STOCKHOLDERS’ DEFICIT

12 Months Ended

Dec. 31, 2023

Equity [Abstract]

STOCKHOLDERS’ DEFICIT

NOTE 12 - STOCKHOLDERS’ DEFICIT

Preferred stock

The Company is authorized to issue up to 10,000,000 shares of one or more series of preferred stock at a par value of $1.00 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 non-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.

During the year ended December 31, 2022, 22,775 Series A Stock was converted into common stock and 40,000 of common stock was converted into Series A Stock. There were no conversions during the year ended December 31, 2023.

As at December 31, 2023 and 2022, 84,416 shares of Series A Stock were issued and outstanding.

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.

During the year ended December 31, 2022, the Company issued 2,000,000 shares of Series B Preferred Stock valued at $52,594 as a deposit on the acquisition of LTB.

Series B preferred stock

During the year ended, 20,000 Series B Stock was converted into common stock at $0.0001 per common share.

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

Series C preferred stock

In March 2023, the Company issued 100,000 shares of its Series C preferred stock (“Series C Stock”) in connection with the investment in LTB (Note 6). The shares of Series C Stock are each convertible into 1,250 shares of the Company’s common stock.

Each share of Series C Stock 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 C 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 C Stock will receive a dividend on the number of shares of common stock into which each share of Series C Stock is convertible.

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 December 31, 2023, 440,752,302 (December 31, 2022 - 274,124,622) shares of common stock were issued and outstanding.

Stock purchase warrants

A summary of the Company’s stock purchase warrant activity is as follow: 

	Number of stock purchase warrants		Weighted average exercise price
Stock purchase warrants outstanding December 31, 2022 and 2021		1,497,778	$	0.79
Stock purchase warrants issued		27,224,962		0.02
Stock purchase warrants outstanding December 31, 2023		28,722,740	$	0.06

A summary of the Company’s number of stock purchase warrants outstanding and exercisable for period ended December 31, 2023 is as follows: 

	Number of stock purchase warrants		Weighted average exercise price		Weighted average remaining life (Years)
July 2, 2024	#	1,020,000	$	1.02		0.50
May 10, 2026	#	477,778	$	0.30		2.36
November 22, 2028	#	27,224,962	$	0.02		4.89

During the year ended December 31, 2023, 27,224,962 warrants, each entitling the holder to purchase one common stock of the Company at $0.02 per share, with a termination date of November 22, 2028, were issued in respect of the LTB transaction (Note 3) (December 31, 2022 - nil).

During the year ended December 31, 2023, the Company corrected an error in the accounting treatment associated with the warrants that were issued during the year ended December 31, 2019 as origination fees associated with a promissory note and loan granted during that year. The value of the warrants should have been expensed upon issuance. The correction of the error resulted in a $271,470 increase to additional paid-in capital and an equivalent decrease to opening accumulated deficit for the year ended December 31, 2023.

A summary of the Company’s weighted average inputs used in the Black-Scholes pricing model for valuation of stock purchase warrants for the year ended December 31, 2023 is as follows: 

	2023
Stock price	$0.006
Exercise price	$0.020
Expected annual dividend yield	0.00%
Risk-free interest rate (1)	3.84%
Expected volatility	253.71%
Expected life	5 years

(1) 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.