STOCKHOLDERS’ EQUITY

9 Months Ended

Sep. 30, 2023

Equity [Abstract]

STOCKHOLDERS’ EQUITY

NOTE 10 - STOCKHOLDERS’ EQUITY

Preferred stock

The Company is authorized to issue up to 3,100,000 shares of one or more series of preferred stock at a par value of $0.0001 per share. The Board of Directors may, without stockholder approval, determine the dividend rates, redemption prices, preferences on liquidation or dissolution, conversion rights, voting rights, and any other preferences.

Series A preferred stock

In April 2018, the Company issued 60,000 shares of its series A convertible preferred stock (“Series A Stock”) for $1.00 per share to certain investors who then became members of management and the Board of Directors. Each share of Series A Stock is not redeemable, entitles the holder to 1,250 votes on all matters submitted to a vote of the shareholders; is convertible into 1,250 shares of common stock and each vote is on an as-converted basis. In addition, the holders of outstanding Series A Stock will only be entitled to receive dividends upon declaration by the Board of Directors of a dividend payable on the Company’s common stock, whereupon the holders of the Series A Stock will receive a dividend on the number of shares of common stock into which each share of Series A Stock is convertible.

The beneficial conversion feature (“BCF”) attributed to the purchase of Series A Stock was deemed to have no value on the date of purchase because there was no public trading market for the Series A Stock, and none is expected to develop in the future. Therefore, the BCF related to the Series A Stock was considered to have no value on the date of issuance.

As at September 30, 2023, 84,416 (December 31, 2022 - 84,416) shares of Series A Stock were issued and outstanding.

Series B preferred stock

In August 2019, the Company closed an offering of up to $3 million of units at a price of $1.00 per unit. Each unit consisted of one share of series B convertible preferred stock (“Series B Stock”) and one common stock purchase warrant (“Common Warrant”) with no expiry date. Each Series B Stock is convertible into one share of the Company’s common stock at the election of the holder. Each Common Warrant is exercisable to purchase one share of common stock at the election of the holder at an exercise price of $2.00 per share, which offering is to be offered only to “accredited investors,” as that term is defined in Rule 501 of Regulation D of the Securities and Exchange Commission regulations. As at December 31, 2020, the Company had accepted $475,000 in subscriptions in this offering.

As at September 30, 2023, 2,455,000 (December 31, 2022 - 2,475,000) shares of Series B Stock and Common Warrants were issued and outstanding.

Common stock

The Company is authorized to issue 5,000,000,000 shares of common stock at a par value $0.0001 per share. As at September 30, 2023, 294,764,614 (December 31, 2022 - 274,124,622) shares of common stock were issued and outstanding.

Stock purchase warrants

A summary of the Company’s number of stock purchase warrants outstanding and exercisable for period ended September 30, 2023 is as follows: 

	Number of stock purchase warrants		Weighted average exercise price		Weighted average remaining life
July 1, 2024	$	1,019,750	$	1.33		0.75

There was no warrant activity during the periods ended September 30, 2023 and December 31, 2022.

During the three and nine months ended September 30, 2023, the Company recorded $45,245 (2022 - $45,245) and $135,734 (2022 - $135,734), respectively, in stock-based compensation related to issued warrants being recognized over a five-year period.

A summary of the Company’s assumptions used in the Black-Scholes pricing model for valuation of stock purchase warrants for the periods ended September 30, 2023 and December 31, 2022 are as follows:

Expected dividend yield (1)	0.00%
Risk-free interest rate (2)	0.07%
Volatility	135%
Expected life in years	5.00

(1)	The Company has no history or expectation of paying cash dividends on its Common Stock.
(2)	The risk-free interest rate is based on the U.S. Treasury yield for a term consistent with the expected life of the awards in effect at the time of grant.