XML 30 R11.htm IDEA: XBRL DOCUMENT v3.19.1
Stockholder's Equity
12 Months Ended
Dec. 31, 2018
Equity [Abstract]  
Stockholder's Equity

NOTE 5 – STOCKHOLDER’S EQUITY

 

In December 2018, the Company declared and issued 50,000 shares of our common stock to Chong Corporation as a 2017 dividend on our 10% Series A convertible preferred stock. The stock was valued at $0.20 per share.

 

Comparatively, in June 2017, we declared and issued 50,000 shares of our common stock to Chong Corporation as a 2016 dividend on our 10% Series A convertible preferred stock. The stock was valued at $0.23 per share.

 

On December 31, 2018, the Company had 75,310,000 shares of common stock issued and outstanding.

 

Preferred Stock

 

Under the terms of the 10% Series A Convertible Preferred Stock the Company pays the holder a 10% annual dividend in common stock and the preferred becomes convertible to common stock five years from issuance at a conversion rate of one share of the Company’s common stock for each share of the 10% Series A Convertible Preferred Stock. The 10% Series A convertible preferred stock is not redeemable at the holder’s option and has no voting rights.

 

The Company analyzed the embedded conversion option for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that the conversion option should be classified as equity.

 

Stock Options

 

In line with the Company’s 2014 Equity Compensation Plan, 3,000,000 non-qualified stock options were granted to management. These options were fully vested at the grant date and have an exercise price of $0.20 per share and a term of 5 years with respect to Mr. Chong, an owner of more than 10% of the Company’s outstanding common stock, and 10 years for the other members of management. The fair market value of the options at the grant date was determined to be $474,886 which was expensed immediately. The options were valued using the Black-Scholes option pricing model with the following assumptions: 1) a current stock price per share of $0.20, based on the price of companies with profiles similar to ours; 2) expected terms ranging from 2.5 - 5 years; 3) computed volatility of 156.57 – 156.73%; and, 4) the risk free rate of return of 2.62%. No stock options were granted in 2017.

 

As of December 31, 2018, the Company had 9,000,000 outstanding and exercisable options at a weighted exercise price of $0.48, a weighted average remaining term of 4.83 years and an intrinsic value of zero.