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NOTE 7. CAPITAL STOCK, STOCK OPTIONS, AND INCENTIVES
 12 Months Ended
Dec. 31, 2024
Statement of Financial Position [Abstract]  
NOTE 7. CAPITAL STOCK, STOCK OPTIONS, AND INCENTIVES

NOTE 7. CAPITAL STOCK, STOCK OPTIONS, AND INCENTIVES

 

PREFERRED STOCK

 

Preferred stock, $0.001 par value, 5,000,000 shares authorized, no shares issued and outstanding as of December 31, 2024 and December 31, 2023.  The Company’s Board of Directors shall determine the rights, preferences, privileges and restrictions of the preferred stock, including dividends rights, conversion rights, voting rights, terms of redemption, liquidation preferences, sinking fund terms and the number of shares constituting any series or the designation of any series. 

 

COMMON STOCK

 

Effective February 15, 2022, the number of authorized common stock, $0.001 par value, was increased to 500,000,000 shares. 

 

Effective on July 3, 2024, the Company issued 1,495,390 shares of common stock in exchange for the release of obligations of the Company to repay expenses in the aggregate amount of $593,670 for expenses of the Company previously paid by the related parties. The shares were issued at an implied price of $0.397 per share.

 

In November 2024, the Company issued an aggregate of 2,631,543 shares of restricted common stock for gross proceeds of $2,500,000, or $0.95 per share, in a private placement. In connection with this offering, the Company incurred $27,394 in offering costs.

 

There were 9,785,056 and 5,658,123 shares of common stock issued and outstanding as of December 31, 2024 and 2023, respectively.

 

WARRANTS

 

The following is a summary of warrants for the year ended December 31, 2024: 

  

Summary of Warrants  

 

Warrants

 

 

Weighted 

 Average 

 Exercise Price

 

 

Instrinsic 

 Value

Outstanding as of December 31, 2023

-

 

$

-

 

$

-

Granted

2,975,000

 

$

0.40

 

 

 

Exercised

-

 

 

-

 

 

 

Forfeited

-

 

 

-

 

 

 

Outstanding as of December 31, 2024

2,975,000

 

$

0.397

 

$

7,000,175

 

 

 

 

 

 

 

 

Exerciseable as of December 31, 2023

-

 

$

-

 

 

 

Exerciseable as of December 31, 2024

2,975,000

 

$

0.40

 

$

7,000,175

 

The weighted-average remaining term of the warrants outstanding was 4.51 years as of December 31, 2024.

  

On July 3, 2024, the Company issued warrants (the “Warrants”) to purchase Common Stock at an exercise price of $0.3970 per share, (i) to James Askew (“Askew”), an individual, for an aggregate of 2,269,583 shares of Common Stock, and (ii) at an exercise price of $0.3970 per share to Investments AKA, LLC, a limited liability company indirectly controlled by Andre K. Agassi, for an aggregate of 705,417 shares of Common Stock. The Warrants are vested immediately. The Warrants were issued to the warrant holders in consideration of services and support previously performed and provided, and expected to be performed or provided, by the warrant holders in furtherance of the Company’s business objectives. The Company entered into a Consulting Agreement, dated July 3, 2024, with Askew with respect to his services and the issuance of his Warrants.

 

The fair value of the warrants was $619,867, which was valued using the Black-Scholes pricing model using the range of inputs as indicated below:  

 

Schedule of Warrants Valuation Assumptions  

Risk-free interest rate

4.33%

Expected term (in years)

5.00

Expected volatility

244.14%

Expected dividend yield

0.00%

 

The Company recognized $619,867 in stock-based compensation expense pertaining to these warrants during the year ended December 31, 2024, based on the vesting conditions noted above.