NOTE 16 – WARRANTS

Warrants Issued for Investment

On May 5, 2022, the Company issued shares and warrants related to that certain Securities Purchase Agreement dated November 10, 2021 with certain of the selling stockholders referenced in our most recent registration statement pursuant to which we sold to such selling stockholders $560,875 in aggregate principal amount of our common stock (747,838 shares) and warrant to purchase common stock shares (which we refer to as the “PIPE Warrants”), exercisable at any time before the close of business on September 9, 2025. Of these warrants, all PIPE warrants except one warrant were redeemed through a cashless redemption into 614,504 shares of the Company’s restricted common stock at $0.25 per share and the warrants were retired. One warrant to purchase 133,334 shares was outstanding as of March 31, 2025.

On July 28, 2022, August 1, 2022, and November 28, 2022, an investor purchased 400,001 Units consisting of one share of the Company’s restricted common stock and one Class C warrant to purchase one share of the Company’s restricted common stock at an exercise price of $1.50 per share for a period of three years. Prior to March 31, 2025, the investor accepted the Company’s offer to redeem the warrant through a cashless redemption into 100,001 shares of the Company’s common stock at a price of $0.25 and the warrant was retired.

On September 29, 2023, the Company issued to a private investor a 180-day Senior Secured Convertible Promissory Note bearing an interest rate of 10% for $25,000, which may be converted at $0.50 per share at any time during the period. As further inducement to purchase this Note, the Company agreed with Investor to issue 25,000 restricted common stock shares and a warrant to purchase 50,000 restricted common stock shares exercisable at $0.75 per share any time prior to October 2, 2026. Prior to March 31, 2025, the investor accepted the Company’s offer to redeem the warrant through a cashless redemption into 12,500 shares of the Company’s common stock at a price of $0.25 and the warrant was retired.

On December 6, 2023, the Company agreed to sell to a private investor 20,000 Units at a price of $0.75 per Unit. Each Unit consists of one share of the Company’s restricted common stock and a warrant to purchase an additional share of the Company’s restricted common stock at a price of $1.50 any time prior to December 6, 2026.Prior to March 31, 2025, the investor accepted the Company’s offer to redeem the warrant through a cashless redemption into 5,000 shares of the Company’s common stock at a price of $0.25 and the warrant was retired.

On February 8, 2024, entities belonging to Peter S. Chung and Timothy B. Ruggiero, collectively, accepted a Pre-Funded Common Stock Purchase Warrant to purchase three million shares of the Company’s restricted common stock at $0.01 per share until the Warrant has been exercised in full. This warrant was issued as full consideration for their surrendering of 1.9 million shares of the Company’s Founder's Common Stock. 

See NOTE. 11 “Related Party Transactions”, Note Payable section for details on convertible promissory notes issued with warrants on March 24, 2023, May 15, 2023, September 25, 2023, September 2023, April 1 2024, and July 1, 2024

Warrants Issued for Management and Consulting Services

On July 1, 2021, Squadron Marketing LLC and Lazarus Asset Management LLC were each issued a Class C warrant to purchase 250,000 common stock shares for a period of three years at an exercise price of $1.50.  Prior to March 31, 2025, the Holders accepted the Company’s offer to redeem the warrants through a cashless redemption into 125,000 common stock shares at a price of $0.25 and the warrants were retired.

On May 26, 2022, the Company issued to Frank Horkey a Class C warrant to purchase 250,000 common stock shares for a period of three years at an exercise price of $1.50 as part of his executive compensation during the 2022 fiscal year. This warrant vested on July 1, 2022.  Prior to March 31, 2025, t Frank Horkey accepted the Company’s offer to redeem the warrants through a cashless redemption into 62,500 shares of the Company’s common stock at a price of $0.25 and the warrant was retired.

On May 26, 2022, Squadron Marketing LLC and Lazarus Asset Management LLC were each issued Class C warrant to purchase 500,000 common stock shares for a period of three years at an exercise price of $1.50 related to consulting services during fiscal 2022. These warrants vested on July 1, 2022. Prior to March 31, 2025, the Holders accepted the Company’s offer to redeem the warrants through a cashless redemption into 250,000 shares of the Company’s common stock at a price of $0.25 and the warrants were retired.

On June 12, 2022, Messrs.  Horkey and Christiansen were issued 250,000 class C warrant to purchase 250,000 shares of the Company’s common stock for a period of three years at an exercise price of $1.50. Exercise of these warrants commenced upon the effective date of the Company’s registration statement for serving on the Company’s Board of Directors. Prior to March 31, 2025, the Holders accepted the Company’s offer to redeem the warrants through a cashless redemption into 62,500 shares each of the Company’s common stock at a price of $0.25 and the warrants were retired.

On June 12, 2022, Squadron Marketing LLC and Lazarus Asset Management LLC were each issued a class C warrant to purchase 250,000 common stock shares for a period of three years at an exercise price of $1.50. Exercise of this warrant commenced upon the effective date of the Company’s registration statement for serving on the Company’s Advisory Board. Prior to March 31, 2025, the Holders accepted the Company’s offer to redeem the warrants through a cashless redemption into 62,500 common stock shares at a price of $0.25 and the warrants were retired.

On July 1, 2023, Squadron Marketing LLC and Lazarus Asset Management LLC were issued a class C warrant to purchase 250,000 shares of the Company’s common stock for a period of three years at an exercise price of $1.50. Prior to March 31, 2025, the Holders accepted the Company’s offer to redeem the warrants through a cashless redemption into 62,500 common stock shares at a price of $0.25, and the warrant was retired.

On July 1, 2023, Mr. Horkey was issued a class C warrant to purchase 250,000 common stock shares for a period of three years at an exercise price of $1.50. Prior to March 31, 2025, the Holder accepted the Company’s offer to redeem the warrants through a cashless redemption into 62,500 common stock shares at a price of $0.25 and the warrant was retired.

On July 1, 2024, Squadron Marketing LLC and Sparta Road LTD were each issued a class C warrant to purchase 250,000 common stock shares for a period of three years at an exercise price of $1.50.Prior to March 31, 2025, the Holders accepted the Company’s offer to redeem the warrants through a cashless redemption  into 62,500 common stock shares each at a price of $0.25, and the warrants were retired.

On July 1, 2024, Mr. Horkey was issued a class C warrant to purchase 250,000 common stock shares for a period of three years at an exercise price of $1.50.  Prior to March 31, 2025, the Holder accepted the Company’s offer to redeem the warrants through a cashless redemption into 62,500 common stock shares at a price of $0.25, and the warrant was retired.

On July 1, 2024, Antonio Oliveira’ was issued a Class C warrant to purchase 250,000 restricted common stock shares for his three-year Advisory Board position vesting as follows: 83,333 shares upon signing as of July 1, 2024; 20,833 shares vest quarterly the fiscal year ended June 30, 2024; 20,833 shares vest quarterly for the fiscal year ended June 30, 2025. Prior to March 31, 2025, the Holder accepted the Company’s offer to redeem the warrant through a cashless redemption into 62,500 common stock shares at a price of $0.25 and the warrant was retired.

On July 1, 2024, Matthew Cohen was issued a warrant to purchase 250,000 restricted common stock shares for his three-year board position vesting as follows: 83,333 shares upon signing as of July 1, 2024; 20,833 shares vest quarterly the fiscal year ended June 30, 2024; 20,833 shares vest quarterly for the fiscal year ended June 30, 2027. Mr. Cohen resigned effective December 31, 2024, and therefore vested only two quarters of his stock and warrant; the adjustments necessary to record his resignation was done on January 1, 2025. Prior to March 31, 2025, Mr. Cohen accepted the Company’s offer to redeem the warrants through a cashless redemption into 10,417 common stock shares at a price of $0.25 and the warrant was retired.

Certain of the shares and warrants noted above were issued to Board Members, Advisory Board Members and Consultants for services to be rendered for periods subsequent to March 31, 2025. Amounts related to shares issued as compensation for services not yet performed are treated as prepaid consulting (current and non-current). The amounts will be recognized in subsequent periods as they are earned according to the Agreements.

The following are changes and balances for common share equivalent due to outstanding warrants.:

As of March 31, 2025, the weighted average remaining contractual life of the warrants was 1.87 years

These warrants were valued using a Black Scholes calculation applying the following factors: a stock price of $0.16, an exercise price of $1.50, a volatility of 170% to 172% and a risk-free interest rate of 4.29% to 4.46%.