Note 9 - Stockholders' Deficit

12 Months Ended

Dec. 31, 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 year ended December 31, 2014, we issued a total of 178,842,449 shares of our common stock: 388 shares at $1 par value in rounding up shares in the reverse stock split; 39,668 shares at $99 par value to extinguish an obligation for unissued common shares; 158,062,393 shares for conversion of debt with a total value of $1,796,319; and 20,740,000 shares for services with a total value of $2,038,345.  Certain officers and directors also exchanged 9,300,000 shares of common stock for 186,000 shares of Series BB Preferred Stock recorded at the $186 par value of the preferred stock.

During the year ended December 31, 2013, we issued a total of 1,135,147 shares of our common stock and at December 31, 2013 had 39,668 unissued common shares: 23,905 shares at par value to extinguish an obligation for unissued common shares; 551,116 issued shares and 34,668 unissued shares for services with a total value of $1,648,655; and 560,126 issued shares and 5,000 unissued shares for conversion of debt with a total value of $2,137,572.  We also cancelled 262 unissued common shares at par value.

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.

On July 31, 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 BB Preferred Stock (the “Series BB Preferred Stock”), and has authorized the issuance of up to 5,000,000 shares of such Series BB Preferred Stock.  Among other things, the Series BB Preferred Stock allows holders thereof voting rights equal to holders of common stock as a single class with respect to all matters submitted to holders of common stock, quarterly dividends payable in arrears in either cash or in kind, liquidation preferences, and is convertible at the option of the holder into 50 common shares of the Company.

On August 15, 2014, a total of 186,000 shares of Series BB Preferred Stock was issued to two officers and one of our founders upon their surrender of a total of 9,300,000 shares of common stock.

As of December 31, 2014, we had several convertible debentures and related accrued interest payable that were convertible into approximately 1,900,000,000 shares of our common stock.  We had 500,000,000 common shares authorized and 170,767,039 common shares issued and outstanding.  We will be required to increase the number of authorized shares of common stock in the event all convertible debt is converted into shares of our common stock.