Capital Stock

12 Months Ended

Dec. 31, 2024

Equity [Abstract]

Capital Stock

7. Capital Stock

Common Stock

We are authorized to issue 50,000,000 shares of our $0.00001 par value common stock, and each holder is entitled to one (1) vote on all matters subject to a vote of stockholders. We discovered an error whereby we previously reported our par value as $0.0001 per share. In accordance with Staff Accounting Bulletin (“SAB”) 99, Materiality, and SAB 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements, we evaluated the materiality of the error from qualitative and quantitative perspectives, and concluded that the error was immaterial to the Balance Sheet as of December 31, 2021 and Statement of Operations, Changes in Stockholders’ Equity (Deficit), and Cash Flows for the year ended December 31, 2021. We have corrected this error by making an out-of-period adjustment as of December 31, 2022, which reduces the Balance Sheet amounts for both Common Stock and Common Stock to be Issued, and increases the Balance Sheet amount for Additional Paid-In Capital.

Common stock activity for the years ended December 31, 2024, and 2023 was as follows:

2023

1. On January 5, 2023, we entered into a Private Placement Subscription Agreement (“PPM”) with a third party (the “Subscriber”) under which the Subscriber agreed to purchase 250,000 units with each unit consisting of one share of our common stock and a warrant to purchase one additional share. The consideration received was $25,000. The warrants are exercisable immediately at $0.10 per share, which was the fair market value of our common stock on the date of the agreement, and expire in three years from the date of issuance. In allocating the proceeds of the PPM between the common stock and the warrant, we valued the warrant using the Black-Scholes option pricing model and recorded the resulting amount of $12,500 as an increase to additional paid-in capital. The shares were issued in April 2023.   On April 13, 2023, we entered into a Private Placement Subscription Agreement (“PPM”) with a third party (the “Subscriber”), under which the Subscriber agreed to purchase 1,000,000 units, each consisting of one share of our common stock. The consideration received was $25,000. The shares have not yet been issued.

2.	On April 21, 2023, our Board of Directors authorized the issuance of 350,000 shares as bonuses, as follows: 250,000 shares to our then-CFO and 100,000 shares to a vendor. To date, only 100,000 bonus shares have been issued to our then-CFO, and the remaining 250,000 bonus shares have yet to be issued.
3.	In February 2023, four stockholders agreed to cancel a total of 2,145,000 shares of our common stock they held. We paid no consideration to the stockholders for the cancellation of their shares.
4.	In connection with the employment agreements for Messrs. Smith and Ritacco, we became obligated to issue an additional 500,000 shares each on their vesting date, which was December 31, 2022. The total of 1,000,000 shares was valued at $300,000, or $0.30 per share, which was the fair market value of our stock as of December 31, 2022, the date they became vested. The shares were issued in January 2023.

2022

1.	On November 22, 2022, we became obligated to issue 600,000 shares to the holder of the convertible promissory note (see Note 6). The shares have not yet been issued.
2.	On November 11, 2022, we issued 500,000 shares each to Don Smith, our CEO, and Steve Ritacco, our CIO, pursuant to the terms of their employment agreements. The total of 1,000,000 shares, which became vested on July 1, 2022, were valued at $300,000 or $0.30 per share, which was the value of our stock on the date of grant.
3.	On April 21, 2022, a stockholder agreed to cancel 2,000,000 shares they held.
4.	In connection with our issuance of the Convertible Promissory Note described in Note 6, we were committed to issue 1,320,000 shares as of December 31, 2021. The shares were issued on February 28, 2022.

2020 Stock Incentive Plan

Effective June 20, 2020, our Board of Directors adopted the 2020 Stock Incentive Plan (the “Plan”), authorizing the issuance of a total of 2,500,000 shares of our common stock under the Plan. Under the Plan, the exercise price of a granted option shall not be less than 100% of the fair market value on the date of grant (110% of the fair market value in the case of a 10% stockholder). Additionally, no option may be exercised more than ten (10) years after the date it is granted (or no more than five (5) years in the case of a 10% stockholder).

Stock Options

On June 20, 2020, we granted options to purchase 100,000 of our common shares to each of Messrs. Grimes, Prasad, and Ritacco, all Officers and/or Directors of our Company. The options are exercisable at $0.01 per share, expire five (5) years from the date of grant, and vest ratably beginning December 20, 2021, over the term of the option.

The fair value of each stock option was estimated on the date of grant using the Black-Scholes option pricing model, resulting in a valuation that was de minimis. The assumptions used in determining the fair value of the stock options were as follows:

	June 20, 2020
Expected term in years	5 years
Risk-free interest rate	0.33%
Annual expected volatility	38.3%
Dividend yield	0.00%

Risk-free interest rate: We use the risk-free interest rate of a U.S. Treasury Bill with a similar term on the date of the option grant.

Volatility: We estimate the expected volatility of the stock price based on the historical volatility of our stock prices.

Dividend yield: We use a 0% expected dividend yield as we have not paid dividends to date and do not anticipate declaring dividends in the near future.

Remaining term: The remaining term is based on the remaining contractual term of the stock options.

Clarification of Valuation Assumptions: The assumptions used in determining the fair value of the stock options were measured as of the grant date of the awards, in accordance with ASC 718. These inputs are not updated in subsequent periods and reflect the conditions as of the options' issuance date.

Activity related to stock options for the years ended December 31, 2024, 2023, and 2022 is as follows:

	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life in Years		Aggregate Intrinsic Value
Outstanding, December 31, 2022		300,000	$	0.01
Outstanding, December 31, 2023		300,000	$	0.01
Outstanding, December 31, 2024		300,000	$	0.01		0.50	$	0.00
Exercisable, end of period		300,000	$	0.01		0.50	$	0.00

Warrants

In connection with the transaction with the third-party lender discussed in Note 6, we issued the lender a warrant to purchase 750,000 common shares at $1.00 per share. The warrant replaced the original warrant issued in November 2021 and is exercisable immediately, expiring five years from the original Issue Date.

We valued the warrant using the Black-Scholes option pricing model and recorded a debt discount of $117,161, which is included in the total discount of $244,450 described in Note 6. The assumptions used in determining the fair value of the warrants were as follows:

	May 23, 2023
Expected term in years	3 years
Risk-free interest rate	0.32%
Annual expected volatility	1,222.7%
Dividend yield	0.00%

Risk-free interest rate: We use the risk-free interest rate of a U.S. Treasury Bill with a similar term on the date of the option grant.

Volatility: We estimate the expected volatility of the stock price based on the historical volatility of our stock prices.

Dividend yield: We use a 0% expected dividend yield as we have not paid dividends to date and do not anticipate declaring dividends in the near future.

Remaining term: The remaining term is based on the remaining contractual term of the warrant.

Clarification of Valuation Assumptions: The assumptions used in determining the fair value of the warrants were measured as of the date of issuance of the warrants, in accordance with ASC 718. These inputs are not updated in subsequent periods and reflect conditions as of the grant date.

Activity related to the warrant for the years ended December 31, 2024, and 2023 is as follows:

	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life in Years		Aggregate Intrinsic Value
Outstanding, December 31, 2022		750,000	$	1.00
Outstanding, December 31, 2023		750,000	$	1.00
Outstanding, December 31, 2024		750,000	$	1.00		1.9	$	0
Exercisable, end of period		750,000	$	1.00		1.9	$	0