Quarterly report pursuant to Section 13 or 15(d)

Note 7 - STOCKHOLDERS' DEFICIT

v3.19.1
Note 7 - STOCKHOLDERS' DEFICIT
3 Months Ended
Mar. 31, 2019
Disclosure Text Block Supplement [Abstract]  
Shareholders' Equity and Share-based Payments [Text Block]

NOTE 7 – STOCKHOLDERS’ DEFICIT


Preferred Stock


The Company has authorized 10,000,000 shares of undesignated preferred stock with a $0.001 par value. As of March 31, 2019, no preferred shares have been issued and these shares are considered blank check preferred shares with no terms, limitations, or rights associated with them.


Common Stock


The Company has authorized 200,000,000 shares of common stock with a $0.001 par value per share. The holders of common stock are entitled to one vote for each share of common stock held at the time of vote. As of March 31, 2019, the Company has deemed 19,218,958 shares outstanding or deemed outstanding.


Shares Issued for Services


On August 8, 2018, the Company entered into a one-year agreement with an advisor for consulting services. Pursuant to the agreement, as amended, the Company has the right to pay $5,000 or issue the advisor a maximum of 6,667 shares of common stock on a quarterly basis, beginning the quarter ended December 31, 2018. The Company elected to issue 6,667 shares for the services provided in the quarter ended March 31, 2019 at a value of $0.04 per share or $280.


On August 28, 2018, the Company entered into a one-year agreement with an advisor for consulting services. Pursuant to the agreement, as amended, the Company has the right to pay $5,000 or issue the advisor a maximum of 6,667 shares of common stock on a quarterly basis, beginning the quarter ended December 31, 2018. The Company elected to issue 6,667 shares for the services provided in the quarter ended March 31, 2019 at a value of $0.04 per share or $280.


Warrants


The following table summarized the warrant activity for the three months ended March 31, 2019:


                   

Weighted

         
           

Weighted

   

Average

         
           

Average

   

Remaining

   

Aggregate

 
   

Number of

   

Exercise

   

Contractual

   

Intrinsic

 

Warrants

 

Shares

   

Price

   

Term

   

Value

 

Balance Outstanding, December 31, 2018

    402,250     $ 0.40       4.72     $ -  

Granted

    -       -       -       -  

Forfeited

    -       -       -       -  

Exercised

    -       -       -       -  

Expired

    -       -       -       -  

Balance Outstanding, March 31, 2019

    402,250     $ 0.40       4.48     $ -  
                                 

Exercisable, March 31, 2019

    402,250     $ 0.40       4.48     $ -  

Options


On January 14, 2019, the Board of Directors approved the issuance of options to purchase an aggregate of 800,000 and 200,000 share of common stock to Boris Goldstein and Vadim Sakharov, respectively. The options have an exercise price of $0.75 per share which will vest over a 24-month period as follows: 25% (or 200,000 and 50,000, respectively) shall vest six months after the grant date with the remaining options will vest on a monthly basis at a rate of 1/24th per month. The options will expire on January 14, 2029. The aggregate fair value of $17,111 was calculated using the Black-Scholes pricing model with the following assumptions: (i) expected life 10 years, (ii) volatility of 77%, (iii) risk free rate of 2.71% (iv) dividend rate of zero, (v) stock price of $0.042, and (vi) exercise price of $0.75. The expense will be amortized over the vesting period and a total of $3,114 was recorded during the three months ended March 31, 2019.


On January 25, 2019, the Company appointed Jesse W. Crowne as the Company’s new Chief Executive Officer. In connection with this appointment, the Company and Mr. Crowne entered into an employment agreement effective as of January 25, 2019. As part of his compensation, Mr. Crowne received options to purchase 800,000 shares of the Company’s common stock at an exercise price of $0.75 per share, of which 200,000 vest on the one year anniversary of the date of grant and the remaining 600,000 shares vest ratably on a quarterly basis over the following two years. The options will expire January 25, 2029. Under certain circumstances, the Company would be obligated to grant options to purchase an additional 200,000 shares at substantially similar terms. The fair value of $13,714 was calculated using the Black-Scholes pricing model with the following assumptions: (i) expected life 10 years, (ii) volatility of 77%, (iii) risk free rate of 2.76% (iv) dividend rate of zero, (v) stock price of $0.042, and (vi) exercise price of $0.75. The expense will be amortized over the vesting period and a total of $1,220 was recorded during the three months ended March 31, 2019.


The following table summarized the option activity for the three months ended March 31, 2019:


                   

Weighted

         
           

Weighted

   

Average

         
           

Average

   

Remaining

   

Aggregate

 
   

Number of

   

Exercise

   

Contractual

   

Intrinsic

 

Options

 

Shares

   

Price

   

Term

   

Value

 

Balance Outstanding, December 31, 2018

    -     $ -       -     $ -  

Granted

    1,800,000       0.75       10       -  

Forfeited

    -       -       -       -  

Exercised

    -       -       -       -  

Expired

    -       -       -       -  

Balance Outstanding, March 31, 2019

    1,800,000     $ 0.75       9.81     $ -  
                                 

Exercisable, March 31, 2019

    -     $ -       -     $ -  

For future periods, the remaining value of the stock options totaling approximately $26,491 will be amortized into the statement of operations consistent with the period for which the services will be rendered.