Equity and Equity Incentive Plan

12 Months Ended

Dec. 31, 2018

Share-based Payment Arrangement [Abstract]

Equity and Equity Incentive Plan

14. EQUITY AND EQUITY INCENTIVE PLAN

Common Stock

The Company had 161,086,228 and 98,192,717 common shares outstanding at December 31, 2018 and 2017, respectively.

On January 6, 2018, the Company issued 217,391 Units consisting of 869,565 shares of common stock and 217,391 common stock purchase warrants exercisable at $0.0115 per share for a fair value of $10,000. The warrants are exercisable at any time for a period of two years from date of issuance.

In January 2018, the Company issued 2,000,000 shares of common stock to Mr. Dana Allan for his services for serving on our board of directors. The grant date fair value of the shares issued was $50,200.

On February 2, 2018, the Company issued 434,783 Units consisting of 1,739,130 shares of common stock and 434,783 common stock purchase warrants exercisable at $0.0115 per share for a fair value of $20,000. The warrants are exercisable at any time for a period of two years from date of issuance.

On April 4, 2018, the Company issued 142,857 shares of common stock to an employee of the Company with a value of $0.014 per share totaling $2,000 which was charged to stock based compensation.

On April 6, 2018, the Company entered into a Patent License Agreement issuing 759,422 shares of common stock with a fair value of $0.0395 per share totaling $30,000.

In May 2018, the Company issued 200,000 shares of common stock to two consultants with a value of $0.0425 per share totaling $8,500 which was charged to consulting fees expense.

Between May 2018 and November 2018, the Company issued 449,550 common shares to a consultant with an average fair value of $0.02 per share totaling $8,949 which was charged to stock based compensation.

In July 2018, the Company issued an aggregate of 722,160 shares of stock to sixteen employees under a one-time employee stock incentive grant. The shares were fair valued at $0.0209 per share based on market value at the time of the grant, with a total value recognized of $16,000.

In September 2018, the Company issued 199,002 shares of common stock to a consultant with a value of $0.0224 per share totaling $4,451 which was charged to consulting fee expense.

On November 15, 2018, the Company entered into a Note Conversion Agreement pursuant to which the Noteholder converted $526,583 of principal and accrued interest due into 50,000,000 shares of the Company’s common stock in full satisfaction of this obligation. The Company recorded a loss on this conversion of this debt of $248,417 which was charged to interest expense.

In December 2018, the Company issued 2,083,197 common shares to a consultant with a fair value of $0.0195 per share totaling $40,622 which was charged to stock based compensation.

In December 2018, the Company issued 20,000,000 shares of common stock to our CEO as an incentive bonus. As the shares are subject to continued employment by the CEO through January 2, 2020, the Company has treated the shares as issued but not as yet outstanding. Expense for the issuance is being recognized over the full vesting period, and accordingly, the Company recognized stock compensation expense of $10,576 as of December 31, 2018.

In December 2018, the Company issued 2,260,963 common shares to three members of our board of director as director fees with a fair value of $0.0195 per share totaling $44,089 and 4,000,412 common shares for services provided with an average fair value of $0.016 per share totaling $78,871.

In March 2017, the Company issued 4,587,190 shares of restricted common stock in satisfaction of $63,303 past due and payable under an exclusive license agreement with 940 Associates, Inc., an entity owned by the Company’s Chief Executive Officer.

On August 1, 2017, Mikkel Pitzner was appointed by the Company’s board of directors to serve on the Company’s board of directors, filling a vacancy on the board. Mr. Pitzner shall serve on the board of directors and shall hold office until the next election of directors by stockholders and until his successor is elected and qualified or until his earlier resignation or removal. The Company has agreed to pay Mr. Pitzner an annual fee of $6,000 and has issued Mr. Pitzner 2,000,000 shares of restricted common stock valued at $25,000 and an additional 1,666,667 with a fair value of $20,883 under a two month consulting agreement expiring in January 2019. In December 2018, Mr. Pitzner was issued 708,287 common shares in payment of accrued director fees through December 31, 2018. The shares were valued at $0.0195 per share, totaling $13,812, the fair value on the date of grant.

Commencing in February, 2019, the Company began paying Mr. Pitzner $9,300 per month, inclusive of a $1,300 auto allowance, for consulting services. These payments are not covered by a written agreement.

On August 1, 2017 the Company entered into six month advisory agreement with Wesley P. Siebenthal to provide certain advisory services to the Company and serve as its Chief Technology Advisor. As compensation for the services, the Company issued him 2,000,000 shares of its common stock valued at $25,000.

On August 1, 2017, the Company entered into a six month employment agreement with Blake Carmichael, the son of the Company’s chief executive officer and an electrical engineer, to serve as the Company’s products development manager, electrical engineer and marketing team member. Under the terms of the employment agreement, in addition to a monthly salary of $3,600, the Company issued Mr. Carmichael 2,000,000 shares of common stock valued at $25,000. Mr. Carmichael is also entitled to performance bonuses at the discretion of the board of directors.

Effective August 1, 2017, the board of directors issued Mr. Robert Carmichael, the Company’s chief executive officer, chief financial officer and member of the Company’s board of directors, 2,000,000 shares of restricted common stock valued at $25,000 in consideration of serving on the Company’s board of directors.

During the year ended December 31, 2017, the Company issued 16,699,315 shares in a Unit Offering with net proceeds of $192,042.

During December 2017, the Company issued two convertible notes totaling $100,000. The combined fair value of the conversion feature of the notes was valued at $25,000 which was recorded as a beneficial conversion feature and was amortized over the one year maturity of the notes.

Preferred Stock

During the second quarter of 2010, the holder of the majority of the Company’s outstanding shares of common stock approved an amendment to the Company’s Articles of Incorporation authorizing the issuance of 10,000,000 shares of preferred stock. The preferred stock as authorized has such voting powers, designations, preferences, limitations, restrictions and relative rights as may be determined by our Board of Directors of the Company from time to time in accordance with the provisions of the Florida Business Corporation Act. Before modification, the existing Articles of Incorporation did not authorize the issuance of shares of preferred stock. The Company authorized the preferred stock for the purpose of added flexibility in seeking capital and potential acquisition targets. The amendment authorizing the issuance of shares of preferred stock grants the Board authority, without further action by our stockholders, to designate and issue preferred stock in one or more series and to designate certain rights, preferences and restrictions of each series, any or all of which may be greater than the rights of the common stock. As of December 31, 2018 and December 31, 2017, the 425,000 shares of preferred stock are owned by the Company’s Chief Executive Officer. The preferred shares have 250 to 1 voting rights over the common stock, and are convertible into 31,481 shares of common stock. The preferred stock votes with the Company’s common stock, except as otherwise required under Florida law.

Equity Incentive Plan

On August 22, 2007, the Company adopted an Equity Incentive Plan (the “Plan”). Under the Plan, Stock Options may be granted to Employees, Directors, and Consultants in the form of Incentive Stock Options or Nonstatutory Stock Options. Stock Purchase Rights, time vested and/performance invested Restricted Stock, and Stock Appreciation Rights and Unrestricted Shares may also be granted under the Plan. The maximum number of shares that may be issued under the Plan shall be 297 shares, and no more than 75 Shares of Common Stock may be granted to any one Participant with respect to Options, Stock Purchase Rights and Stock Appreciation Rights during any one calendar year period. Common Stock to be issued under the Plan may be either authorized and unissued or shares held in treasury by the Company. The term of the Plan shall be ten years. The Plan expired on August 22, 2017. All 297 options issued under the Plan remain outstanding at December 31, 2018.

Equity Compensation Plan Information as of December 31, 2018

	Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)		Weighted – average exercise price of outstanding options, warrants and rights (b)		Number of securities remaining available for future issuances under equity compensation plans (excluding securities reflected in column (a) (c)
Equity Compensation Plans Approved by Security Holders		297	$	1,350		—
Equity Compensation Plans Not Approved by Security Holders		—		—		—
Total		297	$	1,350		—