Related Party Transactions

12 Months Ended

Sep. 30, 2023

Related Party Transactions [Abstract]

Related Party Transactions

Note 4. Related Party Transactions

For the year ended September 30, 2023

As of September 30, 2023 and September 30, 2022, the Company owed $454,665 and $379,126 to officers of the Company for compensation which are recorded as accounts payable related party. Additionally, during the years ended September 30, 2023 and 2022 the Company received short term, unsecured, non-interest bearing advances from the Company’s CEO totaling $21,200 and $2,500, respectively. As of September 30, 2023 and 2022, the Company owed $6,295 and $12,400 on these related party advances, respectively.

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 amount of options equal to 3% of future options or warrants issued, excluding grants to officers. The exercise price of these additional options will be 110% of the price per equity equivalent. To date, a total of 11,632,356 additional options were issued to Mr. Katzaroff pursuant to the agreement terms. The total fair value of these option grants at issuance was $53,117. During the years ended September 30, 2023 and 2022, the Company recognized $108,802 and $186,926 of stock-based compensation, related to outstanding stock options under this agreement, respectively. At September 30, 2023, the Company had $42,228 of unrecognized expense related to options.

Additionally, Mr. Katzaroff will earn a fee related to any 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. Katzaroff of up to $20,000,000, and an additional 0.75% - 3.5% for amounts above that threshold. As of June 30, 2023, no amounts have been earned or paid.

Mr. Katzaroff 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, 2023, no amounts have been earned or paid.

On April 4, 2023, the Company issued 7,422,535 shares to James Katzaroff to settle $50,000 of accrued compensation. The Company recognized a loss of $3,442 on this issuance based on the fair value of the shares issued.

On August 4, 2023, the Company issued 2,000,000 shares to its CFO Robert Chicoski to settle $12,000 of accrued compensation. The shares had a fair value of $3,600. No gain was recognized due to the related party nature of the transaction, with the Company recognizing the settlement in additional paid in capital.

On September 26, 2023, the Company entered into an agreement with SMI HealthCare LLC (“SMIHC”) to manage an initial clinical trial, regulatory filings, intellectual property rights filings, manufacturing, sales and distribution in India, Southeast Asia, Africa, and the Middle East, excluding Israel and Iraq, and for government and private aid organizations, for the Company's patented Multiple Sclerosis treatment. The agreement with SMIHC was approved by the parties’ respective boards of directors. Implementation of the first phase is subject to the Company arranging financing. The first phase includes formation of the Company and SMIHC subsidiaries in India, the clinical trial, regulatory and intellectual property rights filings in India, identifying manufacturers, and planning for the commercial launch in India and countries in the region that accept Drug Controller General of India (“DCGI”) approvals. Implementation of the second phase is expected to commence approximately nine months later, and is subject to receipt of DCGI marketing approval and the Company arranging financing. The second phase may continue for the duration of patent validity, and consists initially of sales, marketing and distribution in India and thereafter, countries in SMIHC’s territory that will permit sales and distribution based upon DCGI approval. After proof of market in those countries, the intention is to seek regulatory approvals elsewhere in SMIHC’s territory in order to expand the sales and distribution of the Company’s MS products. Pursuant to with SMIHC, the Company will receive a 5% royalty on any sales under the agreement by the company formed in India under this agreement, and 50% of any sublicense revenue from the India company formed under the agreement. The Company will pay the following (i) initial fees of between $15,000 - $22,500, and monthly fees of between $5,000 and $12,500 per month for Phase A (ii) monthly fees of $12,500, increase after six months to $17,500 per month, and to $25,000 per month after one year. The fee will increase by 5% per year thereafter for Phase B (iii) an initial management fee of $15,000 upon certain milestones and monthly management fee of $5,000 per month thereafter.

SMIHC is an affiliate of SMI Group LLC, a privately-held Los Angeles-based company. Kevin Spivak, a shareholder of the Company and consultant is the chairman of SMI Group though he did not advise the Company on this transaction and has waived fees payable to an SMI company for introducing SMIHC to the Company.

On September 19, 2023, the Company entered into a supplement to employment agreement with Jim Katzaroff, the CEO. For Mr. Katzaroff’s contribution to the SMIHC transaction, he will be paid the following (i) during the term of the agreement with SMIHC, a fee of 3% of any SMIHC generated revenue and (ii) not less than ¼ of the participation in Pro Forma Profits Before Tax to be payable to the Company at its senior executive pursuant to the SMIHC translation. Additionally, for Mr. Katzaroff’s contribution to the AIP transaction, he will be paid the following (i) if the Company invests in AIP, or merges with AIP, Mr. Katzaroff will receive a fee ranging from 1.5% - 4% during on the aggregate consideration of the AIP transaction and (ii) if AIP generated any revenue for the Company by reason of introductions, sales agency, distribution or other similar activities, he will receive a 3% fee for the term of the AIP transaction.