Stockholders’ Equity

12 Months Ended

Dec. 31, 2022

Stockholders' Equity Note [Abstract]

STOCKHOLDERS’ EQUITY

11 STOCKHOLDERS’ EQUITY

a. Common Stock

The Company has total authorized Common Stock of 750,000,000  shares with a par value of $0.0001 each. The Company had 376,901,679 and 367,901,679 shares of Common Stock issued and outstanding as of December 31, 2022 and December 31, 2021, respectively.

In terms of debt conversion notices received between January 5, 2021 and February 23, 2021, the Company issued an aggregate of 61,793,616 shares of common stock for the conversion of $2,259,221 of convertible debt and interest thereon, realizing a loss on conversion of $5,498,820.

In terms of warrant exercise notices received between February 18, 2021 and June 23, 2021, the Company issued 60,186,982 shares of common stock for gross proceeds of $3,009,349.

On March 17, 2021, the Company, entered into Securities Purchase Agreements with several institutional investors, pursuant to which the Company agreed to sell to the Investors in a private placement (i) 30,333,334 shares of its common stock (the “Shares”) and (ii) warrants (the “Warrants”) to purchase up to an aggregate of 15,166,667 shares of its common stock for gross proceeds of approximately $4,550,000. The combined purchase price for one share of common stock and associated Warrant is $0.15.

Pursuant to an engagement letter dated as of March 6, 2021, by and between the Company and H.C. Wainwright & Co., LLC (“Wainwright”), the Company engaged Wainwright to act as the Company’s exclusive placement agent in connection with the private placement. Pursuant to the engagement agreement, the Company agreed to pay Wainwright a cash fee of 8.0% of the gross proceeds raised by the Company in the private placement. The Company also agreed to pay Wainwright (i) a management fee equal to 1.0% of the gross proceeds raised in the private placement; (ii) $35,000 for non-accountable expenses and (iii) up to $50,000 for fees and expenses of legal counsel and other out-of-pocket expenses. In addition, the Company agreed to issue to Wainwright (or its designees) placement agent warrants (the “Placement Agent Warrants”) to purchase a number of shares equal to 8.0% of the aggregate number of Shares sold under the Purchase Agreement or warrants to purchase an aggregate of up to 2,426,667 shares of the Company’s common stock. The Placement Agent Warrants generally will have the same terms as the Warrants, except they will have an exercise price of $0.1875.

On April 5, 2021, the Board of directors approved advisory board agreements with four individuals, each agreement for a period of two years form the effective date of the agreement and may be terminated by each party with 30 days’ notice. As compensation the Company awarded each advisory board member 2,000,000 restricted shares of common stock, the restricted shares of common stock vest as to 75% on the effective date and 25% on the anniversary date of the agreement.

On July 22, 2021, the Board of directors approved the issuance of 7,000,000 shares of common stock to board members that were appointed during the year. In Addition, a further 300,000  shares of common stock were issued to an employee of the Company and a further 3,650,000  shares of common stock were issued to various consultants.

On July 8, 2022, the Company entered into a consulting agreement with a third-party contractor for a period of twelve months to (i) review the Company’s business plan; (ii) analyze and assess the Company’s revenues, costs, and cash flow; and (iii) introduce the Company to and interface on the Company’s behalf with potential and actual commercial partners.

The Company issued 2,000,000 shares of Common Stock as compensation for the services rendered which were fully earned on the date of issue. These shares were valued at $84,000 at the date of grant. In addition, the contractor will receive a monthly fee of $3,000 for the term of the Agreement, commencing on August 1, 2022.

On July 8, 2022, the Company entered into a second consulting agreement with a separate third-party contractor for a period of twelve months to (i) review the Company’s business plan; (ii) analyze and assess the Company’s revenues, costs, and cash flow; and (iii) introduce the Company to and interface on the Company’s behalf with potential and actual commercial partners. The Company issued 2,000,000 shares of Common Stock as compensation for the services rendered which were fully earned on the date of issue. These shares were valued at $84,000 at the date of grant.

On July 11, 2022, the Board approved the issuance of  2,000,000 restricted shares of Common Stock to Richard Rosenblum, the Company’s President and Chief Financial Officer. These shares were valued at $110,000 at the date of grant.

On August 5, 2022, the Board approved the issuance of 3,000,000 shares of Common Stock to Samad Harake or his designees as compensation for the services rendered which were fully earned on the date of issue., Mr. Harake is the president and control person of Frictionless. These shares were valued at $165,000 at the date of grant.

b. Restricted stock awards

On December 15, 2020, in terms of an employment agreement entered into with an employee, the Company granted 2,500,000 restricted shares of which 1,000,000 vested on January 1, 2021 and the remaining 1,500,000 shares vest over a period of two years. The 1,500,000 shares of unvested restricted stock which was not physically issued to the employee were not earned due to the cessation of employment with the Company.

A summary of restricted stock activity during the period January 1, 2021 to December 31, 2022 is as follows:

	Total restricted shares			Weighted average fair market value per share			Total unvested restricted shares			Weighted average fair market value per share			Total vested restricted shares		Weighted average fair market value per share
Outstanding January 1, 2021		20,495,000		$	0.049			15,371,250		$	0.049			5,123,750	$	0.049
Granted and issued		2,500,000			0.050			2,500,000			0.050			-		-
Forfeited/Cancelled		(1,500,000	)		(0.050	)		(1,500,000	)		(0.050	)		-		-
Vested		-			-			(6,123,750	)		(0.049	)		6,123,750		0.049
Outstanding December 31, 2021		21,495,000		$	0.049			10,247,500		$	0.049			11,247,500	$	0.049
Granted and issued		2,000,000			0.055			-			-			2,000,000		0.055
Forfeited/Cancelled		-			-			-			-			-		-
Vested		-			-			(5,123,750	)		(0.049	)		5,123,750		0.049
Outstanding December 31, 2022		23,495,000		$	0.050			5,123,750		$	0.049			18,371,250	$	0.050

The restricted stock granted, issued and exercisable at December 31, 2022 is as follows:

		Restricted Stock Granted				Restricted Stock Vested
Grant date Price		Number Granted		Weighted Average Fair Value per Share		Number Vested		Weighted Average Fair Value per Share
$	0.049		20,495,000	$	0.049		15,371,250	$	0.049
$	0.050		1,000,000		0.050		1,000,000		0.050
$	0.055		2,000,000		0.055		2,000,000		0.055
			23,495,000	$	0.050		18,371,250	$	0.050

The Company has recorded an expense of $361,064 and $301,064 for the years ended December 31, 2022 and 2021, respectively. 

c. Preferred Stock

The Company has authorized 25,000,000 shares of preferred stock with a par value of $0.0001 authorized. No preferred stock was issued and outstanding as of December 31, 2022 and 2021, respectively.

d. Warrants

Effective July 8, 2022 (the “Effective Date”), the Company entered into an Endorsement Agreement with Pez-Mar, Inc., a California corporation (“Pez-Mar”), to furnish the services of Mario Lopez (“Lopez”). Pursuant to the Endorsement Agreement, Lopez will act as a Company spokesperson in connection with the promotion, advertisement and endorsement of the Company’s physical and virtual payment processing and money remittance business and the Company’s related products and services.

The Endorsement Agreement has a term of two (2) years from the Effective Date (the “Term”), which is subject to earlier termination on customary terms and conditions. The parties have agreed to certain deliverables of Lopez during the term of the agreement, including with respect to social media posts, television commercials, interviews and photo shoots. The Endorsement Agreement also contains other customary terms, covenants and conditions, including representations and warranties, restrictions on endorsements of competitive products during the term of the agreement, confidentiality, indemnification, and Pez-Mar and Lopez’s independent contractor status.

As compensation for the services provided under the Endorsement Agreement, Lopez or their designees are entitled to the following payments: (i) a cash endorsement fee of Three Hundred Thousand U.S. Dollars ($300,000 USD), payable as follows: (i) One Hundred Twenty-Five Thousand Dollars ($125,000) upon execution of the Endorsement Agreement, (ii) One Hundred Twenty-Five Thousand Dollars ($125,000) quarterly during the Term, beginning on the 90^th day following the Effective Date, and (iii) Fifty Thousand Dollars ($50,000) on or prior to the first anniversary of the Effective Date and (ii) warrants exercisable for an aggregate of Fifteen Million (15,000,000) shares of the Common Stock at an exercise price of $0.0345 per share. The Warrants shall have a three-year term commencing from the Effective Date. The right to exercise the Warrants shall be subject to vesting during the Term but shall vest in full upon the consummation of a fundamental transaction involving the Company or upon certain termination events provided for in the Endorsement Agreement. The Exercise Price may be payable via “cashless exercise”, unless the underlying Shares are registered under an effective registration statement under the Securities Act of 1933, as amended. The Shares are subject to certain “piggyback” registration rights.

On August 30, 2022, the Company extended the maturity date of convertible notes issued to Cavalry and Mercer and agreed to grant each note holder a warrant exercisable for 3,000,000 shares of Common Stock at an exercise price of $0.15 per share with an expiration date of August 30, 2027. The fair value of these warrants was $238,182 which was recorded as a loss on convertible notes and a corresponding derivative, determined by using a Black-Scholes valuation model.

On December 30, 2022, the Company issued to Frictionless a 5 year warrant to purchase 30,000,000 shares of common stock in the Company at an exercise price of $0.0115 per share as disclosed in note 5 above. The fair value of these warrants was $348,938 determined by using a Black-Scholes valuation model, which fair value was capitalized to purchased technology on the date of grant.

On December 30, 2022, the Company entered into the December 2022 Note Amendment Transaction, as fully described in note 9 above. In terms of the Note Amendment Transaction the following occurred:

● The warrants issued to Cavalry and Mercer exercisable for 4,973,914 shares of common stock (2,486,957 for each of Cavalry and Mercer), were exchanged for two promissory notes of $482,000 each, as disclosed in note 8 above;

● The warrants issued to Cavalry and Mercer on August 30, 2022, were subject to repricing and a full rachet increase in the number of warrants issued, resulting in an increase in the number of warrants by 72,260,870 (36,130,435 to each Cavalry and Mercer) and a reset of the exercise price to $0.0115 per share. The additional warrants were valued at $841,003 using a Black-Scholes valuation model and was expensed in the statement of operations as a component of the loss on convertible debt.

● An additional 13,736,857 warrants previously issued to Mercer, Iroquois Master Fund and Bellridge Capital LP were subject to repricing of the exercise price from a range of $0.05 to $0.15 per share to $0.0115 per share. The change in the fair value of these warrants of $20,079, using a Black-Scholes valuation model was recorded as a component of the loss on convertible debt.

The fair value of the warrants granted, issued and repriced, as described above, were determined by using a Black Scholes valuation model using the following assumptions:

	Year ended December 31, 2022
Exercise price	$	0.00115 to 0.15
Risk free interest rate		3.14 to 3.27	%
Expected life		3 to 5 years
Expected volatility of underlying stock		182.6 to 199.2	%
Expected dividend rate		0	%

A summary of warrant activity during the period January 1, 2021 to December 31, 2022 is as follows:

	Shares Underlying Warrants			Exercise price per share		Weighted average exercise price
Outstanding January 1, 2021		51,188,572		$	0.05	$	0.05
Granted		66,302,515			0.05 to 0.24		0.16
Forfeited/Cancelled		(20,000,000	)		0.24		0.24
Exercised		(60,186,982	)		0.05		0.05
Outstanding December 31, 2021		37,304,105		$	0.05 – 0.1875	$	0.12
Granted		51,000,000			0.0115 – 0.15		0.02
Increase in warrants due to debt amendment full rachet trigger		72,260,870			0.0115		0.01
Cancelled on debt amendment		(4,973,914	)		0.15		0.15
Exercised		-			-		-
Outstanding December 31, 2022		155,591,061		$	0.05 – 0.1875	$	0.03

The warrants outstanding and exercisable at December 31, 2022 are as follows:

		Warrants Outstanding						Warrants Exercisable
Exercise Price		Number Outstanding		Weighted Average Remaining Contractual life in years		Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price		Weighted Average Remaining Contractual life in years
$	0.0115		121,997,727		4.57				121,997,727				4.57
$	0.0345		15,000,000		2.52				9,375,000				2.52
$	0.05		1,000,000		0.14				1,000,000				0.14
$	0.15		15,166,667		3.21				15,166,667				3.21
$	0.1875		2,426,667		3.21				2,426,667				3.21
			155,591,061		4.19	$	0.03		149,966,061	$	0.03		4.25

The warrants outstanding have an intrinsic value of $60,999 and $0 as of December 31, 2022 and 2021, respectively.

e. Stock options

On June 18, 2018, the Company established its 2018 Stock Incentive Plan (the “Plan”). The purpose of the Plan is to promote the interests of the Company and the stockholders of the Company by providing directors, officers, employees and consultants of the Company with appropriate incentives and rewards to encourage them to enter into and continue in the employ or service of the Company, to acquire a proprietary interest in the long-term success of the Company and to reward the performance of individuals in fulfilling long-term corporate objectives. The Plan terminates after a period of ten years in June 2028.

The Plan is administered by the board of directors or a Committee appointed by the Board of Directors who have the authority to administer the Plan and to exercise all the powers and authorities specifically granted to it under the Plan.

The maximum number of securities available under the Plan is 800,000 shares of common stock. The maximum number of shares of common stock awarded to any individual during any fiscal year may not exceed 100,000 shares of common stock.

On October 22, 2021, the Company (with the approval of the Company’s shareholders) established its 2021 Stock Incentive Plan (“2021 Plan”). The purpose of the 2021 Plan is to promote the interests of the Company and the stockholders of the Company by providing directors, officers, employees and consultants, advisors and service providers of the Company with appropriate incentives and rewards to encourage them to enter into and continue in the employ or service of the Company, to acquire a proprietary interest in the long-term success of the Company and to reward the performance of individuals in fulfilling long-term corporate objectives. The 2021 Plan terminates after a period of ten years in August 2031.

The 2021 Plan is administered by the board of directors or a Compensation Committee appointed by the Board of Directors who have the authority to administer the 2021 Plan and to exercise all the powers and authorities specifically granted to it under the 2021 Plan.

The maximum number of securities available under the 2021 Plan is 53,000,000 shares of common stock.

Under the 2021 Plan the company may award the following: (i) non-qualified stock options; (ii)) incentive stock options; (iii) stock appreciation rights; (iv) restricted stock; (v) restricted stock unit; and (vi) other stock-based awards.

On February 22, 2021, the board awarded each of its directors, James Fuller and Andrey Novikov, options under the Company’s 2018 Stock Incentive Plan to purchase 208,333 shares of the Company’s common stock. The options are exercisable for a period of ten years from the date of grant, vest in full on the date of grant and have an exercise price of $0.24 per share.

On July 22, 2021, the board of directors authorized the reduction in the exercise price of the options exercisable for 208,333 shares of common stock granted to Mr. Fuller on February 22, 2021, from $0.24 per share to $0.15 per share, resulting in an immediate compensation charge of $6, the remaining terms of the option were unchanged.

On August 16, 2021, the Company and Mr. Corbett entered into an Executive Employment Agreement that replaced and superseded the previous executive employment agreement whereby the 20,000,000 warrants previously issued to Mr. Corbett were cancelled and as a replacement for the warrants, he was granted options to purchase 20,000,000 shares of common stock of the Company at a per share exercise price of $0.15. The options are exercisable for a period of ten years from the date of grant, vesting as to 50% on grant date and the remaining 50%, equally over a period of 36 months. The option expense for the year ended December 31, 2022 was $266,348.

In terms of an employment agreement dated August 16, 2021, on August 31, 2021, the Board awarded Richard Rosenblum, the Company’s Chief Financial Officer an option to purchase 10,000,000 shares of the Company’s common stock at an exercise price of $0.15 per share. The options are exercisable for a period of ten years from the date of grant, vesting as to 50% on grant date and the remaining 50%, equally over a period of 36 months. The option expense for the year ended December 31, 2022 was $111,510.

On July 11, 2022, the Board approved, granted and issued 15,000,000 ten-year incentive stock options, with immediate vesting, to the Company’s Chairman and Chief Executive Officer at an exercise price of $0.15 per share. This resulted in an immediate expense of $823,854 for the year ended December 31, 2022.

On September 13, 2022, the Company granted ten-year options exercisable for 200,000 shares of Common Stock, with immediate vesting, to each of its four non-executive directors, totaling options exercisable for 800,000 shares of Common Stock at an exercise price of $0.04 per share. This resulted in an immediate expense of $31,970 for the year ended December 31, 2022.

The fair value of the options granted and issued were determined by using a Black Scholes valuation model using the following assumptions:

	Year ended December 31, 2022
Exercise price	$	0.04 to 0.15
Risk free interest rate		2.99 to 3.42	%
Expected life		10.0 years
Expected volatility of underlying stock		206.4 to 208.4	%
Expected dividend rate		0	%

A summary of option activity during the period January 1, 2021 to December 31, 2022 is as follows:

	Shares Underlying options		Exercise price per share		Weighted average exercise price
Outstanding January 1, 2021		100,000	$	0.40	$	0.40
Granted		30,416,666		0.15 – 0.24		0.15
Forfeited/Cancelled		-		-		-
Exercised		-		-		-
Outstanding December 31, 2021		30,516,666	$	0.15 to 0.40	$	0.15
Granted		15,800,000		0.04 – 0.15		0.14
Forfeited/Cancelled		-		-		-
Exercised		-		-		-
Outstanding December 31, 2022		46,316,666	$	0.04 to 0.40	$	0.15

The options outstanding and exercisable at December 31, 2022 are as follows:

		Options Outstanding						Options Exercisable
Exercise  Price		Number Outstanding		Weighted Average Remaining Contractual life in years		Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price		Weighted Average Remaining Contractual life in years
	0.04		800,000		9.71				800,000				9.71
	0.15		45,208,333		8.94				35,625,000				9.00
	0.24		208,333		8.15				208,333				8.15
	0.40		100,000		5.99				100,000				5.99
			46,316,666		8.94	$	0.15		36,733,333	$	0.15		9.01

The options outstanding have an intrinsic value of $0 as of December 31, 2022 and 2021, respectively.

The option expense was $1,233,682 and $1,382,639 for the years ended December 31, 2022 and 2021, respectively.