EQUITY TRANSACTIONS

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

NOTE 6 - EQUITY TRANSACTIONS

There were no common or other Series A Preferred transactions for the three-month period ending March 31, 2018.

Employee stock compensation expense for the three-month period ending March 31, 2019 and 2018 amounted to $68,693 and $0 respectively. 

On January 16, 2019, an affiliate of the Company converted its remaining 29,051 shares of Series A Preferred into 96,837 common shares.

On January 17, 2019, a non-affiliated shareholder partially exercised 300,000 shares of a warrant they held in the Company. The exercise was cashless, and the shareholder received 299,713 shares of common stock as a result of the conversion.

On January 25, 2019, the Company extended its consulting agreement with Redstone Communications, LLC for an additional six-month term, and as a result, we issued 105,000 restricted common shares to Redstone Communications LLC and 45,000 restricted common shares to Mr. Marlin Molinaro, another five-year warrant to purchase up to 175,000 common shares of our Company at an exercise price of $1.50 per share and issued to Mr. Marlin Molinaro another five-year warrant option to purchase up to 75,000 common shares of our Company at an exercise price of $1.50 per share as compensation for the second six months of an agreement. Should Redstone Communications, LLC and Mr. Molinaro. If the warrants received under the second six months of engagement, the Company will receive up to $262,500 and $112,500, respectively. The common shares were valued at $10.50 on January 25, 2019 and resulted in an expense of $1,575,000 which was recorded in full on January 25, 2019.  The corresponding expense of the issued warrants was recorded in full in the amount of $$2,385,000. 

On January 27, 2019, the Company issued 1,000 shares of common shares to an unrelated party for the consideration of $5,000 cash to the Company.

On January 28, 2019, the Company issued a total of 400 shares of common shares to two unrelated parties for the total consideration of $2,000 cash to the Company.

On January 30, 2019, the Company entered into an Investor Relations Agreement with American Capital Ventures, Inc. (“American Capital”) whereby American Capital will provide, among other services, assistance to the Company in planning, reviewing and creating corporate communications, press releases, and presentations and consulting and liaison services to the Company relating to the conception and implementation of its corporate and business development plan. The term of the agreement is six months and American Capital was immediately issued 9,000 shares of common shares as compensation under the agreement. The common shares were valued at $10.80 on January 30, 2019 and resulted in an expense of $97,200 which was recorded in full on January 30, 2019.

On January 31, 2019, the Company issued a total of 3,917 shares of common shares, priced at $6 per share, to an unrelated party for the settlement of trade payables in the total amount of $23,502. If at the time of potential sale of the shares, the listed price per share is below $6, the Company is required to purchase the shares back at $6 per share which results in a contingent liability of $23,502. The common shares were valued at $11.00 on January 31, 2019 and resulted in a loss on settlement of $19,585.

On February 1, 2019, the Company issued a total of 1,000 shares of common shares to two unrelated parties for the total consideration of $5,000 cash to the Company.

On February 6, 2019, a non-affiliated shareholder partially exercised 300,000 shares of a warrant they held in the Company. The exercise was cashless, and the shareholder received 299,714 shares of common stock as a result of the conversion.

On February 4 through February 8, 2019, the Company issued a total of 17,800 shares of common shares to sixteen unrelated parties for the total consideration of $89,000 cash to the Company.

On February 10, 2019, $3,000 worth of trade payables were settled with 500 common shares of the company. The common shares were valued at $12.15 on February 10, 2019 and resulted in a loss on settlement of $3,075.

On February 12, 2019, the Company executed a contract with an unrelated party for the acquisition of stock and assets of entities with non-operating assets consisting of surface and mineral ownership and other related agreements. Consideration is in the form of 2,000,000 common shares, priced at the closing market price of $12.20 per share of common share, as well as $500,000 cash and a promissory note totaling $2,000,000 with a maturity of less than 1 year. The note is secured by a land contract on the acquired property.

On February 14, 2019, 452,729 Series A preferred shares were converted into 1,509,097 common shares of the company in a cashless conversion under the terms of the agreement. This resulted in no more Series A Preferred stock being outstanding as of this date.

On February 20, 2019, the Company issued 1,000,000 shares of Class A Common Stock at a price of $4 per share in conjunction with its effective S-1/A Registration Statement. Net proceeds to the Company amounted to $3,695,000. As part of the underwriter agreement, 70,000 warrants to purchase Class A Common Stock were issued to the underwriter. These warrants expire on February 15, 2021 and carry an exercise price of $4.40 per share. The warrants had a value of $123,000 was recorded as an increase and decrease in additional paid in capital. Offering costs totaled $447,000, which has been recorded as a reduction of equity.

On February 21, 2019, 50,000 Series C Preferred shares were converted into 13,750 shares of Class A Common Stock in a cashless conversion under the terms of the agreement.  This resulted in no more Series C Preferred stock being outstanding as of this date.

On March 7, 2019, the Company issued an additional 150,000 shares of Class A Common Stock at a price of $4 per share as the over-allotment from the effective S-1/A Registration Statement. The net proceeds to the company amounted to $558,000. As part of the underwriter agreement, 10,500 warrants to purchase Class A Common Stock were issued to the underwriter. These warrants expire on February 15, 2021 and carry an exercise price of $4.40 per share. The warrants had a value of $23,100 was recorded as an increase and decrease in additional paid in capital.

	March 31, 2019			March 31, 2018
Expected Dividend Yield		0	%		0	%
Expected volatility	87.97-109		%		13.73	%
Risk-free rate	2.40-2.33		%	1.47-1.62		%
Expected life of warrants	1.62-6.20 years			2-3 years

Company Warrants:

			Weighted		Weighted
			Average		Average		Aggregate
	Number of		Exercise		Contractual		Intrinsic
	Warrants		Price		Life in Years		Value
Exercisable - December 31, 2017		5,364,230	$	2.638		2.8354	$	138,069
Granted		-		-		-		-
Forfeited or Expired		-		-		-		-
Exercised		-		-		-		-
Outstanding - March 31, 2018		5,364,230	$	2.638		2.835	$	138,069
Exercisable (Vested) - March 31, 2018		5,364,230	$	2.638		2.835	$	138,069
Exercisable (Vested) – December 31, 2018		5,545,227	$	2.745		1.704	$	42,063,228
Granted		330,500	$	2.206		4.106	$	1,026,255
Forfeited or Expired		-		-		-		-
Exercised		600,000	$	0.010		1.688	$	4,869,250
Outstanding - March 31, 2019		5,275,727	$	2.867		1.620	$	13,945,162
Exercisable (Vested) - March 31, 2019		5,275,727	$	2.867		1.620	$	13,945,162

Company Options:

			Weighted		Weighted
			Average		Average		Aggregate
	Number of		Exercise		Contractual		Intrinsic
	Options		Price		Life in Years		Value
Outstanding - December 31, 2017		-		-		-		-
Granted		-		-		-		-
Forfeited or Expired		-		-		-		-
Exercised		-		-		-		-
Outstanding – March 31, 2018		-		-		-		-
Exercisable (Vested) - March 31, 2018		-		-		-		-
Outstanding – December 31, 2018		681,830	$	1.413		6.447	$	405,000
Exercisable (Vested) – December 31, 2018		70,000	$	4.214		4.247	$	405,000
Granted		-		-		-		-
Forfeited or Expired		-		-		-		-
Exercised		-		-		-		-
Outstanding - March 31, 2019		681,830	$	1.330		6.200	$	80,998
Exercisable (Vested) - March 31, 2019		70,000	$	4.214		4.000	$	80,998

Total preferred dividend requirement for the three month period ending March 31, 2019 and 2018 amounted to $0 and $70,157, respectively.