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Related Party Transactions
12 Months Ended
Sep. 30, 2022
Related Party Transactions [Abstract]  
Related Party Transactions

Note 4. Related Party Transactions

 

For the year ended September 30, 2022

 

As of September 30, 2022 and 2021, the Company owed $379,126 and $119,655 to officers of the Company for compensation which are recorded as accounts payable related party. Additionally, the Company received short term, unsecured, non-interest bearing advances from the Company’s CEO and CFO totaling $28,900 and repaid $16,500. As of September 30, 2022, the Company owed $12,400 on these related party advances.

 

In February 2022, the Company entered into an amended and restatement employment agreement with Jim Katzaroff, the CEO. Mr. Katzaroff is entitled to an annual salary of $180,000 and a bonus as determined by the Board of Directors. Mr. Katzaroff may elect to receive payment in shares of stock based on the average of the three lowest trading prices for the 15 days prior to election of payment in stock. Further, in the event of a change of control of the Company, Mr. Katzaroff is entitled to a payment equal to 2.99 multiplied by the larger of the total compensation paid to Mr. Katzaroff over the prior 12-month period or the average compensation paid or payable to the Consultant over the prior three years.

 

The Company awarded Mr. Katzaroff a total of 35,000,000 common stock options with an exercise price of $0.009 per share, an exercise term of five years. The options vest 50% immediately, and the remainder on monthly basis over two years. Mr. Katzaroff is also entitled to additional options in the event of the Company issuing equity or equity equivalents in the future, with him receiving an equal amount of options as those instruments that are issued. The exercise price of these additional options will be 110% of the price per equity equivalent. The total fair value of these option grants at issuance was $284,840. During the year ended September 30, 2022, the Company recognized $186,926 of stock-based compensation, related to outstanding stock options. At September 30, 2022, the Company had $97,914 of unrecognized expenses related to options.

 

Additionally, Mr. Katzaroff will earn a fee related to an strategic transaction, as defined in the agreement, including but not limited to acquisitions, divestitures, partnerships or joint ventures, of at least 2% for any transactions not introduced by Mr. Katzaroff, or 4% for any introduced by Mr. Katzroff of up to $20,000,000, and an additional 0.75% - 3.5% for amounts above that threshold. As of September 30, 2022, no amounts have been earned or paid.

 

Mr. Katzroff will also receive an activity fee of 3% of gross revenues related to activities including securing a variety of vendor, sales or advertising relationships, or any new revenue generating activity. If such activity is a cost saving initiative instead of revenue generating, Mr. Katzaroff will receive 10% of the cost savings. As of September 30, 2022, no amounts have been earned or paid.

 

For the year ended September 30, 2021

 

In January 2021, the Company’s former Chief Executive Officer Sydney Jim agreed to forgive all accrued but unpaid compensation of $38,130, resulting in a gain on settlement of liabilities to the Company that was recorded to additional paid in capital.

 

In March 2021, the Company entered into severance agreement with its former CEO Alex Blankenship. The Company owed Ms. Blankenship unpaid compensation of $130,000 and agreed to issue 8,600,000 shares of common stock in full settlement of this amount and release from the employment agreement with her. The shares had a fair value of $447,200 based on the stock price at the date of the agreement. The Company recognized a loss on settlement of $317,200 in connection with this agreement. The Company also issued an additional 2,600,000 shares to Ms. Blankenship with a fair value of $102,700 in connection with this agreement, which were included in the loss on settlement total of $419,900 for the year ended September 30, 2021. Concurrently with the severance agreement, the Company agreed to purchase the 1,000,000 shares Series E Preferred Stock held by Ms. Blankenship for $325,000 in cash. The Company reissued those Series E preferred Shares to the Company’s new CEO James Katzaroff. The Company recognized stock-based compensation of $325,000 related to this reissuance.

 

During the year ended September 30, 2021, the Company issued 5,000,000 shares of common stock to its CFO Robert Chicoski, with a fair value of $75,000 as a finders fee related to the Company’s license agreement.

 

As of September 30, 2021, the Company owed $161,655 to officers of the Company for compensation.