Note D - Stockholders' Equity

3 Months Ended

Mar. 31, 2019

STOCKHOLDERS' EQUITY (DEFICIT)

Note D - Stockholders' Equity

Common Stock

We are authorized to issue 2,000,000,000 shares of our $.0001 par value common stock, of which 16,712,819 shares were issued and outstanding at March 31, 2019 and December 31, 2018.

During August and September 2016, we sold 33,058 shares of our common stock, with warrants to purchase an additional 545,454 shares of our common stock, to a group of private investors for $100,000. The warrants were issued prior to the reverse merger (Note A) and were subsequently still deemed issued and outstanding. The Series A and B warrants have expired, while the Series C warrants expire on June 30, 2019. The warrants were originally exercisable at prices between $0.55 and $2.20 share at any time between June 30, 2017 and June 30, 2019. Each series of warrants was valued using the Black-Scholes Options Pricing Model resulting in total warrant value of $85,833. The remaining proceeds of $14,167 were allocated to the common stock. Black-Scholes data inputs used to value the warrants are as follows:

Warrants		Stock Price				Exercise Price				Expected Life (Yrs)				Risk-Free Rate				Warrant Value				Number of Warrants				Extended Value
Series A (expired)		$	.275			$	.55				.75				.54	%		$	.1168				181,818			$	21,249
Series B (expired)		$	.275			$	1.10				1.75				.69	%		$	.1639				181,818			$	29,817
Series C		$	.275			$	2.20				1.75				.85	%		$	.1912				181,818			$	34,767
Total																										$	85,833

During May and June 2018, various Series B warrant holders elected to exercise their warrants prior to their June 30, 2018 expiration. As such, the Company issued 19,636 shares of common stock at $1.10 per share for $21,600.

The following table represents the warrant activity for the periods presented;

				Number of Warrants

	Balance, December 31, 2017				545,454
	Granted				(19,636	)
	(Exercised)				(162,182	)
	(Forfeited/expired)				(181,818	)
	Balance, December 31, 2018				181,818
	Granted				—
	(Exercised)				—
	(Forfeited/expired)				—
	Balance, March 31, 2019				181,818

Debt Conversion

As summarized below, various noteholders elected to convert their notes payable into shares of our common stock in accordance with terms of their promissory notes(Note C). Our former officer, Philip Grey, converted his accrued wages as well.

Name						Principal				Interest				Total Converted				Conversion Rate Per Share				Post-Split Shares Issued Upon Conversion
Gulf Coast Capital			January 8, 2018			$	24,090			$	21,376			$	45,466			$	.275			165,331
Mark Bogani			January 8, 2018				12,500				188				12,688				.275			46,138
Stephen Calandrella			January 8, 2018				25,000				375				25,375				.275			92,273
Clifford Thygesen			January 8, 2018				100,000				6,313				106,313				.275			386,593
Kevin Curtis			January 8, 2018				25,000				125				25,125				.275			91,364
Phillip Grey			January 8, 2018				12,500				375				12,875				.275			46,818
Phillip Grey*			January 8, 2018				38,500				—				38,500				.402			95,890
Total						$	237,590			$	28,752			$	266,342				—			924,407

* Represents accrued wages converted at a rate agreed upon by management.

Preferred Stock

Our Articles of Incorporation provide that we may issue up to 10,000,000 shares of various series of preferred stock. Subject to the requirements of the Colorado Business Corporation Act, the Board of Directors may issue the preferred stock in series with rights and preferences as the Board of Directors may determine appropriate, without shareholder approval. As of March 31, 2019, and December 31, 2018, 4,500,000 Series B Preferred shares had been authorized for issuance, and 240,000 Series B preferred shares were issued and outstanding. These 240,000 Series B shares are convertible into 10,909 common shares.