Note (5) Common Stock

3 Months Ended

Mar. 31, 2016

Notes

Note (5) Common Stock

Note (5) Common Stock

On January 25, 2015 the company granted a total of 6,000,000 stock options (the "Options") to 3 Company officers who are also minority owners and 1 employee. The Options, vest over 2 quarters and are exercisable at a price of $0.10 per Share. The options were valued using the Black-Scholes model with 241% volatility and 1.33% discount rate for a total value of $429,679 of this amount $209,094 and $358,448 was expensed during the three months ended September 30, 2015, respectively, with $71,230 to be expenses over 1 additional quarters.

On February 24, 2015 and March 31, 2015 the Company issued 1,900,000 restricted shares of common stock in consideration for investor relations (IR) services provided to the Company. The shares were valued at $114,600 based on the closing price of the Company's common stock on the date of grant.

On March 15, 2015 two note holders converted $145,886 of debt and accrued interest to 2,917,698 shares at a conversion price of $0.05 per share. The conversion occurred within the terms of the convertible note agreements with no gain or loss recorded.

On April 27, 2015 one share and warrant holders exercised warrants for cash consideration of $110,000, in return 2,000,000 shares were issued.

On August 10, 2015 five note holders converted $103,150 of debt and accrued interest to 8,251,963 shares at a conversion price of $0.0125 per share. The conversion price per share was amended from $0.02 to $0.0125 by the board of directors and a $60,182 loss was recorded related to the change in conversion price. Following the change in conversion price the conversion occurred within the terms of the amended agreement so no gain or loss was recorded on the conversion.

From November 25, 2015 through December 2, 2015, the Company sold to 11 non-US private accredited investors, a total of 26,500,000 units for cash consideration of $265,000 at a price of $0.01 (the "Units"), each unit comprised of one share of common stock.

Between November 10, 2015 and December 1, 2015 the Company issued 10,800,000 restricted shares of common stock in consideration for services provided to the Company. The shares were valued at $157,320 based on the closing price of the Company's common stock on the date of grant.

On February 16, 2016 the company received share subscription funds for the purchase of 1,500,000 units for cash consideration of $15,000 at a price of $0.01 (the "Units"), each unit comprised of one share of common stock. These shares were subsequently issued during Q2 2016.

Share based payment transactions were accounted for in accordance with the requirements of ASC 505-50 Equity Based Payments to Non Employees. Paragraph 505-50-30-6 establishes that share-based payment transactions with nonemployees shall be measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The Company measured share-based payment transactions at the fair value of the shares issued at date of grant, the Company believes that the value of the shares is more reliably measurable.

Following is a table of warrant and options still outstanding and exercisable along with exercise price and range of remaining term.

Type	Quantity	Exercise Price	Remaining Term
Warrants Class I	666,667	$0.45	1-3 Months
ESOP Options	5,900,000	$0.05	8-9 years
ESOP Options	6,000,000	$0.10	9 years
Total	12,566,667