Stockholders’ Equity

3 Months Ended

Mar. 31, 2023

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 shares of Common Stock issued and outstanding as of March 31, 2023 and December 31, 2022, respectively.

b. Restricted stock awards

A summary of restricted stock activity during the period January 1, 2022 to March 31, 2023 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, 2022		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
Granted and issued		-		-		-			-			-		-
Forfeited/Cancelled		-		-		-			-			-		-
Vested		-		-		(5,123,750	)		(0.049	)		5,123,750		0.049
Outstanding March 31, 2023		23,495,000	$	0.050		-		$	0.049			23,495,000	$	0.050

The restricted stock granted, issued and exercisable at March 31, 2023 is as follows:

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

The Company has recorded an expense of $0 and $62,766 for the three months March 31, 2023 and 2022, 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 March 31, 2023 and December 31, 2022.

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.

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. Subsequent to March 31, 2023, the Company entered into an agreement to cancel this warrant (see Note 15).

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.

Between February 13, 2023 and February 23, 2023, the Company entered into Securities Purchase Agreements with 11 accredited investors, as disclosed in Note 9 above. In terms of these Securities Purchase Agreements, the Company issued five-year warrants to purchase an aggregate 46,521,739 shares of the Company’s common stock at an exercise price of $0.0115 per share (as adjusted for stock splits, stock combinations, dilutive issuances and similar events). The Company is under no obligation to register the shares of Common Stock underlying the Notes or the Warrants for public resale.

The Warrants contain conversion limitations providing that a holder thereof may not exercise the Warrants to the extent that, if after giving effect to such exercise, the holder or any of its affiliates would beneficially own in excess of 4.99% (the “Maximum Percentage”) of the outstanding shares of the Common Stock immediately after giving effect to such exercise. A holder may increase or decrease its beneficial ownership limitation upon notice to the Company provided that in no event such limitation exceeds 9.99%, and that any increase shall not be effective until the 61^st day after such notice.

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

	Three months ended March 31, 2023
Exercise price	$	0.0115
Risk free interest rate		3.93 to 4.16	%
Expected life		5 years
Expected volatility of underlying stock		189.15 to 189.37	%
Expected dividend rate		0	%

A summary of warrant activity during the period January 1, 2022 to March 31, 2023 is as follows:

	Shares Underlying Warrants			Exercise price per share		Weighted average exercise price
Outstanding January 1, 2022		37,304,105		$	0.05 – 0.1875	$	0.12
Granted		51,000,000			0.0115 – 0.0345		0.01826
Increase in warrants due to debt amendment full rachet trigger		72,260,870			0.0115		0.0115
Cancelled on debt amendment		(4,973,914	)		0.15		0.1500
Exercised		-			-		-
Outstanding December 31, 2022		155,591,061		$	0.0115 – 0.1875	$	0.0300
Granted		46,521,739			0.0115		0.0115
Forfeited		(1,000,000	)		0.05		0.05
Cancelled on debt amendment		-			-		-
Exercised		-			-		-
Outstanding March 31, 2023		201,112,800		$	0.0115 – 0.1875	$	0.0256

The warrants outstanding and exercisable at March 31, 2023 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		168,519,466		4.48				168,519,466				4.48
$	0.0345		15,000,000		2.27				10,312,500				2.27
$	0.15		15,166,667		2.96				15,166,667				2.96
$	0.1875		2,426,667		2.96				2,426,667				2.96
			201,112,800		4.18	$	0.0256		196,425,300	$	0.0256		4.23

The warrants outstanding have an intrinsic value of $0 as of March 31, 2023 and March 31, 2022.

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 or a committee appointed by the Board, 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 established its 2021 Stock Incentive Plan (“2021 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, 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 Plan terminates after a period of ten years in August 2031.

The 2021 Plan is administered by the Board or a Compensation Committee appointed by the Board, 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 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 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.

A summary of option activity during the period January 1, 2022 to March 31, 2023 is as follows:

	Shares Underlying options		Exercise price per share		Weighted average exercise price
Outstanding January 1, 2022		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
Granted		-		-		-
Forfeited/Cancelled		-		-		-
Exercised		-		-		-
Outstanding March 31, 2023		46,316,666	$	0.04 to 0.40	$	0.15

The options outstanding and exercisable at March 31, 2023 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		9.46				800,000				9.46
$	0.15		45,208,333		8.69				38,125,000				8.74
$	0.24		208,333		7.90				208,333				7.90
$	0.40		100,000		5.75				100,000				5.75
			46,316,666		8.69	$	0.15		39,233,333	$	0.15		8.75

The options outstanding have an intrinsic value of $0 as of March 31, 2023 and March 31, 2022.

The option expense was $94,464 and $94,466 for the three months ended March 31, 2023 and 2022, respectively.