Stockholders’ Deficiency

12 Months Ended

Dec. 31, 2024

MEZZANINE EQUITY

Stockholders’ Deficiency

Note 9 Stockholders’ Deficiency

Preferred Stock

As of December 31, 2024 and 2023, the Company is authorized to issue 50,000,000 shares of preferred stock, with designations, voting, and other rights and preferences to be determined by our Board of Directors, of which 48,460,905 remain available for designation and issuance.

Series A Preferred Stock and Series B Preferred Stock

On July 28, 2020, the Company filed a certificate of designations of Series A Convertible Preferred Stock (the “Certificate of Designations”) with the Nevada Secretary of State designating 100,000 shares of the Company’s shares of Preferred Stock as Series A Convertible Preferred Stock and setting forth the voting and other powers, preferences and relative, participating, optional or other rights of the Preferred Shares. Each share of Series A Preferred Stock has a par value of $0.001 per share and a stated value of $100 per share.

Holders of the Series A Preferred Stock are entitled to vote on all matters submitted to the Company’s shareholders, with their voting power equivalent to the number of Common Stock shares they would hold if their preferred stock were converted. This voting right can be exercised through written consent or proxy.

The Series A Preferred Stock does not have redemption rights.

The Series A Preferred Stock, with respect to the payment of dividends and payments upon the liquidation of the Company, ranks senior to all capital stock of the Company.

The Series A Preferred Stockholders is entitled to receive cumulative quarterly dividends, payable in additional Series A Preferred Stock, at an annual rate of 3% of the Stated Value, when declared by the Board. The Board did not declare dividend since issuance of the Series A Preferred Shares.

The Series A Preferred Stock is convertible by the holder into 3,420 shares of the Company’s Common Stock at any time after issuance. For the 24 months following issuance, the conversion ratio will be adjusted if the Company issues Common Stock (or related securities) that causes the total fully diluted Common Stock outstanding to exceed 360,000,000 shares. The adjusted conversion ratio will be calculated based on the total fully diluted shares after such issuance divided by 360,000,000, multiplied by the current conversion ratio.

In the event of a liquidation, dissolution, or winding up of the Company, or a Sale (defined as a sale of the majority of assets or certain mergers/consolidations), holders of Series A Preferred Stock are entitled to receive, prior to any distribution to junior securities, an amount equal to the Stated Value plus all accrued and unpaid dividends. If the Company’s assets are insufficient to pay this full amount, the remaining assets will be distributed proportionally among the Series A Preferred stockholders. The Company will provide at least 45 days' written notice of any such Liquidation.

On July 28, 2020, the Company filed a certificate of designations of Series B Super Voting Preferred Stock (the “Certificate of Designations”) with the Nevada Secretary of State designating 100 shares of the Company’s shares of Preferred Stock as Series B Super Voting Preferred Stock and setting forth the voting and other powers, preferences and relative, participating, optional or other rights of the Preferred Shares. Each share of Series B Preferred Stock has a par value of $0.001 per share.

The shares of Series B Super Voting Preferred Stock will carry a number of votes equal to 51% (representing majority voting power) of all voting shares of every class, including 51% of all of the issued and outstanding shares of common stock on the date of any shareholder vote, such that the holders of Super Voting Preferred Stock shall always possess the majority of voting rights, and shall always out vote all holders of Common Stock.

The Series B Preferred Stock does not have redemption rights.

The Series B Preferred Stock will not be entitled to dividends unless the Corporation pays cash dividends or dividends in other property to holders of outstanding shares of Common Stock.

There is no mandatory conversion of Series B Super Voting Preferred Stock into Common Stock.

On February 17, 2021, the 100 shares Series B Preferred Stock were transferred from Mr. Canouse (the Company’s former director and CEO), to the FFO 1 2021 Irrevocable Trust, a company that Mr. Falcone (the Company’s former director and CEO) is the trustee and has the voting and dispositive power. The 100 shares of Series B Preferred are included in the collateral for the Investor Notes.

In July 2020, pursuant to an acquisition agreement to acquire the Casa Zeta-Jones Brand License Agreement from Luxurie Legs, LLC, the Company issued 92,999 shares of Series A Preferred Stock and 100 shares of Series B Preferred Stock. The fair values of the Series A and Series B Preferred Stock issued were $216,150 and $47,553, respectively, and were determined using a discounted cash flow method. The Company recognized an intangible asset as a result of this share issuance.

The Company accounted for its Series A Preferred Stock as Mezzanine Equity in accordance with ASC 480, Distinguishing Liabilities from Equity. The embedded conversion feature of the preferred stock was evaluated under ASC 815, Derivatives and Hedging, and was separated from the host instrument. This embedded conversion feature was recognized as a derivative liability, with changes in its fair value recorded in the consolidated statements of operations at each reporting period end. Upon the issuance of the Series A Preferred Stock, the Company recognized derivative liabilities of $58,545. For the year ended December 31, 2020, a gain of $20,657 resulting from the change in the fair value of these derivative liabilities was recognized in the consolidated statements of operations.

The Series B Preferred Stock was accounted for as Permanent Equity in accordance with ASC 480 - Distinguishing Liabilities from Equity. The fair value of the Series B Preferred Stock was allocated to par value of $Nil and additional paid-in capital of $47,553.

On February 16, 2021, the Company extinguished all outstanding shares of its Series A Preferred Stock. In exchange, the former holders received one-year options to purchase up to 300,000 shares of the Company’s then wholly-owned subsidiary, CZJ License, Inc., at an exercise price of $10 per share. The fair value of the options issued was $21,465 and was included in additional paid-in capital. This transaction resulted in the derecognition of both the derivative liabilities and the Series A Preferred Stock. The difference between the combined carrying value of the derecognized derivative liabilities and Series A Preferred Stock and the $21,465 fair value of the options issued resulted in a gain on extinguishment of $194,685, which was recognized in the consolidated statements of operations for the year ended December 31, 2021. Separately, a loss of $20,657 resulting from the change in fair value of the derivative liabilities was recorded in the consolidated statements of operations for the year ended December 31, 2021.

The options issued expired without exercise.

The number of Series B Preferred Stock issued and outstanding as of December 31, 2024 and 2023 was 100.

Series C Preferred Stock

On February 11, 2021, the Company filed a certificate of designations of Series C Convertible Preferred Stock (the “Certificate of Designations”) with the Nevada Secretary of State designating 10,000 shares of the Company’s shares of Preferred Stock as Series C Convertible Preferred Stock and setting forth the voting and other powers, preferences and relative, participating, optional or other rights of the Preferred Shares. Each share of Series C Preferred Stock has a par value of $0.001 per share and a stated value of $100 per share.

Holders of the Series C Preferred Stock are entitled to vote on all matters submitted to the Company's shareholders, with their voting power equivalent to the number of Common Stock shares they would hold if their preferred stock were converted. This voting right can be exercised through written consent or proxy.

The Series C Preferred Stock does not have redemption rights.

The Series C Preferred Stockholders are entitled to receive cumulative quarterly dividends, payable in additional Series A Preferred Stock, at an annual rate of 2% of the Stated Value, when declared by the Board. The Board did not declare dividend since issuance of the Series A Preferred Shares.

The Company accounted for its Series C Preferred Stock as Mezzanine Equity in accordance with ASC 480, Distinguishing Liabilities from Equity. The embedded conversion feature of the preferred stock was evaluated under ASC 815, Derivatives and Hedging, and was concluded to qualify for derivatives.

The Company did not issue Series C Preferred Stock. As at December 31, 2024 and 2023, no shares of Series C Preferred Stock are outstanding.

Series D Preferred Stock

On March 26, 2021, the Company filed a certificate of designations of Series D Convertible Preferred Stock (the “Certificate of Designations”) with the Nevada Secretary of State designating 230,000 shares of the Company’s shares of Preferred Stock as Series D Convertible Preferred Stock and setting forth the voting and other powers, preferences and relative, participating, optional or other rights of the Preferred Shares. Each share of Series C Preferred Stock has a par value of $0.001 per share and a stated value of $3.32 per share.

The Series D Preferred Stock has no voting rights.

The Series D Preferred Stock does not have redemption rights.

The Series D are ranked equally with the Series E Preferred Stock and the Series F Preferred Stock and as senior to all previously issued series of Preferred Stock and the Common Stock.

The Series D Preferred Stockholders is entitled to receive dividends when declared by the Board. The Board did not declare a dividend since the issuance of the Series D Preferred Shares.

Each share of Series D Preferred Stock may be converted into 1,000 common shares, subject to a 4.99% conversion limitation, which may be increased to a maximum of 9.99% by a holder by written notice to the Company.

The Series D Preferred Stock was accounted for as Permanent Equity in accordance with ASC 480 - Distinguishing Liabilities from Equity.

During the year ended December 31, 2021, the Company issued 230,000 shares of Series D Preferred Stock to settle several notes payable and accrued interest. The fair value of the Series D Preferred Stock issued was determined to be $1,006,035 by using debt-based valuation method, which was allocated to par value of $230 and additional paid-in capital of $1,005,805.

During the year ended December 31, 2021, 75,000 shares of the Company’s Series D Preferred Stock were converted into 75,000,000 shares of its Common Stock. As of December 31, 2024 and 2023, 155,000 shares of Series D Preferred Stock remain unconverted and outstanding.

Series E Preferred Stock and Series E-1 Preferred Stock

On March 26, 2021, the Company filed a certificate of designations of Series E Convertible Preferred Stock (the “Certificate of Designations”) with the Nevada Secretary of State designating 1,000 shares of the Company’s shares of Preferred Stock as Series E Convertible Preferred Stock and setting forth the voting and other powers, preferences and relative, participating, optional or other rights of the Preferred Shares. Each share of Series E Preferred Stock has a par value of $0.001 per share and a stated value of $1,000 per share.

The Series E are ranked equally with the Series D Preferred Stock and the Series F Preferred Stock and as senior to all previously issued series of Preferred Stock and the Common Stock.

Each Holder of Series E Preferred Stock is entitled to vote on an as-converted basis, with the number of votes equal to the underlying Common Stock shares their Series E Preferred Stock would represent on the voting record date, and shall otherwise have the same voting rights as Common Stock.

The Series E Preferred Stock does not have redemption rights.

The Series E Preferred Stockholders is entitled to receive dividends when declared by the Board. The Board did not declare dividend since issuance of the Series E Preferred Shares.

The Company accounted for its Series E Preferred Stock as permanent equity in accordance with ASC 480, Distinguishing Liabilities from Equity. The embedded conversion feature of the preferred stock was evaluated under ASC 815, Derivatives and Hedging, and was separated from the host instrument. The original embedded conversion feature was recognized as a derivative liability, with changes in its fair value recorded in the consolidated statements of operations at each reporting period end. Upon the issuance of the Series E Preferred Stock, the Company recognized derivative liabilities of $744. Subsequent to the issuance date, the Company evaluated an amendment to the conversion rate and determined that the amended conversion feature did not result in the recognition of a new derivative liability or a significant modification requiring remeasurement under ASC 815.

On September 16, 2021, the Company filed a certificate of designations of Series E-1 Convertible Preferred Stock (the “Certificate of Designations”) with the Nevada Secretary of State designating 1,152,500 shares of the Company’s shares of Preferred Stock as Series E-1 Convertible Preferred Stock and setting forth the voting and other powers, preferences and relative, participating, optional or other rights of the Preferred Shares. Each share of Series E Preferred Stock has a par value of $0.001per share and a stated value of $0.87 per share.

The Series E-1 are ranked equally with the Series D Preferred Stock and the Series F Preferred Stock and as senior to all previously issued series of Preferred Stock and the Common Stock.

Each Holder of Series E-1 Preferred Stock is entitled to vote on an as-converted basis, with the number of votes equal to the underlying Common Stock shares their Series E-1 Preferred Stock would represent on the voting record date and shall otherwise have the same voting rights as Common Stock.

The Series E-1 Preferred Stock does not have redemption rights.

The Series E-1 Preferred Stockholders is entitled to receive dividends when declared by the Board. The Board did not declare dividend since issuance of the Series E-1 Preferred Shares.

The holder of the Series E-1 Preferred Stock may convert Series E-1 Preferred Shares into Common Stock at conversion rate of 1:1,000.

The Series E-1 Preferred Stock was accounted for as Permanent Equity in accordance with ASC 480 - Distinguishing Liabilities from Equity. The fair value of the Series E-1 Preferred Stock was allocated to par value of $1 and additional paid-in capital of $386,220.

On October 11, 2021, 1,000 shares of Series E Preferred Stock were exchanged for 1,152,500 Series E-1 Preferred shares and 1,091,388,889 shares of Common Stock. We valued the exchange at the same $386,221 value as was assigned to the 1,000 shares of Series E Preferred Stock. Upon the exchange of the Series E Preferred Stock for Series E-1 Preferred Stock, the Company derecognized the related derivative liabilities during year ended December 31, 2021. As at December 31, 2024 and 2023, no shares of Series E Preferred Stock are outstanding. As of December 31, 2024 and 2023, 1,152,000 shares of Series E-1 Preferred Stock are outstanding.

Series F Preferred Stock

During year ended December 31, 2021, the Company filed a certificate of designations of Series F Convertible Preferred Stock (the “Certificate of Designations”) with the Nevada Secretary of State designating 1,000 shares of the Company’s shares of Preferred Stock as Series F Convertible Preferred Stock and setting forth the voting and other powers, preferences and relative, participating, optional or other rights of the Preferred Shares. Each share of Series E Preferred Stock has a par value of $0.001 per share and a stated value of $1.00 per share. 1,000 shares of Series F Preferred Stock were issued along with the Senior Secured Notes (Note 8)

The Series F Preferred Stock are ranked equally with the Series D Preferred Stock and the Series E Preferred Stock and as senior to all previously issued series of Preferred Stock and the Common Stock.

Each Holder of Series F Preferred Stock is entitled to vote on an as-converted basis, with the number of votes equal to the underlying Common Stock shares their Series F Preferred Stock would represent on the voting record date and shall otherwise have the same voting rights as Common Stock.

The Series F Preferred Stock does not have redemption rights.

The Series F Preferred Stockholders is entitled to receive dividends when declared by the Board. The Board did not declare dividends since the issuance of the Series F Preferred Shares.

The Company accounted for its Series F Preferred Stock as permanent equity in accordance with ASC 480, Distinguishing Liabilities from Equity. The fair value of the Series F Preferred Stock issued was determined to be $32,229 by using fully-diluted method, which was allocated to par value of $Nil and additional paid-in capital of $32,229.

On October 11, 2021, the 1,000 shares of Series F Preferred Stock were converted into 192,073,017 shares of Common Stock.

Series G Preferred Stock

On March 26, 2021, the Company filed a certificate of designations of Series G Convertible Preferred Stock (the “Certificate of Designations”) with the Nevada Secretary of State designating 3,000 shares of the Company’s shares of Preferred Stock as Series G Convertible Preferred Stock and setting forth the voting and other powers, preferences and relative, participating, optional or other rights of the Preferred Shares. Each share of Series E Preferred Stock has a par value of $0.001 per share and a stated value of $1,000 per share. On August 18, 2021, the Company filed an amendment of certificate of designations and changed the designed number of Series G Convertible Preferred Stock from 3,000 to 4,600.

The Series G are ranked equally with the Series D Preferred Stock and the Series E Preferred Stock and as senior to all previously issued series of Preferred Stock and the Common Stock.

Each Holder of Series G Preferred Stock is entitled to vote on an as-converted basis, with the number of votes equal to the underlying Common Stock shares their Series E Preferred Stock would represent on the voting record date and shall otherwise have the same voting rights as Common Stock.

The Series G Preferred Stock does not have redemption rights.

The Series G Preferred Stockholders is entitled to receive dividends when declared by the Board. The Board did not declare dividend since issuance of the Series G Preferred Shares.

During year ended December 31, 2021, the Company received $4,600,000 in subscriptions pursuant to the issuance of 4,600 of shares Series G Preferred Stock. The proceeds received was allocated into par value and additional paid-in capital of $5 and $4,599,995, respectively.

On November 2, 2021, all the 4,600 shares of Series G Preferred Stock were converted into 255,555,556 shares of the Company’s Common Stock with a conversion price of $0.018 (Note 8). Upon conversion, the amount previously allocated into Series G par value of $5 was reclassified from Series G Preferred Stock to Common Stock’s par value with an additional increase of $255,551 in Common Stock’s par value and a decrease of 250,956 in additional paid-in capital.  

The Company accounted for its Series G Preferred Stock as permanent equity in accordance with ASC 480, Distinguishing Liabilities from Equity. The embedded conversion feature of the preferred stock was evaluated under ASC 815, Derivatives and Hedging, and was separated from the host instrument. The original embedded conversion feature was recognized as a derivative liability, with changes in its fair value recorded in the consolidated statements of operations at each reporting period end. Upon the issuance of the Series G Preferred Stock, the Company recognized derivative liabilities of $354,000. Subsequent to the issuance date, the Company evaluated an amendment to the conversion rate and determined that the amended conversion feature did not result in the recognition of a new derivative liability or a significant modification requiring remeasurement under ASC 815. Upon conversion to common stock, the abovementioned derivative liabilities were derecognized during the year ended December 31, 2021.

Series H Preferred Stock

On November 5, 2021, the Company filed a certificate of designations of Series H Convertible Preferred Stock (the “Certificate of Designations”) with the Nevada Secretary of State designating 39,895 shares of the Company’s shares of Preferred Stock as Series H Convertible Preferred Stock and setting forth the voting and other powers, preferences and relative, participating, optional or other rights of the Preferred Shares. Each share of Series H Preferred Stock has a par value of $0.001 per share and a stated value of $1.00 per share.

Each Holder of Series H Preferred Stock is entitled to vote on an as-converted basis, with the number of votes equal to the underlying Common Stock shares their Series E Preferred Stock would represent on the voting record date and shall otherwise have the same voting rights as Common Stock.

The Series H Preferred Stock does not have redemption rights.

The Series H Preferred Stockholders are entitled to receive dividends when declared by the Board. The Board did not declare dividends since the issuance of the Series H Preferred Shares.

The Series H Preferred Stock allowed holders to convert into common stock by a conversion ratio of 1:1,000.

On November 11, 2021, pursuant to an exchange agreement that we entered into with the Investors, 39,895,000 shares of Common Stock held by the Investors were exchanged for 39,895 shares of Series H Preferred Stock and the Company cancelled the 39,895,000 shares of common stock. The Company valued the 39,895,000 shares and 39,895 shares of Series H Preferred Stock at $3,989,500. Upon exchange, $40 was reclassified from the amount previously allocated into Common Stock par value into Series H Preferred Stock’s par value with the remaining $39,855 reclassified into in additional paid-in capital.  

At December 31, 2024 and 2023, 39,895 shares of Series H Preferred Stock remain outstanding.

Common Stock

No issuances of Common Stock occurred in 2024 and 2023.

On August 14, 2021, our shareholders approved an increase in the authorized number of shares of Common Stock to 6,000,000,000, from 500,000,000, which became effective the same day. As of December 31, 2024 and 2023, there were 1,603,095,243 shares outstanding, respectively.

Warrants

We issued warrants issued as loan incentives and valued the warrants on their respective grant dates using the Black-Scholes option pricing model. Warrant values per share ranged from $0.023 to $0.002. For the year ended December 31, 2023, a summary of our warrant activity is as follows:

	Number of Warrants			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)		Weighted- Average Grant- Date Fair Value
Outstanding and exercisable at December 31, 2022		234,423,017		$	0.021		4.45	$	3,966,694
Issued		20,000,000			0.020		6.03		87,675
Expired		(500,000	)		—		—		—
Outstanding and exercisable at December 31, 2023		253,923,017		$	0.021		4.59	$	3,963,981

For the year ended December 31, 2024, a summary of our warrant activity is as follows:

	Number of Warrants			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)		Weighted- Average Grant- Date Fair Value
Outstanding and exercisable at January 1, 2023		253,923,017		$	0.021		4.59	$	3,963,981
Expired		(10,600,000	)		—		—		—
Outstanding and exercisable at December 31, 2024		243,323,017		$	0.021		2.05	$	1,963,079

In determining the fair value of these equity-classified features, the Company considered the fact that its common stock is quoted on the OTC Expert Market, where trading volume is minimal and pricing is not reliably observable. Due to the absence of active market inputs, the Company determined that a quoted market price could not be used to value the conversion features.

Instead, the Company referred to the most recent observable transaction price from a private placement conducted in 2021, in which it issued 4,600 shares of Series G Preferred Stock for total proceeds of $4,600,000. On November 2, 2021, these preferred shares were converted into 255,555,556 shares of common stock, implying an effective per-share price of $0.018. The Company used this price as the best available input to support the fair value assessment.