CAPITAL STOCK

6 Months Ended

Jun. 30, 2022

Equity [Abstract]

CAPITAL STOCK

NOTE 11: CAPITAL STOCK

The Company has authorized 500,000,000 common shares with a par value of $0.001, 10,000,000 shares of Series A Preferred Stock, par value $0.004 and 1 share of Series B Preferred Stock, par value $0.001.  The shares of Series A Preferred Stock are convertible into shares of Common Stock on the basis of 10 shares of Common Stock for every 1 share of Series A Preferred Stock and have voting rights of one vote for each share of Series A Preferred Stock held. The Series B Preferred Stock is not convertible but has voting rights granting the holder 51% of all votes (including common and preferred stock) entitled to vote at any meeting of the stockholders of the Company. Neither the Series A nor Series B Preferred Stockholders have any rights to dividends or proceeds of the assets of the Company upon any liquidation or winding up of the Company.

Common Stock

On February 8, 2022, pursuant to an Engagement Agreement with Carter, Terry & Company, an authorized, registered broker dealer, the Company issued a total of 10,769 shares of common stock as compensation. The Company recorded $22,400 as financing cost.

On April 7, 2022, pursuant to an Engagement Agreement with Acorn Management Partners, LLC, the Company issued a total of 51,282 shares of common stock as compensation. The Company recorded $60,000 as investor relations services.

On May 23, 2022 pursuant to an Engagement Agreement with Beyond Media SEZC, the Company issued a total of 1,818,181 shares of common stock as compensation. The Company recorded $600,000 as investor relationship expenses.

On May 27, 2022 the Company issued 356,364 shares of common stock as a result of the exercise of a cashless warrants.

The Company issued an accumulated 387,481 shares of common stock under an Equity Purchase Agreement with Mast Hill Fund, L.P. with net proceeds of $36,029 (Note 10(5)).

As of June 30, 2022, and December 31, 2021, there were 27,802,050 and 25,177,973 shares of common stock issued and outstanding, respectively.

Series A Preferred Stock

The total number of Series A Preferred stock that may be issued by the Company is 10,000,000 shares with a par value of $0.004.

As of June 30, 2022 and December 31, 2021, there are a total of 5,000,000 shares of Series A Preferred Stock issued and outstanding. 

Series B Preferred Stock

The total number of Series B Preferred Stock that may be issued by the Company is 1 share with a par value of $0.001.

As of June 30, 2022 and December 31, 2021, there is 1 share of Series B Preferred stock issued and outstanding.

Share Purchase Warrants

On November 11, 2021, the Company entered into a Warrant Agreement with J.H. Darbie and Company, an authorized, registered broker dealer, wherein J.H. Darbie and Company may purchase 10,487 shares of common stock for $1.00 per share, as a Finder’s Fee for introducing the Company to MHFLP. The fair value of the warrants granted was estimated at $25,141 using the Black-Scholes pricing model

In November and December 2021, the Company issued cumulative 1,120,000 warrants to convertible note holders and subscribers for common shares, in accordance with the terms of subscription unit agreements into with the convertible note holder and subscribers. The fair value of the warrants granted was estimated at $503,973 using the Black-Scholes pricing model.

In April and May 2022, the Company issued a total of 1,831,667 warrants to convertible note holders and subscribers for common shares, in accordance with the terms of subscription unit agreements entered into with the convertible note holders and subscribers. The fair value of the warrants granted was estimated at $360,003 using the Black-Scholes pricing model.

During the six months ended June 30, 2022, 356,364 shares of common stock were issued from the exercise of 560,000 cashless warrants.

Certain warrants above include dilution protection for the warrant holders, which could cause the exercise price to be reduced as a result of a financing event at a valuation below the exercise price in effect at the time. During the six months ended June 30, 2022, as a result of additional share issuances below the original exercise price of certain warrants, the warrant exercise price was downward adjusted to $0.095985 per share. The downward adjustment on each of the modification dates was treated as additional paid in capital and fully expensed as financing costs on the modification date, and the Company recorded a cumulative $9,013 to additional paid in capital and interest expenses.

In accordance with authoritative accounting guidance, the fair value of the outstanding common stock purchase warrants was calculated using the Black-Scholes option-pricing model with the following assumptions at the measurement date(s):

	Measurement date
Dividend yield		0	%
Expected volatility		279~297%
Risk-free interest rate		0.83~1.22%
Expected life (years)		3.00~5.00
Stock Price		$0.55~$2.80
Exercise Price		0.3~1.00

The following table summarizes information with respect to outstanding warrants to purchase common stock of the Company at June 30, 2022 and December 31, 2021: 

Exercise Price		December 31, 2021		Issued		Repricing		Exercised			June 30, 2022		Expiration Date
$	1.00		560,000						(560,000	)		-
$	1.00		560,000				0.095985					560,000	December 2024
$	1.00		10,487				0.095985					10,487	November 2026
$	1.00				365,000		0.095985					365,000	April 2025
$	0.30				1,466,667		0.095985					1,466,667	May 2025
			1,130,487		1,831,667				(560,000	)		2,402,154

A summary of the warrant activity for the period ended June 30, 2022, and December 31, 2021 is as follows:

				Weighted- Average Exercise		Weighted- Average Remaining Contractual		Aggregate Intrinsic
	Shares			Price		Term		Value
Outstanding at December 31, 2021		1,130,487		$	1.00		2.93	$	-
Grants		1,831,667			0.44		-		-
Exercised		(560,000	)		-		-		-
Expired		-			-		-		-
Outstanding at June 30, 2022		2,402,154		$	0.09585		2.32	$	-
Exercisable at June 30, 2022		2,402,154		$	0.09585		2.32	$	-