Stockholders’ deficit

12 Months Ended

Sep. 30, 2023

Equity [Abstract]

Stockholders’ deficit

Note 6. Stockholders’ deficit

Preferred Stock

Our authorized preferred stock consists of 20,000,000 shares of $0.001 par value preferred stock.

Series A Preferred Stock – Our board of directors has designated up to 6,000,000 shares of Series A Preferred Stock. The Series A Preferred Stock has a liquidation value of $2.00 per share. The initial number issued is 5,000,000 with additional shares to be issued as a dividend not to exceed a total of 6,000,000 shares. The rank of the Series A is prior to all common and preferred shares. In addition, the Series A Preferred Stock retains protective provisions to maintain their seniority with respect to liquidation or dissolution. The Series A Preferred Stock holds no voting rights and earns an 8% per annum dividend, payable in additional shares of Series A Preferred Stock. At September 30, 2023 and 2022, there were no shares of our Series A Preferred Stock outstanding, respectively.

Series B Preferred Stock – Our board of directors has designated up to 1,000,000 shares of Series B Preferred Stock. The Series B Preferred Stock has a liquidation value of $1.00 per share. The holders of the Series B Preferred Stock are entitled to dividends of 8% per year payable quarterly in cash or in shares of common stock at the option of the Company. The holders of the Series B Preferred Stock have no voting rights. The Series B Preferred Stock is redeemable at the option of the Company at a price of $1.00 per share. At September 30, 2023 and 2022, there were no shares of our Series B Preferred Stock outstanding.

Series C Preferred Stock – On September 12, 2017, our board of directors designated up to 1,200,000 shares of Series C Preferred Stock with a liquidation value of $0.50 per share. The holders of the Series C Preferred Stock have no voting rights. The Series C Preferred Stock is convertible at the option of the holder into shares of common stock at a rate of one share of common stock for each share of Series C Preferred Stock. The Series C Preferred Stock is redeemable at the option of the Company at a price of $0.50 per share. The Series C Preferred Stock has been canceled, and there are no shares of Series C Preferred Stock outstanding as of September 30, 2023 and 2022.

Series D Preferred Stock – On September 21, 2017, our board of directors designated up to 539,988 shares of Series D Preferred Stock with a liquidation value of $1.00 per share. The holders of the Series D Preferred Stock have no voting rights. The Series D Preferred Stock is convertible at the option of the holder into shares of common stock at a rate of $0.01 per share of common stock. The Series D Preferred Stock is not redeemable. In July 2023, the Company issued 50,998,800 shares to the holder of the Series D Preferred Stock for Full conversion of 509,988 shares outstanding. At September 30, 2023 and 2022, there were 0 and 509,988 shares of Series D Preferred Stock outstanding, respectively.

Series E Preferred Stock – On August 3, 2015, our board of directors designated 1,000,000 shares of Series E Preferred stock. The Series E Preferred stock is subordinate to our common stock. It does not receive dividends and does not participate in equity distributions. The Series E Preferred stock retained 2/3 of the voting rights in the Company.

At September 30, 2023 and 2022, there were 1,000,000 shares of Series E Preferred stock outstanding. Dividends, when, as and if declared by the Board of Directors, shall be paid out of funds at the time legally available for such purposes.

Series F Preferred Stock – On September 21, 2017, our board of directors designated up to 501,975 shares of Series F Preferred Stock with a liquidation value of $1.00 per share. The holders of the Series F Preferred Stock have no voting rights. The Series F Preferred Stock is convertible at the option of the holder into shares of common stock at a rate of $0.01 per share of common stock. The Series F Preferred Stock is not redeemable. At September 30, 2021, 386,975 shares of the Series F Preferred Stock were issued and outstanding. During the year ended September 30, 2022, 257,984 shares of Series F Preferred Stock was converted into 25,798,400 shares of common stock. At September 30, 2023 and 2022, 128,991 shares of the Series F Preferred Stock were issued and outstanding.

Conversions to Common Stock of Convertible Notes Payable

During the year ended September 30, 2023, the holders of the April 2017 convertible note payable elected to convert principal of $20,000 into 2,000,000 shares of common stock. The conversion was in accordance with the terms of the agreement and no gain or loss was recognized.

Common stock issued for Services

On April 6, 2023, the Company issued 50,000,000 shares to a consultant for services rendered to the Company. The shares had a fair value of $360,000. 

Common stock issued for settlement of liabilities

During the year ended September 30, 2022, the Company issued 6,000,000 shares of common stock and 900,000 warrants for the settlement of liabilities totaling $15,000. The Company recorded a $146,460 loss on settlement of liabilities related to this transaction.

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 April 25, 2023, the Company issued 7,261,087 shares of common stock to 7 to Stand to settle the outstanding royalty balance of $50,102 under the License Agreement. The Company recognized a gain of $10,166 on the issuance related to the fair value of the shares. See Note 7.

Common stock issued for stock payable

In July 2023, the Company also issued a total of 1,512,152 shares to settle subscription payables of $5,000.

In December 2021, the Company issued 19,980,000 shares of common stock as part of the common stock unit sales that occurred during the year ended September 30, 2021. As of September 30, 2022, no shares are remaining to be issued for these unit sales.

In September 2022, the Company received two subscriptions of $5,000 in cash for 1,515,152 shares of common stock and an equal number of warrants to purchase common stock at an exercise price of $0.01 for one year. In December 2022, the Company received $5,000 of cash as a subscription for an additional 1,515,152 shares of common stock and an equal number of warrants to purchase common stock at an exercise price of $0.01 for one year. The warrants had a fair value of $4,067 based on a Black-Scholes pricing model using the following assumptions: 1) volatility of 176.37%; 2) risk free rate of 4.74%; 3) dividend yield of 0% and 4) expected term of 1 year. In February 2023, the Company received $8,000 of cash and $7,000 of expenses paid on the Company’s behalf as a subscription for 7,500,000 shares of common stock. The common shares were issued in May 2023.

Common Stock Warrants

During the year ended September 30, 2023, the Company amended the exercise price of the common stock warrants issued to investors in its 2021 private placement to reduce the price from $0.03 per share to $0.01 per share. In accordance with ASC 718, the Company estimated the incremental value of the warrants based on terms immediately preceding the amendment, and immediately after the amendment, using the follow range of assumptions in a Black-Scholes option price model: 1) volatility of 203%; 2) expected term of approximately one year; 3) risk-free rate of 5.05%; 5) a common stock price at the date of grant of $0.086 and 6) a dividend yield of 0%. The Company recognized stock-based compensation expense of $51,761 related to the repricing.

In February 2022, the Company entered into a consulting agreement with Spivak Management, Inc. (the “Consultant”). Under the agreement, the Consultant will provide business strategy advice and introductions to the Company for a period of five years unless mutually terminated sooner. The Consultant is also entitled to additional warrants in the event of the Company issuing equity or equity equivalents in the future, with him receiving an number of warrants equal to 3% of future warrants issued, excluding grants to officers. The exercise price of these additional warrants will be 110% of the price per equity equivalent. The total fair value of these option grants at issuance was $53,117 using the follow range of assumptions in a Black-Scholes option price model volatility of 215.45 % - 253.78% ; 2) risk free rate of 2.37% - 4.46%; 3) dividend yield of 0% and 4) expected term of 5.0 years. During the years ended September 30, 2023 the Company recognized $53,117, related to this agreement, respectively.

The Company recognized $322,266 of expense related to these warrants during the year ended September 30, 2022. The Company estimated the fair value of the warrants based on a Black-Scholes pricing model using the following assumptions: 1) volatility of 254.43%; 2) risk free rate of 1.76%; 3) dividend yield of 0% and 4) expected term of 5 years.

The following table summarizes the stock warrant activity for the years ended September 30, 2023 and 2022:

	Warrants			Weighted-Average Exercise Price Per Share
Outstanding, September 30, 2021		29,970,000		$	0.03
Granted		41,415,152			0.01
Exercised		—			—
Forfeited		—			—
Expired		—			—
Outstanding, September 30, 2022		71,385,152		$	0.02
Granted		90,181,342			0.002
Exercised		—			—
Forfeited		—			—
Expired		(3,030,304	)		0.01
Outstanding, September 30, 2023		158,536,190		$	0.01

As of September 30, 2023, the outstanding warrants had an expected remaining life of 1.60 years and have an intrinsic value of $69,300.

Common Stock Options

As discussed in Note 4, The Company awarded common stock options to Mr. Katzaroff in connection with his amended and restated employment agreement. During the year ended September 30, 2023, the Company estimated the fair value of the options to be $53,117, using the following assumptions range: 1) volatility of 215.45 % - 253.78% ; 2) risk free rate of 2.37% - 4.46%; 3) dividend yield of 0% and 4) expected term of 5.0 years. The Company recognized $108,802 of expense related to the fair value of options vesting during the year ended September 30, 2023. The Company recognized $186,926 of expense related to the fair value of options vesting during the year ended September 30, 2022. The Company expects to recognize an additional $42,229 of expense related to these options assuming all vest.

The Company also recognized $696,294 of expense related to the estimated fair value of stock options awarded to officers of the Company. The Company awarded 50,000,000 options with a $0.01 exercise price to the Company’s CFO Robert Chicoski that expire in May 2026, and awarded 20,000,000 options with an exercise price of $0.01 each to Mr. Farley and Mr. Penderghast which expire in April 2026. The fair value was estimated using a Black-Scholes option pricing model and the following assumptions: 1) volatility of 184%; 2) expected term of approximately three years; 3) risk-free rate of 4.52%; 5) a common stock price at the date of grant of $0.086 and 6) a dividend yield of 0%. The option wards vested immediately.

At September 30, 2023, the Company had $42,229 of unrecognized expenses related to options.

The following table summarizes the stock option activity for the years ended September 30, 2023 and 2022:

	Options			Weighted-Average Exercise Price Per Share
Outstanding, September 30, 2021		70,000,000		$	0.03
Granted		35,000,000			0.01
Exercised		—			—
Forfeited		—			—
Expired		—			—
Outstanding, September 30, 2022		105,000,000			0.02
Granted		101,632,356			0.01
Exercised		—			—
Forfeited		—			—
Expired		(70,000,000	)		0.03
Outstanding, September 30, 2023		136,632,356		$	0.01

As of September 30, 2023, the aggregate intrinsic value of options vested and outstanding were $0. As of September 30, 2023, the outstanding options had a weighted average remaining term of 2.94 years.