v3.22.2.2
Stockholders’ Equity
 12 Months Ended
Dec. 31, 2019
Equity [Abstract]  
Stockholders’ Equity

Note E – Stockholders’ Equity

 

Common Stock

 

We are authorized to issue 300,000,000,000 shares of our $.0001 par value common stock, of which 487,359,288 and 16,712,819 were issued and outstanding at December 31, 2019 and 2018, respectively.

 

On January 8, 2018, the Company issued 95,890 shares of our common stock to a former officer in exchange for $38,500 owed to him for services rendered during 2016 and 2017. The shares were issued at a 50% discount to the market price of the shares which resulted in a fair market value adjustment of $39,552 which was classified as an additional wage expense during the year ended December 31, 2018.

 

On February 1, 2018, the Company issued 190,000 shares of common stock based on the stock’s approximate trading price of $.80 per share for total value of $152,000. The shares were issued to an independent consultant for services rendered over the six months following issuance.

 

On October 1, 2018, the company issued 20,000 shares of our common stock at a price of $2 per share to a former consultant in exchange for $12,000 owed to him for services rendered during 2018.

 

On March 8, 2018, the Company issued 20,000 shares of common stock to an unaffiliated individual as a finder’s fee in connection with the procurement of a variable rate convertible note with an unrelated party as detailed in Note C (d). The stock was valued at $15,000 based on the per-share stock price of $.75 on the issuance date and recorded as a debt discount that was netted with the underlying convertible note and amortized to interest expense over the length of the note, which was converted in full in May 2018.

 

On May 21 through May 30, 2018, the Company issued 110,955 shares of common stock to friends and family under the Company’s Friends and Family Stock Offering at a price of $.55 per share in exchange for $61,025 in cash.

 

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 expired prior to December 31, 2018, while the Series C warrants expired 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 (expired)  $.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 remaining un-exercised warrants were forfeited and expired on June 19, 2019.

 

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

 

   Number of Warrants 
     
Balance, December 31, 2017   363,636 
Granted   - 
(Exercised)   (19,636)
(Forfeited/expired)   (162,182)
Balance, December 31, 2018   181,818 
Granted   - 
(Exercised)   - 
(Forfeited/expired)   (181,818)
Balance, December 31, 2019   - 

 

2019 Debt Conversions - Unaffiliated

 

During the year ended December 31, 2019, unaffiliated holders of our convertible notes payable elected to convert $234,678 of principal into 281,322,314 shares of our common stock and $18,766 in accrued interest into 101,256,825 shares of common stock at prices per share between $.00004 and $.21 per share at rates discounted from the stock’s fair market value on each conversion date based on discount rates specified in each respective note.

 

During the year ended December 31, 2019, unaffiliated convertible debt holders were issued 87,705,792 shares of common stock in exchange for $15,100 in conversion fees at prices between $.00008 and $.00315 at rates discounted from the stock’s fair market value on each conversion date based on discount rates specified in each respective note.

 

2018 Debt Conversions – Related Party

 

During the year ended December 31, 2018, related party holders of our convertible notes payable elected to convert $79,590 of principal into 289,417 shares of our common stock and $27,487 in accrued interest into 99,953 shares of common stock at a price of $.275 per share.

 

2018 Debt Conversions - Unaffiliated

 

During the year ended December 31, 2018, unaffiliated holders of our convertible notes payable elected to convert $427,775 of principal into 1,166,469 shares of our common stock and $13,835 in accrued interest into 35,781 shares of common stock at a price of $.275 per share.

 

 

2019 Commitment Fee Shares

 

On May 1, 2019, The Company issued 361,538 shares of common stock to the holder of convertible note as a commitment fee at a price of $.38 per share. The shares were to have been returned to the Company if the note was fully repaid and satisfied prior to 180 days from the issue date, which did not occur. The commitment fee shares were valued at $0.38 fair market value on their date of issuance, and their total value of $137,384 was recorded as a debt discount and amortized to interest expense during 2019.

 

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 December 31, 2019 and 2018, 4,500,000 Series B Convertible Preferred shares had been designated, and 240,000 Series B Convertible Preferred shares were issued and outstanding. These 240,000 Series B shares are convertible into 10,909 common shares.

 

On October 30, 2019, our Board of Directors authorized the designation of 150,000 shares of Series A Convertible Preferred Shares. These shares entitle the holder to $.01 per share dividend when declared by the Board of Directors. Each Series A share entitles the holder thereof to 1,000 votes on all matters submitted to a vote of the shareholders of the Corporation. Each Series A Convertible Preferred share may be converted into one share of our common stock.

 

On October 30, 2019, Robert W. Ferguson, our CEO, and Fred J. Popke, our COO, were each issued 40,000 shares of Series A Convertible Preferred stock at $.01 par value in exchange for $50 resulting in 80,000 shares of Series A preferred stock issued and outstanding at December 31, 2019.