Related Party Transactions

12 Months Ended

Dec. 31, 2023

Related Party Transactions [Abstract]

Related Party Transactions

9. Related Party Transactions

On August 2, 2023, we entered into a consulting agreement with Noreen Griffin, our Chief Executive Officer,. Pursuant to the terms of the consulting agreement, we agreed to pay Ms. Griffin a monthly fee of $20,834 and a monthly insurance stipend of $1,200, in return for at least 40 hours of weekly services. The agreement is for a term of one year, cancellable with 30 days written notice by either party.

On November 1, 2022 we entered into a consulting agreement with Kelly Wilson, our Interim Chief Executive Officer, Interim President and Chief Operating Officer. Pursuant to the terms of the consulting agreement, we agreed to pay Ms. Wilson a monthly fee of $21,000 and a monthly insurance stipend of $2,800, in return for 40-50 hours of weekly services. In lieu of cash compensation, Ms. Wilson may elect to receive restricted shares of the Company’s Common stock valued at whichever is lower: (a) 25% below any current offering price (or the most recent offering price if the Company is not engaged in the offering) or (b) 50% below the Company’s current common stock value as determined by the average of the previous 30 days’ closing market prices. This election can be made from 30 days before, and up to 90 days after, the date such cash should have been paid to Ms. Wilson. The agreement is for a term of one year, cancellable with 30 days written notice by either party.

On April 13, 2023 the Wilson Agreement was amended (“Amendment 1 to the Executive Consulting Agreement”) to acknowledge that Ms. Wilson was serving as Interim Chief Executive Officer.

On July 25, 2023, the Wilson agreement was amended (“Amendment 2 to the Executive Consulting Agreement”) to remove the provision to convert accrued and unpaid amounts into shares of common stock and instead accrue interest on unpaid amounts at 8.5% per annum.

On November 1, 2022 we entered into a consulting agreement with Glen Farmer, our Chief Financial Officer. Pursuant to the terms of the consulting agreement, we agreed to pay Mr. Farmer a monthly fee of $10,500 and a monthly insurance stipend of $2,800, in return for 20 hours of weekly services. In lieu of cash compensation, Mr. Farmer may elect to receive restricted shares of the Company’s Common stock valued at whichever is lower: (a) 25% below any current offering price (or the most recent offering price if the Company is not engaged in the offering) or (b) 50% below the Company’s current common stock value as determined by the average of the previous 30 days’ closing market prices. This election can be made from 30 days before, and up to 90 days after, the date such cash should have been paid to Mr. Farmer. The agreement is for a term of one year, cancellable with 30 days written notice by either party.

On July 25, 2023, the Farmer Agreement was amended (Amendment 1 to the Executive Consulting Agreement”) to remove the provision to convert accrued and unpaid amounts into shares of common stock and instead accrue interest on unpaid amounts at 8.5% per annum.

On April 29, 2020, we entered into an employment agreement with Kevin Phelps, our former Chief Executive Officer and Chief Financial Officer, setting forth the terms of Mr. Phelps’s employment. Pursuant to the terms of the employment agreement, we agreed to pay Mr. Phelps an annual base salary of $240,000. Mr. Phelps was also eligible to receive a salary increase of 20% for his second year of employment and a salary increase of 15% for his third year of employment. Mr. Phelps also had the opportunity to receive a discretionary bonus of up to 33% based on the achieved milestones and goals. Mr. Phelps was entitled to employment benefits, including healthcare, dental, life insurance, and any other benefits offered to the Company’s employees. Mr. Phelps’s agreement provided for a three-year term, but could be terminated by the Board. Pursuant to the employment agreement, if we terminated Mr. Phelps’s employment after March 30, 2021, he would need to receive three months of written notice, and he was entitled to six months of base compensation and vesting of equity, benefits, and payments of past due compensation. The employment agreement contains customary confidentiality provisions.

On July 19, 2022, we entered into a separation agreement and release with Mr. Phelps providing for the separation of his employment effective as of July 18, 2022. Under the separation agreement, we agreed, subject to Mr. Phelps’s compliance with each and every provision of the separation agreement, to pay Mr. Phelps a severance payment of three convertible promissory notes, that in the aggregate, have a principal amount of $400,000. The separation agreement also includes a customary release of claims by Mr. Phelps in favor of the Company and its affiliates, as well as customary confidentiality and mutual non-disparagement provisions. Mr. Phelps’s resignation was not due to any disagreement with the Company on any matter relating to its operation, policies (including accounting or financial policies), or practices.

Two of the notes are for a principal amount of $100,000 each. The third note is for the principal amount of $200,000. Each of the three notes: (a) matures on July 19, 2023, with the Company having the option to extend the maturity date by six months (b) carries a six percent (6.00%) per annum simple interest rate; (c) provides that, if converted by the holder in accordance with its terms, the Company shall issue a number of shares of common stock in the Company to the holder of the note equal to (i) the principal amount of the note divided by (ii) $0.05, subject to certain equitable adjustments; and (d) requires the note holder to notify the Company in writing by 11:59 p.m. on July 22, 2022, the expiration of the conversion provision in each note; of its intent to exercise its conversion right. If converted into shares of common stock, each of the three notes prohibits the note holder, without the prior written consent of the Company, from selling, pledging, or otherwise transferring such shares for one year from their date of issuance, except that up to 5% of the shares may be sold, pledged, or otherwise transferred during three of every four calendar quarters during the 18-month period following the issuance date of the converted Note. Mr. Phelps converted one note with a principal amount of $200,000 into 2,500,000 shares of common stock, and has two non-convertible notes outstanding, with principal amounts of $100,000 each, as such notes were not converted prior to the expiration of the conversion option.

On July 5, 2022, the Company’s board of directors approved the issuance of a $200,000 convertible promissory note to Noreen Griffin, for services performed in connection with the recapitalization of the Company. This note was converted into common shares at $0.05 per share during the quarter.

Under a Settlement Agreement and Release of Claims, dated July 1, 2022, among Kelly Wilson, Robert Wilson, and Noreen Griffin (collectively, the “Employees”), Murphy Advisors, and the Company (the “July 2022 Settlement Agreement”), the Company agreed to issue a convertible note in order to settle debts due to the Employees for past due wages and out-of-pocket reimbursable expenses. The Company owed $313,164 to Ms. Wilson for past due wages earned and $52,578 for out-of-pocket reimbursable expenses as of December 31, 2020, for an aggregate amount owed of $365,742. The Company owed Ms. Griffin $1,231,787 for past due wages as of December 31, 2020. Mr. Wilson was owed $230,000 for past due wages as of December 31, 2020. Collectively, the amount owed to the Employees was $1,827,530 (the “Debt”).

Pursuant to the July 2022 Settlement Agreement, the Company agreed to issue a 6% convertible promissory note payable to Murphy Advisors, of which Kelly Wilson is the sole beneficial owner, for $1,211,366 and with other terms including those described in this paragraph (the “Murphy Note”), and the Employees agreed that the July 2022 Settlement Agreement’s agreements and covenants constituted full payment of all claims related to employment, subject to potential indemnification obligations of the Company. The July 2022 Settlement Agreement also contains a non-disparagement covenant which provides that the Company may recover 50% of compensation paid under the Settlement Agreement for violation of the covenant. The Murphy Note allowed the holder to convert the principal amount plus all accrued and unpaid interest into shares of common stock for $0.05 per share of common stock at any time prior to July 22, 2022, upon notice to the Company. All principal and interest under the Murphy Note was repayable on its maturity date, July 14, 2023, subject to the Company’s right to extend the maturity date by six months. On July 25, 2022, Murphy Advisors converted the Murphy Note into 24,227,320 shares of common stock, of which Murphy Advisors received 15,604,818 shares, Pixelheads, Inc., of whose shares Mr. Wilson is the sole beneficial owner, received 3,695,358 shares, and Global Reverb Corporation, of whose shares Ms. Griffin is the sole beneficial owner, received the remaining 4,927,144 shares. All shares issued as a result of converting the Murphy Note are required to be restricted from transfer for 12 months following the date of issuance, then subject to a lock-up leak of 5% per quarter for three out of four quarters for the following 18 months

On March 31, 2022, the Company entered into a Release of Claims and Settlement Agreement with Dr. Moore. The agreement provided for release of employment, breach of contract and related claims and settlement of aggregate accrued but unpaid compensation through March 31, 2022. Pursuant to the agreement, Dr. Moore released claims to a total of $230,250 in compensation, including $15,000 accrued of the total $60,000 compensation for Board service in 2022, $120,000 in total Board service compensation that accrued prior to 2022, and $95,250 in total consulting service compensation unrelated to Board service that accrued prior to 2022. The agreement also contains a non-disparagement covenant which provides that the Company may recover 50% of compensation paid under the agreement for violation of the covenant. Pursuant to the agreement, on July 14, 2022, Dr. Moore was issued a 6% convertible promissory note in the principal amount of $230,250, bearing interest at 6%, accruing on an annual basis. All principal and interest under the convertible promissory note was repayable on its maturity date, July 14, 2023, subject to the Company’s right to extend the maturity date by six months. The convertible note allowed the holder to convert the principal amount plus all accrued and unpaid interest into shares of common stock for $0.05 per share of common stock at any time prior to July 22, 2022, upon notice to the Company. On July 18, 2022, Dr. Moore sold the convertible note and all rights under the note to Henry Louis Salomonsky, a director of the Company, for $135,000. Mr. Salomonsky immediately fully converted the convertible note into 4,605,000 shares of common stock. All shares issued as a result of converting the convertible note are required to be restricted from transfer for 12 months following the date of issuance, then subject to a lock-up leak of 5% per quarter for three out of four quarters for the following 18 months.

Similarly, on March 31, 2022, the Company entered into a Release of Claims and Settlement Agreement with Dr. Selsky. The agreement provided for release of employment, breach of contract and related claims and settlement of aggregate accrued but unpaid compensation for services that were provided through March 31, 2022. Pursuant to the agreement, Dr. Selsky released claims for a total of $250,000 in compensation, for Board service fees earned from 2018 to 2020. Accrued Board service fees totaling $15,000 that were earned from January 2022 to March 2022, and accrued Board service fees totaling $35,000 that were earned subsequent to March 2022, were not subject to the agreement. None of the agreement amount paid any of the accrued $50,000 compensation for Board service in 2022. The agreement also contains a non-disparagement covenant which provides that the Company may recover 50% of compensation paid under the agreement for violation of the covenant. Pursuant to the agreement, on July 14, 2022, Dr. Selsky was issued two 6% convertible promissory notes each in the principal amount of $125,000, bearing interest at 6%, accruing on an annual basis. All principal and interest under the convertible promissory notes were repayable on their maturity date, July 14, 2023, subject to the Company’s right to extend the maturity date by six months. The convertible note allowed the holder to convert the principal amount plus all accrued and unpaid interest into shares of common stock for $0.05 per share of common stock at any time prior to July 22, 2022, upon notice to the Company. On July 15, 2022, Dr. Selsky sold one of the convertible notes and all rights under the note to Mr. Salomonsky for aggregate consideration of $125,000. Mr. Salomonsky immediately converted the purchased convertible note into 2,500,000 shares of common stock. On July 15, 2022, Dr. Selsky converted the remaining convertible note into 2,500,000 shares of common stock. All shares issued as a result of converting the convertible note are required to be restricted from transfer for 12 months following the date of issuance, then subject to a lock-up leak of 5% per quarter for three out of four quarters for the following 18 months.

On March 24, 2023, the Company issued a $100,000 promissory note to H. Louis Salomonsky, a Director of the Company. The note matures in 90 days and pays interest of 8%.