subsidiary are translated into U.S. Dollars at the year-end exchange rate, and revenues and expenses are translated at average monthly exchange rates. Translation gains and losses are recorded as a component of accumulated other comprehensive income (loss) within stockholders’ equity. All other foreign currency transaction gains and losses are included in other (income) expense, net.

7 

Earnings Per Share - Basic earnings per share have been calculated based upon the weighted-average number of common shares outstanding. Diluted earnings per share were not calculated as such potential shares would be anti-dilutive. Potential shares that could be converted into common shares at December 31, 2019 are approximately 636,364.

Reclassifications - Certain amounts previously presented for prior periods have been reclassified to conform to the current presentation. The reclassifications had no effect on net loss, working capital or equity previously reported.

Recently Issued Accounting Pronouncements - Various accounting standards updates have been recently issued, most of which represented technical corrections to the accounting literature or were applicable to specific industries. Recently accounting pronouncements have been issued that are likely to have a material impact to the Company’s consolidated financial statements. These include accounting standards as they apply to leases. The Company will treat its development of mineral rights under standards for operating leases commonly applied in mineral extraction industries.

Mineral Rights- Investment in mineral rights consists of the exclusive mining and development rights for the two high purity quartz silica deposits known as Quartz Hill (represented by mining leases ML 30235, ML 30236 and ML 30237) and White Springs (represented by leases ML 30238 and ML 30239) located in North Queensland, Australia. The investment in mineral rights is carried on the books of the Company at the cost of the lease rights. Mineral rights assets are tested for impairment if facts and circumstances indicate that impairment exists.

NOTE 3 – CONVERTIBLE NOTES PAYABLE

The Company’s indebtedness as of December 31 and September 30, 2019 were as follows:

Description	December 31, 2019		September 30, 2019
Convertible notes	$	138,967	$	70,747
Notes Payable	$	90,000	$	90,000

$70,747 of the convertible notes bear interest at 15% and are also due on demand. The principal and accrued interest of these convertible notes can be converted at the discretion of the holders into common shares at $3.31/share.

$68,220  of the convertible notes bear interest at 10% and the principal and accrued interest of these convertible notes can be converted at the discretion of the holders into common shares at 45% discount to the ADR 20 days prior to notification of conversion.The majority shareholder agreed to increase authorized shares if needed in order to settle this debt. This note was discounted for the full amount and the amount of amortization during the period. 

The Notes Payable bear interest at 10% and are due on demand .

NOTE 4- RELATED PARTY

PGRNZ Limited, a management company controlled by the Company’s Chief Executive Officer, and a Company Director, provides management services to the Company for which the Company is charged $75,000(AUD) quarterly, approximately $48,000 (US). During the three months ended Dec 31, 2019 and 2018, the Company incurred charges to operations of $51,245 (US) and $63,837(US), respectively, with respect to this arrangement.

As of December 31, 2019 and September 30, 2019, accrued expenses due to related parties was $486,071 and $455,557 respectively.

NOTE 5 – STOCKHOLDERS’ EQUITY

Common shares of 153,333 were issued resulting in an increase to capital stock of $3 and an increase to Additional Paid-in Capital of $52,999. 153,333 shares were issued for proceeds totaling $53,002. The Company has a total of 5,039,210 shares that remain approved, reserved and outstanding and not yet issued by the Transfer Agent at Deecmber 31, 2020.

NOTE 6 – SUBSEQUENT EVENTS

During the quarter ending March 31, 2020 Common shares of 356,467 were approved resulting in an increase to capital stock of $3 and an increase to Additional Paid-in Capital of $15,781.

During the month of June 2020 an additional Common shares of 250,000 were approved at a share price of approximately $0.08. These shares are yet to be issued by the Transfer Agent as at June 30, 2020.

During the month of June 2020 an additional Common shares of 250,000 were approved at a share price of approximately $0.08. These shares are yet to be issued by the Transfer Agent as at June 30, 2020.

On June 1, 2020 one additional Director was approved and appointed by the Board and 8-K and Form 3 filed with the SEC.

On July 1, 2020 two additional Directors were approved for appointment to the Board of Directors. 

8 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND PLAN OF OPERATION

The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes, and other financial information included in this Form 10-Q.

Our Management’s Discussion and Analysis contains not only statements that are historical facts, but also statements that are forward-looking. Forward-looking statements are, by their very nature, uncertain and risky. Although the forward-looking statements in this Quarterly Report reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by them. Consequently, and because forward-looking statements are inherently subject to risks and uncertainties, the actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. You are urged to carefully review and consider the various disclosures made by us in this report as we attempt to advise interested parties of the risks and factors that may affect our business, financial condition, and results of operations and prospects.

FORWARD LOOKING STATEMENTS

The information contained in this Form 10-Q contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks and uncertainties, including among other things, statements regarding our capital needs, business strategy and expectations. Any statement which does not contain a historical fact may be deemed to be a forward-looking statement. In some cases, you can identify forward-looking statements by terminology such as “may”, “will”, “should”, “expect”, “plan”, “intend”, “anticipate”, “believe”, “estimate”, “predict”, “potential” or “continue”, the negative of such terms or other comparable terminology. In evaluating forward looking statements, you should consider various factors outlined in our Form 10-K report for the year ended September 30, 2019, filed with the U.S. Securities Exchange Commission (“SEC”) and, from time to time, in other reports we file with the SEC. These factors may cause our actual results to differ materially from any forward-looking statement. We disclaim any obligation to publicly update these statements or disclose any difference between our actual results and those reflected in these statements.

Overview

In July 2017 we acquired Solar Quartz Technologies Limited, a New Zealand corporation. We are now seeking new financing in the form of equity, debt or a combination thereof to meet development and general operating obligations .. Absent achieving sufficient funds soon, our viability is in doubt. The Company has managed to raise some capital by sale of shares, but as of December 31, 2019, the Company has not been successful in raising sufficient funds; However, work is underway to secure funding, and we believe that funding for the Company is possible in the near future although no assurance can be made as to the amount of funds, if any, or the terms thereof..

Current Business and Operations

On July 2017 we acquired Solar Quartz Technologies Limited, a New Zealand Corporation..

With the acquisition of Solar Quartz Technologies Limited we now own mining exploration and development rights to significant deposits of High Purity Quartz that we have determined in our evaluation of independent reports and considered judgment to have reserves which are adequate to provide the Company with adequate resources for 25-30 years of production. See Item 1 in the FY 2019 10-K Business for greater details.

9 

We are currently actively seeking interim working capital in order to complete mining plans and build a pre-processing plant in Townsville, North Queensland, Australia, build upon our management team and market high purity quartz (HPQS) to established markets with whom our management team have had prior relationships. These organizational efforts will be to secure significant new capital for the acquisition of a site and the building of the pre-processing plant. Upon completion, that plant will enable the Company to upgrade its newly mined HPQS to a higher level of purity that has a significant world-wide demand for use in the production of advanced PV solar Panels and all high-end electronics, lighting, telecom, optic and microelectronics. Failure to secure these financings will have a negative impact on the Company’s ability to continue as a going concern.

Results of Operations 

For the fiscal quarters ended December 31, 2018 and December 31, 2019 we generated no revenues, and thus no cost of sales or gross profits.

For the fiscal quarters ended December 31, 2018 and December 31, 2019, we incurred $272,317 and $235,338 respectively in operating expenses.

For the fiscal quarter ended December 31, 2018 we recorded other expenses of $7,761 while in December 31, 2019 we incurred expenses of $7,366 both items are represented by accrued interest on debt. Other income of $2,050 was earned in the fiscal quarter, December 31, 2019 and $1,434 in fiscal quareter, December 31,2018.

For the year quarter December 31, 2018, we reported net loss before taxes of $278,644 while in the fiscal quarter ended December 31, 2019, we reported a net loss before taxes of $240,654. Since there were no tax obligations in either year, net income / loss in each year was the same as that reported before taxes.

For the periods ended September 30, 2019 and December 31, 2019, our cash positions were $74,241 and $39,166 respectively.

As of December 31, 2019, we had total current liabilities of $1,234,147 while as of September 30, 2019, we had total current liabilities of $1,129,661 an increase of about 8%. Accrued interest payable increased from $110,738 to $118,107, all attributable to accruals on the loans and the convertible notes payable.

Liquidity and Capital Resources 

As of December 31, 2019, we had $111,359 in total current assets and $1,234,147 in total current liabilities. Accordingly, we had a working capital deficit of $1,128,788.

Operating activities used $235,338 in cash for the quarter ended December 31, 2019, as compared to $272,317 for the quarter ended December 31, 2018.

10 

Off-Balance Sheet Arrangements

There are no off-balance sheet arrangements.

Critical Accounting Policies and Estimates

For a discussion of our accounting policies and related items, please see the Notes to the Financial Statements, included in Item 1.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.

Not applicable.

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

(a) We maintain a system of controls and procedures designed to ensure that information required to be disclosed in reports filed or submitted under the Securities Exchange Act of 1934, as amended (“1934 Act”), is recorded, processed, summarized and reported within time periods specified in the SEC’s rules and forms and to ensure that information required to be disclosed by us in the reports that we file or submit under the 1934 Act is accumulated and communicated to our management, including our Chief Executive and Financial Officer, as appropriate to allow timely decisions regarding required disclosure. As of December 31, 2019, our Interim Chief Financial Officer evaluated the effectiveness of the design and operation of our disclosure controls and procedures. Based on that evaluation, our Interim Chief Financial Officer concluded that our disclosure controls and procedures were more effective when compared to FY 2019. Checks and balances have been implemented; a system of accounting for expenditures is in place and control of cash has been improved. Subject to available capital, the Company plans to hire a full time Chief Financial Officer which should have the effect of improving our disclosure controls and procedures.

Changes in Internal Control Over Financial Reporting

Improvements in our internal control over financial reporting have been implemented during the period covered by this report.

Management has addressed the underlying causes for our weaknesses in internal control since early FY 2019. Our efforts to raise both debt and equity capital soon will allow us to continue to engagements with recently appointed external independent consultants who have been assisting with the processing of data and drafting financial reports on a timely basis in future reporting periods.

11 

PART II

ITEM 1. LEGAL PROCEEDINGS

None.

ITEM 1A. RISK FACTORS

Our business is subject to numerous risks and uncertainties including but not limited to those discussed in “Risk Factors” in our annual report on Form 10-K.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Please see Note 5 to our Financial Statements.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

None.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

Exhibits

31.1	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32	Certification pursuant to Section 906 of the Sarbanes-Oxley Act.

12 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	GRAPHENE & SOLAR TECHNOLOGIES LIMITED
Date: July 6, 2020	By:	/s/ David AB Halstead
		David AB Halstead
		Director and Interim Chief Financial Officer

13

EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

I, Roger May, certify that;

1.	I have reviewed this quarterly report on Form 10-Q of Graphene & Solar Technologies Limited;
2.	Based on my knowledge, this report, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by the report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 6, 2020	By:	/s/ Roger May
		Roger May
		Chairman and Interim Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATIONS

I, David AB Halstead, certify that;

1.	I have reviewed this quarterly report on Form 10-Q of Graphene & Solar Technologies Limited;
2.	Based on my knowledge, this report, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by the report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 6, 2020	By:	/s/ David AB Halstead
		David AB Halstead
		Director and Interim Chief Financial Officer

EX-32

EXHIBIT 32

In connection with the Quarterly Report of Graphene & Solar Technologies Limited (the “Company”) on Form 10-Q for the period ending December 31, 2019 as filed with the Securities and Exchange Commission (the “Report”), Roger May, the Chairman and Interim Chief Executive Officer of the Company, certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of his knowledge:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects the financial condition and results of operations of the Company.

Date: July 6, 2020	By:	/s/ Roger May
		Roger May
		Chairman and Interim Chief Executive Officer

XML

Document and Entity Information - shares	3 Months Ended
	Dec. 31, 2019	Jul. 03, 2020
Document And Entity Information
Entity Registrant Name	Graphene & Solar Technologies Ltd
Entity Central Index Key	0001497649
Document Type	10-Q
Amendment Flag	false
Current Fiscal Year End Date	--09-30
Entity Small Business	true
Entity Shell Company	false
Entity Emerging Growth Company	true
Entity Current Reporting Status	Yes
Interactive Data Current	Yes
Entity Incorporation State Country Code	CO
Document Period End Date	Dec. 31, 2019
Entity Filer Category	Non-accelerated Filer
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2020
Entity Ex Transition Period	false
Entity Common Stock Shares Outstanding		242,803,100
EntityFileNumber	333-174194

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($)	Dec. 31, 2019	Sep. 30, 2019
Current assets:
Cash and cash equivalents	$ 39,166	$ 74,241
Prepaid expenses	12,605	11,684
Other receivables	5,395	5,197
Total current assets	57,166	91,122
Other Assets:
Furniture & Equipment, net of depreciation, $4,130 and $51,946	24,696	27,869
Quartz Deposits	29,497	28,415
Total Other Assets	54,193	56,284
Total Assets	111,359	147,406
Current liabilities:
Accounts payable	449,857	402,599
Accrued interest & other payables	135,046	110,738
Short term notes payable	60,000	60,000
Due to related parties	486,071	455,577
Convertible notes payable-, net of discount $65,794 and $0	103,173	100,747
Total current liabilities	1,234,147	1,129,661
Total liabilities	1,234,147	1,129,661
Stockholders' Deficit:
Preferred stock, $0.00001 par value; 5,000,000 shares authorized; none issued or outstanding	0	0
Common stock, $0.00001 par value; 500,000,000 and 500,000,000 shares authorized; 242,603,100 and 242,449,767 shares issued and outstanding	2,427	2,424
Additional paid-in capital	9,168,358	9,047,139
Accumulated other comprehensive income	79,616	100,717
Accumulated deficit	(10,373,189)	(10,132,535)
Total stockholders' deficiency	(1,122,788)	(982,255)
Total liabilities and stockholders' deficiency	$ 111,359	$ 147,406

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($)	Dec. 31, 2019	Sep. 30, 2019
Statement of Financial Position [Abstract]
Accumulated Depreciation	$ 4,130	$ 51,946
Discount	$ 65,794	$ 0
Preferred stock, shares par value	$ 0.00001	$ 0.00001
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, shares par value	$ 0.00001	$ 0.00001
Common stock, shares authorized	500,000,000	500,000,000
Common stock, shares issued	242,603,100	242,449,767
Common stock, shares outstanding	242,603,100	242,449,767

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	3 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Income Statement [Abstract]
Revenues	$ 0	$ 0
Operating expenses
Professional Services	179,487	100,200
General and administrative	55,851	172,117
Total operating expenses	235,338	272,317
Loss from operations	(235,338)	(272,317)
Other income (expense):
Other income	2,050	1,434
Interest expense	(7,366)	(7,761)
Total other income (expense)	(5,316)	(6,327)
Net Income (Loss)	(240,654)	(278,644)
Other Comprehensive Income	(21,101)	36,894
Net Comprehensive Loss	$ (261,755)	$ (241,750)
Net loss per common share - basic and diluted	$ (0.00)	$ (0.00)
Weighted average common shares outstanding - basic and diluted	242,567,545	234,301,260

XML

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIENCY EQUITY (Unaudited) - USD ($)	Common Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Income	Accumulated Deficit	Total
Beginning Balance, Shares at Sep. 30, 2018	236,046,151
Beginning Balance, Amount at Sep. 30, 2018	$ 2,360	$ 7,972,361	$ 92,046	$ (8,885,981)	$ (819,214)
Shares issued in connection with the sale of common stock, Shares	2,070,333
Shares issued in connection with the sale of common stock, Amount	$ 21	341,073			341,094
Stock-based compensation expense, Shares	600,000
Stock-based compensation expense, Amount	$ 6	100,194			100,200
Foreign currency translation adjustment			36,894		36,894
Net Loss				(278,643)	(278,644)
Ending Balance, Shares at Dec. 31, 2018	238,716,484
Ending Balance, Amount at Dec. 31, 2018	$ 2,387	8,393,701	128,940	(9,164,624)	(639,596)
Beginning Balance, Shares at Sep. 30, 2019	242,499,767
Beginning Balance, Amount at Sep. 30, 2019	$ 2,424	9,047,139	100,717	(10,132,535)	(982,255)
Shares issued in connection with the sale of common stock, Shares	153,333
Shares issued in connection with the sale of common stock, Amount	$ 3	52,999			53,002
Debt discount		68,220			68,220
Foreign currency translation adjustment			(21,101)		(21,101)
Net Loss				(240,654)	(240,654)
Ending Balance, Shares at Dec. 31, 2019	242,603,100
Ending Balance, Amount at Dec. 31, 2019	$ 2,427	$ 9,168,358	$ 79,616	$ (10,373,189)	$ (1,122,788)

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	3 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Cash flows from operating activities
Net Income (loss)	$ (240,654)	$ (278,644)
Adjustments to reconcile net income/(loss) to net cash from operating activities:
Stock-based compensation	0	100,200
Depreciation expense	4,130	4,335
Amortization of debt discounts	2,426	952
Change in operating assets and liabilities:
Accounts payable	59,665	(30,868)
Accrued interest payable	4,943	2,653
Accrued Liabilities	0	4,156
Receivables	(198)	0
Pre-Payments	(921)	0
Due to related parties	51,245	(63,837)
Net cash used in operating activities	(119,364)	(261,053)
Cash flows from financing activities:
Due to Affiliates	0	0
Proceeds from issuance of common stock	53,002	345,000
Repayments to related party	(36,933)	0
Issuance of short term note payable	68,220	0
Net cash provided by financing activities	84,289	345,000
Effect of exchange rate on cash	0	3,180
Net change in cash and cash equivalents	(35,075)	87,127
Beginning of period	74,241	6,704
End of period	39,166	93,831
Interest paid	0	$ 0
Noncash investing and financing activities:
Debt discount	$ 68,220

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BASIS OF PRESENTATION

3 Months Ended

Dec. 31, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

BASIS OF PRESENTATION

NOTE 1 – BASIS OF PRESENTATION

These consolidated financial statements of Graphene &Solar Technologies Limited (GSTX or the Company) have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). In the opinion of management, these financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results for the interim periods. Certain information, accounting policies and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been omitted pursuant to Securities and Exchange Commission (SEC) rules and regulations. These financial statements should be read along with Solar Quartz’s audited financial statements as of September 30, 2019.

Going Concern   – The Company has incurred cumulative net losses throughout 2018 and 2019 financial periods and currently in 2020 periods. Accordingly, it requires capital to fund working capital deficits and for future operating activities to take place. The Company’s ability to raise new funds through the future issuances of debt or common stock is unknown. The obtainment of additional financing, the successful development of a plan of operations, and its transition, ultimately, to the attainment of profitable operations are necessary for the Company to continue operations. The ability to successfully resolve these factors raise substantial doubt about the Company’s ability to continue as a going concern.

Future issuances of the Company’s equity or debt securities will be required for the Company to finance operations and continue as a going concern. The financial statements do not include any adjustments that may result from the outcome of these uncertainties.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION

3 Months Ended

Dec. 31, 2019

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION  

Principles of Consolidation and Basis of Presentation — The consolidated financial statements include the accounts of Graphene & Solar Technologies Limited and its subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation.

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the accounting and disclosure rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). A summary of the significant accounting policies applied in the preparation of the accompanying financial statements can be found in the Company’s Annual Report in form 10-K for the year ended September 30, 2019.

Use of Estimates - The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Significant estimates include but are not limited to the estimated useful lives of equipment for purposes of depreciation and the valuation of common shares issued for services, equipment and the liquidation of liabilities.

Cash and Cash Equivalents-Cash and cash equivalents are carried at cost and represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less as of the purchase date of such investments. As of December 31, 2019 and September 30,2018 the Company had $39,166 and $74,241 in cash, respectively, and no cash equivalents.

Derivative Financial Instruments - The Company accounts for freestanding contracts that are settled in a company’s own stock, including common stock warrants, to be designated as an equity instrument or generally as a liability. A contract so designated is carried at fair value on a company’s balance sheet, with any changes in fair value recorded as a gain or loss in a company’s results of operations.

The Company records all derivatives on the balance sheet at fair value, adjusted at the end of each reporting period to reflect any material changes in fair value, with any such changes classified as changes in derivatives valuation in the statement of operations. The calculation of the fair value of derivatives utilizes highly subjective and theoretical assumptions that can materially affect fair values from period to period. The recognition of these derivative amounts does not have any impact on cash flows.

At the date of the conversion of any convertible debt, the pro rata fair value of the related embedded derivative liability is transferred to additional paid-in capital.

The Company determined our derivative liabilities to be a Level 3 fair value measurement and uses the Binomial pricing model to calculate the fair value. The Binomial model requires six basic data inputs: the exercise or strike price, time to expiration, the risk free interest rate, the current stock price, the estimated volatility of the stock price in the future, and the dividend rate. Changes to these inputs could produce a significantly higher or lower fair value measurement. The fair value of each convertible note is estimated using the Binomial valuation model.

Stock-Based Compensation - The Company accounts for employee stock-based compensation using the fair value method. However, the Company did not evaluate employee-based compensation as the Company has no employees. The Company did issue stock to vendors/consultants for services performed. The fair value attributable to stock options is calculated based on the Black-Scholes option pricing model and is amortized to expense over the service period which is equivalent to the time required to vest the stock options.

Foreign Currency Translations – The functional currency of the Company’s foreign subsidiary is primarily the respective local currency. Assets and liabilities of the Company’s foreign subsidiary are translated into U.S. Dollars at the year-end exchange rate, and revenues and expenses are translated at average monthly exchange rates. Translation gains and losses are recorded as a component of accumulated other comprehensive income (loss) within stockholders’ equity. All other foreign currency transaction gains and losses are included in other (income) expense, net.

Earnings Per Share - Basic earnings per share have been calculated based upon the weighted-average number of common shares outstanding. Diluted earnings per share were not calculated as such potential shares would be anti-dilutive. Potential shares that could be converted into common shares at December 31, 2019 are approximately 636,364.

Reclassifications - Certain amounts previously presented for prior periods have been reclassified to conform to the current presentation. The reclassifications had no effect on net loss, working capital or equity previously reported.

Recently Issued Accounting Pronouncements - Various accounting standards updates have been recently issued, most of which represented technical corrections to the accounting literature or were applicable to specific industries. Recently accounting pronouncements have been issued that are likely to have a material impact to the Company’s consolidated financial statements. These include accounting standards as they apply to leases. The Company will treat its development of mineral rights under standards for operating leases commonly applied in mineral extraction industries.

Mineral Rights- Investment in mineral rights consists of the exclusive mining and development rights for the two high purity quartz silica deposits known as Quartz Hill (represented by mining leases ML 30235, ML 30236 and ML 30237) and White Springs (represented by leases ML 30238 and ML 30239) located in North Queensland, Australia. The investment in mineral rights is carried on the books of the Company at the cost of the lease rights. Mineral rights assets are tested for impairment if facts and circumstances indicate that impairment exists.

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CONVERTIBLE NOTES PAYABLE

3 Months Ended

Dec. 31, 2019

Convertible Notes Payable

CONVERTIBLE NOTES PAYABLE

NOTE 3 – CONVERTIBLE NOTES PAYABLE

The Company’s indebtedness as of December 31 and September 30, 2019 were as follows:

Description	December 31, 2019		September 30, 2019
Convertible notes	$	138,967	$	70,747
Notes Payable	$	90,000	$	90,000

$70,747 of the convertible notes bear interest at 15% and are also due on demand. The principal and accrued interest of these convertible notes can be converted at the discretion of the holders into common shares at $3.31/share.

$68,220  of the convertible notes bear interest at 10% and the principal and accrued interest of these convertible notes can be converted at the discretion of the holders into common shares at 45% discount to the ADR 20 days prior to notification of conversion.The majority shareholder agreed to increase authorized shares if needed in order to settle this debt. This note was discounted for the full amount and the amount of amortization during the period. 

The Notes Payable bear interest at 10% and are due on demand.

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RELATED PARTY

3 Months Ended

Dec. 31, 2019

Related Party Transactions [Abstract]

RELATED PARTY

NOTE 4- RELATED PARTY

PGRNZ Limited, a management company controlled by the Company’s Chief Executive Officer, and a Company Director, provides management services to the Company for which the Company is charged $75,000(AUD) quarterly, approximately $48,000 (US). During the three months ended Dec 31, 2019 and 2018, the Company incurred charges to operations of $51,245 (US) and $63,837(US), respectively, with respect to this arrangement.

As of December 31, 2019 and September 30, 2019, accrued expenses due to related parties was $486,071 and $455,557 respectively.

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STOCKHOLDERS’ EQUITY

3 Months Ended

Dec. 31, 2019

Equity [Abstract]

STOCKHOLDERS' EQUITY

NOTE 5 – STOCKHOLDERS’ EQUITY

Common shares of 153,333 were issued resulting in an increase to capital stock of $3 and an increase to Additional Paid-in Capital of $52,999. 153,333 shares were issued for proceeds totaling $53,002. The Company has a total of 5,039,210 shares that remain approved, reserved and outstanding and not yet issued by the Transfer Agent at Deecmber 31, 2020.

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SUBSEQUENT EVENTS

3 Months Ended

Dec. 31, 2019

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

NOTE 6 – SUBSEQUENT EVENTS

During the quarter ending March 31, 2020 Common shares of 356,467 were approved resulting in an increase to capital stock of $3 and an increase to Additional Paid-in Capital of $15,781.

During the month of June 2020 an additional Common shares of 250,000 were approved at a share price of approximately $0.08. These shares are yet to be issued by the Transfer Agent as at June 30, 2020.

During the month of June 2020 an additional Common shares of 250,000 were approved at a share price of approximately $0.08. These shares are yet to be issued by the Transfer Agent as at June 30, 2020.

On June 1, 2020 one additional Director was approved and appointed by the Board and 8-K and Form 3 filed with the SEC.

On July 1, 2020 two additional Directors were approved for appointment to the Board of Directors. 

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION (Policies)

3 Months Ended

Dec. 31, 2019

Accounting Policies [Abstract]

Principles of Consolidation and Basis of Presentation

Principles of Consolidation and Basis of Presentation — The consolidated financial statements include the accounts of Graphene & Solar Technologies Limited and its subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation.

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the accounting and disclosure rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). A summary of the significant accounting policies applied in the preparation of the accompanying financial statements can be found in the Company’s Annual Report in form 10-K for the year ended September 30, 2019.

Use of Estimates

Use of Estimates - The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Significant estimates include but are not limited to the estimated useful lives of equipment for purposes of depreciation and the valuation of common shares issued for services, equipment and the liquidation of liabilities.

Cash and Cash Equivalents

Cash and Cash Equivalents-Cash and cash equivalents are carried at cost and represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less as of the purchase date of such investments. As of December 31, 2019 and September 30,2018 the Company had $39,166 and $74,241 in cash, respectively, and no cash equivalents.

Derivative Financial Instruments

Derivative Financial Instruments - The Company accounts for freestanding contracts that are settled in a company’s own stock, including common stock warrants, to be designated as an equity instrument or generally as a liability. A contract so designated is carried at fair value on a company’s balance sheet, with any changes in fair value recorded as a gain or loss in a company’s results of operations.

The Company records all derivatives on the balance sheet at fair value, adjusted at the end of each reporting period to reflect any material changes in fair value, with any such changes classified as changes in derivatives valuation in the statement of operations. The calculation of the fair value of derivatives utilizes highly subjective and theoretical assumptions that can materially affect fair values from period to period. The recognition of these derivative amounts does not have any impact on cash flows.

At the date of the conversion of any convertible debt, the pro rata fair value of the related embedded derivative liability is transferred to additional paid-in capital.

The Company determined our derivative liabilities to be a Level 3 fair value measurement and uses the Binomial pricing model to calculate the fair value. The Binomial model requires six basic data inputs: the exercise or strike price, time to expiration, the risk free interest rate, the current stock price, the estimated volatility of the stock price in the future, and the dividend rate. Changes to these inputs could produce a significantly higher or lower fair value measurement. The fair value of each convertible note is estimated using the Binomial valuation model.

Stock-Based Compensation

Stock-Based Compensation - The Company accounts for employee stock-based compensation using the fair value method. However, the Company did not evaluate employee-based compensation as the Company has no employees. The Company did issue stock to vendors/consultants for services performed. The fair value attributable to stock options is calculated based on the Black-Scholes option pricing model and is amortized to expense over the service period which is equivalent to the time required to vest the stock options.

Foreign Currency Translations

Foreign Currency Translations – The functional currency of the Company’s foreign subsidiary is primarily the respective local currency. Assets and liabilities of the Company’s foreign subsidiary are translated into U.S. Dollars at the year-end exchange rate, and revenues and expenses are translated at average monthly exchange rates. Translation gains and losses are recorded as a component of accumulated other comprehensive income (loss) within stockholders’ equity. All other foreign currency transaction gains and losses are included in other (income) expense, net.

Earnings Per Share

Earnings Per Share - Basic earnings per share have been calculated based upon the weighted-average number of common shares outstanding. Diluted earnings per share were not calculated as such potential shares would be anti-dilutive. Potential shares that could be converted into common shares at December 31, 2019 are approximately 636,364.

Reclassifications

Reclassifications - Certain amounts previously presented for prior periods have been reclassified to conform to the current presentation. The reclassifications had no effect on net loss, working capital or equity previously reported.

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements - Various accounting standards updates have been recently issued, most of which represented technical corrections to the accounting literature or were applicable to specific industries. Recently accounting pronouncements have been issued that are likely to have a material impact to the Company’s consolidated financial statements. These include accounting standards as they apply to leases. The Company will treat its development of mineral rights under standards for operating leases commonly applied in mineral extraction industries.

Mineral Rights

Mineral Rights- Investment in mineral rights consists of the exclusive mining and development rights for the two high purity quartz silica deposits known as Quartz Hill (represented by mining leases ML 30235, ML 30236 and ML 30237) and White Springs (represented by leases ML 30238 and ML 30239) located in North Queensland, Australia. The investment in mineral rights is carried on the books of the Company at the cost of the lease rights. Mineral rights assets are tested for impairment if facts and circumstances indicate that impairment exists.

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CONVERTIBLE NOTES PAYABLE (Tables)

3 Months Ended

Dec. 31, 2019

Convertible Debt [Abstract]

Convertible Notes Payable

The Company’s indebtedness as of December 31 and September 30, 2019 were as follows:

Description	December 31, 2019		September 30, 2019
Convertible notes	$	138,967	$	70,747
Notes Payable	$	90,000	$	90,000

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION (Details Narrative) - USD ($)	3 Months Ended
	Dec. 31, 2019	Sep. 30, 2019
Summary of Significant Accounting Policies (Details Narrative)
Cash	$ 39,166	$ 74,241
Antidilutive Securities Excluded from Computation of Earnings Per Share	636,364

XML

CONVERTIBLE NOTES PAYABLE (Details) - USD ($)	Dec. 31, 2019	Sep. 30, 2019
Convertible Debt [Abstract]
Convertible notes payable	$ 138,967	$ 70,747
Notes payable	$ 90,000	$ 90,000

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CONVERTIBLE NOTES PAYABLE (Details Narrative) - USD ($)	3 Months Ended
	Dec. 31, 2019	Sep. 30, 2019
Notes Payable (Details Narrative)
Convertible notes payable	$ 68,220	$ 70,747
Interest rate	10.00%	15.00%
Common stock per share		$ 3.31
Note payable interest rate	10.00%

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RELATED PARTY (Details Narrative) - USD ($)	3 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Sep. 30, 2019
Due to related party	$ 486,071		$ 455,557
Operating expenses	235,338	$ 272,317
Chief Executive Officer [Member] | PGRNZ Limited [Member]
Operating expenses	51,245	$ 63,837
Services charges	$ 48,000

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STOCKHOLDERS' EQUITY (Details Narrative) - USD ($)	3 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Equity [Abstract]
Number of shares approved	153,333
Stock Price	$ 3
Additional Paid-in Capital	$ 52,999
Stock issued during period new issuance, shares	153,333
Proceeds from issuance of common stock	$ 53,002	$ 345,000
Number of shares remain reserved	5,039,210

XML

SUBSEQUENT EVENTS (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2020	Dec. 31, 2019	Jun. 30, 2020
Number of shares approved		153,333
Stock Price		$ 3
Additional Paid-in Capital		$ 52,999
Subsequent Event [Member]
Number of shares approved	356,467
Stock Price	$ 3
Additional Paid-in Capital	$ 15,781
Transfer Agent [Member] | Subsequent Event [Member]
Number of shares approved			250,000
Stock Price			$ 0.08
Transfer Agent [Member] [Default Label] | Subsequent Event [Member]
Number of shares approved			250,000
Stock Price			$ 0.08