| STOCKHOLDERS' EQUITY (DEFICIT) |
NOTE 15 – STOCKHOLDERS’ EQUITY (DEFICIT) a) | Preferred and Common Stock |
The Company had two classes of stock authorized (Preferred Stock and Common Stock) and three classes of stock issued and outstanding (Preferred Stock Series A, Preferred Stock Series B, and Common Stock) as of March 31, 2026 and December 31, 2025. The rights and preferences of each are summarized as follows: Number of shares authorized | | | 10,000,000 | | Par value | | $ | 0.001 | | Voting rights | | None | | Dividend rights | | None | | Redemption rights | | None | | Conversion rights | | None | | Liquidation preference | | None | |
| ii) | Preferred Stock Series A |
Number of Preferred Stock shares designated as Series A | | | 2,000,000 | | Number of shares issued and outstanding as of: | | | | | March 31, 2026 | | | 2,000,000 | | December 31, 2025 | | | 2,000,000 | | Par value | | $ | 0.001 | | Voting rights | | 30 votes per share | | Dividend rights | | None | | Redemption rights | | None | | Conversion rights | | None | | Liquidation preference | | None | |
| iii) | Preferred Stock Series B |
Number of Preferred Stock shares designated as Series B | | | 1,000,000 | | Number of shares issued and outstanding as of: | | | | | March 31, 2026 | | | 75,000 | | December 31, 2025 | | | 75,000 | | Par value | | $ | 0.001 | | Voting rights | | 10 votes per share | | Dividend rights | | None | | Redemption rights | | None | | Conversion rights | | 50 common shares per share | | Liquidation preference | | None | |
Number of shares designated | | | 90,000,000 | | Number of shares issued and outstanding as of: | | | | | March 31, 2026 | | | 9,690,429 | | December 31, 2025 | | | 9,690,429 | | Par value | | $ | 0.001 | | Voting rights | | 1 vote per share | | Dividend rights | | None | | Redemption rights | | None | |
The Company issued shares of preferred stock, common stock, and warrants in connection with financing activities during the three months ended March 31, 2026 and the years ended December 31, 2025 and 2024. Such activities are summarized as follows: During the three months ended March 31, 2026: On February 3, 2026, the Company sold 350,000 Warrant Units to a private investor at $1.00 per Unit and received cash proceeds of $350,000. Each Unit consists of one Pre-Funded Warrant to purchase one share of Common Stock at $0.001 per share. All warrants were fully vested upon issuance and the warrant agreement did not specify an expiration date. During the year ended December 31, 2025: | i) | On June 24, 2025, the Company issued 135,000 shares of common stock at $1.00 per share to a private investor and received cash proceeds of $135,000. | | | | | ii) | On June 24, 2025, the Company issued 15,000 shares of Preferred Stock Series B to a consultant for services with a fair value of $750,000. | | | | | | The Company’s Preferred Stock Series B is not traded on a public exchange and therefore lacks an observable market price. As a result, the Company estimated the fair value of such shares in accordance with the provisions of ASC 718, Compensation - Stock Compensation. Specifically, each share of Preferred Stock Series B was deemed to have a value of $50 per share as each such share is convertible into 50 shares of Common Stock. Further, each share of Common Stock was deemed by Management to have a value of $1.00 per share based upon the most recent cash the price paid per common share by third-party investors earlier in that same quarter. That value was deemed to be the best and most reliable indicator of the value for the Company’s common shares at the time of this transaction. Therefore, the value of $750,000 was calculated as follows: |
Quantity of Preferred Stock Series B shares issued | | | 15,000 | | Conversion ratio of Preferred Stock Series B into Common Stock | | | 50 | | Equivalent quantity of common shares | | | 750,000 | | Cash offering price of common shares | | $ | 1.00 | | Value of Preferred Stock Series B shares issued | | $ | 750,000 | |
| iii) | On June 24, 2025, the Company extended the expiration date of certain outstanding warrants held by a private investor for the purchase of up to 1,000,000 shares of Common Stock at $3.50 per share to a new expiration date of July 27, 2027. The Company did not receive any consideration for this action nor did it attribute any value to it. | | | | | iv) | On various dates from July 23, 2025 through September 23, 2025, the Company sold a total of 1,685,000 Warrant Units to private investors at $1.00 per Unit for the purchase of up to a total of 3,370,000 shares of Common Stock and received cash proceeds of $1,685,000 | | | | | | Each Unit consists of one Series A Warrant to purchase one share of Common Stock at $3.50 per share and one Pre-Funded Warrant to purchase one share of Common Stock at $0.001 per share. All warrants were fully vested upon issuance and expire on various dates from September 24, 2030 to October 8, 2030. Such Units, and specifically the Pre-Funded Warrants contained within, were accounted for as equity instruments in accordance with the provisions of ASC 815-40-25 because: |
| · | The warrants are indexed to the Company’s common stock; | | · | The Company is not required to settle the warrants with cash; | | · | The Company has sufficient authorized and unissued shares available to settle the warrants; and | | · | The warrants contain an explicit limit on the number of shares to be delivered upon settlement. |
| v) | On October 28, 2025, the Company issued 1,600,000 shares of Preferred Stock Series A to a related party as partial compensation valued at $1,600 for consulting services as further described in Note 21, Related Party Transactions. | | | | | | Shares of Preferred Stock Series A have voting rights, but they do not accrue dividends nor do they have any redemption rights, conversion rights, or liquidation preferences. Therefore, consistent with previous accounting for such issuances, such shares were valued at their par value of $0.001 per share. |
| vi) | On October 30, 2025, the Company issued 10,000 shares of Preferred Stock Series B to a related party, the Company’s President and CEO, as compensation valued at $500,000 for services performed in connection with an acquisition in October 2025 as further described in Note 3, Acquisition, and Note 21, Related Party Transactions. This amount was recorded as an expense in the statement of operations and classified in general and administrative expenses. | | | | | | The Company’s Preferred Stock Series B is not traded on a public exchange and therefore lacks an observable market price. As a result, the Company estimated the fair value of such shares in accordance with the provisions of ASC 718, Compensation - Stock Compensation. Specifically, each share of Preferred Stock Series B was deemed to have a value of $50 per share as each such share is convertible into 50 shares of Common Stock. Further, each share of Common Stock was deemed by Management to have a value of $1.00 per share based upon the most recent cash the price paid per common share by third-party investors earlier in the same quarter. That value was deemed to be the best and most reliable indicator of the value for the Company’s common shares at the time of this transaction. Therefore, the value of $500,000 was calculated as follows: |
Quantity of Preferred Stock Series B shares issued | | | 10,000 | | Conversion ratio of Preferred Stock Series B into Common Stock | | | 50 | | Equivalent quantity of common shares | | | 500,000 | | Cash offering price of common shares | | $ | 1.00 | | Value of Preferred Stock Series B shares issued | | $ | 500,000 | |
| vii) | On December 12, 2025, the Company adopted the 2025 Sentinel Equity Incentive Plan and approved the issuance of 184,000 shares of Common Stock to employees with a fair value of $184,000 in recognition of services rendered. | | | | | | Each share of Common Stock was deemed by Management to have a value of $1.00 per share based upon the most recent cash the price paid per common share by third-party investors during the second quarter of that year. That value was deemed to be the best and most reliable indicator of the value for the Company’s common shares at the time of this transaction. |
During the year ended December 31, 2024: | i) | 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 shares pursuant to the terms of the Gladiator Stock Purchase Agreement of December 19, 2021 due to Gladiator’s lack of performance. | | | | | ii) | On April 8, 2024 and as more fully described in Note 21, Related Party Transactions, the Company issued 550,000 warrants to a related party, the Company’s majority shareholder, for the purchase of 550,000 shares of Common Stock at $3.50 per share valued at $1,138,500 as compensation for consulting services. All warrants were fully vested upon issuance and expire on April 8, 2026 |
The Company estimated the fair value of such warrants with the following inputs: Expected term (in years) | | | 2.7 | | Volatility | | | 52% | | Dividends | | None | | Risk-free interest rate | | | 4.6% | |
| iii) | On June 8, 2024 and June 28, 2024, the Company sold a total of 175,000 Units to private investors at $1.00 per Unit, issued 175,000 shares of Common Stock, and received cash proceeds of $175,000. | | | | | | Each Unit consisted of one share of Common Stock and one warrant to purchase one share of Common Stock at $3.50 per share. All warrants were fully vested upon issuance and expire on December 31, 2026. | | | | | iv) | On various dates from July 25, 2024 through August 12, 2024, the Company sold a total of 275,000 Units to private investors at $1.00 per Unit, issued 275,000 shares of Common Stock, and received cash proceeds of $275,000. | | | | | | Each Unit consisted of one share of Common Stock and one warrant to purchase one share of Common Stock at $3.50 per share. All warrants were fully vested upon issuance and expire on December 31, 2026. | | | | | v) | On August 26, 2024, the Company issued 35,000 shares of common stock at $1.00 per share to private investors and received cash proceeds of $35,000. | | | | | vi) | On September 6, 2024, the Company issued 50,000 shares of Preferred Stock Series B to a related party, the Company’s majority shareholder, as compensation valued at $2,500,000 for consulting services as further described in Note 21, Related Party Transactions. | | | | | | The Company’s Preferred Stock Series B is not traded on a public exchange and therefore lacks an observable market price. As a result, the Company estimated the fair value of such shares in accordance with the provisions of ASC 718, Compensation - Stock Compensation. Specifically, each share of Preferred Stock Series B was deemed to have a value of $50 per share as each such share is convertible into 50 shares of Common Stock. Further, each share of Common Stock was deemed by Management to have a value of $1.00 per share based upon the most recent cash the price paid per common share by third-party investors earlier in the same quarter. That value was deemed to be the best and most reliable indicator of the value for the Company’s common shares at the time of this transaction. Therefore, the value of $2,500,000 was calculated as follows: |
Quantity of Preferred Stock Series B shares issued | | | 50,000 | | Conversion ratio of Preferred Stock Series B into Common Stock | | | 50 | | Equivalent quantity of common shares | | | 2,500,000 | | Cash offering price of common shares | | $ | 1.00 | | Value of Preferred Stock Series B shares issued | | $ | 2,500,000 | |
| vii) | On October 30, 2024, the Company sold a total of 20,000 Units to private investors at $1.00 per Unit, issued 20,000 shares of Common Stock, and received cash proceeds of $20,000. | | | | | | Each Unit consisted of one share of Common Stock and one warrant to purchase one share of Common Stock at $3.50 per share. All warrants were fully vested upon issuance and expire on October 30, 2026. | | | | | viii) | On November 4, 2024, the Company sold a total of 250,000 Units to private investors at $1.00 per Unit, issued 250,000 shares of Common Stock, and received cash proceeds of $250,000. | | | | | | Each Unit consisted of one share of Common Stock and one warrant to purchase one share of Common Stock at $3.50 per share. All warrants were fully vested upon issuance and expire on December 31, 2026. | | | | | ix) | On December 9, 2024, the Company issued 50,000 shares of common stock at $1.00 per share to private investors and received cash proceeds of $50,000. |
c) | Warrant Activities | | | | Warrant activities described in detail in the preceding section for the three months ended March 31, 2026 and for the years ended December 31, 2025 and 2024 are summarized as follows: |
| | | | | | | | Weighted | | | | | | | | | | | | | Average | | | | | | | | | | Weighted | | | Remaining | | | | | | | Number | | | Average | | | Contractual | | | Aggregate | | | | Of | | | Exercise | | | Term | | | Intrinsic | | | | Warrants | | | Price | | | (In Years) | | | Value | | Outstanding and exercisable as of January 1, 2024 | | | 1,000,000 | | | $ | 3.50 | | | | 1.6 | | | $ | 2,500,000 | | Issued during 2024 | | | 1,270,000 | | | $ | 3.50 | | | | 2.2 | | | | n/a | | Outstanding and exercisable as of December 31, 2024 | | | 2,270,000 | | | $ | 3.50 | | | | 2.1 | | | $ | 3,382,300 | | Issued during 2025 | | | 3,370,000 | | | $ | 1.75 | | | | 5.1 | | | | n/a | | Outstanding and exercisable as of January 1, 2025 | | | 5,640,000 | | | $ | 2.45 | | | | 3.3 | | | $ | 20,954,615 | | Issued during 2026 | | | 350,000 | | | $ | 0.01 | | | | - | | | | n/a | | Outstanding and exercisable as of March 31, 2026 | | | 5,990,000 | | | $ | 2.45 | | | | 3.0 | | | $ | 23,361,000 | |
The aggregate intrinsic value was calculated using $6.00, $4.99, $6.17, and $6.35 per share for January 1, 2024, December 31, 2024, December 31, 2025, and March 31, 2026, respectively.
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