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STOCKHOLDERS' DEFICIT
12 Months Ended
Dec. 31, 2019
Equity [Abstract]  
STOCKHOLDERS’' DEFICIT

NOTE 8 – STOCKHOLDERS’ DEFICIT

 

Series A Preferred Stock

 

The Company is authorized to issue 100,000 shares of $0.001 par value Series A preferred stock (“Series A”). There were fourteen (14) shares of Series A preferred stock outstanding as of December 31, 2019 and 2018. The holders of Series A preferred stock are entitled to one vote per share on an “as converted” basis on all matters submitted to a vote of stockholders and are not entitled to cumulate their votes in the election of directors. The holders of Series A preferred stock are entitled to any dividends that may be declared by the Board of Directors out of funds legally available, therefore on a pro rata basis according to their holdings of shares of Series A preferred stock, on an as converted basis. In the event of liquidation or dissolution of the Company, holders of Series A preferred stock are entitled to share ratably in all assets remaining after payment of liabilities and have no liquidation preferences. Holders of Series A preferred stock have a right to convert each share of Series A into 780 shares common stock.

 

Common Stock

 

The Company is authorized to issue 1,000,000,000 shares of $0.001 par value common stock. There were 84,153,825 and 86,797,132, respectively, shares of common stock outstanding as of December 31, 2019 and 2018. The holders of common stock are entitled to one vote per share on all matters submitted to a vote of stockholders and are not entitled to cumulate their votes in the election of directors. The holders of common stock are entitled to any dividends that may be declared by the board of directors out of funds legally available, therefore subject to the prior rights of holders of any outstanding shares of preferred stock and any contractual restrictions against the payment of dividends on common stock. In the event of liquidation or dissolution of the Company, holders of common stock are entitled to share ratably in all assets remaining after payment of liabilities and the liquidation preferences of any outstanding shares of preferred stock. Holders of common stock have no preemptive or other subscription rights and no right to convert their common stock into any other securities.

 

During the years ended December 31, 2019 and 2018, the Company issued 454,500 and 1,758,000, respectively, shares of common stock to several consultants in connection with business development and professional services. The Company valued the common stock issuances at $91,414 and $1,547,388, respectively, based upon the closing market price of the Company’s common stock on the date in which the performance was complete. The amounts were expensed to general and administrative expenses on the accompanying consolidated statements of operations.

 

During the years ended December 31, 2019 and 2018, the Company issued 40,000 and 50,000 shares of common stock to the landlord in lieu of rent, respectively. The Company valued the common stock issuance at $18,400 and $25,500, respectively, based upon the closing market price of the Company’s common stock on the date in which the performance was complete. The amount was expensed to general and administrative expenses on the accompanying consolidated statements of operations.

 

See Note 4 for common stock issued in connection with the acquisition of patents.

 

See Note 5 for common stock issued for the merchant equity liability.

 

See Note 6 for common stock issued for interest expense.

 

Common Stock Repurchase Option

 

On May 1, 2018, the Company entered into a common stock repurchase option agreement to purchase 500,000 shares of common stock from a third party at $0.10 per share. The Company assigned its rights to the repurchase option agreement to a third party in exchange for compensation. The common stock repurchase options were exercised on May 15, 2018 and March 8, 2019 for which the Company received $37,500 and $123,750, respectively, in proceeds from which was recorded as additional paid-in capital.

 

On June 3, 2019, the Company entered into a common stock repurchase option agreement to purchase 2,000,000 shares of common stock from the former President of the Company at $0.05 per share. The Company assigned its rights to the repurchase option agreement to a third party in exchange for compensation. The common stock repurchase option was exercised on June 3, 2019 and December 20, 2019 for which the Company received $500,000 and $112,500 in proceeds for which was recorded as additional paid-in capital, respectively.