Shareholders' Deficit

12 Months Ended

Dec. 31, 2018

Stockholders' Equity Note [Abstract]

SHAREHOLDERS' DEFICIT

NOTE 8 – SHAREHOLDERS' DEFICIT

Preferred Stock

Series A Preferred Stock

As of December 31, 2018, there are 10 million shares of Series A Preferred Stock outstanding.

Attributes of Series A Preferred Stock include but are not limited to the following:

Distribution in Liquidation

The Series A Preferred Stock has a liquidation preference of $10,000,000, payable only upon certain liquidity events or upon achievement of a market value of our equity equaling $200,000,000 or more. Upon any liquidation, dissolution or winding up of the Company, and after paying or adequately providing for the payment of all its obligations, the remainder of the assets of the Company shall be distributed, either in cash or in kind, first pro rata to the holders of the Series A Preferred Stock in an amount equal to the Liquidation Value (as described below); then, to any other series of Preferred Stock, until an amount to be determined by a resolution of the Board of Directors prior to issuances of such Preferred Stock, has been distributed per share, and, then, the remainder pro rata to the holders of the Common Stock. Upon the occurrence of any Liquidation Event (as defined below), each holder of Series A Preferred Stock will receive a payment equal to the Original Issue Price for each share of Series A Preferred Stock held by such holder (the "Liquidation Value"). A "Liquidation Event" will have occurred when:

●       The Company has an average market capitalization (calculated by adding the value of all outstanding shares of Common Stock valued at the Company's closing sale price on the OTCQB or other applicable bulletin board or exchange, plus the value of the outstanding Series A Preferred Stock at the Original Issues Price per share) of $200,000,000 or more over any 90 day period. The holders of the Series A Preferred Stock would have the right, for 30 days after the end of such qualifying 90 day measurement period, to require the Company to purchase the Series A Preferred Stock for an amount equal to the Liquidation Value.

●       Any Liquidity Event in which the Company receives proceeds of $50,000,000 or more. For purposes hereof, a "Liquidity Event" means any (a) liquidation, dissolution or winding up of the Company; (b) acquisition of the Company by means of any transaction or series of related transactions (including, without limitation, any reorganization, merger, share exchange, share purchase or consolidation) provided that the applicable transaction shall not be deemed a liquidation unless the Company's stockholders constituted immediately prior to such transaction hold less than 50% of the voting power of the surviving or acquiring entity; or (c) the sale, lease, transfer or other disposition, in a single transaction or series of related transactions, by the Company or any subsidiary of the Company of all or substantially all the assets of the Company and its subsidiaries taken as a whole, or the sale or disposition (whether by merger or otherwise) of one or more subsidiaries of the Company if substantially all of the assets of the Company and its subsidiaries taken as a whole are held by such subsidiary or subsidiaries.

Written notice of any Liquidation Event (the "Liquidation Notice") shall be given by mail, postage prepaid, or by facsimile to non-U.S. residents, not less than five days prior to the anticipated payment date state therein, to the holders of record of Series A Preferred Stock, such notice to be addressed to each such holder at its address as shown by the records of the Company. The Liquidation Notice shall state (i) the anticipated payment date, and (ii) the total Liquidation Value available for distribution to Series A Preferred Stock shareholders upon the occurrence of the Liquidation Event.

Redemption

The Series A Preferred Stock may be redeemed in whole or in part as determined by a resolution of the Board of Directors at any time, at a price equal to the Liquidation Value.

Voting Rights

Shares of Series A Preferred Stock shall have no rights to vote on any matter submitted to a vote of shareholders, except as required by law, in which case each share of Series A Preferred Stock shall be entitled to one vote.

Conversion Rights

Holders of Series A Preferred Stock will have no right to convert such shares into any other equity securities of the Company.

Common Stock

Common Stock issued on conversion of notes payable-

On April 26, 2018, an outstanding promissory note with a balance of $68,324.38 issued on August 1, 2016 was converted into 1,138,740 shares of restricted common stock at a per share price of $0.06.

During May 2018 and June 2018, two of the convertible promissory notes outstanding as of the year ending December 31, 2017, and two notes that were issued in May 2018 totaling principal of $105,000 together with accrued interest of $2,387, were converted into an aggregate of 2,051,864 shares of restricted common stock, at conversion prices ranging from $0.05 to $0.09.

On June 14, 2018, the Company settled an outstanding account payable through the issuance and subsequent conversion of a convertible promissory note in the principal amount of $10,000. The note, which was issued December 29, 2017, was due December 29, 2018 and accrued interest at 6%. The note was convertible into common shares of the Company at a conversion price of $0.025. The note was issued as a settlement in exchange for a $91,463 account payable, that the noteholder purchased from a vendor on December 29, 2017. Upon conversion of the note into 411,046 shares of restricted common stock of the Company, the noteholder signed a debt settlement and release agreement for the outstanding account payable.

Sale of Common Stock

On June 11, 2018, a holder of common stock purchase warrants exercised 250,000 warrants. The Company received $25,000.

Option Grants

The following tables summarize information about the Company's stock options:  

	Number of Options		Weighted Average Exercise Price
Options outstanding - December 31, 2016		32,576,223	$	0.98
Granted		—		—
Canceled or expired
Exercised		—		—
Options outstanding –December 31, 2017		32,576,223	$	0.98
Granted		—		—
Canceled or expired		—		—
Exercised		—		—
Options outstanding –December 31, 2018		32,576,223	$	0.98

There are no unvested options as of December 31, 2018.

The following tables summarize information about stock options outstanding and exercisable:

	Options Outstanding and Exercisable at December 31, 2018
Range of  Exercise Prices	Number  Outstanding		Weighted  Remaining  Contractual  Life	Weighted  Average  Exercise  Price		Aggregate  Intrinsic Value(1)
$0.40 to $0.60		5,276,223	1.9 years	$	0.46	$	—
$0.61 to $1.00		9,800,000	1.7 years	$	0.67	$	—
$1.01 to $1.50		14,500,000	1.8 years	$	1.25	$	—
$1.51 to $2.25		3,000,000	2.3 years	$	1.63	$	—
$0.40 to $2.25		32,576,223	1.9 years	$	0.98	$	—

	Options Outstanding and Exercisable at December 31, 2017
Range of Exercise Prices	Number  Exercisable		Weighted  Remaining  Contractual  Life	Weighted  Average  Exercise  Price		Aggregate  Intrinsic Value(1)
$0.40 to $0.60		5,276,223	1.9 years	$	0.46	$	—
$0.61 to $1.00		9,800,000	1.7 years	$	0.67	$	—
$1.01 to $1.50		14,500,000	1.8 years	$	1.25	$	—
$1.51 to $2.25		3,000,000	2.3 years	$	1.63	$	—
$0.40 to $2.25		32,576,223	1.9 years	$	0.98	$	—

(1) The aggregate intrinsic value in the table represents the difference between the closing stock price on December 31, 2017 and 2016 and the exercise price, multiplied by the number of in-the-money options that would have been received by the option holders had all option holders exercised their options on December 31, 2018 and 2017.

Common Stock Purchase Warrants

For warrants granted to non-employees in exchange for services, the Company recorded the fair value of the equity instrument using the Black-Scholes pricing model unless the value of the services is more reliably measurable.

The Company and Wits Basin (Note 3) executed a Settlement Agreement on January 22, 2016 (Note 9). Pursuant to the terms of the Settlement Agreement, the Company issued 630,000 warrants to purchase common stock at an exercise price of $0.70 and 630,000 warrants at an exercise price of $0.30 to investors of Wits Basin. The warrants expired on December 31, 2018.

The following table summarizes information about the Company's stock purchase warrants outstanding at December 31, 2018 and December 31, 2017:

	Number			Weighted  Average  Exercise  Price		Range  of  Exercise  Price		Weighted  Remaining  Contractual  Life
Outstanding at December 31, 2017		6,125,640		$	0.77	$	0.20 – 1.23		2.2 years
Granted		—
Cancelled or expired		--
Exercised		—
Outstanding at December 31, 2017		6,125,640		$	0.77	$	0.20 – 1.23		2.2 years
Warrants exercisable at December 31, 2017		6,125,640
Granted		--
Cancelled or expired Exercised		(1,260,000	)	$	0.50	$	0.30 – 0.70
Warrants exercisable at December 31, 2018		4,865,640		$	0.84	$	0.20 - 1.23		1.3 years
		4,865,640

The aggregate intrinsic value of the 4,865,640 and 6,125,640 outstanding and exercisable warrants at December 31, 2018 and 2017 was $0. The intrinsic value is the difference between the closing stock price on December 31, 2018 and 2017 and the exercise price, multiplied by the number of in-the-money warrants had all warrant holders exercised their warrants on December 31, 2018 and 2017.