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STOCKHOLDERS’ DEFICIT
 3 Months Ended
Mar. 31, 2026
Equity [Abstract]  
STOCKHOLDERS’ DEFICIT

7. STOCKHOLDERS’ DEFICIT

 

Series B Preferred Stock

 

Effective March 2021, pursuant to authority of its Board of Directors, the Company filed a Certificate of Determination for its Series B Preferred Stock. The Series B Preferred Stock has a par value of $0.001 per shares and consists of 12,000,000 shares.

 

Terms of the Series B Preferred include the following:

 

  1. The Series B Preferred votes with the Company’s common stock as a single class on all matters or consents for the Company’s common stockholders. Each share of Series B Preferred is entitled to one thousand votes per share.
     
  2. The Series B Preferred will not be entitled to dividends unless the Company pays cash dividends or dividends in other property to holders of outstanding shares of common stock, in which event, each outstanding share of the Series B Preferred will be entitled to receive dividends of cash or property in an amount or value equal to one thousand multiplied by the amount paid in respect of one share of common stock. Any dividend payable to the Series B Preferred will have the same record and payment date and terms as the dividend payable on the common stock.
     
  3. Upon any voluntary or involuntary liquidation, dissolution or winding up of the Company, the holders of all shares of Series B Preferred then outstanding shall be entitled to be paid out of the assets of the Company available for distribution to its stockholders an amount in cash equal to $0.133 in cash per share before any distribution is made on any shares of the Company’s common stock. If upon any voluntary or involuntary liquidation, dissolution or winding up of the Company, the application of all amounts available for payments with respect to Series B Preferred would not result in payment in full of Series B Preferred, the holders shall share equally and ratably in any distribution of assets of the Company in proportion to the full liquidation preference to which each is entitled.
     
  4. The Series B Preferred does not have any redemption rights.

 

Common Stock Issued for Services

 

On May 1, 2025, the Company entered into a consulting agreement for services. Pursuant to the agreement, the Company agreed to issue up to 300,000,000 shares of restricted common stock as compensation over an initial 12-month service period, including an initial issuance of 100,000,000 shares upon execution and monthly issuances of 20,000,000 shares beginning July 1, 2025. The initial 100,000,000 shares were issued in May 2025 and were valued at $10,000. During the third and fourth quarter of 2025, the Company issued an additional 120,000,000 shares under this arrangement, with an aggregate fair value of $20,000. During the first quarter of 2026, the Company issued an additional 60,000,000 shares under this arrangement, with an aggregate fair value of $8,000. For the three months ended March 31, 2026, the Company recognized stock-based compensation expense of $10,500 related to this agreement. The remaining unrecognized compensation cost of $833 is expected to be recognized over the remaining service period (See Note 9). 

 

On January 1, 2026, the Company entered into a consulting agreement for services. Pursuant to the agreement, the Company issued 30,000,000 shares of restricted common stock as compensation for a 12-month service period. The shares were valued at $3,000. For the three months ended March 31, 2026, the Company recognized stock-based compensation expense of $750 related to this agreement. The remaining unrecognized compensation cost of $2,250 is expected to be recognized over the remaining service period (See Note 9).

 

As of the date of this report, the above mentioned shares have not been issued by the transfer agent; however, the Company has recorded the shares as common stock to be issued and recognized the related stock based compensation expense.

 

Debt Settlement and Stock Issuance

 

In January 2026, the Company entered into a settlement agreement with the holder of certain promissory notes originally issued in 2021 and 2022. As of the settlement date, the aggregate carrying value of the outstanding debt was approximately $172,500 (see Note 6). Pursuant to the settlement, all outstanding notes were cancelled and extinguished. In exchange, the Company agreed to (i) pay $20,000 in cash, payable in four monthly installments of $5,000, and (ii) issue 60,000,000 shares of the Company’s common stock. In connection with the settlement agreement, the $20,000 cash payment obligation was reclassified to settlement payable and included in accrued expenses. The Company made the first three installment payments totaling $15,000 in the first quarter of 2026, and the final $5,000 was paid in April 2026 (see Note 8). The common shares issued in connection with the settlement were valued based on the Company’s trading price of $0.0002 per share, resulting in a fair value of $12,000. We recognized a gain on debt settlement of $140,500 during the first quarter of 2026, representing the excess of the carrying amount of the debt over the fair value of the consideration transferred. The gain on settlement is included in the accompanying condensed consolidated statements of operations.