Note 9 - Stockholders' Deficit

12 Months Ended

Dec. 31, 2015

Notes

Note 9 - Stockholders' Deficit

Note 9 – Stockholders' Deficit

On March 3, 2016, the holders with the power to vote more than a majority of the outstanding common stock of the Company approved an amendment to the Company's Articles of Incorporation to effect the authorized share increase in our common stock from 500,000,000 shares to two billion (2,000,000,000) shares of common stock. The amendment became effective April 8, 2016.

Previously, 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.

The increase in the authorized shares of common stock and the reverse stock split have been given retroactive effect in our consolidated financial statements for all periods presented.

We have authorized the issuance of up to 1,000,000 shares of 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. In June 2014, 20,000 shares of Series AA Preferred Stock were issued to each of the four members of the Company's Board of Directors. Effective January 1, 2016, we cancelled 20,000 shares of Series AA Preferred Stock upon the resignation of a Director.

We have also authorized the issuance of up to 5,000,000 shares of Series BB Preferred Stock. Among other things, the Series BB Preferred Stock allows holders thereof voting rights, on an as-converted basis, 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 shares of common stock of the Company. In August 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.

During the year ended December 31, 2015, we issued a total of 261,357,966 shares of our common stock with a total value of $1,245,158 for conversion of debt.

During the year ended December 31, 2015, 10,000,000 shares of our common stock were surrendered to the Company at par value of $25,000 and cancelled.

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.

As of December 31, 2015, we had several convertible debentures and related accrued interest payable that were convertible into approximately 2,496,336,000 shares of our common stock. We have 2,000,000,000 common shares authorized will be required to again increase the number of authorized shares of common stock in the event all convertible debt is converted into shares of our common stock.

As of December 31, 2015, we had certain penalties on delinquent convertible debentures and pending debenture conversions that are payable in shares of our common stock. We record these obligations at the current market value of our common stock, marking the obligations to market at each reporting date. We recognize the change in the market value as gain or loss on debt payable in shares in other income (expense) in our consolidated statements of operations. For the year ended December 31, 2015, we recognized a gain on debt payable in shares of $47,057.