NOTE 10 - STOCKHOLDERS' EQUITY

9 Months Ended

Sep. 30, 2025

Notes

NOTE 10 - STOCKHOLDERS' EQUITY

NOTE 10 – STOCKHOLDERS’ EQUITY

Authorized Stock 

The Company has authorized 75,000,000 common shares with a par value of $0.001 per share. Each common share entitles the holder to one vote on any matter on which action of the stockholders of the corporation is sought. During February 2017, the Company increased the authorized number of shares to 500,000,000. Also, the Company increased the authorized preferred stock to 75,000,000 shares and designated 25,000,000 shares of preferred stock to Series A Convertible Preferred Stock. During January 2018, the Company increased its authorized number of common shares to 1,000,000,000. During April 2018, the Company increased its authorized number of common shares to 2,500,000,000. The Board of Directors, in the future, has the authority to increase the authorized capital up to 4,000,000,000 shares based on shareholder approval. On December 29, 2023 the Company decreased its authorized number of common shares to 50,000,000.

The Company effectuated a reverse stock split of 120-for-1 as of December 29, 2023.  Due to the reverse stock split we added 9,802 common stock shares from the fractional shares issued by the DTC.

On October 16, 2017, the Company filed an Amended and Restated Certificate of Designation of the Rights, Preferences, Privileges and Restrictions of the Series A Convertible Preferred Stock (the “Amended Certificate”) with the Secretary of State of the State of Nevada. The Amended Certificate reduces the number of preferred shares designated as Series A Preferred Stock from 25,000,000 shares to 1,333,334 shares. The Amended Certificate also changes the conversion and voting rights of the Series A Preferred Stock. The Series A Preferred Stock is now convertible into the number of shares of our common stock equal to 0.00006% of our outstanding common stock upon conversion. The voting rights of the Series A Preferred Stock are now equal to the number of shares of common stock into which the Series A Preferred Stock may convert.

As of September 30, 2025, there are no outstanding shares of preferred stock. All the preferred stock was converted in common stock on February 4, 2019.

Common Share Issuances

There were no shares issued during the first quarter 2025.  During the three months ended June 30, 2025, the Company issued 4,584 shares of common stock for services.  They were issued at $2.00 per share.  Additionally, the Company issued 147,500 shares of common stock for the conversion of the note payable.  They were issued at $2.00 per share.  During the three months ended September 30, 2025, the Company issued 653,458 shares of common stock for services.  They were issued at $1.80 per share, but 520,958 elected to use the current 409a valuation.  On July 19, 2025, the Company issued 13,075,920 shares of common stock due to the merger with Gummy USA, LLC.  These shares were rescinded on September 26, 2025.  The shares of common stock were reissued as of October 1, 2025.

There were no shares issued during the first quarter 2024.  During the three months ended June 30, 2024, the Company issued 29,666 shares of common stock for services.  4,166 shares were issued at $6.00 per share while 25,500 shares were issued at $2.20 per share. During the three months ended September 30, 2024, the Company repurchased the 4,166 shares which were issued in the 2nd quarter of 2024.  These shares are classified as treasury stock with a value of $5,400. During the three months ended December 31, 2024, there were no shares issued.

Warrant Issuances

During the three months ending March 31, 2023, the Company issued 61,846 warrants to 2 unrelated parties at a per share price of $5.6592. On February 2, 2022, the Company issued 16,667 warrants to an individual at a per share price of $6.00. As of December 31, 2023, there were 195,180 warrants outstanding, of which 195,180 warrants are fully vested. As of June 30, 2024, there were 132,680 warrants outstanding, of which 132,680 warrants are fully vested.

			Weighted-
		Weighted-	Average
		Average	Remaining	Aggregate
		Exercise	Contractual	Intrinsic
	Warrants	Price	Life (Years)	Value
Outstanding at December 31, 2024	132,680	$7.07	2.06	$-
Granted	-	-	-	-
Forfeited	(16,667)	6.00	-	-
Exercised	-	-	-	-
Outstanding at September 30, 2025	116,013	$7.22	1.59	$-
Vested and expected to vest at September 30, 2025	116,013	$7.22		$-
Exercisable at September 30, 2025	116,013	$7.22		$-

At September 30, 2025, the intrinsic value of these stock warrants was $0 as the exercise price of these stock warrants were greater than the market price.

Share Conversion Agreements

All of the holders of the Company’s Series A Convertible Preferred Stock (the “Preferred Holders”) entered into a Preferred Stock Conversion Agreement. Pursuant to the Conversion Agreements, the Preferred Holders converted their shares of preferred stock into common stock, effective as of the Exchange. As a result, no shares of the Company’s Series A Convertible Preferred Stock are outstanding. An aggregate of 15,592,986 shares of common stock were issued to the Preferred Holders. The Preferred Holders agreed to convert each share of Series A Convertible Preferred Stock into eighteen (18) shares of common stock and agreed to retire a total of 467,057 shares of Series A Convertible Preferred Stock. The Company cancelled the retired shares.

Omnibus Stock Grant and Option Plan

The following summary of options activity for the nine months ended September 30, 2025 is presented below:

			Weighted-
		Weighted-	Average
		Average	Remaining	Aggregate
		Exercise	Contractual	Intrinsic
	Options	Price	Life (Years)	Value
Outstanding at December 31, 2024	38,333	$6.00	1.34	-
Granted	-	-	-	-
Forfeited	-	-	-	-
Exercised	-	-	-	-
Outstanding at September 30, 2025	38,333	$6.00	0.59	$-
Vested and expected to vest at September 30, 2025	38,333	$6.00		$-
Exercisable at September 30, 2025	38,333	$6.00		$-

At September 30, 2025, the intrinsic value of these stock options was $0 as the exercise price of these stock options were greater than the market price.

The following summary of restricted stock units’ activity for the nine months ended September 30, 2025 is presented below:

			Weighted-
			Weighted-
			Average
			Grant Date
	Shares		Fair Value
Non-vested at December 31, 2024		58,958		1.20
Granted		-		-
Vested		-		-
Forfeited		58,958		-
Non-vested at September 30, 2025		-		-

As of December 31, 2023, the amount of unvested compensation related to issuances of restricted stock units’ fair value was $423,910. This amount will be amortized and expensed over the life of the contract and will be included in selling, general and administrative expenses in the accompanying consolidation statements of operations.

As of December 31, 2024, the amount of unvested compensation related to issuances of restricted stock units’ fair value was $77,230. This amount will be amortized and expensed over the life of the contract and will be included in selling, general and administrative expenses in the accompanying consolidation statements of operations.  As of September 30, 2025, the intrinsic value of these restricted stock unit was $0 as the Company decided to let these restricted stock units expire.

The fair value of share options, units, and warrants are estimated using the Black-Scholes option pricing method based on the following weighted-average assumptions:

	Years Ending
	September 30, 2025			December 31, 2024
Risk-free interest rate		4.13	%		4.29	%
Average expected term (years)		1.09 years			1.7 years
Expected volatility		171	%		235	%
Expected dividend yield		-			-