Note 9 - Stockholders' Deficit

6 Months Ended

Jun. 30, 2014

Notes

Note 9 - Stockholders' Deficit

NOTE 9 – STOCKHOLDERS’ DEFICIT

As discussed in Note 1, stockholders holding a majority of the voting power of the our outstanding voting stock, as well as our Board of Directors, approved an amendment to our Articles of Incorporation dated December 30, 2013 to (a) effect a reverse stock split of our common stock by a ratio of one-for-seven hundred fifty (1:750) and (b) reduce the number of authorized shares of common stock from 1,500,000,000 to 50,000,000.  The Financial Industry Regulatory Authority (“FINRA”) approved the reverse stock split effective January 13, 2014, and the reverse stock split has been given retroactive effect in our consolidated financial statements for all periods presented.

During the six months ended June 30, 2014, we issued a total of 24,655,740 shares of our common stock: 39,668 shares at par value for 39,668 unissued common shares; 388 shares valued at $1 for rounding in the reverse stock split; 16,540,000 shares valued at $1,660,346 for services; and 8,075,684 shares with a total value of $951,103 for conversion of debt.

During the six months ended June 30, 2013, we issued a total of 26,535 shares of our common stock: 28,165 shares at par value for 28,165 unissued common shares, 8,733 shares valued at $110,500 for services, and 7,426 shares and 3,999 unissued common shares with a total value of $417,280 for conversion of debt.

During the six months ended June 30, 2013, we issued 200,000 shares of preferred stock for $100,000 cash.  The preferred shares were cancelled later in 2013.

On June 13, 2014, the Company filed a Certificate of Designations, Preferences and Rights (the “Certificate”) with the Nevada Secretary of State to establish a class of preferred stock designated as Series AA Preferred Stock (the “Series AA Preferred Stock”), and has authorized the issuance of up to 1,000,000 shares of such Series AA Preferred Stock.  Among other things, the Series AA Preferred Stock allows holders thereof enhanced voting rights based on ten thousand (10,000) votes per share of the Company’s common stock held by such holders of Series AA Preferred Stock.  The Series AA Preferred Stock is not convertible into common stock, does not pay dividends, and does not include a liquidation preference.

On June 19, 2014, 20,000 shares of Series AA Preferred Stock were issued to each of the four members of the Company’s Board of Directors for services and valued at par value totaling $80.