STOCKHOLDERS' EQUITY (DEFICIT)

12 Months Ended

Dec. 31, 2014

Notes to Financial Statements

NOTE 3 - STOCKHOLDERS' EQUITY (DEFICIT)

During January 2013, a consultant was granted 3,000 registered shares of the Company’s common stock pursuant to its S-8 registration filed in March 2013 for website services. The shares were valued at $15,000 or $5.00 per share. The shares were issued on March 8, 2013. Compensation was calculated at the fair market value of the shares at the date earned.

During January 2013, a consultant was granted 4,000 registered shares of the Company’s common stock pursuant to its S-8 registration filed in March 2013 for legal services to the Company. The shares were valued at $26,000 or $6.50 per share. The shares were issued on March 8, 2013. Compensation was calculated at the fair market value of the shares at the date earned.

During January 2013 a consultant was issued 4,000 unregistered shares of the Company’s common stock for marketing services to the Company. These shares were valued at $26,000 or $6.50 per share. Compensation was calculated at the fair market value of the shares at the date earned.

During January 2013 a consultant was granted 1,000 unregistered shares of the Company’s common stock for accounting and finance services to the Company. These shares were valued at $6,000 or $6.00 per share. The shares were issued on April 23, 2013. Compensation was calculated at the fair market value of the shares at the date earned.

During January 2013, a consultant was granted 1,250 registered shares of the Company’s common stock in pursuant to its S-8 registration filed March 2013 for marketing services to the Company. The shares were valued at $6,938 or $5.55 per share. The shares were issued on March 8, 2013. Compensation was calculated at the fair market value of the shares at the date earned.

During January 2013, a consultant was granted 9,000 registered shares of the Company’s common stock pursuant to its S-8 registration filed March 2013 for marketing services to the Company. The shares were valued at $50,000 or $5.56 per share. The shares were issued on March 15, 2013. Compensation was calculated at the fair market value of the shares at the date earned.

During January and February 2013, a convertible promissory note totaling $30,983 including interest was fully converted into 8,852 unregistered shares of the Company’s common stock at $3.50 per share, the conversion price as stated in the convertible promissory note.

During February 2013, a consultant was granted 9,000 registered shares of the Company’s common stock pursuant to its S-8 registration filed March 2013 for marketing services to the Company. The Company issued 6,000 shares on April 23, 2013 and issued the remaining 3,000 shares on June 10, 2013 upon fulfilling certain performance obligations under the agreement. The 6,000 shares were valued at $56,700 or $9.45 per share and the 3,000 shares were valued at $19,500 or $6.50 per share for an aggregate of $76,200. Compensation was calculated at the fair market value of the shares at the date earned.

During March 2013, a consultant was granted 9,000 registered shares of the Company’s common stock pursuant to its S-8 registration filed March 2013 for marketing services to the Company. The Company issued 6,000 shares on April 22, 2013 and issued the remaining 3,000 shares on June 10, 2013 upon fulfilling certain performance obligations under the agreement. The 6,000 shares were valued at $69,000 or $11.50 per share and the 3,000 shares were valued at $19,500 or $6.50 per share for an aggregate of $88,500. Compensation was calculated at the fair market value of the shares at the date earned.

On March 4, 2013, the Company filed a Form S-8 with the Security and Exchange Commission. The 2013 Stock Incentive Plan may issue up to 30,000,000 registered shares of the Company’s common stock for services to the Company. The Company granted 26,375,000 (52,750 post reverse split shares) shares under this plan during the years ended December 31, 2014 and 2013.

During March 2013, a convertible promissory note was partially converted into unregistered shares of the Company’s common stock. The amount totaled $3,091 including interest was converted into 883 unregistered shares of the Company’s common stock at $3.50 per share, the conversion price as stated in the convertible promissory note.

During March 2013, a convertible promissory notes totaling $4,433.61 including interest was fully converted into 3,547 unregistered shares of the Company’s common stock at $1.25 per share. The shares were issued on April 3, 2013, the conversion price as stated in the convertible promissory note.

During April 2013, the Company issued 1,000 registered shares of the Company’s common stock in their S-8 registration filed March 2013 to settle an accounts payable. These shares were valued at $6.38 per share or $6,375. The settlement was calculated at the fair market value of the shares at the date earned.

During April 2013, a convertible promissory note was converted into unregistered shares of the Company’s common stock. The amount totaled $10,266 including interest was converted into 2,933 unregistered shares of the Company’s common stock at $3.50 per share, the conversion price as stated in the convertible promissory note.

During May 2013 a consultant was granted 200 unregistered shares of the Company’s common stock for investor relation services to the Company. These shares were valued at $1,410 or $7.05 per share. Compensation was calculated at the fair market value of the shares at the date earned.

During May 2013, a convertible promissory note was converted into unregistered shares of the Company’s common stock. The amount totaled $7,175 including interest was converted into 2,050 unregistered shares of the Company’s common stock at $3.50 per share, the conversion price as stated in the convertible promissory note.

During June 2013, a director was issued 5,000 unregistered shares of the Company’s common stock for marketing services compensation. These shares were valued at $7.50 per share or $37,500. Compensation was calculated at the fair market value of the shares at the date earned.

During June 2013, an employee was issued 7,000 unregistered shares of the Company’s common stock for website services and salary compensation. These shares were valued at $7.50 per share or $52,500. Compensation was calculated at the fair market value of the shares at the date earned.

During June 2013, a consultant was issued 5,000 unregistered shares of the Company’s common stock for warehousing and fulfillment services compensation. These shares were valued at $7.50 per share or $37,500. Compensation was calculated at the fair market value of the shares at the date earned.

During June 2013, William Gallagher, our former Chief Executive Officer, was issued 30,000 unregistered shares of the Company’s common stock for fulfilling provisions in the Type2 acquisition agreement dated September 26, 2011. These shares were valued at $7.50 per share or $225,000. Compensation was calculated at the fair market value of the shares at the date earned.

During June 2013, a consultant was issued 5,000 unregistered shares of the Company’s common stock for investor relations compensation. These shares were valued at $7.50 per share or $37,500. Compensation was calculated at the fair market value of the shares at the date earned.

During July 2013, a convertible promissory note was converted into unregistered shares of the Company’s common stock. The amount totaled $7,688 including interest was converted into 3,075 unregistered shares of the Company’s common stock at $2.50 per share, the conversion price as stated in the convertible promissory note.

During July 2013, a consultant was granted 4,000 unregistered shares of the Company’s common stock for investor relations services compensation. These shares were valued at $5.00 per share or $20,000. Compensation was calculated at the fair market value of the shares at the date earned. The shares have not been issued as of March 30, 2015.

During August 2013, a consultant was granted 15,000 registered shares of the Company’s common stock pursuant to its S-8 registration filed March 2013 for marketing services and creating an infomercial for the Company. The shares were valued at $75,000 or $5.00 per share. Compensation was calculated at the fair market value of the shares at the date earned.

During August 2013, a convertible promissory note was converted into unregistered shares of the Company’s common stock. The amount totaled $12,500 was converted into 2,500 unregistered shares of the Company’s common stock at $5.00 per share, the conversion price as stated in the convertible promissory note.

During September 2013, a convertible promissory note was converted into unregistered shares of the Company’s common stock. The amount totaled $7,688 including interest was converted into 3,075 unregistered shares of the Company’s common stock at $2.5 per share, the conversion price as stated in the convertible promissory note.

During September 2013, a third party purchased a $12,000 demand promissory note dated January 25, 2013 from one of the Company’s investors. According to the release and settlement between the Company and the third party, the note may be converted into unregistered shares of the Company’s common stock for $.01 per share. The third party partially converted $6,000 of the demand promissory note into 12,000 unregistered shares of the Company’s common stock at $0.50 per share. In addition, the Company recorded a loss on conversion of debt for $21,000 in the accompanying statements of operations for the difference between the fair market value to the Company’s common stock and the conversion price. The fair market value on the date of conversion was $2.25 per share.

During November 2013, a convertible promissory note was converted into unregistered shares of the Company’s common stock. On November 7, 2013, the Company agreed to modify the terms of the convertible promissory note to reduce the conversion price from $5.00 per share and to $0.75 per share. The amount totaled $10,750 including interest was converted into 14,333 unregistered shares of the Company’s common stock at $0.75 per share, the conversion price as stated in the convertible promissory note.

During December 2013, a convertible promissory note was converted into unregistered shares of the Company’s common stock. On November 7, 2013, the Company agreed to modify the terms of the convertible promissory note to reduce the conversion price from $2.50 per share and to $0.75 per share. The amount totaled $10,189 including interest was converted into 13,585 unregistered shares of the Company’s common stock at $0.75 per share, the conversion price as stated in the convertible promissory note.

During December 2013, a consultant was granted 16,000 unregistered shares of the Company’s common stock for a clinical research study on our Type2Defense product. These shares were valued at $0.90 per share or $14,400. The shares were issued in January 2014. Compensation was calculated at the fair market value of the shares at the date earned.

During January 2014, a promissory note was converted into unregistered shares of the Company’s common stock. The amount totaled $12,849 including interest was converted into 17,132 unregistered shares of the Company’s common stock at $0.75 per share, the conversion price as stated in the convertible promissory note. On January 6, 2014, the Company agreed to modify the terms of this $12,500 convertible promissory notes dated May 27, 2013. The conversion rate was reduced from $5.00 per share to $0.75 per share. The Company recognized a loss on extinguishment of $14,562 resulting from the debt modification. 

During March 2014, a promissory note was partially converted into unregistered shares of the Company’s common stock. The amount totaled $4,000 was converted into 16,000 unregistered shares of the Company’s common stock at $0.25 per share, the conversion price as stated in the convertible promissory note. 

During March 2014, a promissory note was converted into unregistered shares of the Company’s common stock. The amount totaled $13,151 including interest was converted into 13,171 unregistered shares of the Company’s common stock at $0.999 per share, the conversion price as stated in the convertible promissory note.

During March 2014, the Company signed an agreement with a firm to provide strategic business development activities for the Company. The firm will be compensated with 7,200 unregistered shares of the Company’s common stock payable in increments of 600 shares per month for twelve (12) months starting on April 1, 2014. During 2014, the Company issued 7,200 unregistered shares of the Company’s common stock which were valued at $0.52 per share or $3,732 to fully satisfy the March 2014 agreement. Compensation was calculated at the fair market value of the shares at the date earned.

On April 7, 2014, the Company terminated the Marketing Services Agreement Dated July 24, 2013 between the Company and Damon R Devitt to produce an infomercial for the Type2 Defense product. The Company issued 15,000 S-8 shares to Mr. Devitt at $0.755 per share on April 15, 2014.

During April 2014, Thomas E. Metzger, Ph.D., Chief Executive Officer and director resigned from the Company’s board of directors. Mr. Metzger signed a twelve (12) month consulting agreement for services rendered to the Company. Mr. Metzger received five thousand (5,000) unregistered shares of the Company’s common stock in consideration for services rendered to the Company. These shares were valued at $0.755 per share or $3,375. In addition, the Company agreed to pay Mr. Metzger $18,000 for the twelve month consulting period. In lieu of cash, the Company will issue unregistered shares of the Company’s common stock at September 4, 2014 equal to $18,000 with a cap of 5,000 unregistered shares of the Company’s common stock which shall be determined based on the average closing price of the Company’s common stock, as publicly traded, during the last five (5) business days prior to September 8, 2014. On July 22, 2014, Mr. Metzger resigned from the Company and the board approved issuing Mr. Metzger 5,000 shares due September 4, 2014 according to the April 2014 agreement in July 2014. These shares were valued at $0.985 per share or $4,925. Compensation was calculated at the fair market value of the shares at the date earned.

During April 2014, James Hodge, the Company’s Chairman of the board of directors, was issued 5,000 unregistered shares of the Company’s common stock for joining the Company’s board. These shares were valued at $0.755 per share or $3,775. In addition, the Company agreed to pay Mr. Hodge $4,500 per quarter for the twelve month consulting period and aggregate of $18,000. In lieu of cash, the Company will issue unregistered shares of the Company’s common stock starting June 30, 2014 which shall be determined based on the average closing price of the Company’s common stock, as publicly traded, during the last five (5) business days prior to the last day of each calendar quarter.

During April 2014, Peggy Knight our Chief Marketing Officer was issued 15,000 unregistered shares of the Company’s common stock for marketing compensation. These shares were valued at $0.755 per share or $11,325. Compensation was calculated at the fair market value of the shares at the date earned.

On June 27, 2014, the Company signed a one year consulting agreement with an individual to provide product marketing, endorsement and spokesperson services for the Company. The agreement began on May 10, 2014 and expires on May 10, 2015. The consultant will be compensated with 5,000 shares of the Company’s common stock. These shares were issued in July 2014. The shares were valued at $0.65 per share or $3,250. Compensation was calculated at the fair market value of the shares at the date earned. In addition, the consultant may purchase 50,000 shares of the Company’s common stock at an exercise price of $0.025 per share each quarter ending May 10, 2015 (an aggregate of 200,000 shares). Options were valued using the Black Scholes Method, resulting in a value of $103,700 of which $51,850 have vested and expense recognized in year 2014. The weighted average assumptions made in calculating the fair values of options granted during the years ended December 31, 2014 and 2013 are as follows:

	Years Ended December 31,
	2014			2013
Expected volatility		197.1	%		0	%
Expected dividend yield		-			-
Risk-free interest rate		.86	%		0	%
Expected term (in years)		3.0			-

On June 30, 2014, James Hodge, the Company’s Chairman of the board of directors, earned 6,923 shares of the Company’s restricted common stock for service to the Company. These shares were valued at $0.65 per share or $4,500. These shares were earned in accordance to Mr. Hodge’s April 2014 twelve month consulting agreement. The shares were issued in July 2014. Compensation was calculated at the fair market value of the shares at the date earned.

On July 7, 2014, the Company signed a consulting agreement with an individual to provide website services for the Company. The agreement began on July 1, 2014 and expires on August 1, 2015. The consultant will be compensated with 60,000 shares of the Company’s common stock. The shares were issued in July 2014 and valued at $69,000 or $1.15 per share. Compensation was calculated at the fair market value of the shares at the date earned.

During July 2014, a promissory note was partially converted into unregistered shares of the Company’s common stock. The amount totaled $4,103 including accrued interest was converted into 16,412 unregistered shares of the Company’s common stock at $0.25 per share, the conversion price as stated in the convertible promissory note. 

During August 2014, a promissory note was partially converted into unregistered shares of the Company’s common stock. The amount totaled $3,059 including accrued interest was converted into 12,235 unregistered shares of the Company’s common stock at $0.25 per share, the conversion price as stated in the convertible promissory note.

During September 2014, a promissory note was partially converted into unregistered shares of the Company’s common stock. The amount totaled $2,529 including accrued interest was converted into 10,115 unregistered shares of the Company’s common stock at $0.25 per share, the conversion price as stated in the convertible promissory note. 

On September 30, 2014, James Hodge, the Company’s Chairman of the board of directors, earned 5,000 shares of the Company’s restricted common stock for service to the Company. These shares were valued at $0.30 per share or $1,500. These shares were earned in accordance to Mr. Hodge’s April 2014 twelve month consulting agreement. Compensation was calculated at the fair market value of the shares at the date earned. The shares were issued in February 2015.

On October 1, 2014, the Company entered into an Intellectual Property Purchase Agreement to purchase the “Glucose Health Natural Blood Sugar Maintenance” product from a company beneficially owned by our CEO, Murray Fleming. The seller, a related party, received 300,000 unregistered shares of the Company’s common stock, which were recorded at their par value of $0.001 per share, as the related party had a nominal historical basis for the property.

On October 1, 2014, Murray Fleming was appointed as the Company’s Chief Executive Officer for the 12-month period ending October 1, 2015. Mr. Fleming was compensated with 300,000 unregistered shares of the Company’s common stock valued at $0.38 per share or $114,000. Compensation was calculated at the fair market value of the shares at the date earned. On October 1, 2014, Mr. Fleming beneficially owned 600,000 shares or 50.1% of the outstanding shares of the Company’s common stock, which resulted in a change in control of the Company.

During November 2014, a promissory note was partially converted into unregistered shares of the Company’s common stock. The amount totaled $250 was converted into 50,000 unregistered shares of the Company’s common stock at $0.005 per share, the conversion price as stated in the convertible promissory note.

During November 2014, Murray Fleming, the Company CEO was granted 1,000 shares of the Company’s preferred stock as compensation for serving the Company. The preferred stock was valued at $113.30 per share or $113,300 based on 50.1% of the Company’s market capitalization on the date of issuance.

During December 2014, a promissory note was partially converted into unregistered shares of the Company’s common stock. The amount totaled $285 including accrued interest was converted into 56,918 unregistered shares of the Company’s common stock at $0.005 per share, the conversion price as stated in the convertible promissory note.

On December 31, 2014, James Hodge, the Company’s Chairman of the board of directors, earned 5,000 shares of the Company’s restricted common stock for service to the Company. These shares were valued at $0.122 per share or $1,500. These shares were earned in accordance to Mr. Hodge’s April 2014 twelve month consulting agreement. Compensation was calculated at the fair market value of the shares at the date earned. The shares were issued in February 2015.

As of December 31, 2014, the Company has 1,309,825 shares of common stock issued and outstanding.