CAPITAL STOCK

6 Months Ended

Jun. 30, 2015

Notes to Financial Statements

NOTE 10 - CAPITAL STOCK

Authorized

The Company is authorized to issue 10,000,000 shares of preferred stock, having a par value of $0.0001 per share, and 50,000,000 shares of common stock, having a par value of $0.0001 per share. 

Issued and Outstanding 

Preferred Stock

At June 30, 2015, the Company there are no shares of preferred stock outstanding. 

Common Stock

At June 30, 2015, shares of common stock issued and outstanding totaled 25,493,402. 

During the six months ended June 30, 2015, the Company issued 6,274,332 shares of common stock as follows: 

On January 8, 2015, the Company sold 25,000 shares of Common Stock and received net proceeds of $25,000.  

On January 30, 2015, the Company entered into shares for liability settlement with a creditor wherein an aggregate of $88,431 of debt was settled by the aggregate issuance of 87,212 shares of common stock. The estimated fair value of the common shares was used to measure and record the transaction with the difference between the conversion prices and estimated fair value being recorded as gain on extinguishment of debt aggregating $44,825.

On February 4, 2015, the Company entered into a note conversion agreement with Rocky Road Capital, Inc. to convert $94,200 of the principal balance, which was due to a former director and subsequently assigned to Rocky Road Capital, Inc., into 942,000 shares of Common Stock (at $0.10 per share), thereby reducing the balance owed under the note to $472,012. The estimated fair value of the common shares was used to measure and record the transaction with the difference between the conversion prices and estimated fair value being recorded as loss on extinguishment of debt aggregating $376,800.

On February 20, 2015, the Company entered into a note conversion agreement with Rocky Road Capital Inc. to convert $150,000 of the principal balance, which was due to a former director and subsequently assigned to Rocky Road capital, Inc., into 1,500,000 shares of Common Stock (at $.10 per share), thereby reducing the balance owed under the note to $322,012. The estimated fair value of the common shares was used to measure and record the transaction with the difference between the conversion prices and estimated fair value being recorded as loss on extinguishment of debt aggregating $600,000.  

On June 12, 2015 and June 15, 2015, the Company entered into note conversions pursuant to the Rocky Road note totaling $322,012 at $.10 per share for the conversion of 3,220,120 Shares of the Company’s Common Stock, thereby eliminating the entire balance owed. Rocky Road Capital Inc. The estimated fair value of the common shares was used to measure and record the transaction with the difference between the conversion prices and estimated fair value being recorded as loss on extinguishment of debt aggregating $152,520.

On June 15, 2015, the Company entered into a Separation and Settlement Agreement Release of Claims (the “Settlement Agreement”) with Steven Frye, our former Chief Executive Officer, Chief Financial Officer, and President. According to the Settlement Agreement, the Company agreed to pay Mr. Frye $54,794 for services rendered in the form of 391,386 shares of Common Stock of the Company closing price of the Company’s stock as of June 15, 2015 ($.14 per share). The Settlement Agreement further stated Mr. Frye would be responsible for all taxes and signed a general release of any and all claims, known or unknown, against the Company. On July 1, 2015, Mr. Frye delivered his executed paperwork to the Company.

On June 15, 2015, the Company entered into Addendum Two (“Addendum Two”) of the Promissory Note dated April 15, 2014 (the “Note”) between the Company and Steven Frye. The Promissory Note dated April 15, 2015 was for the principle amount of $13,500 with 12% accrued interest. As of June 15, 2015, the principal and interest totaled $15,206 and was converted into 108,614 shares of Common Stock of the Company at the fair value of the closing stock price calculated as of June 15, 2015 ($0.14). On July 1, 2015, Mr. Frye delivered his executed paperwork to the Company.

Warrants Issued for Services 

The Company issued no warrants in the six months ending June 30, 2015, and there were 2,307 warrants outstanding with a weighted average exercise price of $260 at June 30, 2015. 

The following table summarizes the warrant activity for the six months ended June 30, 2015: 

	Warrants Outstanding
				Weighted
				Average
	Number of			Exercise
	Shares			Price
Balance, December 31, 2014		1,002,307		$	259
Granted		—		$	—
Exercised		—			—
Expired/Cancelled		(1,000,000	)		(2	)
Balance, June 30, 2015		2,307		$	260
Exercisable at June 30, 2015		2,307		$	260

The range of exercise prices and the weighted average exercise price and remaining weighted average life of the warrants outstanding at June 30, 2015 were $130 to 390.00, $260 and .51 years, respectively. The aggregate intrinsic value of the outstanding warrants at June 30, 2015 was $0.