NOTE 8: STOCKHOLDERS' DEFICIT |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| NOTE 8: STOCKHOLDERS' DEFICIT | NOTE 8: STOCKHOLDERS’ DEFICIT
Common Stock
The Company is authorized to issue 500,000,000 shares of common stock, $0.001 par value per share. As of June 30, 2026 and December 31, 2025, 9,536,357 and 8,581,357 shares of common stock were issued and outstanding, respectively.
During the three months ended June 30, 2026, the Company issued 120,000 shares of common stock for services at an aggregate fair value of $108,000, and 470,000 shares of common stock in satisfaction of accrued Series B Preferred Stock interest at an aggregate fair value of $423,000. During the six months ended June 30, 2026, the Company issued an aggregate of 485,000 shares of common stock for services and settlement at an aggregate fair value of $517,800, and 470,000 shares of common stock in satisfaction of accrued preferred stock interest at an aggregate fair value of $423,000. In each case the fair value was based on the closing market price of the Company’s common stock on the respective issuance dates. The fair value of shares issued for services and settlement was recorded as stock-based compensation and settlement expense within general and administrative expenses.
Preferred Stock
The Company is authorized to issue 2,000,000 shares of preferred stock with a par value of $0.001 per share, of which 500 have been authorized as Series A Preferred Stock and 3,000 have been authorized as Series B Preferred Stock. As of June 30, 2026 and December 31, 2025, 500 shares of Series A Preferred Stock and 3,000 shares of Series B Preferred Stock were issued and outstanding. For the three months ended June 30, 2026 and 2025, the Company incurred $105,000 and $60,000, respectively, and for the six months ended June 30, 2026 and 2025, the Company incurred $210,000 and $120,000, respectively, of interest from the outstanding preferred stock. On May 20, 2026, the Company issued 470,000 shares of common stock to Emerging Growth, LLC in satisfaction of $423,000 of accrued Series B Preferred Stock interest.
Warrants
During the six months ended June 30, 2026, the Company issued immediately exercisable five-year warrants to purchase an aggregate of 80,000 shares of common stock at an exercise price of $0.50 per share to lenders in connection with the issuance of the 2026 promissory notes. The relative fair value of these warrants of $28,132 was recorded as a debt discount and additional paid-in capital and is being amortized to interest expense over the term of the related notes. See Note 7.
On May 20, 2026, the Company issued immediately exercisable ten-year warrants to purchase up to 500,000 shares of common stock at an exercise price of $0.50 per share to each of Brian Ross, the Company's President and Chief Executive Officer and a director, and Mario Marsillo Jr., the Company's Chief Business Officer and a director, in consideration of each executive officer's and director's services to the Company and in connection with their continuing deferral of compensation. The aggregate fair value of these warrants of $900,000 was recorded as stock-based compensation expense within general and administrative expenses for the three and six months ended June 30, 2026. See Note 11.
Details of warrants outstanding as of June 30, 2026 as follows:
As of June 30, 2026, all outstanding warrants were fully vested and there was no remaining unrecorded compensation expense. |