Quarterly report pursuant to Section 13 or 15(d)

Stockholders' Deficit

v3.8.0.1
Stockholders' Deficit
6 Months Ended
Jun. 30, 2017
Stockholders Deficit  
Stockholders' Deficit

NOTE 10 – STOCKHOLDERS’ DEFICIT

 

 Preferred stock

 

The Company is authorized to issue 50,000,000 shares of $0.001 par value preferred stock as of June 30, 2017 and December 31, 2016. As of June 30, 2017 and December 31, 2016, 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.

 

Common stock

 

The Company is authorized to issue 5,000,000,000 shares of $0.001 par value common stock as of June 30, 2017 and December 31, 2016. As of June 30, 2017 and December 31, 2016, the Company had 1,975,075,786 and 1,620,996,998 common shares issued and outstanding.

 

During the six months ended June 30, 2017, the Company issued an aggregate of 300,533,333 shares of its common stock for services rendered with an estimated fair value of $17,692,083.

 

During the six months ended June 30, 2017, the Company issued an aggregate of 29,545,455 shares of its common stock for prior year officer stock-based compensation accrual.

 

During the six months ended June 30, 2017, the Company issued an aggregate of 20,000,000 shares of its common stock as replacement shares previously canceled in 2016 as part of settlement agreement.

 

During the six months ended June 30, 2017, the Company sold an aggregate of 4,000,000 shares of its common stock for net proceeds of $60,000.

 

Options

 

The following table summarizes the stock option activity for the six months ended June 30, 2017:

 

    Shares    

Weighted-Average

Exercise Price

   

Weighted Average

Remaining

Contractual Term

   

Aggregate

Intrinsic Value

 
Outstanding at December 31, 2016     1,000,000,000     $ 0.005       8.76   $ 76,000,000  
Granted     -                        
Forfeitures or expirations     -                        
Outstanding at June 30, 2017     1,000,000,000     $ 0.005       8.51   $   15,500,000  
                                 
Exercisable at June 30, 2017     583,333,333     $ 0.005       8.51     $ 9,041,667  

 

The aggregate intrinsic value in the preceding tables represents the total pretax intrinsic value, based on options with an exercise price less than the Company’s stock price of $0.0205 as of June 30, 2017, which would have been received by the option holders had those option holders exercised their options as of that date.

 

The following table presents information related to stock options at June 30, 2017:

 

Options Outstanding     Options Exercisable  

      Exercise

     Price

   

Number of

Options

   

Weighted Average

Remaining Life

In Years

   

Exercisable

Number of

Options

 
$ 0.005       1,000,000,000     8.26       500,000,000  
                           

 

As of June 30, 2017, stock-based compensation of $750,000 remains unamortized and is expected to be amortized over the weighted average remaining period of 1.25 years.

 

The stock-based compensation expense related to option grants was $150,000 and $300,000 during the three and six months ended June 30, 2017 and $150,000 and $300,000 during the three and six months ended June 30, 2016, respectively.

 

Restricted Stock Units (“RSU”)

 

The following table summarizes the restricted stock activity for the three months ended June 30, 2017:

 

Restricted shares units issued as of December 31, 2016     10,000,000  
Granted      
Forfeited      
Total Restricted Shares Issued at June 30, 2017     10,000,000  
Vested at June 30, 2017      
Unvested restricted shares as of June 30, 2017     10,000,000  

 

As of June 30, 2017, stock-based compensation related to restricted stock awards of $76,875 remains unamortized and is expected to be amortized over the weighted average remaining period of 0.75 years.