Shareholders’ Deficit

12 Months Ended

Dec. 31, 2021

Equity [Abstract]

Shareholders’ Deficit

Note 6 - Shareholders’ Deficit

Preferred Stock

The Company has authorized 5,000,000 shares of preferred stock which have been designated as follows:

	Number of Shares Authorized		Number of Shares Outstanding at December 31, 2021		Par Value		Liquidation Value per Share
Series AA		1,000,000		25,000	$	0.0010		-
Preferred Series B		50,000		600	$	0.0001		100
Preferred Series C		8,000		738	$	0.0001		1,000
Preferred Series D		20,000		305	$	0.0001		1,000
Undesignated		3,922,000		-		-		-

Series AA Preferred Shares

On February 22, 2013, the Board of Directors of the Company authorized an amendment to the Company’s Articles of Incorporation, as amended (the “Articles of Incorporation”), in the form of a Certificate of Designation that authorized the issuance of up to one million (1,000,000) shares of a new series of preferred stock, par value $0.001 per share, designated “Series AA Super Voting Preferred Stock,” for which the board of directors established the rights, preferences and limitations thereof.

Each holder of outstanding shares of Series AA Super Voting Preferred Stock shall be entitled to one hundred thousand (100,000) votes for each share of Series AA Super Voting Preferred Stock held on the record date for the determination of stockholders entitled to vote at each meeting of stockholders of the Company. As of December 31, 2021, and 2020, there were and 25,000 shares of Series AA Preferred stock outstanding.

Series B Convertible Preferred Stock

On February 7, 2017, the Company filed a certificate of designation for 50,000 shares of Series B Convertible Preferred Stock designated as Series B (“Series B”) which are authorized and convertible, at the option of the holder, commencing six months from the date of issuance into common shares and warrants. For each share of Series B, the holder, on conversion, shall receive the stated value divided by 75% of the market price on the date of purchase of Series B and a three-year warrant exercisable into up to a like amount of common shares with an exercise price of 150% of the market price as defined in the Certificate of Designation. Dividends shall be paid only if dividends on the Company’s issued and outstanding Common Stock are paid and the amount paid to the Series B holder will be as though the conversion shares had been issued. The Series B holders have no voting rights. Upon liquidation, the holder of Series B, shall be entitled to receive an amount equal to the stated value, $100 per share, plus any accrued and unpaid dividends thereon before any distribution is made to Series C Secured Redeemable Preferred Stock or common stockholders. There has been no activity during the year ended December 31, 2021, and 2020. As of December 31, 2021, and 2020, there are 600 shares of Series B outstanding.

Series C Secured Redeemable Preferred Stock

On December 22, 2017, the Company filed a certificate of designation for 8,000 shares of Series C Secured Redeemable Preferred Stock (“Series C”). Each share of the C Preferred is entitled to receive a $20.00 quarterly dividend commencing March 31, 2018, and each quarter thereafter and is to be redeemed for the stated value, $1,000 per share, plus accrued dividends in cash (i) at the Company’s option, commencing one year from issuance and (ii) mandatorily as of December 31, 2019. On January 29, 2020, the Company filed the amended and restated certificate of designation fort its Series C Secured Redeemable Preferred Stock. The amendment changed the rights of the Series C by (a) removing the requirement to redeem the Series C, (b) removing the obligation to pay dividends on the Series C, (c) Allowing the holders of shares of Series C to convert the stated value of their shares into common stock of the Company at 75% of the closing price of such common stock on the day prior to the conversion. The Series C preferred does not have any rights to vote with the common stock. Upon liquidation, the holder of Series C, shall be entitled to receive an amount equal to the stated value, $1,000 per share, plus any accrued and unpaid dividends thereon before any distribution is made to common stockholders but after distributions are made to holders of Series B.

Management reviewed the guidance in ASC 470-60 Troubled Debt Restructurings and ASC 470-50 Debt Modifications and Extinguishments and concluded that the changes to the terms of the Series C qualified for debt extinguishment and recorded a loss on debt extinguishment totaling approximately $604,000 for the year ended December 31, 2020.

Management determined the fair value of the new instrument based on the guidance in ASC 820 Fair Value Measurement. Management concluded that the preferred stock should not be classified as a liability per the guidance in ASC 480 Distinguishing Liabilities from Equity even though the conversion would require the issuance of variable number of shares since such obligation is not unconditional. Management classified the Series C in permanent equity as of December 31, 2021, and 2020.

During the year ended December 31, 2021, and 2020, the Company converted 25 and 1,051 shares of Series C into 1,111,111 and 2,754,822 shares of common stock, respectively. As of December 31, 2021, and 2020, there were 738 and 763 shares of Series C outstanding, respectively.

Series D Convertible Preferred Stock

On November 11, 2019, the Company filed a certificate of designation for 20,000 shares of Series D Convertible Preferred Stock designated as Series D (“Series D”), which are authorized and convertible, at the option of the holder, at any time from the date of issuance, into shares of common shares. On or prior to August 1, 2020, for each share of Series D, the holder, on conversion, shall receive a number of common shares equal to 0.01% of the Company’s issued and outstanding shares on conversion date and for conversion on or after August 2, 2020, the holder shall receive conversion shares as though the conversion date was August 1, 2020, with no further adjustments for issuances by the Company of common stock after August 1, 2020, except for stock split or reverse stock splits of the common stock.

The Series D holders have no voting rights. Upon liquidation, the holder of Series D, shall be entitled to receive an amount equal to the stated value, $1,000 per share, plus any accrued and unpaid dividends thereon before any distribution is made to common stockholders.

During the years ended December 31, 2021, and 2020, 0 and 50 shares of Series D have been issued, respectively. As of December 31, 2021, and 2020, there are 305 shares of Series D outstanding.

Common Stock

Equity Purchase Line Agreement

On May 18, 2020, the Company and Cavalry Fund I LP (the “investor”) entered into an Equity Line Purchase Agreement (“ELPA”) pursuant to which the investor committed to purchase, subject to certain restrictions and conditions, up to $10,000,000 (the “Commitment”) worth of the Company’s common stock, over a period of 24 months from the effectiveness of the registration statement registering the resale of shares purchased by the investor pursuant to the ELPA.

The Company agreed to issue shares of its common stock (the “commitment shares”) to the investor having a market value of 5% of the commitment ($500,000 and 3,859,630 shares) based on the market price of the shares at the execution of the ELPA to be delivered in three tranches of 385,963 shares on: (i) the execution of the ELPA; (ii) thirty days after the effectiveness of the registration statement to be filed under the RRA (the “registration right agreement” or the “registration statement”), and (iii) 90 trading days after the effectiveness of the registration statement with the balance of the commitment shares to be issued pro-rata over the first $3,000,000 of puts in accordance with a formula set forth in the ELPA.

The ELPA provides that at any time after the effective date of the registration statement and provided the closing sale price of the common shares on the OTCQB is not below $0.01, from time to time on any business day selected by the Company (the “Purchase Date”), the Company shall have the right, but not the obligation, to direct the investor to buy up to 300,000 shares of the common stock (the “regular purchase amount”) at a purchase price equal to the lower of: (i) the lowest applicable sales price on the date of the put and (ii) 85% of the arithmetic average of the 3 lowest closing prices for the common stock during the 10 consecutive trading days ending on the trading day immediately preceding such put date. The regular purchase amount may be increased as follows: to up to 400,000 shares of common stock if the closing price of the common shares is not below $0.25 per share and up to 500,000 shares if the closing price is not below $0.40 per share.

Under the ELPA the Company has the right to submit a regular purchase notice to the investor as often as every business day. The payment for the shares covered by each put notice will generally occur on the day following the put notice. The ELPA contains provisions which allow for the Company to make additional puts beyond the regular purchase amount at greater discounts to the market price of the common stock as forth in the ELPA.

The ELPA requires the Company to apply at least 50% of the proceeds of puts to the payment of certain variable rate convertible notes issued by the Company. The Company does not anticipate that it will raise any funds under the ELPA.

During the years ended December 31, 2021, and 2020, pursuant to the execution of the ELPA, the Company issued 0 and 771,926 shares of common stock with a fair value of $97,920. No funds were raised under the ELPA during the years ended December 31, 2021, and 2020. The Company does not anticipate that it will raise any funds under the ELPA.

Activity during the year ended December 31, 2021:

During the year ended December 31, 2021, the Company issued 27,461,307 shares of common stock for the conversion of principal notes and accrued interest for aggregate fair value of issued common stock of $1,117,990.

During the year ended December 31, 2021, the Company issued 7,868,668 shares of common stock labeled as commitment shares in connection with the issuance of promissory notes for a total fair value of approximately $223,000.

During the year ended December 31, 2021, the Company issued 7,000,000 shares of common stock pursuant to securities purchase agreement for total consideration of $126,000.

During the year ended December 31, 2021, the Company issued 1,111,111 shares of common stock with a value of $33,333, related to the conversion of Series C.

During the year ended December 31, 2021, the Company issued 4,020,986 shares of common stock with a value of $142,424, related to the settlement of debts, of which 2,505,834 shares of common stock were issued with a fair value of $84,697 to a former related party.

During the year ended December 31, 2021, the Company issued 2,500,000 shares of common stock in connection with the consulting agreement, with a fair value of approximately $95,000.

Activity during the year ended December 31, 2020:

During the year ended December 31, 2020, the Company issued 14,557,343 shares of common stock for the conversion of notes and accrued interest for aggregate fair value of issued common stock of $3,339,109.

During the year ended December 31, 2020, the Company issued 1,206,398 shares of common stock with a value of $109,800 related to services.

During the year ended December 31, 2020, the Company issued 1,234,568 shares of common stock in exchange for $100,000 cash pursuant to Securities Purchase Agreements.

During the year ended December 31, 2020, the Company issued 1,500,000 shares of common stock for total value of $165,000 in exchange for 34,690 stock options regarding the ambiguity of price adjustment in the event of a reverse split that the Company completed on December 20, 2019.

During the year ended December 31, 2020, the Company issued 58,428 shares of common stock to Series C with a value of $8,152 to induce the holders to convert into shares of common stock.

During the year ended December 31, 2020, the Company issued 2,754,822 shares of common stock with a value of $1,400,934, related to the conversion of Series C.

During the year ended December 31, 2020, the Company modified the terms of its promissory note with one investor, which extended the maturity date of its promissory note and the issuance of 500,000 restricted stock with a fair value of $55,000. The recorded of this transaction resulted in a loss on debt extinguishment of $55,000 per ASC 470-60 Troubled Debt Restructurings.

During the year ended December 31, 2020, in connection with the issuance of a new self-amortization promissory note, the Company issued 355,000 restricted shares as inducement with a fair value of $24,140.

During the year ended December 31, 2020, the Company issued 409,000 shares with a value of $58,855 to one investor to exchange one variable convertible note with remaining principal of $283,000 past maturity for a fix rate convertible note with principal of $525,000 and maturing one year from issuance. The Company recorded a loss on debt extinguishment of $151,496 for the fair value of the shares issued in accordance with guidance in ASC 470-50 Debt- Modifications and Extinguishments.

Stock Options

The Company did not issue any stock options during the year ended December 31, 2021. The Company cancelled 2,500,350 stock options during the year ended December 31, 2021.

During the year ended December 31, 2020, the Company granted stock options to independent contractor exercisable into up to 3,000,000 shares of common stock with an exercise price of $ 0.15 per share and expiration date of 2 years from the vesting date. The options shall vest in twelve equal quarterly instalments so long as the contractor remains under retention by the Company to provide service. The stock options will vest in twelve equal instalments of 250,000 shares. These options were valued at approximately $245,900 using the Black Scholes option pricing model. The Company cancelled 2,500,000 of these stock options since the contract terminated on January 1, 2021.

Share-based compensation expense for the years ended December 31, 2021, and 2020, totaled $0 and $57,400, respectively.

The weighted average grant date fair value of stock options issued during the year ended December 31, 2020, was $0.08 per share. The Company did not issue any stock options during the year ended December 31, 2021.

Stock option activities for the years ended December 31, 2021, and 2020, are as follows:

	Options			Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term (years)		Aggregate Intrinsic Value
Outstanding at December 31, 2019		99,833		$	27.81		2.02	$	-
Granted		3,000,000		$	0.15		1.65		-
Cancelled		(85,753	)	$	23.53		0.68		-
Exercised		-		$	-		-		-
Outstanding at December 31, 2020		3,014,080		$	0.37		1.67	$	-
Granted		-		$	-		-		-
Cancelled		(2,500,350	)	$	0.16		0.65		-
Exercised		-		$	-
Outstanding at December 31, 2021		513,730		$	1.43		0.76	$	-
Exercisable at December 31, 2021		513,730		$	1.43		0.76	$	-

The balance of all stock options outstanding as of December 31, 2021, is as follows:

		Outstanding						Exercisable
				Weighted
				Average		Weighted				Weighted
Range of				Remaining		Average				Average
Exercise		Number		Contractual		Exercise		Number		Exercise
Prices		Outstanding		Life		Price		Exercisable		Price
	Options
$	54.00		11,750		5.30	$	54.00		11,750	$	54.00
$	11.60		1,980		0.75	$	11.60		1,980	$	11.60
$	0.15		500,000		0.65	$	0.15		500,000	$	0.15
			513,730		0.76	$	1.43		513,730	$	1.43

Warrants

During the years ended December 31, 2021, and 2020, the Company did not issue any warrants.

A summary of the status of the warrants at December 31, 2021, and changes during the years ended December 31, 2021, and 2020, are presented below:

	Outstanding Warrants
				Weighted Average
				Exercise Price
	Shares			Per Share
Outstanding at December 31, 2019		73,486		$	306.28
Granted		-		$	-
Cancelled		(33,920	)	$	404.55
Exercised		(271	)	$	44.35
Outstanding at December 31, 2020		39,295		$	200.72
Granted		-		$	-
Cancelled		(17,095	)	$	384.39
Exercised		-		$	-
Outstanding at December 31, 2021		22,200		$	59.25
Exercisable at December 31, 2021		22,200		$	59.25

		Outstanding						Exercisable
				Weighted
				Average		Weighted				Weighted
Range of				Remaining		Average				Average
Exercise		Number		Contractual		Exercise		Number		Exercise
Prices		Outstanding		Life		Price		Exercisable		Price
	Warrants
$	14.50-50.00		10,326		0.35	$	32.64		10,326	$	32.64
$	51.00-100.00		10,595		0.29	$	77.47		10,595	$	77.47
$	101.25-239.00		1,203		0.30	$	114,19		1,203	$	114.19
$	266.88		76		0.30	$	266.88		76	$	266.88
			22,200		0.32	$	59.25		22,200	$	59.25