NOTE 14 - STOCKHOLDERS' EQUITY/(DEFICIT)

Convertible Preferred stock

The Company is authorized to issue 600,000 shares of preferred stock with no par value. As of June 30, 2025 and December 31, 2024, the Company had 80,000 shares of Series A preferred stock and 160,000 shares of Series B preferred stock issued and outstanding.

As of June 30, 2025 and December 31, 2024, each share of Series A preferred stock is entitled to one thousand (1,000) votes and is convertible into one share of common stock. 30,000 shares of Series A Preferred Stock are owned by management. The Series A Preferred Stock is not entitled to dividends and there are no liquidation rights associated with Series A. Each share of Series A Preferred Stock may be converted, at the option of the holder, into one (1) fully paid and non-assessable share of Common Stock, par value $0.001.

As of June 30, 2025 and December 31, 2024, each share of Series B stock is entitled to two thousand (2,000) votes and is convertible into one share of common stock. 120,000 shares of Series B Preferred Stock are owned by management. The Series B Preferred Stock is not entitled to dividends and there are no liquidation rights associated with Series B. Each share of Series B Preferred Stock may be converted, at the option of the holder, into one (1) fully paid and non-assessable share of Common Stock, par value $0.001.

Common stock

Nine months ended September 30, 2024

During the nine months ended September 30, 2024, the Company issued an aggregate of 1,639,519 shares of its common stock for services rendered valued at $825,530 based on the underlying market value of the common stock at the date of issuance, among which 200,043 shares valued at $110,154 were issued to the board of directors for board compensation.

During the nine months ended September 30, 2024, the Company issued an aggregate of 180,000 shares as consideration to the holders of promissory notes entering into the amended agreements to the promissory notes (see Note 9). The 180,000 shares of common stock were valued at an aggregate value of $95,350. The Company also issued 24,000 shares as additional consideration for the issuance of one promissory note (see Note 9).  The 24,000 shares of common stock were valued at a value of $11,867.

During the nine months ended September 30, 2024, the Company issued 460,477 shares of its common stock at $1.18 per share in connection with conversion of the promissory note then outstanding of $446,426 and the accrued interest on the promissory note of $7,858 and director fees of $90,000. During the nine months ended September 30, 2024, the Company also issued 224,196 shares of its common stock at $1.18 per share in connection with conversion of director fees of $265,000.

During the nine months ended September 30, 2024, the Company issued 9,374 shares of its common stock in connection with the 2023 Q4 Lucido Subscription Agreement (as defined below) and the 2023 Q4 Galligan Subscription Agreement (as defined below).

As of September 30, 2024 and December 31, 2023, the Company had 11,211,595 shares and 8,674,029 shares of common stock issued and outstanding, respectively.

Nine months ended September 30, 2025

During the nine months ended September 30, 2025, the Company issued an aggregate of 960,413 shares of its common stock for services rendered valued at $345,220 based on the underlying market value of the common stock at the date of grant among which 223,742 shares valued at $86,538 were issued to the board of directors for board compensation. No gain or loss was recognized.

During the nine months ended September 30, 2025, the Company issued an aggregate of 104,500 shares as consideration to the holders of promissory notes entering into the amended agreements to the promissory notes (see Note 10). The 104,500 shares of common stock were valued at an aggregate value of $36,800.

During the nine months ended September 30, 2025, the Company issued 1,770,452 shares of its common stock at $0.41 per share in connection with conversion of the promissory note then outstanding of $$725,000. As the fair value of the shares issued equaled the carrying amount of the note, no gain or loss was recognized. During the nine months ended September 30, 2025, the Company also issued 585,394 shares of its common stock at $0.34 per share in connection with conversion of the promissory note then outstanding of $200,000. As the fair value of the shares issued equaled the carrying amount of the note, no gain or loss was recognized. During the nine months ended September 30, 2025, the Company also issued 103,627 shares of its common stock at $0.39 per share in connection with conversion of accounts payable of $40,000. As the fair value of the shares issued equaled the carrying amount of the note, no gain or loss was recognized.

During the nine months ended September 30, 2025, one holder of the warrants elected to exercise their warrants on a cashless basis. An aggregate of 234,482 shares of common stock were issued to the holder.

During the nine months ended September 30, 2025, as part of the consideration paid to the Seller for the purchase of the assets, the Company issued 500,000 shares of the Company’s common stock at $0.31 per share.

On July 29, 2025, the Company entered into a Securities Purchase Agreement (“SPA”) with several accredited investors for the sale of 2,000,000 shares of its common stock, par value $0.001 per share, and the issuance of accompanying warrants to purchase up to 2,000,000 shares of common stock (collectively, the “Securities”).

Under the terms of this SPA, the shares were issued at a purchase price of $0.35 per share for total gross proceeds of approximately $700,000, with the initial tranche of 1,000,000 shares and warrants purchased for aggregate cash proceeds of $350,000 at closing. Each warrant entitles the holder to purchase one share of common stock at an exercise price of $0.35 per share and expires five years from the date of issuance.

The warrants are classified as equity instruments under ASC 815-40 as they are indexed to the Company’s own stock and meet the requirements for equity classification. Accordingly, the proceeds were allocated entirely to common stock and additional paid-in capital based on the relative fair value of the shares and warrants at issuance. No liability or derivative accounting was required.

As of September 30, 2025 and December 31, 2024, the Company had 20,188,029 shares and 13,299,349 shares of common stock issued and outstanding, respectively.