| Summary of Significant Accounting Policies | 2. Summary of Significant Accounting
Policies Principles of Consolidation The consolidated financial statements
include the financial statements of Graphene and its wholly-owned subsidiary, Solar Quartz Technologies Ltd. (“SQTNZ”)
nka Graphene and Solar Technologies Limited. All significant inter-company balances and transactions within the Company have been
eliminated upon consolidation. Basis of These accompanying consolidated financial
statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”). Use of Estimates The preparation of financial statements
in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities
at the date of the financial statements and the reported amounts of expenses during the reporting period. Management bases its
estimates on historical experience and on various assumptions that are believed to be reasonable in relation to the financial statements
taken as a whole under the circumstances, the results of which form the basis for making judgments about the carrying values of
assets and liabilities that are not readily apparent from other sources. Management regularly evaluates the key factors and assumptions
used to develop the estimates utilizing currently available information, changes in facts and circumstances, historical experience
and reasonable assumptions. After such evaluations, if deemed appropriate, those estimates are adjusted accordingly. Actual results
could differ from those estimates. Significant estimates include those related to assumptions used in accruals for potential liabilities,
valuing equity instruments issued for services, and the realization of deferred tax assets. Cash and Cash Equivalents Cash and cash equivalents are carried
at cost and represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments
with an original maturity of three months or less as of the purchase date of such investments. As of September 30, 2020 and 2019,
the Company had $12 and $74,241 in cash, respectively, and no cash equivalents. Financial Instruments and Fair
Value Measurements As defined in ASC 820 “Fair
Value Measurements,” The Company determines the level in
the fair value hierarchy within which each fair value measurement falls in its entirety, based on the lowest level input that
is significant to the fair value measurement in its entirety. In determining the appropriate levels, the Company performs an analysis
of the assets and liabilities at each reporting period end. The Company’s financial instruments
consist of cash, accounts receivable, accounts payable, accrued interest, and due to related parties. The carrying amounts of these
financial instruments approximate fair value due to either length of maturity or interest rates that approximate prevailing rates
unless otherwise disclosed in these financial statements. Derivative Financial Instruments The Company accounts for freestanding
contracts that are settled in a company’s own stock, including common stock warrants, to be designated as an equity instrument
or generally as a liability. A contract so designated is carried at fair value on a company’s balance sheet, with any changes
in fair value recorded as a gain or loss in a company’s results of operations. The Company records all derivatives
on the balance sheet at fair value, adjusted at the end of each reporting period to reflect any material changes in fair value,
with any such changes classified as changes in derivatives valuation in the statement of operations. The calculation of the fair
value of derivatives utilizes highly subjective and theoretical assumptions that can materially affect fair values from period
to period. The recognition of these derivative amounts does not have any impact on cash flows. At the date of the conversion of any
convertible debt, the pro rata fair value of the related embedded derivative liability is transferred to additional paid-in capital. There was no derivative activity in
fiscal 2020. Therefore no derivative liabilities were recorded during the year ended September 30, 2020: Activities for fiscal
year 2019 is below:
Fair Value Measurements Using Significant Observable Inputs (Level 3)
Balance - September 30, 2018 —
Addition of new derivatives recognized as debt discounts 55,109
Settled due to conversion of debt (57,649 )
Loss on change in fair value of the derivative 2,540
Balance – September 30, 2019 $ —
Addition of new derivatives recognized as debt discounts —
Settled due to conversion of debt —
Loss on change in fair value of the derivative —
Balance – September 30, 2020 $ — Debt Issuance Costs Costs incurred in connection with the
issuance of debt are amortized over the term of the related debt and netted against the liability. Commitments and Contingencies The Company follows ASC 450-20 to report
accounting for contingencies. Certain conditions may exist as of the date the financial statements are issued, which may result
in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company assesses
such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related
to legal proceedings that are pending against the Company or un-asserted claims that may result in such proceedings, the Company
evaluates the perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount of
relief sought or expected to be sought therein. If the assessment of a contingency indicates
that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated
liability would be accrued in the Company’s financial statements. If the assessment indicates that a potentially material
loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent
liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed. Loss contingencies considered remote
are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not
believe, based upon information available at this time, that these matters will have a material adverse effect on the Company’s
consolidated financial position, results of operations or cash flows. However, there is no assurance that such matters will not
materially and adversely affect the Company’s business, financial position, and results of operations or cash flows. Income Taxes The Company accounts for income taxes
under an asset and liability approach for financial accounting and reporting for income taxes pursuant to ASC 740, “Income
Taxes.” The Company records a valuation allowance
to reduce its deferred tax assets to the amount that is more likely than not to be realized. In the event the Company was to determine
that it would be able to realize its deferred tax assets in the future in excess of its recorded amount, an adjustment to the deferred
tax assets would be credited to operations in the period such determination was made. Likewise, should the Company determine that
it would not be able to realize all or part of its deferred tax assets in the future, an adjustment to the deferred tax assets
would be charged to operations in the period such determination was made. The Company is subject to U.S. federal
income taxes and income taxes of various state tax jurisdictions. As the Company’s net operating losses have yet to be utilized,
all previous tax years remain open to examination by Federal authorities and other jurisdictions in which the Company currently
operates or has operated in the past. The Company had no unrecognized tax benefits as of September 30, 2020 and does not anticipate
any material amount of unrecognized tax benefits within the next 12 months. The Company accounts for uncertainties
in income tax law under a comprehensive model for the financial statement recognition, measurement, presentation and disclosure
of uncertain tax positions taken or expected to be taken in income tax returns as prescribed by GAAP. The tax effects of a position
are recognized only if it is “more-likely-than-not” to be sustained by the taxing authority as of the reporting date.
If the tax position is not considered “more-likely-than-not” to be sustained, then no benefits of the position are
recognized. As of September 30, 2020, the Company had not recorded any liability for uncertain tax positions. In subsequent periods,
any interest and penalties related to uncertain tax positions will be recognized as a component of income tax expense. On December 22, 2017, the Tax Reform
Act was signed into law. The Tax Reform Act is effective for tax years beginning on or after January 1, 2018, except for certain
provisions, and resulted in significant changes to existing United States tax law, including various provisions that are expected
to impact the Company. Among other provisions, the Tax Reform Act reduced the federal corporate tax rate from 35% to 21% effective
January 1, 2018. The Company completed the accounting for the effects of the Tax Reform Act during the year ended September
30, 2019. Given that current deferred tax assets are offset by a full valuation allowance, these changes will have no
impact on the balance sheet. The Company is currently delinquent
with respect to certain of its U.S. federal and state income tax filings. Property and Equipment Property and equipment is stated at
cost, net of accumulated depreciation. Major improvements are capitalized, while maintenance and repairs are charged to expense
as incurred. Gains and losses from disposition of property and equipment are included in the statement of operations when realized.
Depreciation and amortization are provided using the straight-line method over a life of five years. Mineral Rights Investment in mineral rights consists
of the exclusive mining and development rights for the two high purity quartz silica deposits known as Quartz Hill (represented
by mining leases ML 30235, ML 30236 and ML 30237) and White Springs (represented by leases ML 30238 and ML 30239) located in North
Queensland, Australia. Based on independent expert reports, together they are estimated to contain deposits in excess of 15 million
tons of 99.97% pure HPQ which is feedstock that, when refined, may be used for the production of photovoltaic solar panels, and
semiconductors as well as polysilicon for the production of photovoltaic solar cells. HPQS is a core ingredient in the production
in crucibles for the manufacture of photovoltaic solar cells, as well as high-end microchips. The investment in mineral rights
is carried on the books of the Company at the cost of the lease rights. Mineral rights assets are tested for impairment if facts
and circumstances indicate that impairment exists. Due to uncertainty of the realization
of being able to utilize the assets the Company determined a full impairment was warranted. An impairment of $28,581 was applied
for the year ending Sept 30, 2020. Long-Lived Assets The Company periodically evaluates the
carrying value of long-lived assets to be held and used when events or circumstances warrant such a review. The carrying value
of a long-lived asset to be held and used is considered impaired when the anticipated separately identifiable undiscounted cash
flows from such an asset are less than the carrying value of the asset. In that event, a loss is recognized based on the amount
by which the carrying value exceeds the fair value of the long-lived asset. Fair value is determined primarily by reference to
the anticipated cash flows discounted at a rate commensurate with the risk involved. No impairment charges have been recorded in
the periods presented. Stock-Based Compensation ASC 718, “Compensation - Stock
Compensation,” During the year ended September 30,
2020, the Company issued 3,000,000 shares of the Company’s common stock to members of the Board of Directors, employees and
consultants. The fair value of the shares, as determined by reference to the closing price of the Company’s common stock
on each respective grant date, aggregated $300,000, ($0.10 per share). During the year ended September 30,
2019, the Company issued 600,000 shares of the Company’s common stock to members of the Board of Directors, employees and
consultants. The fair value of the shares, as determined by reference to the closing price of the Company’s common stock
on each respective grant date, aggregated $100,200, ($0.17 per share). Total stock-based compensation expense
was $300,000 and $100,200 for the years ended September 30, 2020 and 2019, respectively. Basic and Diluted Net Loss per
Common Share The Company computes basic and diluted
earnings (loss) per share amounts in accordance with ASC Topic 260, “ Earnings per Share The common share equivalents of these
securities have not been included in the calculations of loss per share because such inclusions would have an anti-dilutive effect
as the Company has incurred losses during the years ended September 30, 2020 and 2019. For the years ended September 30, 2020
and 2019, respectively, the following common stock equivalents were potentially dilutive.
Years ended
September 30,
2020 2019
(Shares) (Shares)
Convertible notes payable 132,609 123,378
Foreign Currency The accompanying consolidated financial
statements are presented in United States dollars (“USD”). The Australian dollar (“AUD”) is the functional
currency of Solar Quartz (the operating subsidiary) as it is the currency of Australia, which is the primary economic environment
the operating subsidiary operates in and the environment in which the Company primarily utilizes cash. Assets and liabilities are translated
into USD utilizing currency exchange rates as published by WM/Reuters WM/Refinitiv FX Benchmark Rates | Refinitiv
September 30, September 30,
2020 2019
Spot AUD: USD exchange rate $ 0.7108 $ 0.6749
Average AUD: USD exchange rate $ 0.6789 $ 0.7038 Related parties Parties, which can be a corporation
or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party
or exercise significant influence over the other party in making financial and operational decisions. Companies are also considered
to be related if they are subject to common control or common significant influence. Recent Accounting Pronouncements Management does not believe that any
recently issued but not yet effective, authoritative guidance, if currently adopted, would have a material impact on the Company’s
financial statement presentation or disclosures. |
