Annual report pursuant to Section 13 and 15(d)

STOCKHOLDERS??? DEFICIT

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STOCKHOLDERS’ DEFICIT
12 Months Ended
Dec. 31, 2021
Equity [Abstract]  
STOCKHOLDERS’ DEFICIT

NOTE 7 – STOCKHOLDERS’ DEFICIT

 

Preferred stock

 

The Company is authorized to issue 10,000,000 shares of $0.001 par value preferred stock as of December 31, 2021 and December 31, 2020. As of December 31, 2021, and 2020, the Company has designated and issued 10,000,000 shares of Class A Preferred Stock.

 

Each share of Class A Preferred Stock is entitled to 100 votes on all matters submitted to a vote to the stockholders of the Company, does not have conversion, dividend or distribution upon liquidation rights. On November 9, 2020, the Company issued 2,000,000 shares of its Class B Preferred Common Stock to Jesus Quintero. The Class B Preferred Stock carries a voting preference of One Thousand (1,000) times that number of votes on all matters submitted to the shareholders that is equal to the number of shares of Common Stock (rounded to the nearest whole number), at the record date for the determination of the shareholders entitled to vote on such matters or, if no such record date is established, at the date such vote is taken or any written consent of such shareholders is affected. The issuance constitutes a change of control of the Company, as the voting preference of the issued Class B Preferred Stock provides Mr. Quintero with the right to control a majority of the votes of shareholders eligible to cast votes on any matter brought before the stockholders. The Class B shares were valued at $2,229,027 and recognized as stock-based compensation expense during the year ended December 31, 2020. As of December 31, 2021 and 2020, there were 2,000,000 shares of Class B Preferred Stock outstanding. The Class B Preferred Stock is not convertible into common shares.

 

Common stock

 

The Company was authorized to issue 22,000,000,000 shares of $0.001 par value per share common stock as of December 31, 2021. As of December 31, 2021, and 2020, the Company had 7,122,806,264 and 3,136,774,861, respectively, common shares issued and outstanding. As of February 4, 2022, we reduced the par value of our common stock from $0.001 per share to zero par value ($0.00) per share.

 

In 2021, the Company issued an aggregate of 142,946,860 shares of its common stock for services rendered with an estimated fair value of $661,292.

 

In 2021, the Company issued an aggregate of 1,236,181,851 shares of its common stock in settlement of convertible notes payable and accrued interest with an estimated fair value of $2,309,874.

 

In 2021, the Company issued an aggregate of 22,500,000 shares of its common stock in conversion of related party notes payable with an estimated fair value of $141,750.

 

In 2021, the Company issued an aggregate of 462,844,406 common shares of its common stock in exchange for exercise of warrants on a cashless basis.

 

In 2021, the Company sold 1,052,297,599 shares of its common stock with a value of $2,201,601.

 

In 2021, the Company issued 3,027,031 shares of its common stock with an estimated value of $8,623 to settle liabilities.

 

In 2021, the Company issued 691,935,484 shares of common stock for investments with an estimated value of $1,300,000.

 

In 2021, the Company issued 265,164,070 shares of common stock issued for acquisition of business with an estimated value of $1,617,501.

 

In 2021, the Company issued 109,134,122 shares for amendment to an acquisition consideration with an estimated value of $251,008.

 

In 2020, the Company issued an aggregate of 217,396,427 shares of its common stock for services rendered with an estimated fair value of $785,861.

 

In 2020, the Company issued an aggregate of 2,291,141,317 shares of its common stock in settlement of convertible notes payable and accrued interest with an estimated fair value of $3,916,940.

 

In 2020, the Company issued an aggregate of 21,276,596 shares of its common stock in conversion of related party notes payable with an estimated fair value of $50,000.

 

In 2020, the Company issued an aggregate of 51,054,214 common shares of its common stock in exchange for exercise of warrants on a cashless basis.

 

In 2020, the Company issued 205,582,481 shares of its common stock with an estimated value of $762,723 to settle liabilities.

 

In 2020, the Company sold shares 268,679,513 shares of its common stock for proceeds of $478,686.

 

Options

 

Option valuation models require the input of highly subjective assumptions. The fair value of stock-based payment awards was estimated using the Binomial Option Pricing Model with a volatility figure derived from using the Company’s historical stock prices. Management determined this assumption to be a more accurate indicator of value. The Company accounts for the expected life of options based on the contractual life of options for non-employees. For employees, the Company accounts for the expected life of options in accordance with the “simplified” method, which is used for “plain-vanilla" options, as defined in the accounting standards codification.

 

The risk-free interest rate was determined from the implied yields of U.S. Treasury zero-coupon bonds with a remaining life consistent with the expected term of the options. 

 

In addition, the Company is required to estimate the expected forfeiture rate and only recognize expense for those shares expected to vest. In estimating the Company’s forfeiture rate, the Company analyzed its historical forfeiture rate, the remaining lives of unvested options, and the number of vested options as a percentage of total options outstanding. If the Company’s actual forfeiture rate is materially different from its estimate, or if the Company reevaluates the forfeiture rate in the future, the stock-based compensation expense could be significantly different from what the Company has recorded in the current period.

 

The following table summarizes the stock option activity for the years ended December 31, 2021 and 2020:

 

               
    Shares  

Weighted-Average

Exercise Price

 

Weighted Average

Remaining

Contractual Term

 

Aggregate

Intrinsic Value

Outstanding at December 31, 2020     16,666,667     $ 0.30       7.76     $ 15,400,000  
Granted                                 
Forfeitures or expirations                                 
Outstanding at December 31, 2021     16,666,667     $ 0.30       6.76     $ 15,296,667  
Granted                                 
Forfeitures or expirations     (16,666,667 )     0.30                  
Outstanding at December 31, 2021     0     $          —             
Exercisable at December 31, 2021     0     $          —       $     

    

The aggregate intrinsic value in the preceding table represents the total pretax intrinsic value, based on options with an exercise price less than the Company’s stock price of $0 and $0 as of December 31, 2021 and 2020, respectively, which would have been received by the option holders had those option holders exercised their options as of that date.

  

Warrants

 

The following table summarizes the stock warrant activity for the two years ended December 31, 2021:

 

               
    Shares  

Weighted-Average

Exercise Price

 

Weighted Average

Remaining

Contractual Term

 

Aggregate

Intrinsic Value

Outstanding at December 31, 2019     4,011,111       2.15                  
Granted     6,980,769       0.01                  
Exercised     (192,521 )     1.78                  
Increase due to reset provision     322,906,286       0.0004                  
Exercised     (40,843,463 )     0.0027                  
Forfeitures or expirations                                 
Outstanding at December 31, 2020     293,054,702     $ 0.0011       2.2     $ 1,023,306  
Granted     133,107,371       0.0084                  
Exercised     (271,137,466 )     0.01                  
Adjustment due to price reset provision     (9,722,222 )     0.0004                  
Forfeitures or expirations                                 
Outstanding at December 31, 2021     145,302,385     $ 0.0033       2.8     $ 70,200  
Exercisable at December 31, 2021     145,302,385     $ 0.0033       2.8     $ 70,200  

 

Certain warrants issued to debt holders have reset provisions whereby upon subsequent issuances of common stock at a price below the current exercise price, the number of warrants increase and the exercise price is reduced to the new price. The aggregate intrinsic value in the preceding tables represents the total pretax intrinsic value, based on warrants with an exercise price less than the Company’s stock price of $0.0012 and $0.004 as of December 31, 2021 and 2020, respectively, which would have been received by the warrant holders had those option holders exercised their warrants as of that date.