Stockholders' Equity

3 Months Ended

Mar. 31, 2021

Stockholders' Equity Note [Abstract]

STOCKHOLDERS' EQUITY

9. STOCKHOLDERS’ EQUITY

Series A Preferred Stock

The Company has designated 150,000 shares of its preferred stock as Series A Preferred Stock. Each share of Series A Preferred Stock has a stated value of $10. The Series A Preferred Stock is convertible into shares of the Company’s common stock by dividing the stated value by a conversion price of $0.10 per share. The Series A Preferred Stock shall have voting rights on an as converted basis (subject to limitations) and liquidation preference for each share of Series A Preferred Stock at an amount equal to the stated value per share.

On August 14, 2017, the Company entered into Securities Purchase Agreements with two accredited investors. In connection with these agreements, the Company issued 45,000 shares of Series A Preferred Stock and warrants to acquire 9,000,000 shares of common stock. The shares of Series A Preferred Stock are convertible, at any time at the option of the holder, into an aggregate of 4,500,000 shares of the Company’s common stock. The Warrants shall be exercisable for a period of five years at an exercise price of $0.15 per share.

The Company recognized the value attributable to the conversion feature of the issued warrants of $650,421 as a charge against additional paid in capital up to $450,000 with the excess of $200,421 charged to change in fair value of warrant liability during the year ended December 31, 2017. The Company valued the warrants using the Black-Scholes pricing model as described in Note 5.

On October 24, 2017, the Company entered into Securities Purchase Agreements with an accredited investor. In connection with the agreement, the Company issued 10,000 shares of Series A Preferred Stock and warrants to acquire 2,000,000 shares of common stock. The shares of Series A Preferred Stock are convertible, at any time at the option of the holder, into an aggregate of 1,000,000 shares of the Company’s common stock. The Warrants shall be exercisable for a period of five years at an exercise price of $0.15 per share.

During 2017, the Company recognized the value attributable to the conversion feature of the issued warrants of $93,312 as a charge against additional paid in capital. The Company valued the warrants using the Black-Scholes pricing model as described in Note 5.

On February 2, 2018, the Company entered into Securities Purchase Agreements with four accredited investors. In connection with these agreements, the Company issued 27,500 shares of Series A Preferred Stock and warrants to acquire 5,500,000 shares of common stock in consideration of $275,000. The shares of Series A Preferred Stock are convertible, at any time at the option of the holder, into an aggregate of 2,750,000 shares of the Company’s common stock. The Warrants shall be exercisable for a period of five years at an exercise price of $0.15 per share.

During 2018, the Company recognized the value attributable to the conversion feature of the issued warrants of $226,833 as a charge against additional paid in capital. The Company valued the warrants using the Black-Scholes pricing model as described in Note 5.

As of December 31, 2020, the Company had 82,500 shares of Series A Preferred Stock outstanding. During January 2021, the holders of the Series A Preferred Stock exchanged 100% of the outstanding shares into 75,000,000 shares of the Company’s common shares. The terms of the exchange were different than the original terms of the Series A Preferred stock resulting in a non-cash loss to the Company of $1,735,500.

Common Stock

During January 2021, the Company issued 75,000,000 shares of its common stocks in exchange for 100% of the outstanding shares of its Series A Preferred Stock. The terms of the exchange were different than the original terms of the Series A Preferred stock resulting in a non-cash loss to the Company of $1,735,500.

During January 2021, the Company issued 20,052,000 shares of its common stock to a related party in full payment of a trade accounts payable totaling $20,052. As a result of this settlement, the Company recorded a non-cash loss of $501,300.

During January 2021, the Company issued 32,827,636 shares of its common stock to a related party in full payment for past CEO and other consulting services rendered totaling $361,104. As a result of this settlement, the Company recorded a non-cash loss of $492,415.

During January 2021, the Company issued 43,860,545 shares of its common stock to a related party in full payment of a loans totaling $404,500 and related accrued interest totaling $77,966.

During January 2021, the Company issued 320,855,533 shares of its common stock to a related party in full payment of loans totaling $2,101,000 and related accrued interest totaling $264,523.

During January 2021, the Company issued 39,836,667 shares of its common stock to a related party in full payment of a loan totaling $200,000 and related accrued interest totaling $42,044.

During January 2021, the Company issued 273,350,500 shares of its common stock to a related party in full payment of convertible loans totaling $1,202,000 and related accrued interest totaling $568,400.

Common Stock Warrants

The Company accounts for warrants as either equity instruments or liabilities depending on the specific terms of the warrant agreement. As of March 31, 2021, the Company had 38,208,320 warrants outstanding which are all classified as equity instruments and are fully exercisable.

The following tables summarize the Company’s common stock warrants activity for the three months ended March 31, 2021 and 2020:

	Warrants		Weighted Average Exercise Price		Aggregate Intrinsic Value
Outstanding as of December 31, 2020		38,208,320	$	0.16	$	—
Granted		—		—		—
Exercised		—		—		—
Forfeited/Canceled		—		—		—
Outstanding as of March 31, 2021		38,208,320	$	0.16	$	—

	Warrants		Weighted Average Exercise Price		Aggregate Intrinsic Value
Outstanding as of December 31, 2019		38,458,320	$	0.16	$	—
Granted		—		—		—
Exercised		—		—		—
Forfeited/Canceled		—		—		—
Outstanding as of March 31, 2020		38,458,320	$	0.16	$	—

The aggregate intrinsic value represents the pretax intrinsic value, based on the warrants with an exercise price less than the Company’s stock price of $0.03 as of March 31, 2021, which would have been received by the warrant holders had those warrant holders exercised their warrants as of that date.