Stockholders Deficit

9 Months Ended

Sep. 30, 2024

Stockholders Deficit

Stockholders' Deficit

Note 10 – Stockholders’ Deficit

At September 30, 2024 and December 31, 2023, respectively, the Company had three (3) classes of stock:

Preferred Stock – Series A

- 2,000,000 shares authorized

- 400,000 issued and outstanding at September 30, 2024 and December 31, 2023, respectively.

- Par value - $0.001

- Voting – 30 votes per share

- Dividends - none

- Liquidation preference – none

- Rights of redemption - none

- Conversion - none

Preferred Stock – Series B

- 1,000,000 shares authorized

- 50,000 and 0 issued and outstanding at September 30, 2024 and December 31, 2023, respectively.

- Par value - $0.001

- Voting – 10 votes per share

- Dividends - none

- Liquidation preference – none

- Rights of redemption - none

- Conversion – 50:1 into common

Common Stock

- 90,000,000 shares authorized

- 9,051,429 and 9,064,129 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively

- Par value - $0.001

- Voting - 1 vote per share

Equity Transactions for the Nine Months Ended September 30, 2024:

Stock and Warrants Issued for Cash

On August 26, 2024, the Company issued 17,500 shares of common stock at $1/share for gross proceeds of $17,500.

On August 26, 2024, the Company issued 17,500 shares of common stock at $1/share for gross proceeds of $17,500.

On August 12, 2024, the Company issued 50,000 units consisting of one share of common stock and one warrant. The units were sold at $1/unit for gross proceeds of $50,000. The warrants are exercisable immediately at $3.50/share and expire on December 31, 2026.

On July 26, 2024, the Company issued 125,000 units consisting of one share of common stock and one warrant. The units were sold at $1/unit for gross proceeds of $125,000. The warrants are exercisable immediately at $3.50/share and expire on December 31, 2026.

On July 25, 2024, the Company issued 100,000 units consisting of one share of common stock and one warrant. The units were sold at $1/unit for gross proceeds of $100,000. The warrants are exercisable immediately at $3.50/share and expire on December 31, 2026.

On June 28, 2024, the Company issued 100,000 units consisting of one share of common stock and one warrant. The units were sold at $1/unit for a subscription amount of  $100,000. The warrants are exercisable immediately at $3.50/share and expire on December 31, 2026.  The subscription was received in July 2024. 

On June 18, 2024, the Company issued 75,000 units consisting of one share of common stock and one warrant. The units were sold at $1/unit for gross proceeds of $75,000. The warrants are exercisable immediately at $3.50/share and expire on December 31, 2025.

Stock Issued for Services – Related Party

The Company’s Class B, Preferred Stock is not traded in an observable public market and there were no other third party cash offerings to establish a fair value for these preferred shares.  However, in accordance with ASC 470 “Debt”, under its parity value (as-converted value), this represented the best evidence of fair value on the acquisition date as these preferred shares convert on a 50 for 1 basis (see above) into common stock.

On September 6, 2024, the Company issued 50,000 shares of Class B preferred stock, having a fair value of $2,500,000 ($1/share) for as a consulting fee to its majority shareholder, based upon the most recent third party cash offering price for common stock, which represents the  best value of fair value.

The Company determined the valuation of this transaction as follows:

Quantity of Series B, preferred stock issued majority shareholder		50,000
Conversion ratio of Series B, preferred stock into common stock		50
Equivalent Series A, common shares		2,500,000
Cash offering price for common shares	$	1.00
Value of Series A, preferred stock issued	$	2,500,000

Stock Issued for Services

On March 6, 2024, the Company cancelled 866,667 shares of common stock that was previously issued and re-issued the same shareholders a total of 368,967 in accordance with stated agreements.

Warrants Issued for Services

On April 8, 2024, the Company issued 550,000, fully vested warrants for services rendered, having a fair value of $1,138,500.  These warrants had an exercise price of $3.50/share.

The fair value of all warrants granted during the nine months ended September 30, 2024 was determined using a Black-Scholes option pricing model with the following inputs:

Expected term (years)	2.73
Expected volatility	52	%
Expected dividends	0.00	%
Risk free interest rate	4.60	%

Equity Transactions for the Year Ended December 31, 2023:

On December 23, 2022, the Company received $50,000 as consideration for 50,000 common shares to an officer. These shares were not issued until after year-end, resulting in a liability rather than equity transaction as of the year ended December 31, 2022. During the year ended December 31, 2023, these shares were issued and included in stockholders’ deficit.

On April 20, 2023, the Company issued 10,000 shares of common stock for professional services received, having a fair value of $63,150.

Warrants

Warrant activity for the nine months ended September 30, 2024, and the year ended December 31, 2023 are summarized as follows:

					Weighted
					Average
			Weighted		Remaining		Aggregate
	Number of		Average		Contractual		Intrinsic
Warrants	Warrants		Exercise Price		Term (Years)		Value
Outstanding - December 31, 2022		1,000,000	$	3.50		2.57	$	-
Vested and Exercisable - December 31, 2022		1,000,000	$	3.50		2.57	$	-
Unvested - December 31, 2022		-	$	-		-	$	-
Granted		-
Exercised		-
Cancelled/Forfeited		-
Outstanding - December 31, 2023		1,000,000	$	3.50		1.57	$	2,500,000
Vested and Exercisable - December 31, 2023		1,000,000	$	3.50		1.57	$	2,500,000
Unvested and non-exercisable - December 31, 2023		-	$	-		-	$	-
Granted		1,000,000	$	3.50
Exercised		-
Cancelled/Forfeited		-
Outstanding - September 30, 2024		2,000,000	$	3.50		1.50	$	-
Vested and Exercisable - September 30, 2024		2,000,000	$	3.50		1.50	$	-
Unvested and non-exercisable - September 30, 2024		-	$	-		-	$	-