|  |
|--|

 

**UNITED STATES SECURITIES AND**

**EXCHANGE COMMISSION**

**Washington, D.C. 20549**

 

**FORM 10-Q**

 

**(Mark One)**

 

| ☒ | **QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** |
|---------|---------------------------------------------------------------------------------------------|

 

**For the Quarterly Period Ended June 30, 2019**

 

**Commission file number: 1-03319**

 

**Quad M Solutions, Inc.**

(Exact name of registrant as specified in its charter)

 

| **Idaho**                                                       |   | **82-0144710**                                    |
|-----------------------------------------------------------------|--------|---------------------------------------------------|
| (State or Other Jurisdiction

of Incorporation or Organization) |   | **(**I.R.S. Employer 

Identification Number**)** |
|                                                                 |        |                                              |
| **122 Dickinson Avenue, Toms River, NJ**                        |   | **08753**                                         |
| (Address of Principal Executive Offices)                        |   | (Zip Code)                                        |

 

Registrant’s Telephone Number, Including Area Code: (732) 423-5520

 

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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 x No  ̈

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ☐

 

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

 

| Large accelerated filer |  ̈ | Accelerated filer         |  ̈ |
|-------------------------|--------|---------------------------|--------|
| Non-accelerated filer   | x      | Smaller reporting company | x      |
| Emerging growth company | x      |                           |        |

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ̈

 

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

 

As of August 09, 2019, there were 68,777,733 shares of the issuer’s common stock outstanding.

 

    

 

**Table of Contents**

 

|                                 |                                                                                                                   | **Page** |   |
|--------------------------------------|------------------------------------------------------------------------------------------------------------------------|----------|--------|
| **Part I.****Financial Information** |                                                                                                                   |     |
|                                 |                                                                                                                   |     |   |
| Item 1.                              | Financial Statements                                                                                                   | 3        |   |
|                                 | Condensed Consolidated Balance Sheets as of June 30, 2019 (unaudited) and September 30, 2018                           | 3        |   |
|                                 | Condensed Consolidated Statements of Operations for the Three and Nine Months Ended June 30, 2019 and 2018 (unaudited) | 4        |   |
|                                 | Condensed Consolidated Statement of Stockholder’s Equity (unaudited)                                             | 5        |   |
|                                 | Condensed Consolidated Statements of Cash Flows for the Nine Months Ended June 30, 2019 and 2018 (unaudited)           | 6        |   |
|                                 | Notes to Condensed Consolidated Financial Statements (unaudited)                                                       | 7        |   |
| Item 2.                              | Management’s Discussion and Analysis of Financial Condition and Results of Operations                            | 19       |   |
| Item 3.                              | Quantitative and Qualitative Disclosures about Market Risk                                                             | 23       |   |
| Item 4.                              | Controls and Procedures                                                                                                | 23       |   |
|                                 |                                                                                                                        |     |   |
| **Part II. Other Information**       |                                                                                                                   |     |
|                                 |                                                                                                                   |     |
| Item 1.                              | Legal Proceedings                                                                                                      | 24       |   |
| Item 1A.                             | Risk Factors                                                                                                           | 24       |   |
| Item 2.                              | Unregistered Sales of Equity Securities and Use of Proceeds                                                            | 24       |   |
| Item 3.                              | Defaults upon Senior Securities                                                                                        | 24       |   |
| Item 4.                              | Mine Safety Disclosures                                                                                                | 24       |   |
| Item 5.                              | Other Information                                                                                                      | 24       |   |
| Item 6.                              | Exhibits                                                                                                               | 25       |   |
|                                 |                                                                                                                        |     |   |
| **Signatures**                       | 26                                                                                                                     |     |

 

 2 *Table of contents*

 

 

**PART I - FINANCIAL INFORMATION**

 

**Item 1. Financial Statements**

 

| **QUAD M SOLUTIONS, INC.**                                                                                             |
|------------------------------------------------------------------------------------------------------------------------|
| **(fka MINERAL MOUNTAIN MINING & MILLING COMPANY)**                                                                |
| **CONDENSED CONSOLIDATED BALANCE SHEETS**                                                                              |
|                                                                                                                   |   |  |   |   |  |   |
|                                                                                                                   |   | **June 30,**

**2019** |   |   | **September****30,**

**2018** |   |
| **ASSETS**                                                                                                             |   |   |   |   |   |   |
|                                                                                                                   |   |   |   |   |   |   |
| **CURRENT ASSETS**                                                                                                     |   |   |   |   |   |   |
| Cash and cash equivalents                                                                                              |   | $ | 23,360 |   |   | $ | 1,900 |   |
| Total Current Assets                                                                                                   |   |   | 23,360 |   |   |   | 1,900 |   |
|                                                                                                                   |   |   |   |   |   |   |   |   |
| **TOTAL ASSETS**                                                                                                       |   | $ | 23,360 |   |   | $ | 1,900 |   |
|                                                                                                                   |   |   |   |   |   |   |   |   |
| **LIABILITIES AND STOCKHOLDERS’ EQUITY**                                                                         |   |   |   |   |   |   |   |   |
|                                                                                                                   |   |   |   |   |   |   |   |   |
| **CURRENT LIABILITIES**                                                                                                |   |   |   |   |   |   |   |   |
| Accounts payable                                                                                                       |   | $ | - |   |   | $ | 21,084 |   |
| Accrued interest                                                                                                       |   |   | 19,219 |   |   |   | 8,002 |   |
| Deferred payroll                                                                                                       |   |   | - |   |   |   | 74,257 |   |
| Notes payable - related party                                                                                          |   |   | 58,128 |   |   |   | 57,000 |   |
| Convertible debt, net                                                                                                  |   |   | 107,565 |   |   |   | - |   |
| Derivative liability                                                                                                   |   |   | 887,124 |   |   |   | - |   |
| Accrued expense                                                                                                        |   |   | 186,833 |   |   |   | - |   |
| Aurum payable                                                                                                          |   |   | 400,000 |   |   |   | - |   |
| Total Current Liabilities                                                                                              |   |   | 1,658,869 |   |   |   | 160,343 |   |
|                                                                                                                   |   |   |   |   |   |   |   |   |
| **TOTAL LIABILITIES**                                                                                                  |   |   | 1,658,869 |   |   |   | 160,343 |   |
|                                                                                                                   |   |   |   |   |   |   |   |   |
| **COMMITMENTS AND CONTINGENCIES**                                                                                      |   |   | - |   |   |   | - |   |
|                                                                                                                   |   |   |   |   |   |   |   |   |
| **STOCKHOLDERS’ EQUITY**                                                                                         |   |   |   |   |   |   |   |   |
| Preferred stock, $.10 par value, 10,000,000 shares authorized, 800,001 issued and outstanding                          |   |   | 80,000 |   |   |   | - |   |
| Common stock, $0.001 par value, 100,000,000 shares authorized; 68,777,733 and 60,436,162 shares issued and outstanding |   |   | 68,778 |   |   |   | 60,436 |   |
| Additional paid-in capital                                                                                             |   |   | 3,529,630 |   |   |   | 2,752,600 |   |
| Shares to be issued                                                                                                    |   |   | - |   |   |   | 55,000 |   |
| Subscription receivable                                                                                                |   |   | (3,100 | ) |   |   | - |   |
| Accumulated deficit                                                                                                    |   |   | (5,310,817 | ) |   |   | (3,026,479 | ) |
| Total Stockholders’ Equity                                                                                       |   |   | 1,635,509 |   |   |   | (158,443 | ) |
|                                                                                                                   |   |   |   |   |   |   |   |   |
| **TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY**                                                                   |   | $ | 23,360 |   |   | $ | 1,900 |   |

 

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

 

 3 *Table of contents*

 

 

| **QUAD M SOLUTIONS, INC.**                                                    |
|-------------------------------------------------------------------------------|
| **(fka MINERAL MOUNTAIN MINING & MILLING COMPANY)**                       |
| **CONSOLIDATEDSTATEMENTS OF OPERATIONS**                                      |
|                                                                          |   |  |   |   |  |   |   |  |   |   |   |   |
|                                                                          |   | **Three Months Ended** |   |   | **Nine Months Ended** |   |
|                                                                          |   | **June 30** |   |   | **June 30** |   |
|                                                                          |   | **2019** |   |   | **2018** |   |   | **2019** |   |   | **2018** |   |
|                                                                          |   | **(unaudited)** |   |   | **(unaudited)** |   |   | **(unaudited)** |   |   | **(unaudited)** |   |
| **REVENUES**                                                                  |   | $ | - |   |   | $ |   |   | $ | - |   |   | $ | - |   |
| **OPERATING EXPENSES**                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Professional fees                                                             |   |   | 18,470 |   |   |   | 7,322 |   |   |   | 361,250 |   |   |   | 70,601 |   |
| General and administrative                                                    |   |   | 397,094 |   |   |   | 23,294 |   |   |   | 450,425 |   |   |   | 53,032 |   |
| Officers’ fees                                                          |   |   | 155 |   |   |   | 8,747 |   |   |   | 148,117 |   |   |   | 57,739 |   |
| Mineral property expense                                                      |   |   | 2,500 |   |   |   | 8,040 |   |   |   | 42,301 |   |   |   | 26,740 |   |
| Travel                                                                        |   |   | 28,558 |   |   |   | 23,298 |   |   |   | 82,241 |   |   |   | 51,693 |   |
| Directors’ fees                                                         |   |   | - |   |   |   | - |   |   |   | 22,000 |   |   |   | 39,194 |   |
| **TOTAL OPERATING EXPENSES**                                                  |   |   | 446,777 |   |   |   | 70,701 |   |   |   | 1,106,334 |   |   |   | 298,999 |   |
|                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **LOSS FROM OPERATIONS**                                                      |   |   | (446,777 | ) |   |   | (70,701 | ) |   |   | (1,106,334 | ) |   |   | (298,999 | ) |
|                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **OTHER INCOME (EXPENSES)**                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest expense                                                              |   |   | (219,479 | ) |   |   | (1,280 | ) |   |   | (248,155 | ) |   |   | (3,848 | ) |
| Financing fees                                                                |   |   | (12,500 | ) |   |   | - |   |   |   | (37,500 | ) |   |   | - |   |
| Gain (loss) on issuance of convertible debt                                   |   |   | (611,417 | ) |   | ** ** | **-** | ** ** |   |   | (719,493 | ) |   |   | - |   |
| Gain (loss) on revaluation of derivative                                      |   |   | 236,712 |   |   | ** ** | **-** | ** ** |   |   | 337,313 |   |   |   | - |   |
| Gain (loss) on extinguishment of debt                                         |   |   | (29.943 | ) |   | ** ** | **-** | ** ** |   |   | (29,943 | ) |   |   | - |   |
| Gain (loss) on disposal of subsidiary                                         |   |   | (403,327 | ) |   | ** ** | **-** | ** ** |   |   | (403,327 | ) |   |   | - |   |
| Gain (loss) on acquisition of subsidiaries                                    |   |   | (76,900 | ) |   |   |   |   |   |   | (76,900 | ) |   |   |   |   |
| **TOTAL OTHER INCOME (EXPENSES)**                                             |   |   | 1,116,854 |   |   |   | (1,280 | ) |   |   | (1,178,005 | ) |   |   | (3,848 | ) |
|                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **LOSS BEFORE TAXES**                                                         |   |   | (1,563,631 | ) |   |   | (71,981 | ) |   |   | (2,284,339 | ) |   |   | (302,847 | ) |
|                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **INCOME TAXES**                                                              |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **NET LOSS**                                                                  |   | $ | (1,563,631 | ) |   | $ | (71,981 | ) |   | $ | (2,284,339 | ) |   | $ | (302,847 | ) |
|                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| NET LOSS PER COMMON SHARE, BASIC AND DILUTED                                  |   | $ | (0.02 | ) |   | $ | (0.00 | ) |   | $ | (0.03 | ) |   | $ | (0.01 | ) |
|                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| WEIGHTED AVERAGE NUMBER OF COMMON STOCK SHARES OUTSTANDING, BASIC AND DILUTED |   |   | 68,777,733 |   |   |   | 59,802,829 |   |   |   | 67,506,876 |   |   |   | 58,188,384 |   |

 

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

 

 4 *Table of contents*

 

 

| **QUAD M SOLUTIONS, INC.**                               |   |
|----------------------------------------------------------|--------|
| **(fka MINERAL MOUNTAIN MINING & MILLING COMPANY)**  |   |
| **CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY** |   |
|                                           |   |
|                                                     |   | **Common Stock** |   |   | **Preferred Stock** |   |   | **Additional**

**Paid-in ****** |   |   | **Accumulated** |   |   | **Stock to be Issued**

**or**

**Subscription** |   |   | **Total**

**Stockholders’**** ** |   |
|                                                     |   | **Shares** |   |   | **Amount** |   |   | **Shares** |   |   | **Amount** |   |   | **Capital** |   |   | **Deficit** |   |   | **Receivable** |   |   | **Equity** |   |
| Balance, September 30, 2017                              |   |   | 53,816,162 |   |   | $ | 53,816 |   |   |   |   |   | $ |   |   | $ | 2,444,186 |   |   | $ | (2,563,145 | ) |   | $ | - |   |   | $ | (65,143 | ) |
| Common stock issued for cash                             |   |   | 3,700,000 |   |   |   | 3,700 |   |   |   |   |   |   |   |   |   | 127,800 |   |   |   |   |   |   |   |   |   |   |   | 131,500 |   |
| Net income for period ending December 31, 2017           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (50,385 | ) |   |   | - |   |   |   | (50,385 | ) |
| Balance, December 31, 2017 (unaudited)                   |   |   | 57,516,162 |   |   | $ | 57,516 |   |   |   |   |   | $ |   |   | $ | 2,571,986 |   |   | $ | (2,613,530 | ) |   | $ | - |   |   | $ | 15,972 |   |
| Common stock issued for cash                             |   |   | 1,090,000 |   |   |   | 1,090 |   |   |   |   |   |   |   |   |   | 22,510 |   |   |   |   |   |   |   |   |   |   |   | 23,600 |   |
| Common stock issued for services                         |   |   | 250,000 |   |   |   | 250 |   |   |   |   |   |   |   |   |   | 39,750 |   |   |   |   |   |   |   |   |   |   |   | 40,000 |   |
| Warrants                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 39,194 |   |   |   |   |   |   |   |   |   |   |   | 39,194 |   |
| Exercise of warrants                                     |   |   | 60,000 |   |   |   | 60 |   |   |   |   |   |   |   |   |   | 1,140 |   |   |   |   |   |   |   |   |   |   |   | 1,200 |   |
| Net income for period ending March 31, 2018              |   |   | - |   |   |   | - |   |   |   |   |   |   |   |   |   | - |   |   |   | (180,482 | ) |   |   | - |   |   |   | (180,482 | ) |
| Balance, March 31, 2018 (unaudited)                      |   |   | 58,916,162 |   |   | $ | 58,916 |   |   |   |   |   | $ |   |   | $ | 2,674,580 |   |   | $ | (2,794,012 | ) |   | $ | - |   |   | $ | (60,516 | ) |
| Common stock issued for cash                             |   |   | 970,000 |   |   |   | 970 |   |   |   |   |   |   |   |   |   | 69,030 |   |   |   |   |   |   |   | - |   |   |   | 70,000 |   |
| Common stock issued for services                         |   |   | 50,000 |   |   |   | 50 |   |   |   |   |   |   |   |   |   | 5,450 |   |   |   |   |   |   |   |   |   |   |   | 5,500 |   |
| Common stock issued reimbursement of mineral claims      |   |   | 500,000 |   |   |   | 500 |   |   |   |   |   |   |   |   |   | 4,540 |   |   |   |   |   |   |   |   |   |   |   | 5,040 |   |
| Net income for period ending June 30, 2018               |   |   | - |   |   |   | - |   |   |   |   |   |   |   |   |   | - |   |   |   | (71,980 | ) |   |   | - |   |   |   | (71,980 | ) |
| Balance, June 30, 2018 (unaudited)                       |   |   | 60,436,162 |   |   | $ | 60,436 |   |   |   |   |   | $ |   |   | $ | 2,753,600 |   |   | $ | (2,865,992 | ) |   | $ | - |   |   | $ | (51,956 | ) |
| Common stock to be issued                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (1,000 | ) |   |   |   |   |   |   | 55,000 |   |   |   | 54,000 |   |
| Net income for period ending September 30, 2018          |   |   | - |   |   |   | - |   |   |   |   |   |   |   |   |   | - |   |   |   | (160,487 | ) |   |   | - |   |   |   | (160,487 | ) |
| Balance, September 30, 2018                              |   |   | 60,436,162 |   |   | $ | 60,436 |   |   |   |   |   | $ |   |   | $ | 2,752,600 |   |   | $ | (3,026,479 | ) |   | $ | 55,000 |   |   | $ | (158,443 | ) |
| Common stock issued for cash                             |   |   | 3,925,000 |   |   |   | 3,925 |   |   |   |   |   |   |   |   |   | 170,075 |   |   |   |   |   |   |   | (55,000 | ) |   |   | 119,000 |   |
| Common stock issued for services                         |   |   | 200,000 |   |   |   | 200 |   |   |   |   |   |   |   |   |   | 49,800 |   |   |   |   |   |   |   |   |   |   |   | 50,000 |   |
| Common stock issued for directors’ fees            |   |   | 110,000 |   |   |   | 110 |   |   |   |   |   |   |   |   |   | 21,890 |   |   |   |   |   |   |   |   |   |   |   | 22,000 |   |
| Common stock issued for officers’ fees             |   |   | 4,000,000 |   |   |   | 4,000 |   |   |   |   |   |   |   |   |   | 76,000 |   |   |   |   |   |   |   |   |   |   |   | 80,000 |   |
| Rescinded shares                                         |   |   | (4,300,000 | ) |   |   | (4,300 | ) |   |   |   |   |   |   |   |   | 4,300 |   |   |   |   |   |   |   |   |   |   |   | - |   |
| Net income for period ending December 31, 2018           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (300,798 | ) |   |   |   |   |   |   | (300,798 | ) |
| Balance, December 31, 2018 (unaudited)                   |   |   | 64,371,162 |   |   | $ | 64,371 |   |   |   |   |   | $ |   |   | $ | 3,074,665 |   |   | $ | (3,327,277 | ) |   | $ | - |   |   | $ | (188,241 | ) |
| Common stock issued for cash                             |   |   | 1,758,000 |   |   |   | 1,758 |   |   |   |   |   |   |   |   |   | 62,242 |   |   |   |   |   |   |   |   |   |   |   | 64,000 |   |
| Common stock issued for services                         |   |   | 1,000,000 |   |   |   | 1,000 |   |   |   |   |   |   |   |   |   | 229,000 |   |   |   |   |   |   |   |   |   |   |   | 230,000 |   |
| Common stock issued for officers’ fees             |   |   | 220,000 |   |   |   | 220 |   |   |   |   |   |   |   |   |   | 4,780 |   |   |   |   |   |   |   |   |   |   |   | 5,000 |   |
| Common stock issued for financing fees asset             |   |   | 1,428,571 |   |   |   | 1,429 |   |   |   |   |   |   |   |   |   | 98,571 |   |   |   |   |   |   |   |   |   |   |   | 100,000 |   |
| Net income for period ending March 31, 2019              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (419,909 | ) |   |   |   |   |   |   | (419,909 | ) |
| Balance, March 31, 2019 (unaudited)                      |   |   | 68,777,733 |   |   | $ | 68,778 |   |   |   | - |   |   | $ | - |   |   | $ | 3,469,258 |   |   | $ | (3,747,186 | ) |   | $ | - |   |   | $ | (209,150 | ) |
| Preferred shares issued for subsidiaries                 |   |   |   |   |   |   |   |   |   |   | 800,000 |   |   |   | 80,000 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 80,000 |   |
| Retirement of derivative liability                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 60,372 |   |   |   |   |   |   |   |   |   |   |   | 60,372 |  |
| Subscription receivable                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (3,100 | ) |   |   | (3,100 | ) |
| Net income for period ending June 30, 2019               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (1,563,631 | ) |   |   |   |   |   |   | (1,563,631 | ) |
| Balance, June 30, 2019 (unaudited)                       |   |   | 68,777,733 |   |   | $ | 68,778 |   |   |   | 800,000 |   |   | $ | 80,000 |   |   | $ | 3,529,630 |   |   | $ | (5,310,817 | ) |   | $ | (3,100 | ) |   | $ | (1,635,509 | ) |

 

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

 

 5 *Table of contents*

 

 

| **QUAD M SOLUTIONS, INC.**                                        |
|-------------------------------------------------------------------|
| **(fka MINERAL MOUNTAIN MINING & MILLING COMPANY)**           |
| **CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS**               |
|                                                              |   |   |   |   | ** ** |   |
|                                                              |   | **Nine Months Ended** |   |
|                                                              |   | **June 30,** |   |
|                                                              |   | **2019** |   |   | **2018** |   |
|                                                              |   | **(unaudited)** |   |   | **(unaudited)** |   |
|                                                              |   |   |   |   |   |   |
| **CASH FLOWS FROM OPERATING ACTIVITIES:**                         |   |   |   |   |   |   |
| Net income (loss)                                                 |   | $ | (2,284,339 | ) |   | $ | (302,847 | ) |
| Adjustments to reconcile net income (loss) to net cash            |   |   |   |   |   |   |   |   |
| provided (used) by operating activities:                          |   |   |   |   |   |   |   |   |
| Amortization of debt discount                                     |   |   | 170,565 |   |   |   | - |   |
| Amortization of financing fees                                    |   |   | 100,000 |   |   |   | - |   |
| Common stock issued for services                                  |   |   | 280,000 |   |   |   | 45,500 |   |
| Common stock issued for officers’ and directors’ fees |   |   | 107,000 |   |   |   | - |   |
| Common stock issued for reimbursement of mineral claim fees       |   |   | - |   |   |   | 5,040 |   |
| Loss on issuance of convertible debt                              |   |   | 719,493 |   |   |   | - |   |
| Gain on revaluation of derivative liability                       |   |   | (337,312 | ) |   |   | - |   |
| Loss on extinguishment of debt                                    |   |   | 29,943 |   |   |   |   |   |
| Loss on disposal of subsidiary                                    |   |   | 303,327 |   |   |   |   |   |
| Loss on acquisition of subsidiaries                               |   |   | 76,900 |   |   |   |   |   |
| Warrants issued for directors’ fees                         |   |   | - |   |   |   | 39,194 |   |
| Changes in assets and liabilities:                                |   |   |   |   |   |   |   |   |
| Increase (decrease) in accounts payable                           |   |   | 5,705 |   |   |   | (10,803 | ) |
| Increase (decrease) in accrued interest                           |   |   | 15,090 |   |   |   | 3,848 |   |
| Increase (decrease) in deferred payroll                           |   |   | (14,536 | ) |   |   | - |   |
| Increase (decrease) in accrued expense                            |   |   | 186,833 |   |   |   | - |   |
| **Net cash used by operating activities**                         |   |   | (641,333 | ) |   |   | (220,068 | ) |
|                                                              |   |   |   |   |   |   |   |   |
| **CASH FLOWS FROM INVESTING ACTIVITIES:**                         |   |   | - |   |   |   | - |   |
|                                                              |   |   |   |   |   |   |   |   |
| **CASH FLOWS FROM FINANCING ACTIVITIES:**                         |   |   |   |   |   |   |   |   |
| Proceeds from sale of common stock and warrants                   |   |   | 193,000 |   |   |   | 225,100 |   |
| Proceeds from convertible debt, net                               |   |   | 468,500 |   |   |   | - |   |
| Proceeds from note payable-related party                          |   |   | 1,293 |   |   |   |   |   |
| Proceeds from conversion of warrants                              |   |   | - |   |   |   | 1,200 |   |
| **Net cash provided by financing activities**                     |   |   | 662,793 |   |   |   | 226,300 |   |
|                                                              |   |   |   |   |   |   |   |   |
|                                                              |   |   |   |   |   |   |   |   |
| **INCREASE(DECREASE) IN CASH AND CASH EQUIVALENTS**               |   |   | 21,460 |   |   |   | (6,232 | ) |
| **Cash, beginning of period**                                     |   |   | 1,900 |   |   |   | 5,011 |   |
| **Cash, end of period**                                           |   | $ | 23,360 |   |   | $ | 11,243 |   |
|                                                              |   |   |   |   |   |   |   |   |
| **SUPPLEMENTAL CASH FLOW INFORMATION:**                           |   |   |   |   |   |   |   |   |
| Interest paid                                                     |   | $ | - |   |   | $ | - |   |
| Income taxes paid                                                 |   | $ | - |   |   | $ | - |   |
| Common stock issued for deferred payroll                          |   | $ | 80,000 |   |   | $ | - |   |
| Common stock issued for prepaid financing fees                    |   | $ | 100,000 |   |   | $ | - |   |
| Preferred stock issued for acquisition of subsidiaries            |   | $ | 80,000 |   |   | $ | - |   |
| Note payable issued for sale of subsidiary                        |   | $ | 2,000 |   |   | $ | - |   |

 

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

 

 6 *Table of contents*

 

 

**QUAD M SOLUTIONS, INC**

**(fka MINERAL MOUNTAIN MINING & MILLING COMPANY)**

**Notes to Condensed Consolidated Financial Statements**

**(Unaudited)**

**June 30, 2019**

 

**NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS**

 

Quad M Solutions, Inc. (the “Company”) was incorporated under the laws of the State of Idaho on August 4, 1932 as Mineral Mountain Mining and Milling Company and is publicly held. The Company was incorporated for the purpose of mining and exploring for non-ferrous and precious metals, primarily silver, lead and copper. Until April 16, 2019, the Company had two wholly owned subsidiaries, Nomadic Gold Mines, Inc., an Alaska corporation, and Lander Gold Mines, Inc., a Wyoming corporation. The foregoing are referred to as the “MMMM Mining Subsidiaries.” The Company divested itself of seventy-five percent of MMMM Mining Subsidiaries on April 16, 2019. Reference is made to *Recent Developments-Former MMMM Mining Subsidiaries* under Note 3 – MINING CLAIMS AND LAND, below.

 

On March 22, 2019 the Company entered into two separate Share Exchange Agreements pursuant to which it agreed to acquire 100% of the capital stock of two newly organized entities, NuAxess 2, Inc., a Delaware corporation, and PR345, Inc., a Texas corporation, both private companies, in consideration for the issuance of 400,000 shares of Series C Preferred Stock, issued to the control shareholders of each of NuAxess and PR345, and 400,000 shares of Series D Preferred Stoc, issued to the minority, non-control shareholders of the two entities. The closing of the two Share Exchange Agreements occurred on April 16, 2019, at which date NuAxess and PR345 became wholly-owned subsidiaries of the Company.

 

On May 13, 2019, the Company filed a Definitive Information Statement on Schedule 14C for the purpose of implementing the following corporate actions: (i) the increase in the authorized shares of common stock from 100 million shares to 900 million shares (the “Authorized Common Stock Share Increase”); and (ii) change the name of the Company from Mineral Mountain Mining & Milling Company to Quad M Solutions, Inc. (the “Name Change”). 

 

On June 7, 2019, the Company filed Articles of Amendment to its Articles of Incorporation with the Secretary of State of the State of Idaho effecting the Name Change. On June 14, 2019 the Company filed Articles of Amendment to its Articles of Incorporation with the Secretary of State of the State of Idaho effecting the Authorized Common Stock Share Increase. In addition, effecting the Authorized Common Stock Share Increase. In addition, on July 19, 2019, the Company obtained the requisite approval from FINRA for the Name Change. 

 

The foregoing unaudited interim financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information. Accordingly, these financial statements do not include all of the disclosures required by generally accepted accounting principles in the United States of America for complete financial statements. These unaudited interim financial statements should be read in conjunction with the Company’s audited financial statements for the year ended September 30, 2018. In the opinion of management, the unaudited interim financial statements furnished herein includes all adjustments, all of which are of a normal recurring nature, necessary for a fair statement of the results for the interim period presented. Operating results for the nine-month period ended June 30, 2019 are not necessarily indicative of the results that may be expected for the year ending September 30, 2019.

 

**NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

 

This summary of significant accounting policies of Mineral Mountain Mining & Milling Company and its two wholly owned subsidiaries is presented to assist in understanding the Company’s financial statements. The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States and have been consistently applied in the preparation of the financial statements.

 

 7 *Table of contents*

 

Fair Value of Financial Instruments

 

The Company’s financial instruments as defined by ASC 825-10-50, include cash, receivables, accounts payable and accrued expenses. All instruments are accounted for on a historical cost basis, which, due to the short maturity of these financial instruments, approximates fair value at September 30, 2018 and June 30, 2019.

 

The standards under ASC 820 defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles, and expands disclosures about fair value measurements. FASB ASC 820 establishes a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value as follows:

 

Level 1. Observable inputs such as quoted prices in active markets;

 

Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

 

Level 3. Unobservable inputs in which there is little of no market data, which require the reporting entity to develop its own assumptions. 

 

The Company has convertible debt of $107,565 measured at fair value at June 30, 2019.

 

|                 |   | **June 30, 2019** |   | **Quoted Prices in Active Markets for Identical Assets**

**(Level 1)** |   | **Significant Other Observable Inputs**

**(Level 2)** |   | **Significant Unobservable Inputs**

**(Level 3)** |    |
|----------------------|--------|-------------------|--------|-------------------------------------------------------------------------|--------|--------------------------------------------------------|--------|----------------------------------------------------|---------|
| Derivative liability |   |              |   |                                                                    |   |                                                   |   | $                                                  | 887,124 |   |
|                 |   |              |   |                                                                    |   |                                                   |   |                                               |    |   |
| Total                |   |              |   |                                                                    |   |                                                   |   | $                                                  | 887,124 |   |

 

Going Concern

 

As shown in the accompanying financial statements, the Company has incurred cumulative operating losses since inception. As of June 30, 2019, the Company has limited financial resources with which to achieve its objectives and attain profitability and positive cash flows from operations. As shown in the accompanying balance sheets and statements of operations, the Company has an accumulated deficit of $5,310,817. The Company’s working capital deficit is $1,635,509.

 

Achievement of the Company’s objectives will depend on its ability to obtain additional financing, to generate revenue from current and planned business operations, and to effectively operating and capital costs.

 

The Company plans to fund the operations of its two wholly-owned subsidiaries, NuAxess and PR345, by potential sales of its common stock and/or by issuing debt securities to institutional investors. However, there is no assurance that the Company will be able to achieve these objectives, therefore substantial doubt about its ability to continue as a going concern exists.

 

Provision for Taxes

 

Income taxes are provided based upon the liability method of accounting pursuant to ASC 740-10-25 *Income Taxes – Recognition*. Under the approach, deferred income taxes are recorded to reflect the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each year-end. A valuation allowance is recorded against deferred tax assets if management does not believe the Company has met the “more likely than not” standard imposed by ASC 740-10-25-5 to allow recognition of such an asset. See Note 8.

 

 8 *Table of contents*

  

**NOTE 3 – MINING CLAIMS AND LAND**

 

*Recent Developments-Former MMMM Mining Subsidiaries*

 

On April 24, 2019, the Company filed a Form 8-K reporting that on April 16, 2019, the Company entered into a Share Exchange and Assignment Agreement (the “MBO Agreement”) between the Company and Aurum, LLC, a newly organized Nevada corporation (“Aurum”) formed by Sheldon Karasik, the Company’s former CEO, for the purpose of entering into the MBO Agreement and operating the Company’s formerly wholly-owned mining subsidiaries. Pursuant to the MBO Agreement, the Company sold, transferred and assigned to Aurum a number of shares equal to 75% of the shares of capital stock of the MMMM Mining Subsidiaries with the Company retaining 25% of the capital stock of the MMMM Mining Subsidiaries. Effective on June 3 2019, the Company divested 6% of its equity interest in the MMMM Mining Subsidiaries to an unaffiliated third party for nominal consideration in the amount of $2000, represented by a note payable. 

 

Alaska Mineral Lease and Option to Purchase

 

On April 5, 2016, the Company signed a Lease Agreement with Option to Purchase thirty contiguous mining claims known as the Caribou Mining Claims consisting of 4,800 acres in the State of Alaska. The agreement consists of two parts, an Option to Purchase and until such time as the Option to Purchase is exercised, the Agreement is considered a lease. 

 

*Option to Purchase*

 

The Option to Purchase may be exercised without pre-payment penalty at any time prior to the ninth anniversary of the effective date of the agreement which would be April 5, 2025 by remitting $5,000,000. In order to maintain the Option to Purchase the Company must make expenditures for work on the property as follows:

 

| **Work Expenditure Commitments** |
|----------------------------------|
| **Due Before**                   |   | **Amount** |   |
|                             |   |   |   |
| December 1, 2019                 |   | $ | 150,000 |   |
| December 1, 2020                 |   |   | 250,000 |   |
| December 1, 2021                 |   |   | 500,000 |   |
| December 1, 2022                 |   |   | 1,000,000 |   |
| December 1, 2023                 |   |   | 1,000,000 |   |
| December 1, 2024                 |   |   | 1,000,000 |   |
| **Total**                        |   | $ | 3,900,000 |   |

 

 9 *Table of contents*

 

*Lease*

 

In order to maintain the Option to Purchase the Company shall make the following lease payments.

 

**Lease Payment Obligations**

**Date Due**

 

**Amount**

 

 

 

 

 

April 5, 2016

 
$20,000
 

April 5, 2016

 

 
5,000
 

April 5, 2019

 

 
10,000
 

April 5, 2020

 

 
20,000
 

April 5, 2021

 

 
40,000
 

April 5, 2022

 

 
70,000
 

April 5, 2023

 

 
100,000
 

 

 

 

 

 

Total

 
$265,000
 

Paid during year ended September 30, 2017

 

 
0
 

Balance at September 30, 2017

 
$240,000
 

Paid during year ended September 30, 2018

 

 
0
 

Balance at September 30, 2018

 
$240,000
 

Paid during the period ended March 31, 2019

 

 
0
 

Balance at March 31, 2019

 

 
240,000
 

 

There was additional consideration of 11,200,000 shares of common stock valued at $336,000 recorded as investment in mineral lease.

 

In addition, under the agreement a royalty equal to two percent (2%) of the net smelter returns derived by the Company shall be payable, without regard to whether the Option to Purchase has been exercised. No royalties have been incurred as of March 31, 2019 or September 30, 2018.

 

On August 17, 2018, the Company agreed to an amendment to Lease Agreement with Option to Purchase, with effect on April 18, 2016, for the Caribou Mining Claims modifying the payment schedules for the lease payments and option to purchase to accommodate the Company’s efforts to secure additional capital investment for the Caribou Mining Claims resulting in significant savings and flexibility to the Company.

 

Reference is made to disclosure under *Recent Developments-Former MMMM Mining Subsidiaries***above and the divestment of 75% of the MMMM Mining Subsidiaries to an entity controlled by Sheldon Karasik, our former CEO who continues to serve on the Company’s Board.

 

Lewis Mineral Lease and Option to Purchase

 

On December 18, 2017, the Company signed a Lease Agreement with Option to Purchase sixteen unpatented mining claims known as the Lewiston Claims and three patented mining claims known as the Hidden Hand, Morris and Casselton Claims, located in the State of Wyoming. The agreement consists of two parts, an option to purchase and until such time as the Option to Purchase is exercised, the Agreement is considered a lease. 

 

*Option to Purchase*

 

The Option to Purchase may be exercised without pre-payment penalty at any time prior to the seventh anniversary of the effective date of the agreement which would be December 18, 2024 by remitting $1,000,000. In order to maintain the Option to Purchase the Company must make six annual payments all of which will be credited to the purchase price beginning on December 18, 2018 and continuing until December 18, 2023.

 

 10 *Table of contents*

*Lease*

 

In order to maintain the Option to Purchase the Company shall make the following lease payments.

 

| **Lease Payment Obligations** |
|-------------------------------|
| **Date Due**                  |   | **Amount** |   |
| June 18, 2018                 |   | $ | 20,000 |   |
| December 18, 2018             |   |   | 30,000 |   |
| December 18, 2019             |   |   | 30,000 |   |
| December 18, 2020             |   |   | 30,000 |   |
| December 18, 2021             |   |   | 30,000 |   |
| December 18, 2022             |   |   | 30,000 |   |
| December 18, 2023             |   |   | 30,000 |   |
|                          |   |   |   |   |
| **Total**                     |   | $ | 200,000 |   |

 

The parties to the lease amended the payment schedule to indefinitely defer $35,000 in lease payments from the June 18, 2018 and December 18, 2018 payment periods. 

 

There was additional consideration of 500,000 warrants to purchase shares of common stock value. 

 

In addition, under the agreement a royalty equal to three percent (3%) of the net smelter returns derived by the Company shall be payable, without regard to whether the Option to Purchase has been exercised. No royalties have been incurred as of March 31, 2019.

 

The parties to the lease amended the payment schedule to defer $7,500 in lease payments indefinitely.

 

Helen G Mineral Lease 

 

On March 8, 2018, the Company signed a Lease Agreement for three patented mining claims known as the Helen G. (a/k/a Allen G), Mill and Star Lode Claims, located in the State of Wyoming. 

 

Under the agreement a royalty shall be paid as follows:

   

 
·If the monthly average per troy ounce of gold is over $1,500 the royalty shall be 3.5% of net smelter returns.
 

 

 

 
·If the monthly average per troy ounce of gold is greater than $1,400 but less than $1,500, the royalty shall be 3.0% of net smelter returns.
 

 

 

 
·If the monthly average per troy ounce of gold is greater than $1,300 but less than $1,400, the royalty shall be 2.5% of net smelter returns.
 

 

 

 
· If the monthly average per troy ounce of gold is $1,300 or less the royalty shall be 2.0% of net smelter returns.

 

No royalties have been incurred as of March 31, 2019.

 

*Lease*

 

In order to maintain its lease the Company shall make a $2,500 advance royalty payments at execution of the agreement and on each yearly anniversary for as long as the agreement is in effect. These advance royalty payments will be credited to the production royalty payments owed above. The failure of the Company to timely tender the advance royalty payment may terminate this lease. 

 

Reference is made to disclosure under *Recent Developments-Former MMMM Mining Subsidiaries***above and the divestment of 75% of the MMMM Mining Subsidiaries to an entity controlled by Sheldon Karasik, our former CEO who continues to serve on the Company’s Board.

 

 11 *Table of contents*

 

**NOTE 4 – EQUITY PURCHASE AGREEMENT**

 

The Company entered into an Equity Purchase Agreement, dated as of October 1, 2018 (the “Equity Purchase Agreement”), by and between the Company and Crown Bridge Partners, LLC (the “Crown Bridge”) pursuant to which the Company has agreed to issue to Crown Bridge shares of the Company’s Common Stock, $0.001 par value (the “Common Stock”), in an amount up to Five Million Dollars ($5,000,000.00) (the “Shares”), in accordance with the terms of the Equity Purchase Agreement. In connection with the transactions contemplated by the Equity Purchase Agreement, the Company is required to register with the SEC the following shares of Common Stock: (1) 8,000,000 Put Shares to be issued to the Investors upon purchase from the Company by the Investors from time to time pursuant to the terms and conditions of the Equity Purchase Agreement; (2) 1,428,571 shares of Common Stock to be issued by the Company to the Investors as a commitment fee pursuant to the Equity Purchase Agreement; and (3) the Company also has entered into a Registration Rights Agreement, of even date with the Equity Purchase Agreement with the Investors (the “Registration Rights Agreement”) pursuant to which the Company agreed, among other things, to register the Put Shares under the Securities Act of 1933, as amended (the “Securities Act”) relating to the resale of the Put Shares.

 

The Company intends to use the proceeds of the revolving credit line for general corporate purposes, which may include (i) acquisitions, (ii) refinancing or repayment of indebtedness, (iii) capital expenditures and working capital, (iv) investing in equipment and property development (which may include funding associated with exploration), and (v) pursuing other business opportunities both related and unrelated to our existing mining activities.

 

**NOTE 5 – ACQUISTION OF WHOLLY OWNED SUBSIDIARIES**

 

On April 24, 2019, the Company filed a Form 8-K reporting that effective on April 16, 2019, the Company completed the closing of the two separate Share Exchange Agreements with unaffiliated third parties, dated March 22, 2019, pursuant to which the Company acquired 100% of the capital stock of NuAxess 2, Inc., a newly-organized Delaware corporation, and PR345, Inc., a newly organized Texas corporation. Pursuant to these Agreements, the Company acquired all of the capital stock of NuAxess and P3R45 in exchange for the issuance to the shareholders of NuAxess and PR345 shares of newly authorized Series C and D Convertible Preferred Stock, par value $0.10 per share (the “New Preferred Stock”). The Shares of Series D Convertible Preferred Stock have beneficial ownership limitation provisions. The transaction was valued at $80,000 and as a result a loss on acquisition in the amount of $76,900 was recorded.

 

**NOTE 6 – SHARE EXCHANGE AND ASSIGNMENT AGREEMENT**

 

On April 16, 2019, the Company entered into a Share Exchange and Assignment Agreement (the “MBO Agreement”) with Aurum, LLC (“Aurum”), a newly formed Nevada corporation organized by Sheldon Karasik for the purpose of entering into the MBO Agreement thereby acquiring 75% of the capital stock of the MMMM Mining Subsidiaries from the Company. On the date of closing, the Company made a payment of $100,000 to Aurum for the operations of the MMMM Mining Subsidiaries, and agreed to make an additional payments subject to the terms and conditions of the MBO Agreement. In connection with the MBO Agreement, Aurum agreed to assume all of the liabilities of the MMMM Mining Subsidiaries, which were disclosed to the Company as totaling approximately $96,673. As a result of this transaction, a loss of $403,327 was recorded.

 

**NOTE 7 – CONVERTIBLE DEBT**

 

On or about November 27, 2018, the Company issued a convertible promissory note to Power Up Lending Group Ltd. (“Power Up”) for the principal sum of $63,000.00, together with interest at 12% per annum, with a maturity date of November 27, 2019 (the “Note”). The Note is convertible at any time during the period beginning 180 days following the date of the Note to convert all or any part of the outstanding and unpaid principal amount of the Note into shares of Common Stock at a Variable Conversion Price, which is equal to 58% multiplied by the Market Price (as defined below), representing a discount rate of 42% Market Price” is defined as the average of the lowest two (2) Trading Prices for the Company’s Common Stock during the preceding 15 trading day period prior to the Conversion Date. The Company paid $3,000 as a fee which is recorded as a debt discount and being amortized over the life of the loan.

 

 12 *Table of contents*

 

The conversion feature of the note represents an embedded derivative. A derivative liability with an intrinsic value of $0.1770 was $131,158 using a binomial pricing model and was calculated as a discount to the Note. That amount is recorded as a new contra-note payable amount (similar to the recorded OID and transaction costs and amounts discussed immediately below), but only for an amount not in excess of and thus capped by the otherwise undiscounted amount of the Note. Because of the derivative nature of the $131,158 valuation of the conversion feature, $71,158 is recorded as an expense in the current period and reported as a loss on issuance of convertible debt.

 

On June 4, 2019, KinerjaPay Corp. (“KPAY”) acquired the note from PowerUp, with the consent of the Company, paying PowerUp the outstanding principal, accrued interest and prepayment penalty in the aggregate amount of $96,816. The Company then issued a replacement convertible promissory note payable to KPAY for the principal sum of $96,816 with identical terms to the original note (interest at 12% per annum, maturity date of November 27, 2019, conversion rights and conversion price.) This transaction was treated as an extinguishment of the original note and resulted in accelerated recognition of interest expense for original issue discount debt discount of $1,471, interest expense for derivative liability debt discount of $26,425 and a loss on extinguishment in the amount of $29,943. 

 

The conversion feature of the KPAY note represents an embedded derivative. A derivative liability with an intrinsic value of $0.1775 was $292,344 using a binomial pricing model and was calculated as a discount to the Note. That amount is recorded as a new contra-note payable amount, but only for an amount not in excess of and thus capped by the otherwise undiscounted amount of the Note. Because of the derivative nature of the $292,344 valuation of the conversion feature, $195,528 is recorded as an expense in the current period and reported as a loss on issuance of convertible debt.

 

During the period ended June 30, 2019, $828 of regular interest and $14,063 of derivative liability was expensed. There was no corresponding expense during the period ended June 30, 2018.

 

On or about February 22, 2019, the Company issued a second convertible promissory note to Power Up for the principal sum of $43,000, together with interest at the rate of 12%per annum, with a maturity date of February 22, 2020. Power Up has the right at any time during the period beginning 180 days following the date of the Note to convert all or any part of the outstanding and unpaid principal amount of the Note into fully paid and non-assessable shares of Common Stock at a Variable Conversion Price which is equal 58% multiplied by the Market Price (representing a discount rate of 42%), in which Market Price is the average of the lowest two (2) Trading Prices for the Company’s Common Stock during the preceding 15 trading day period prior to the Conversion Date. The Company paid $3,000 as a fee which is recorded as a debt discount and being amortized over the life of the loan.

 

The conversion feature of the note represents an embedded derivative. A derivative liability with an intrinsic value of $0.116 was $76,918 using a binomial pricing model and was calculated as a discount to the note. That amount is recorded as a new contra-note payable amount (similar to the recorded OID and transaction costs and amounts discussed immediately below), but only for an amount not in excess of and thus capped by the otherwise undiscounted amount of the note payable. Because of the derivative nature of the $76,918 valuation of the conversion feature, $36,918 is recorded as an expense in the current period and reported as a loss on issuance of convertible debt.

 

During the period ended June 30, 2019, $1,824 of regular interest, $1,052 of original issue discount, and $14,027 of derivative liability was expensed. There was no corresponding expense during the period ended June 30, 2018.

 

On or about April 25, 2019, the Company issued a convertible promissory note to GS Capital Partners, LLC (“GS”) for the principal sum of $75,000, together with interest at the rate of 12%per annum, with a maturity date of April 25, 2020. GS has the right at any time during the period beginning 180 days following the date of the Note to convert all or any part of the outstanding and unpaid principal amount of the Note into fully paid and non-assessable shares of Common Stock at a Variable Conversion Price which is equal 58% multiplied by the Market Price (representing a discount rate of 42%), in which Market Price is the average of the lowest two (2) Trading Prices for the Company’s Common Stock during the preceding 20 trading day period including the Conversion Date. The Company paid $1,250 in original issue discount and $3,000 as a fee both of which are recorded as a debt discount and being amortized over the life of the loan.

 

 13 *Table of contents*

 

The conversion feature of the note represents an embedded derivative. A derivative liability with an intrinsic value of $0.1062 was $139,348 using a binomial pricing model and was calculated as a discount to the note. That amount is recorded as a new contra-note payable amount (similar to the recorded OID and transaction costs), but only for an amount not in excess of and thus capped by the otherwise undiscounted amount of the note payable. Because of the derivative nature of the $139,348 valuation of the conversion feature, $69,348 is recorded was an expense in the current period and reported as a loss on issuance of convertible debt.

 

During the period ended June 30, 2019, $1,627 of regular interest, $902 of original issue discount, and $12,623 of derivative liability was expensed. There was no corresponding expense during the period ended June 30, 2018.

 

On or about April 29, 2019, the Company issued a convertible promissory note to Jefferson Street Capital LLC (“Jefferson”) for the principal sum of $66,000, together with interest at the rate of 12% per annum, with a maturity date of April 29, 2020. Jefferson has the right at any time following the date of the Note to convert all or any part of the outstanding and unpaid principal amount of the Note into fully paid and non-assessable shares of Common Stock at a Variable Conversion Price which is equal 58% multiplied by the Market Price (representing a discount rate of 42%), in which Market Price is the average of the lowest two (2) Trading Prices for the Company’s Common Stock during the preceding 20 trading day period including the Conversion Date. The Company paid $6,000 in original issue discount and $3,000 as a fee both of which are recorded as a debt discount and being amortized over the life of the loan.

 

The conversion feature of the note represents an embedded derivative. A derivative liability with an intrinsic value of $0.1510 was $175,334 using a binomial pricing model and was calculated as a discount to the note. That amount is recorded as a new contra-note payable amount (similar to the recorded OID and transaction costs), but only for an amount not in excess of and thus capped by the otherwise undiscounted amount of the note payable. Because of the derivative nature of the $175,334 valuation of the conversion feature, $118,334 is recorded was an expense in the current period and reported as a loss on issuance of convertible debt.

 

During the period ended June 30, 2019, $1,345 of regular interest, $1,525 of original issue discount, and $9,656 of derivative liability was expensed. There was no corresponding expense during the period ended June 30, 2018.

 

On or about May 7, 2019, the Company issued a convertible promissory note to Sunshine Equity Partners LLC (“Sunshine”) for the principal sum of $50,000, together with interest at the rate of 12% per annum, with a maturity date of May 7, 2020. Sunshine has the right at any time following the date of the Note to convert all or any part of the outstanding and unpaid principal amount of the Note into fully paid and non-assessable shares of Common Stock at a Variable Conversion Price which is equal 60% multiplied by the Market Price (representing a discount rate of 40%), in which Market Price is the average of the lowest two (2) Trading Prices for the Company’s Common Stock during the preceding 20 trading day period prior to the Conversion Date. The Company paid $3,500 as a fee which is recorded as a debt discount and being amortized over the life of the loan.

 

The conversion feature of the note represents an embedded derivative. A derivative liability with an intrinsic value of $0.1607 was $131,162 using a binomial pricing model and was calculated as a discount to the note. That amount is recorded as a new contra-note payable amount (similar to the recorded OID and transaction costs), but only for an amount not in excess of and thus capped by the otherwise undiscounted amount of the note payable. Because of the derivative nature of the $131,162 valuation of the conversion feature, $84,662 is recorded was an expense in the current period and reported as a loss on issuance of convertible debt.

 

During the period ended June 30, 2019, $904, of regular interest, $516 of original issue discount, and $6,861 of derivative liability was expensed. There was no corresponding expense during the period ended June 30, 2018.

 

On or about May 17, 2019, the Company issued a convertible promissory note to Crossover Capital Fund I LLC (“Crossover”) for the principal sum of $50,000, together with interest at the rate of 12% per annum, with a maturity date of February 17, 2020. Crossover has the right at any time following the date of the Note to convert all or any part of the outstanding and unpaid principal amount of the Note into fully paid and non-assessable shares of Common Stock at a Variable Conversion Price which is equal 58% multiplied by the Market Price (representing a discount rate of 42%), in which Market Price is the lowest bid price for the Company’s Common Stock during the preceding 20 trading day period including the Conversion Date. The Company paid $5,000 as a fee which is recorded as a debt discount and being amortized over the life of the loan.

 

 14 *Table of contents*

 

The conversion feature of the note represents an embedded derivative. A derivative liability with an intrinsic value of $0.0902 was $76,989 using a binomial pricing model and was calculated as a discount to the note. That amount is recorded as a new contra-note payable amount (similar to the recorded transaction costs), but only for an amount not in excess of and thus capped by the otherwise undiscounted amount of the note payable. Because of the derivative nature of the $76,989 valuation of the conversion feature, $31,989 is recorded was an expense in the current period and reported as a loss on issuance of convertible debt.

 

During the period ended June 30, 2019, $723, of regular interest, $797 of original issue discount, and $7,174 of derivative liability was expensed. There was no corresponding expense during the period ended June 30, 2018.

 

On or about May 21, 2019, the Company issued a convertible promissory note to Harbor Gates Capital, LLC (“Harbor Gates”) for the principal sum of $110,000, together with interest at the rate of 8% per annum, with a maturity date of November 21, 2019. Harbor Gates has the right at any time during the period beginning 180 days following the date of the Note to convert all or any part of the outstanding and unpaid principal amount of the Note into fully paid and non-assessable shares of Common Stock at a Variable Conversion Price which is equal 60% multiplied by the Market Price (representing a discount rate of 40%), in which Market Price is the lowest bid price for the Company’s Common Stock during the preceding 20 trading day period including the Conversion Date. The Company paid $5,000 as a fee which is recorded as a debt discount and being amortized over the life of the loan.

 

The conversion feature of the note represents an embedded derivative. A derivative liability with an intrinsic value of $0.0765 was $138,861 using a binomial pricing model and was calculated as a discount to the note. That amount is recorded as a new contra-note payable amount (similar to the recorded transaction costs), but only for an amount not in excess of and thus capped by the otherwise undiscounted amount of the note payable. Because of the derivative nature of the $138,861 valuation of the conversion feature, $38,861 is recorded was an expense in the current period and reported as a loss on issuance of convertible debt.

 

During the period ended June 30, 2019, $964, of regular interest, $2,174 of original issue discount, and $21,739 of derivative liability was expensed. There was no corresponding expense during the period ended June 30, 2018.

 

On or about June 11, 2019, the Company issued a convertible promissory note to Tiger Trout Capital, LLC (“Tiger”) for the principal sum of $70,000, together with guaranteed interest at the rate of 15% per annum with a six month minimum, with a maturity date of September 11, 2019. Tiger has the right if the note is defaulted to convert all or any part of the outstanding and unpaid principal amount of the Note into fully paid and non-assessable shares of Common Stock at a Variable Conversion Price which is equal 50% multiplied by the Market Price (representing a discount rate of 50%), in which Market Price is the lowest trading price for the Company’s Common Stock during the preceding 30 trading day period prior to the Conversion Date. The Company paid $20,000 in original issue discount which is recorded as a debt discount and being amortized over the life of the loan.

 

The conversion feature of the note represents an embedded derivative. A derivative liability with an intrinsic value of $0.0631 was $122,694 using a binomial pricing model and was calculated as a discount to the note. That amount is recorded as a new contra-note payable amount (similar to the recorded transaction costs), but only for an amount not in excess of and thus capped by the otherwise undiscounted amount of the note payable. Because of the derivative nature of the $122,694 valuation of the conversion feature, $72,694 is recorded was an expense in the current period and reported as a loss on issuance of convertible debt.

 

During the period ended June 30, 2019, $1,084, of regular interest, $4,130 of original issue discount, and $10,326 of derivative liability was expensed. There was no corresponding expense during the period ended June 30, 2018.

 

 15 *Table of contents*

 

**NOTE 8 – COMMON AND PREFERRED STOCK**

 

Upon formation the authorized capital of the Company was 2,000,000 shares of common stock with a par value of $.05, in 1953 the Company increased the authorized capital to 3,000,000 shares of common stock, in 1985 the authorized capital was again increased to 10,000,000 shares of common stock, and in 2014 the Company increased the authorized capital to 100,000,000 shares of common stock with a par value of $.001 and 10,000,000 shares of preferred stock with a par value of $.10.

 

During the year ended September 30, 2018, the Company issued 5,760,000 shares of common stock for cash of $224,100; 1,275,000 shares of common stock for cash of $55,000 that were unissued as of September 30, 2018;300,000 shares of common stock for services valued at $45,500; and 500,000 shares of common stock for reimbursement of mineral claim fees. Additionally, 280,000 warrants were issued for directors fees at an exercise price of $0.02 and a term of two years. The fair value of the warrants was estimated using the Black Scholes Option Price Calculation. The following assumptions were made to value the warrants on the date of issuance: strike price of $0.02, risk free interest rate of 1.99%, expected life of two years, and expected volatility of 495.28%. The fair value of the warrants totaled $39,194 at the issuance date and this amount was recorded as equity. Also during the period 60,000 options were exercised at a price of $.02 for cash in the amount of $1200.00

 

During the three month period ended December 31, 2018, the Company issued 2,650,000 shares of common stock for cash of $119,000; 1,275,000 shares that were paid for but unissued as of September 30, 2018; 200,000 shares of common stock for services valued at $50,000; 110,000 shares for directors’ fees valued at $22,000; and 4,000,000 shares for settlement of accumulated officers’ fees valued at $80,000.

 

During the three-month period ended March 31, 2019, the Company issued 1,958,000 shares of common stock for cash of $74,000; 1,000,000 shares of common stock for services valued at $230,000; 200,000 shares for officers’ fees valued at $4,000 and 1,428,571 shares valued at $100,000 for prepaid financing fees.

 

Additionally, in 2016, former management of the Company negotiated a contract with M6 Limited, a stock promotion company, in which M6 would collectively receive an advanced payment of 4.3 million shares of Company common stock for certain promotional services. M6 itself received 2 million shares, an affiliated company, Maximum Harvest LLC, received 1.3 million shares and an affiliate of M6, Hahn M. Nguyen, received 1 million shares. In 2018, current management determined that it was not in the best interest of the Company to pursue the services and therefore terminated the contract with M6. The 4.3 million shares of common stock have been rescinded and returned.

 

On March 21, 2019, the Company filed a Certificate of Designation amending the Articles of Incorporation and designating the rights and restrictions of 1 share of Series B Super Voting Preferred Stock, par value $0.10 per share (the “Series B Preferred Stock”), pursuant to resolutions approved by the Board of Directors (the “Board”) on November 5, 2018. On March 21, 2019, the Company issued to Sheldon Karasik, the Chief Executive Officer, President and Chairman of the Board, the one share of Series B Preferred Stock in exchange for $0.16, which price was based on the closing price of the Company’s Common Stock as of November 5, 2018 of $0.16, the date the issuance was approved by the Board. Sheldon Karasik, as the holder of the Series B Preferred Stock, is entitled to vote together with the holders of the Company’s Common Stock upon all matters that may be submitted to holders of Common Stock for a vote, and on all such matters, the share of Series Voting Preferred Stock shall be entitled to that number of votes equal to 51% of the total number of votes that all issued and outstanding shares of Common Stock and all other securities of the Company are entitled to, as of any such date of determination, on a fully diluted basis. The Company filed the Certificate of Designation with the Secretary of State of Idaho on March 21, 2019.

 

On April 2, 2019, the Company filed two Certificates of Designation amending the Articles of Incorporation and designation the rights and restrictions of 400,000 shares of Series C Convertible Preferred Stock, par value $0.10 and 400,000 shares of Series D Convertible Preferred Stock, par value $0.10 pursuant to two separate Share Exchange Agreements, see Note 5. 

 

On April 8, 2019, the Company filed a Certificates of Designation amending the Articles of Incorporation and designation the rights and restrictions of 25,000 shares of Series E Convertible Preferred Stock, par value $0.10. 

 

The following warrants were outstanding at June 30, 2019:

 

 16 *Table of contents*

 

 

| **Warrant Type** |   | **Warrants**
**Issued and
Unexercised** |      |   | **Exercise**
**Price** |   |   | **Expiration**
**Date** |   |
|------------------|--------|-----------------------------------------|-----------|--------|------------------------|--------|--------|-------------------------|--------|
| Warrants         |   |                                    | 1,000,000 |   |                   | $      | 0.05   |                    |   | December 2021 |   |
| Warrants         |   |                                    | 500,000   |   |                   | $      | 0.10   |                    |   | December 2021 |   |
| Warrants         |   |                                    | 220,000   |   |                   | $      | 0.02   |                    |   | January 2020 |   |

 

**NOTE 9 – RELATED PARTY TRANSACTIONS**

 

During the year ended September 30, 2016 the Company issued a note payable to a family member of an officer in the amount of $15,000. $3,000 was converted to 300,000 shares of common stock and $5,000 was repaid in cash. The note bears interest at a rate of 10% beginning on July 24, 2016, the balance of principal and interest at June 30, 2019 and September 30, 2018 was $9,462 and $9,660, respectively.

 

Also during the year ended September 30, 2016, the Company through its wholly owned subsidiary, Nomadic Gold Mines, Inc., entered into a lease agreement with option to purchase with Ben Porterfield, a related party. See Note 3.

 

During the year ended September 30, 2017 the Company issued two notes payable to Premium Exploration Mining in the amount of $35,000 and $15,000 each having an interest rate of 5%, the balance of principal and interest at June 30, 2019 and September 30, 2018 was $57,457 and 55,342, respectively, the companies had directors in common at the time of the transaction. 

 

A family member of a former officer provided investor relations consulting services and other administrative functions to the Company, during the period ended June 30, 2019, $35,000 was paid in cash for consulting; during the period ended June 30, 2018, $20,300 was paid in cash.

 

On March 21, 2019, we filed a Certificate of Designation amending our Articles of Incorporation and designating the rights and restrictions of 1 share of our Series B Super Voting Preferred Stock, par value $0.10 per share (the “Series B Preferred Stock”), pursuant to resolutions approved by our Board of Directors (the “Board”) on November 5, 2018.On March 21, 2019, we issued to Sheldon Karasik, our Chief Executive Officer, President and Chairman of the Board, the one share of our Series B Preferred Stock in exchange for $0.16,which price was based on the closing price of our Common Stock as of November 5, 2018 of $0.16, the date the issuance was approved by our Board. Sheldon Karasik, as the holder of our Series B Preferred Stock, is entitled to vote together with the holders of our Common Stock upon all matters that may be submitted to holders of our Common Stock for a vote, and on all such matters, the share of Series Voting Preferred Stock shall be entitled to that number of votes equal to 51% of the total number of votes that all issued and outstanding shares of Common Stock and all other securities of the Company are entitled to, as of any such date of determination, on a fully diluted basis. The Company filed the Certificate of Designation with the Secretary of State of Idaho on March 21, 2019. 

 

**NOTE 10 – INCOME TAXES**

 

Topic 740 in the Accounting Standards Codification (ASC 740) prescribes recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC 740 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. At December31, 2018 the Company had taken no tax positions that would require disclosure under ASC 740.

 

The Company files income tax returns in the U.S. federal jurisdiction and the State of Idaho. The Company is currently in arrears in filing their federal and state tax returns, both jurisdictions statute of limitations of three years does not begin until the tax returns are filed. 

 

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amount used for income tax purposes.

 

Significant components of the deferred tax assets at an anticipated tax rate 21% for the period ended June 30, 2019 and September 30, 2018 are as follows:

 

 17 *Table of contents*

 

 

|                                   |   | **June 30,**

**2019** | ** ** | ** ** | **September 30,**

**2018** |   |
|----------------------------------------|--------|------------------------|------------|------------|-----------------------------|--------|
| Net operating loss carryforwards       |   |                   | 5,310,818  |       |                        |   | 3,026,479 |   |
| Deferred tax asset                     |   |                   | 1,448,481  |       |                        |   | 968,769 |   |
| Valuation allowance for deferred asset |   |                   | (1,448,481 | )          |                        |   | (968,769 | ) |
| Net deferred tax asset                 |   |                   | -          |       |                        |   | - |   |

 

At June 30, 2019 and September 30, 2018, the Company has net operating loss carryforwards of approximately $5,310,818 and $3,026,479 which will begin to expire in the year 2031. The change in the allowance account from September 30, 2018 to June 30, 2019 was $479,712.

 

On December 22, 2017 H.R. 1, originally known as the Tax Cuts and Jobs Act, (the “Tax Act”) was enacted. Among the significant changes to the U.S. Internal Revenue Code, the Tax Act lowered the U.S. federal corporate income tax rate (“Federal Tax Rate”) from 35% to 21% effective January 1, 2018. The Company will compute its income tax expense for the December 31, 2017 fiscal year using a Federal Tax Rate of 21%. The remeasurement of the deferred tax assets resulted in a $68,010 reduction in tax assets to $885,961 from an estimate of $953,971 that the assets would have been using a 35% effective tax rate.

 

**NOTE 11 – SUBSEQUENT EVENTS**

 

On or about July 2, 2019 (signed June 25, 2019), the Company issued a convertible promissory note to Labrys Fund, LP (“Labrys”) for the principal sum of $112,500, together with interest at the rate of 12% per annum, with a maturity date of December 25, 2020. Labrys has the right at any time after the date of the Note to convert all or any part of the outstanding and unpaid principal amount of the Note into fully paid and non-assessable shares of Common Stock at a Variable Conversion Price which is equal 60% multiplied by the Market Price (representing a discount rate of 40%), in which Market Price is the average of the two lowest trading prices for the Company’s Common Stock during the preceding 20 trading day period prior to the Conversion Date. The Company paid $12,500 fees which is recorded as a debt discount and being amortized over the life of the loan.

 

The conversion feature of the note represents an embedded derivative. A derivative liability with an intrinsic value of $0.0696 was $182,517 using a binomial pricing model and was calculated as a discount to the note. That amount is recorded as a new contra-note payable amount (similar to the recorded transaction costs), but only for an amount not in excess of and thus capped by the otherwise undiscounted amount of the note payable. Because of the derivative nature of the $182,517 valuation of the conversion feature, $82,517 is recorded was an expense in the current period and reported as a loss on issuance of convertible debt.

 

During the period ended June 30, 2019, $184, of regular interest, $114 of original issue discount, and $911 of derivative liability was expensed. There was no corresponding expense during the period ended June 30, 2018.

 

On or about July 12, 2019, the Company issued a convertible promissory note to Auctus Fund, LLC (“Auctus”) for the principal sum of $75,000, together with interest at the rate of 12% per annum, with a maturity date of April 12, 2020. Auctus has the right at any time after the date of the Note to convert all or any part of the outstanding and unpaid principal amount of the Note into fully paid and non-assessable shares of Common Stock at a Variable Conversion Price which is equal 50% multiplied by the Market Price (representing a discount rate of 40%), in which Market Price is the average of the two lowest trading prices for the Company’s Common Stock during the preceding 25 trading day period prior to the Conversion Date. The Company paid $10,250 fees which is recorded as a debt discount and being amortized over the life of the loan.

 

The conversion feature of the Note represents an embedded derivative. A derivative liability has an intrinsic value of which has not yet been calculated.

 

Management has evaluated subsequent events through the date these financial statements were available to be issued. Based on our evaluation no other material events have occurred that require disclosure.

 

 18 *Table of contents*

 

**Item 2.****Management’s Discussion and Analysis of Financial Condition and Results of Operations General**

 

*The following discussion and analysis of the financial condition and results of our operations should be read in conjunction with our financial statements and the notes to those statements.**In addition to historical financial information,**this discussion contains forward-looking statements reflecting our management’s current expectations that involve risks and uncertainties. Actual results and the timing of events may differ materially from those contained in these forward-looking statements due to a number of factors, including those discussed under the heading “Risk Factors” in our Consolidated Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on January 15, 2019.*

 

*Unless otherwise indicated or the context requires otherwise, the words “we,” “us,” “our,” the “Company” or “our Company,” “Quad M” or “Mineral Mountain” refer to Quad M Solutions, Inc. f/k/a Mineral Mountain Mining & Milling Company, an Idaho corporation.*

 

**New Developments - Goals and Objectives**

 

On March 27, 2019, the Company filed a Form 8-K with the SEC reporting that the Company entered into two separate Share Exchange Agreements dated March 22, 2019 (the “Agreements”) with unaffiliated third parties, one with PR345, Inc. (“PR345”), a newly organized Texas corporation, and one with NuAxess 2, Inc. (“NuAxess”), a newly organized Delaware corporation. Pursuant to these Agreements, the Company agreed to acquire the all of the capital stock of P3R45 and NuAxess in exchange of the issuance of newly authorized shares of Series C and D Preferred Stock, par value $0.10 per share, to the shareholders of PR345 and NuAxess. The entry into the two Agreements was authorized and approved by the Company’s Board in furtherance of the Company’s plan, as disclosed in its registration statement declared effective by the SEC on March 8, 2019, Registration No. 333-227839 (the “Registration Statement”), to diversify its business beyond its historic mining operations of its two subsidiaries, Nomadic Gold Mines, Inc. and Lander Gold Mines, Inc. (the “MMMM Mining Subsidiaries”). The Company also granted Sheldon Karasik or an entity to be formed by him to acquire for a nominal amount 75% of the capital stock of the MMMM Mining Subsidiaries, with the Company retaining 25% of its capital stock.

 

The Company also agreed that upon the closing of the Agreements, among other conditions, that: (i) Sheldon Karasik shall resign as CEO and Chairman, but shall continue to serve as a director, as will Michael Miller, an independent director; (ii) Felix Keller shall resign as a director; and (iii) Pat Dileo, Carl Dorvil and Derrick Chambers would be appointed to the newly constituted 5 person Board and Pat Dileo would be appointed as CEO and Chairman of the Board. 

 

As disclosed under Note 9-Subsequent Events, below, on April 24, 2019, the Company filed a Form 8-K reporting that: (i) on April 16, 2019, it entered into a Share Exchange and Assignment Agreement, also referred to as the MBO Agreement with Aurum, an entity formed by Sheldon Karasik for the purpose of acquiring 75% of the capital stock of the MMMM Mining Subsidiaries from the Company; (ii) effective April 16, 2019, Felix Keller resigned as a director; (iii) effective April 17, Sheldon Karasik resigned as CEO and Board Chairman (but continued to serve on the Board); (iii) effective April 17, 2019, Pat Dileo was appointed as CEO and Chairman of the Board and Carl Dorvil and Derrick Chambers were appointed to as members of the 5 person Board, joining Sheldon Karasik and Michael Miller; and (v) effective April 16, 2019, Sheldon Karasik transferred and assigned the Series B Super Voting Preferred Stock to Pat Dileo.

 

As a result of the execution of the MBO Agreement and the closing of the March 22, 2019 Share Exchange Agreements, the Company’s resources will be devoted to the business operations of NuAxess and PR345, as follows:

 

(i) NuAxess’ business plan is to serve as a full service financial, employee benefit and insurance consulting company offering, either directly or through proven third parties, innovative ways to provide its clients’ employees with affordable and manageable health plans and comprehensive benefits, based upon a new system being developed throughout the country for the rapidly expanding market of small and medium-sized businesses (SMBs) which are experiencing significant problems with their existing programs, to the extent that they even provide programs because of their costs and complexities. NuAxess also intends to create an international professional employer association (IPEA) headquartered in San Juan, Puerto Rico, that will sponsor and provide professional outreach programs offering health insurance, healthcare and financial education to its PEO and financial services members globally; and (iii) additionally, the IPEA will offer these and other services to leading rural hospital providers via a proprietary program called ‘Community Health Exchanges’, which will work directly with SMB employers in rural communities providing access to private insured health plans with contracted medical services through the rural hospitals.

   19  

 

(ii) PR345, a business enterprise consulting firm, plans to provide: (a) specialized staffing services for a variety of professional industries including, but not limited to, medical, education, financial services, technology and hospitality, among others; (b) specific back office services including accounting, payroll, and a full complement of Human Resource (HR) benefits; and (iii) serve as a Professional Employer Organization (PEO).

 

The Company understands that Aurum, 75% owner of the MMMM Mining Subsidiaries, Lander Gold Mines, Inc. and Nomadic Gold Mines, Inc., will continue to operate its leases and staked claims of such entities which, as of the date of this Form 10-Q are 25% owned by the Company.

 

***Results of Operations For the Three Months Ended******June 30, 2019 compared to the Three Month Ended June 30, 2018***

 

The disclosure contained herein below relates solely to the Company’s mining operations.

 

We did not generate revenues from operations during the three months ended June 30, 2019 and 2018. We incurred professional fees of $18,470 and $7,322 during the three months ended June 30, 2019 and 2018, respectively. During the three months ended March 31, 2019, we had general and administrative expenses of $397,094 as compared to $23,294 in the same period in the prior year. During the three months ended June 30, 2019 and 2018, we had officers’ and directors’ compensation expenses of $155 and $8,747, respectively. We had mineral property expenses of $2,500 during the three months ended June 30, 2019 as compared to $8,040 during the same period in the prior year. Our total operating expenses during the three months ended June 30, 2019 were $446,777 as compared to $70,701 during the three months ended June 30, 2018.

 

During the three months ended June 30, 2019 and 2018, we incurred interest expenses and financing fees of $219,479 and $1,280, respectively. We also incurred a loss of $611,417 in connection with the issuance of convertible debt during the three months ended June 30, 2019 as compared to no gain/loss in the same period in the prior year. During the three months ended June 30, 2019, we had a gain of $236,712 on the revaluation of derivative securities as compared to no gain/loss during the same period in the prior year. During the three months ended June 30, 2019 we had a loss on extinguishment of debt of $29,943, with no corresponding gain or loss during the same period in the prior year, additionally we incurred a loss on disposal of two of our subsidiaries in the amount of $403,327 at June 30, 2019, with no corresponding gain or loss in the prior year, and a loss on acquisition of two additional subsidiaries in the amount of $76,900, with no corresponding gain or loss in the prior year.

 

Our net loss for the three months ended June 30, 2019 was $1,563,631 compared to a net loss of $71,981 for the three months ended June 30, 2018. 

 

The increase in net loss during the three months ended June 30, 2019 was primarily due to non-cash gains and losses and increased interest expense related to convertible debt.

 

***Results of Operations For the Nine Months Ended******June 30, 2019 compared to the Nine Months Ended June 30, 2018***

 

We did not generate revenues from operations during the nine months ended June 30, 2019 and 2018. We incurred professional fees of $361,250 and $70,601 during the nine months ended June 30, 2019 and 2018, respectively. During the nine months ended June 30, 2019, we had general and administrative expenses of $450,425 as compared to $53,032 in the same period in the prior year. During the nine months ended June 30, 2019 and 2018, we had officers’ and directors’ compensation expenses of $170,117 and $96,933, respectively. We had mineral property expenses of $42,301 during the nine months ended March 31, 2019 as compared to $26,740 during the same period in the prior year. Our total operating expenses during the nine months ended June 30, 2019 were $1,106,334 as compared to $298,999 during the nine months ended June 30, 2018.

 

 20 *Table of contents*

 

During the nine months ended June 30, 2019 and 2018, we incurred interest expenses and financing fees of $285,655 and $3,848, respectively. We also incurred a loss of $719,493 in connection with the issuance of convertible debt during the nine months ended June 30, 2019 as compared to no gain/loss in the same period in the prior year. During the nine months ended June 30, 2019, we had a gain of $337,313 on the revaluation of derivative liabilities as compared to no gain/loss during the same period in the prior year. During the nine months ended June 30, 2019 we had a loss on extinguishment of debt of $29,943, with no corresponding gain or loss during the same period in the prior year, additionally we incurred a loss on disposal of two of our subsidiaries in the amount of $403,327 at June 30, 2019, with no corresponding gain or loss in the prior year and a loss on acquisition of two additional subsidiaries in the amount of $76,900, with no corresponding gain or loss in the prior year.

 

Our net loss for the nine months ended June 30, 2019 was $2,284,339 compared to a net loss of $302,847 for the nine months ended June 30, 2018. 

 

The increase in net loss during the nine months ended June 30, 2019 was primarily due to non-cash losses and increase in interest expense and financing fees and an increase in general and administrative expenses.

 

***Liquidity and Capital Resources*****

 

As of June 30, 2019, we had current assets of $23,360 consisting of cash of 23,360. As of September 30, 2018, we had current assets of $1,900 consisting of cash in the same amount. As of June 30, 2019, we had current liabilities of $1,658,869 consisting of $19,219 in accrued interest, $58,128 in related party notes payable, $107,565 in convertible debt, $887,124 in derivative liabilities, $186,833 in accrued expense and $400,000 in a payable pursuant to a share exchange agreement. As of September 30, 2018, we had current liabilities of $160,343 consisting of $21,084 in accounts payable, $8,002 in accrued interest, deferred payroll liabilities of $74,257 and $57,000 in related party notes payable. 

 

We had negative working capital of $1,635,509 as of June 30, 2019. We had negative working capital of $158,443 as of September 30, 2018. 

 

During the nine month period ended June 30, 2019, we used $641,333 in our operating activities due to a net loss of $2,284,339 offset by $170,565 in amortization of debt discount, $387,000 in non-cash compensation expenses, a loss of $719,493 due to the issuance of debt, a gain of $337,312 on revaluation of derivative liabilities, a loss on extinguishment of debt of $29,943, a loss on disposal of $303,327 and a loss on acquisition of $76,900, an increase of $5,705 in accounts payable, an increase of $15,090 in accrued interest and a decrease of $14,536 in deferred payroll liabilities and an increase of $186,833 in accrued expense.

 

During the nine month period ended June 30, 2018, we used $220,068 in our operating activities due to a net loss of $302,847 offset by $45,500 in non-cash compensation expenses, expenses related to the issuance of common stock valued at $5,040 for mineral claim fees, a decrease of $10,803 in accounts payable and an increase of $3,848 in accrued interest.

 

We had no investing activities during the nine months ended June 30, 2019 and 2018.

 

We financed our negative cash flow from operations during the nine months ended June 30, 2019 through proceeds of $193,000 from the issuance of common stock and $468,500 in proceeds from the issuance of debt, and $1,293 in proceeds from note payable from related parties. 

 

We financed our negative cash flow from operations during the nine months ended June 30, 2018 through proceeds of $225,100 from the issuance of common stock and $1,200 from the conversion of warrants.

 

 21 *Table of contents*

 

**Contractual Obligations**

**  ** 

Other than lease obligations stated above, as of June 30, 2019, we have contractual obligations relating to debt or anticipated debt, as follows:

 

The Company entered into an Equity Purchase Agreement, dated as of October 1, 2018 (the “Equity Purchase Agreement”), by and between the Company and Crown Bridge Partners, LLC (the “Crown Bridge”) pursuant to which the Company has agreed to issue to Crown Bridge shares of the Company’s Common Stock, $0.001 par value (the “Common Stock”), in an amount up to Five Million Dollars ($5,000,000.00) (the “Shares”), in accordance with the terms of the Equity Purchase Agreement. In connection with the transactions contemplated by the Equity Purchase Agreement, the Company is required to register with the SEC the following shares of Common Stock: (1) 8,000,000 Put Shares to be issued to the Investors upon purchase from the Company by the Investors from time to time pursuant to the terms and conditions of the Equity Purchase Agreement; (2) 1,428,571 shares of Common Stock to be issued by the Company to the Investors as a commitment fee pursuant to the Equity Purchase Agreement; and (3) the Company also has entered into a Registration Rights Agreement, of even date with the Equity Purchase Agreement with the Investors (the “Registration Rights Agreement”) pursuant to which the Company agreed, among other things, to register the Put Shares under the Securities Act of 1933, as amended (the “Securities Act”) relating to the resale of the Put Shares.

 

The Company intends to use the proceeds of the revolving credit line for general corporate purposes, which may include (i) acquisitions, (ii) refinancing or repayment of indebtedness, (iii) capital expenditures and working capital, (iv) investing in equipment and property development (which may include funding associated with exploration), and (v) pursuing other business opportunities both related and unrelated to our existing mining activities. 

 

On or about November 27, 2018, the Company issued a convertible promissory note with Power Up Lending Group Ltd. (“Power Up”) for the principal sum of $63,000.00, together with interest, with a maturity date of November 27, 2019. The Company agreed to pay interest on the unpaid principal balance at the rate of 12%per annum from the date thereof until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment. Power Up has the right at any time during the period beginning 180 days following the date of the Note to convert all or any part of the outstanding and unpaid principal amount of the Note into fully paid and non-assessable shares of Common Stock. The conversion price shall be equal to the Variable Conversion Price, which is 58% multiplied by the Market Price (representing a discount rate of 42%), in which Market Price is the average of the lowest two (2) Trading Prices for the Company’s Common Stock during the preceding 15 trading day period prior to the Conversion Date. The Company paid a fee of $3,000 related to the convertible debt which is recorded as debt discount and will be amortized over the life of the note.

 

The following is a listing of the convertible debt principal amounts outstanding at June 30, 2019.

 

| Crossover Capital Fund I, LLC |   | $      | 50,000  |   |
|-------------------------------|--------|--------|---------|--------|
| GS Capital Partners, LLC      |   |   | 75,000  |   |
| Harbor Gates Capital, LLC     |   |   | 110,000 |   |
| Jefferson Street Capital LLC  |   |   | 66,000  |   |
| KinerjaPay Corp               |   |   | 96,816  |   |
| Power Up Lending Group        |   |   | 43,000  |   |
| Sunshine Equity Partners LLC  |   |   | 50,000  |   |
| Tiger Trout Capital, LLC      |   |   | 70,000  |   |
|                          |   |   |    |   |
| Total                         |   | $      | 560,816 |   |

 

The following is a listing of loan amounts (all of which are unsecured) due to related parties (each of whom are either a shareholder or related to a shareholder of Mineral Mountain Mining & Milling Company) and the dates that these loans were made to the Company:

 

| **Name**                                                 | ** ** | **Date**  | ** ** | **As of**

**March 31 , 2019**

**Amount** | ** ** | ** ** | **As of**

**September30,**

**2018**

**Amount** |   |
|----------------------------------------------------------|------------|-----------|------------|--------------------------------------------|------------|------------|---------------------------------------------------|--------|
| Premium Exploration                                      |       | 03/27/17  |       |                                       | 15,000     |       |                                              |   | 15,000 |   |
|                                                     |       | 08/02/17  |       |                                       | 35,000     |       |                                              |   | 35,000 |   |
| John J. Ryan, adult son of a former officer and director |       | 2/23/2016 |       |                                       | 7,000      |       |                                              |   | 7,000 |   |
|                                                     |       |      |       |                                       |       |       |                                              |   |   |   |
| Total notes payable - shareholders                       |       |      |       | $                                          | 57,000     |       |                                              | $      | 57,000 |   |

 

 22 *Table of contents*

 

The loan from John J. Ryan bears interest at 10% per annum and is due upon demand. $3,000 was converted to 300,000,000 shares of common stock and $5,000 was repaid in cash. The note bears interest at a rate of 10% beginning on July 24, 2016 and, in the event of demand for payment, a default interest rate of 15% applies. the balance of principal and interest at June 20, 2019 was $9,462. The loans from Premium Exploration bear interest at 5% and 10% per annum. Pursuant to the terms of the loan agreements, interest on the unpaid balance increase from 5% to 10% for the $35,000 note on August 2, 2018 and interest increased from 5% to 10% for the $15,000 note on September 27, 2018. The outstanding principal and interest are due, upon demand of payment of Premium Exploration, on July 1, 2019. The outstanding principal will continue to earn 10% interest if demand for payment is not made on July 1, 2019 or in the event of default pursuant to the terms of the agreements the balance of principal and interest at June 20, 2019 was $57,457.

 

**Off-Balance Sheet Arrangements**

 

The Company has not undertaken any off-balance sheet transactions or arrangements. We have no guarantees or obligations other than those which arise out of normal business operations.

 

**Critical Accounting Policies and Estimates**

 

Our significant accounting policies are more fully described in Note 2 to our Unaudited Condensed Consolidated Financial Statements. 

 

**Item 3. Quantitative and Qualitative Disclosures about Market Risk**

 

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item. 

 

**Item 4. Controls and Procedures**

 

**Disclosure Controls and Procedures**

 

As of June 30, 2019, we conducted an evaluation, under the supervision and participation of management including our chief executive officer and chief financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Securities Exchange Act of 1934, as amended). Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act.

 

The management of the Company assessed the effectiveness of the Company’s internal control over financial reporting based on the criteria for effective internal control over financial reporting established in SEC guidance on conducting such assessments. Based on this assessment, management determined that, during the nine months ended June 30, 2019 our internal controls and procedures require additional improvement due to deficiencies in the design or operation of the Company’s internal controls. Management identified the following areas of improvement in internal controls over financial reporting:

 

1. The Company did not have a written internal control procedurals manual which outlines the duties and reporting requirements of the Directors and any staff to be hired in the future. This lack of a written internal control procedurals manual does not meet the requirements of the SEC or good internal controls.

 

2. The Company should further improve maintenance and access to a centralized location for current and historical business records.

 

**Changes in Internal Control over Financial Reporting**

 

We have evaluated our internal control over financial reporting, and there have been no significant changes in our internal controls or in other factors that could significantly affect those controls as of June 30, 2019. 

 

 23 *Table of contents*

 

**PART II - OTHER INFORMATION**

 

**Item 1. Legal Proceedings**

 

We are not currently a party to nor are we aware of any threatened or ongoing legal proceedings against the Company. Nonetheless, it is possible that from time to time in the ordinary course of business we may be involved in legal proceedings or investigations, which could have an adverse impact on our reputation, business and financial condition and divert the attention of our management from the operation of our business. However, we are not aware of any such legal proceedings or investigations and, in the opinion of our Board of Directors, legal proceedings are not expected to have a material adverse effect on our financial position or results of operations.

 

**Item 1A. Risk Factors**

 

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

 

**Item 3. Defaults upon Senior Securities**

 

None

 

**Item 4. Mine Safety Disclosures**

 

None

 

**Item 5. Other Information**

 

None

 

 24 *Table of contents*

 

**Item 6. Exhibits**

 

The following is a list of exhibits filed as part of this Quarterly Report on Form 10-Q.

 

| **Exhibit No.** |                                                                                                    |
|-----------------|---------------------------------------------------------------------------------------------------------|
| 31.1            | Certification of Principal Executive Officer Pursuant to Section 302 of The Sarbanes-Oxley Act of 2002. |
| 32.1            | Certification of Principal Executive Officer Pursuant to Section 906 of The Sarbanes-Oxley Act of 2002. |

     

25*Table of contents*

       

**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.

 

|                   | **Mineral Mountain Mining & Milling Company** |                                                                                                               |
|------------------------|---------------------------------------------------|---------------------------------------------------------------------------------------------------------------|
|                        |                                              |                                                                                                          |  |
| Dated: August 19, 2019 | By:                                               | */s/ Pat Dileo*                                                                                               |   |
|                        |                                              | Pat Dileo                                                                                                     |   |
|                        |                                              | Chief Executive Officer (Principal Executive Officer

and Principal Financial Officer and Accounting Officer) |   |

 

 
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