STOCKHOLDERS’ EQUITY

12 Months Ended

Dec. 31, 2023

Equity [Abstract]

STOCKHOLDERS’ EQUITY

NOTE 15 – STOCKHOLDERS’ EQUITY

Preferred Stock

The Company is authorized to issue 10,000,000 shares of blank check preferred stock, par value $0.001 per share.

Series Z

On September 30, 2021, the Company authorized the issuance of 500 shares of Series Z Preferred Stock, par value $0.001 per share. The Series Z Preferred Stock has a $20,000 stated value per share and all 500 Series Z preferred shares, in aggregate, are convertible into 19.98% of the issued and outstanding common shares of the Company (post conversion). The conversion rate is applicable on a pro rata basis to each share of Series Z Preferred Stock upon conversion. This anti-dilutive conversion feature is in effect until such time an S-1 Registration Statement is declared effective by the SEC in conjunction with a NASDAQ listing.

On September 30, 2021, the Company entered into a Series Z Preferred Stock Issuance Agreement with the Company’s Chief Executive Officer whereby the Company entered into a non–convertible note payable agreement for $1,000,000 in exchange for: (i) a $1,000,000 cash payment directly paid to the warrant holder; and (ii) the issuance of 250 Series Z Preferred Shares having a fair value of $6,530,867. The note bears interest of 8% per annum and is due within three days of the Company’s next closing of equity financing of $3,000,000 or more. The proceeds received were allocated to the debt and equity on a relative fair value basis. Accordingly, debt discount of $867,213 was recognized with a corresponding increase in additional paid-in capital. Since the due date is contingent upon a future event, the entire debt discount was amortized to interest expense immediately.

On September 30, 2021, an investor owning warrants to purchase 520,834 common shares at $0.12 per share entered into an agreement to cancel the aforementioned warrants in exchange for: (i) a cash payment of $1,000,000 received directly from the Chief Executive Officer; and (ii) 250 Series Z Preferred Shares having a fair value of $6,530,867. The settlement resulted in a reduction in the derivative liability of $5,750,067, an increase in non-convertible notes payable of $1,000,000, an increase in additional paid-in capital of $6,530,867 and a loss on settlement of debt of $1,780,800.

The Series Z Preferred Shares are not convertible into shares of common stock until there is sufficient authorized but unissued shares of common stock to satisfy the conversions, thus a derivative liability was not recorded for the shares of common stock underlying the Series Z Preferred Shares.

On September 9, 2022, 117 shares of Series Z Preferred Stock were converted into 475,000 shares of common stock.

On November 16, 2022, 61 shares of Series Z Preferred Stock were converted into 250,000 shares of common stock.

On January 23, 2023, 72 shares of Series Z Preferred Stock were converted into 288,494 shares of common stock.

On July 28, 2023, the Company issued 1,013,500 shares of common stock to the Company’s Chief Executive Officer for the exchange of 250 shares of Series Z preferred stock.

On August 1, 2023, the Company filed a Certificate of Elimination to retire the class of Series Z preferred stock.

As of December 31, 2023 and 2022, there were 0 and 322 shares of Series Z Preferred Stock issued and outstanding.

Common Stock

The Company is authorized to issue 1,200,000,000 shares of common stock, par value $0.001 per share.

During the year ended December 31, 2022, the Company issued 8,500 shares of the Company’s common stock previously recorded as to be issued as of December 31, 2021.

During the year ended December 31, 2022, the Company issued 6,896,903 shares of the Company’s common stock for the conversion of convertible debt in the principal amount of $37,714,966, together with accrued interest in the amount of $1,470,884. The Company recorded $2,625,378 gain on conversion and credited $36,553,575 to additional paid in capital for this conversion.

During the year ended December 31, 2022, the Company issued 725,000 shares of common stock for the conversion of 178 shares of Series Z Preferred Stock. The Company credited additional paid in capital $725 for the par value of the common shares issued in this conversion.

During the year ended December 31, 2023, the Company issued 1,301,994 shares of common stock for the conversion and exchange of 322 shares of Series Z Preferred Stock.

During the year ended December 31, 2023, the Company issued 275,929 shares of common stock with a fair market value of $254,448 for services rendered and to be rendered under the Company’s employee stock option plan.

During the year ended December 31, 2023, the Company issued 1,551,428 shares of common stock for the exercise of warrants for cash proceeds of $15,511.

During the year ended December 31, 2023, the Company issued 361,487 shares of common stock for the cashless exercise of 367,079 warrants.

During the year ended December 31, 2023, the Company issued 2,511,166 shares of common stock for the sale of common stock for proceeds of $2,841,181, net offering costs of $348,000.

As of December 31, 2023 and 2022, there were 16,964,336 and 10,962,319 shares, respectively, of common stock issued and outstanding.

Additional Paid in Capital

During the year ended December 31, 2022, the Company credited additional paid in capital $21,115,910 for a deemed dividend for the trigger of certain price protection provisions in certain warrants upon uplisting to Nasdaq and issuance of additional warrants upon uplisting. See Note 16 – Warrants.

During the year ended December 31, 2022, the Company credited additional paid in capital $7,237,572 for a deemed dividend for the trigger of certain price protection provisions in its Series Z Preferred Stock upon uplisting to Nasdaq.

During the year ended December 31, 2022, the Company credited additional paid in capital $7,408,681 for the fair value of warrants issued for the waiver of certain liquidated damages. See Note 16 – Warrants.

During the year ended December 31, 2022, the Company credited additional paid in capital $462,556 for a deemed dividend for the voluntary repricing of certain warrants for the waiver of certain liquidated damages. See Note 16 – Warrants.

During the year ended December 31, 2023, the Company credited additional paid in capital $3,279,570 for a debt discount for the fair value of warrants issued in its senior secured debt offering. The Company estimated the fair value of the warrants using the Black-Scholes Pricing Model based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 149.08%, (3) risk-free interest rate of 4.18%, and (4) expected life of 5.01 years.

During the year ended December 31, 2023, the Company credited additional paid in capital $753,567 for a debt discount for the fair value of warrants issued as commission for its senior secured debt offering. The Company estimated the fair value of the warrants using the Black-Scholes Pricing Model based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 149.08%, (3) risk-free interest rate of 4.70%, and (4) expected life of 5.01 years.

During the year ended December 31, 2023, the Company credited additional paid in capital $5,022,200 for a deemed dividend for the triggering of certain price protection provisions in its senior secured debt. The Company estimated the fair value of the deemed dividend using the Black-Scholes Pricing Model based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 150.05%, (3) risk-free interest rate of 4.70%, and (4) expected life of 2.95 years.

During the year ended December 31, 2023, the Company credited additional paid in capital $1,638,952 for a deemed dividend for the reduction in the exercise price of certain warrants. The Company estimated the fair value of the warrants using the Black-Scholes Pricing Model based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 148.60% to 149.08%, (3) risk-free interest rate of 4.18% to 4.70% to 1.15%, and (4) expected life of 3.34 to 5.01 years.