NOTE 6: STOCKHOLDERS’ DEFICIT

Common Stock

On September 18, 2024, the Company adopted and on October 21, 2024, filed the Articles of Amendment to its Articles of Incorporation to increase the number of authorized shares of Common Stock from 1,000,000,000 shares to 3,000,000,000 shares. The board increased the authorized shares to provide for the flexibility to raise additional capital and to execute on the business plan and potential upcoming opportunities.

At March 31, 2026, the Company had 3,000,000,000 authorized common shares.

At March 31, 2026, the Company has 498,254,643 common shares issued and outstanding.

Issuances of Common Stock During the Nine Months ended March 31, 2026

Convertible Notes Payable

During the nine months ended March 31, 2026 the Company issued 58,834,782 shares of its common stock related to the conversion of $180,884 of principal, accrued interest, and fees for four of its convertible notes payable, at an average contract conversion price of $0.003 per share.

Commitment Shares

During the nine months ended March 31, 2026 the Company issued 2,625,000 shares of its common stock valued at $18,788 or an average price of $0.0072 per share, pursuant to the issuance of two promissory notes.

Stock Based Compensation

During the nine months ended March 31, 2026 the Company issued 65,000,000 shares of its $0.0001 par value common stock as compensation to its directors and officers. The shares were valued at $337,100, or $0.0052 per share, based on the share price at the time of the transactions.

During the nine months ended March 31, 2026 the Company issued 1,000,000 shares of its $0.0001 par value common stock as compensation to employees. The shares were valued at $4,300, or $0.0043 per share.

During the nine months ended March 31, 2026 the Company issued 2,250,000 shares of its $0.0001 par value common stock as compensation to a consultant. The shares were valued at $10,750, or $0.0048 per share.

Preferred Stock

Series A and B issued and outstanding shares of the Company’s convertible preferred stock have a par value of $0.001. All classes rank(ed) prior to any class or series of the Company’s common stock as to the distribution of assets upon liquidation, dissolution or winding up of the Company or as to the payment of dividends. All preferred stock shall have no voting rights except if the subject of such vote would reduce the amount payable to the holders of preferred stock upon liquidation or dissolution of the company and cancel and modify the conversion rights of the holders of preferred stock as defined in the certificate of designations of the respective series of preferred stock.

Series A Convertible Preferred Stock

The Series A Preferred Stock has a stated value of $750.00 per share. Each one share of Series A Preferred Stock is convertible into one (1) share of Common Stock. In the event the Common Stock price per share is lower than $0.10 (ten cents) per share then the Conversion shall be set at $0.035 per share. The Common Stock shares are governed by Lock-Up/Leak-Out Agreements.

Series B Convertible Preferred Stock

Thirty million (30,000,000) shares of preferred stock were designated as a new Series B Preferred stock in April 2016. This new Series B Preferred Stock has a $0.001 par value, and each 300 shares is convertible into one share of the Company’s common stock, with a stated value of $375 per share.

Series C Convertible Preferred Stock

Thirty thousand (30,000) shares of preferred stock were designated as a new Series C Preferred stock in October 2024. This new Series C Preferred Stock has a $0.001 par value, and has a stated value of $100 per share. The Series C shares are convertible into shares of the Company’s common stock at the price of $0.075 per share, subject to customary adjustment, including in the event of certain issuances at a price lower than $0.075 per share, as set forth in the Certificate of Designations for the Series C Preferred. The shares of the Series C Preferred shall rank (i) senior to the Company’s Common Stock and any other class or series of capital stock of the Company hereafter created, the terms of which specifically provide that such class or series shall rank junior to the Series C Preferred (each of the securities in clause (i) collectively referred to as “Junior Stock”) and (ii) pari passu with the Company’s Series A Preferred Stock, Series B Preferred Stock, Series AA Preferred Stock and any class or series of capital stock of the Company hereafter created and specifically ranking, by its terms, on par with the Series C Preferred, in each case as to dividend distributions or distributions of assets upon liquidation, dissolution or winding up of the Company or a Deemed Liquidation Event, whether voluntary or involuntary. Holders of the Series C Preferred will vote together with the holders of the Company’s Common Stock on an as-converted basis on each matter submitted to a vote of holders of Common Stock (whether at a meeting of shareholders or by written consent).

Series AA Convertible Preferred Stock

In March 2018, the Company authorized and issued one share of Series AA convertible preferred stock which provides for the holder to vote on all matters as a class with the holders of Common Stock and each share of Series AA Convertible Preferred Stock shall be entitled to 51% of the common votes on any matters requiring a shareholder vote of the Company. Each one share of Series AA Convertible Preferred Stock is convertible into one (1) share of Common Stock. Mark Lucky, our CEO, is the holder of the one share of Series AA Convertible Preferred Stock.

Common Stock Warrants

In September 2022 we issued 138,667 warrants with a five year life, and a fixed exercise price of $1.35 per share, as part of a modification to three outstanding convertible notes payable. The Company evaluated these amendments under ASC 470-50, “Debt - Modification and Extinguishment”, and concluded that the issuance of these warrants in exchange for deferring the interim interest payments that were due resulted in significant and consequential changes to the economic substance of the debt and thus resulted in accounting for these modifications as an extinguishment of the debt.  The Company recorded a loss of extinguishment of debt of $504,925. These warrants had price protection provisions that allow for the reduction in the current exercise price upon the occurrence of certain events, including the Company’s issuance of common stock or securities convertible into or exercisable for common stock, such as options and warrants, at a price per share less than the exercise price then in effect. For instance, if the Company issues shares of its common stock or options exercisable for or securities convertible into common stock at an effective price per share of common stock less than the exercise price then in effect, the exercise price will be reduced to the effective price of the new issuance. Simultaneously with any reduction to the exercise price, the number of shares of common stock that may be purchased upon exercise of each of these warrants shall be increased proportionately, so that after such adjustment the aggregate exercise price payable for the adjusted number of warrants shall be the same as the aggregate exercise price in effect immediately prior to such adjustment.

Due to the price protection features of these warrants, the Company issued 5,048,426 warrant shares in September 2022 to these warrant holders.

The Company has outstanding common stock purchase warrants that include full-ratchet anti-dilution provisions. Under these provisions, if the Company issues common stock or securities convertible into common stock at a price lower than the then-current warrant exercise price, the warrant exercise price is automatically adjusted to the lower issuance price.

The Company issued equity securities at a price below the then-current warrant exercise price of $0.00097 per share. As a result, pursuant to the full-ratchet provisions, the exercise price of 5,112,426 outstanding warrants was reduced to $0.00097 per share.

This repricing:

A summary of the status of the Company’s outstanding common stock warrants as of March 31, 2026 and changes during the nine months ended on that date is as follows:

The following table summarizes information about common stock warrants outstanding at March 31, 2026: