Stockholders’ deficit

6 Months Ended

Mar. 31, 2024

Equity [Abstract]

Stockholders’ deficit

Note 5. 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 March 31, 2024 and September 30, 2023, 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 March 31, 2024 and September 30, 2023, 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 March 31, 2024 and September 30, 2023.

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 March 31, 2024 and September 30, 2023, there were no shares of Series D Preferred Stock outstanding.

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 March 31, 2024 and September 30, 2023, 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 March 31, 2024 and September 30, 2023, 128,991 shares of the Series F Preferred Stock were issued and outstanding.

Common Stock

The Company is authorized to issue an unlimited number of shares of common stock, with a par value of $0.001.

Stock payable

On March 7, 2024, the Company entered into a consulting agreement with Valerian Capital, LLC to provide management consulting services through September 8, 2024. Pursuant to the agreement, the Company shall issue Valerian Capital, LLC 50,000,000 shares of the Company’s common stock for a payment of $5,000. In March 2024, the Company received $5,000 of cash for the 50,000,000 shares of common stock. As of March 31, 2024, the common shares were not issued and were recorded in stock payable.

On March 8, 2024, the Company entered into a consulting agreement with Educational Group, LLC to provide business development and strategic consulting services through March 8, 2025. Pursuant to the agreement, the Company shall issue Educational Group, LLC 50,000,000 shares of the Company’s common stock for a payment of $5,000. In March 2024, the Company received $5,000 of cash for the 50,000,000 shares of common stock. As of March 31, 2024, the common shares were not issued and were recorded in stock payable.

The Company recognized prepaid expense of $169,000 related to the difference between the fair value of the shares to be issued and the cash paid by the consultant. The prepaid expense will be amortized to stock-based compensation expense over the term of the agreements.

Common Stock Warrants

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 a number of warrants equal to 3% of future warrants issued, excluding grants to officers. During the six months ended March 31, 2024, a total of 1,608,935 additional warrants were granted to the Consultant pursuant to the agreement terms. 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 $5,838 using the follow range of assumptions in a Black-Scholes option price model volatility of 204.84 % - 213.91%; 2) risk free rate of 3.91% - 4.80%; 3) dividend yield of 0% and 4) expected term of 5 years. During the six months ended March 31, 2024 the Company recognized $2,554, related to this agreement, respectively. At March 31, 2024, the Company had $14,964 of unrecognized expense related to warrants.

The following table summarizes the stock warrant activity for the six ended March 31, 2024:

	Warrants			Weighted-Average Exercise Price Per Share		Weighted-Average Term (Years)
Outstanding, September 30, 2023		191,869,523		$	0.004	1.60
Granted		5,004,049			0.001	4.78
Exercised		(33,333,333	)		0.001	—
Forfeited		—			—	—
Expired		(1,428,571	)		0.01	—
Outstanding and exercisable, March 31, 2024		162,111,668		$	0.01	1.23

The common shares issued under the warrant exercises above were issued below par value. As of March 31, 2024, the outstanding warrants had an expected remaining life of 1.23 years and have an intrinsic value of $10,059.

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 six months ended March 31, 2024, the Company estimated the fair value of the options to be $5,838, using the following assumptions range: 1) volatility of 204.84 % - 213.91%; 2) risk free rate of 3.91% - 4.80%; 3) dividend yield of 0% and 4) expected term of 5 years. The Company recognized $36,395 of expense related to the fair value of options vesting during the six months ended March 31, 2024. The Company expects to recognize an additional $11,671 of expense related to these options assuming all vest.  

The following table summarizes the stock option activity for the six months ended March 31, 2024:

	Options		Weighted-Average Exercise Price Per Share
Outstanding, September 30, 2023		136,632,356	$	0.01
Granted		5,004,049		0.001
Exercised		—		—
Forfeited		—		—
Expired		—		—
Outstanding, March 31, 2024		141,636,405	$	0.01
Exercisable, March 31, 2024		137,177,100	$	0.01

The weighted average grant date fair value of the common stock options granted during the period was $0.0013 per share. As of March 31, 2024, the aggregate intrinsic value of options vested and outstanding were $0. As of March 31, 2024, the outstanding options had a weighted average remaining term of 2.52 years.