Note 7 – Stockholders’ Deficit

Common Stock

The Company has authorized 500,000,000 shares of common stock, par value $0.01; 86,566,999 and 81,268,443 shares were issued and outstanding at March 31, 2020 and December 31, 2019, respectively.

Common Stock Transactions During the Three Months Ended March 31, 2020

During the three months ending March 31, 2020, the Company issued 200,000 restricted shares of the Company’s common stock at valued $7,680 in exchange for services conducted on behalf of the Company. The value of these shares was based on the closing market price on the respective date of grant.

Also during the three months ended March 31, 2020, the Company charged the amount of $33,676 to operations in connection with the vesting of stock granted to its officers and board members; the Company also charged the amount of $7,072 to operations in connection with the vesting of options granted to officers and board members.

Also during the three months ended March 31, 2020, the Company entered into agreements to issue 500,000 options to each of four consultants (a total of 2,000,000 options). The options have a fair value of $20,930 per consultant (a total of $83,720). These agreements will become effective April 6, 2020, at which time the Company will begin to charge the value of these options to operations. The Company valued these options using the Black-Scholes valuation model.

Also, during the three months ended March 31, 2020, the Company entered into agreements with two note holders regarding the exercise price of warrants held by the note holders. These agreements resulted in the following: (i) the Company issued 1,000,000 shares of common stock, and the note holders agreed to cancel 2,769,482 warrants; the Company recorded a gain in the amount of $77,652 on this transaction; (ii) the Company issued 4,098,556 shares of common stock for the exercise of 4,480,938 warrants in a cashless transaction; the Company recorded a gain in the amount of $259,947 on this transaction, which is included in gain on derivative liabilities.

Common Stock Transactions During the Three Months Ended March 31, 2019

During the three months ending March 31, 2019, the Company issued 200,000 restricted shares of the Company’s common stock at valued $17,480 in exchange for services conducted on behalf of the Company. The value of these shares was based on the closing market price on the respective date of grant.

Also during the three months ended March 31, 2019, the Company charged the amount of $2,875 to additional paid-in capital in connection with the vesting of stock granted to its President.

Also during the three months ended March 31, 2019, the Company issued, in seven transactions, a total of 1,918,625 shares in connection with the conversion of notes payable principal and accrued interest in the aggregate amount of $86,000 and $4,260, respectively; a loss in the aggregate amount of $99,724 was recognized on these transactions.

Also during the three months ended March 31, 2019, the Company cancelled 400,000 shares of common stock issued to a former executive officer.

Preferred Stock

The Company has authorized 100,000,000 shares of Preferred Stock. At March 31, 2020, designations have been filed for the issuance of up to 400,000 shares of its Series X preferred stock, and for the issuance of up to 500,000 shares of its Series A Preferred stock.

Series A Preferred Stock

The Company has issued 4,800 and 0 shares of its 10% Series A Cumulative Redeemable Perpetual Preferred Stock (the “Series A Preferred Stock”) as of March 31, 2020 and December 31, 2019, respectively. The Series A Preferred Stock has a par value of $0.01 per share, no stated maturity, a liquidation preference of $25.00 per share, and will not be subject to any sinking fund or mandatory redemption and will remain outstanding indefinitely unless the Company decides to redeem or otherwise repurchase the Series A Preferred Stock. The Series A Preferred Stock is not redeemable prior to November 4, 2020. The Series A Preferred Stock will rank senior to all classes of the Company’s common stock and will accrue dividends at the rate of 10% on $25.00 per share. The Company reserves the right to pay the dividends in shares of the Company’s common stock at a price equal to the average closing price over the five days prior to the date of the dividend declaration. The Series A Preferred Stock will have no voting rights. The Company valued the 4,800 shares of Series A Preferred Stock at $71,558 or approximately $14.91 per share based upon an analysis performed by an independent valuation consultant.

Series A Preferred Stock Transactions During the Three Months Ended March 31, 2020

On March 2, 2020, the Company issued 4,800 shares of its Series A Preferred Stock to four individuals with certain skills and know-how to assist the Company in the development of its newly-formed subsidiary My Care, LLC. The Company has valued these shares at $71,558 or approximately $14.91 per share based upon an analysis performed by an independent valuation consultant. During the three months ended March 31, 2020, the Company accrued dividends in the amount of $967 on the Series A Preferred Stock. At March 31, 2020, dividend payable on the Series A Preferred Stock was $967. At March 31, 2020, if management determined to pay these dividends in shares of the Company’s common stock, this would result in the issuance of 39,534 shares of common stock based upon the average price of $0.02446 per share for the five day period ended March 31, 2020.

Series X Preferred Stock

The Company has issued 26,227 shares of its 10% Series X Cumulative Redeemable Perpetual Preferred Stock (the “Series X Preferred Stock”) as of March 31, 2020 and December 31, 2019 and 2018. The Series X Preferred Stock has a par value of $0.01 per share, no stated maturity, a liquidation preference of $25.00 per share, and will not be subject to any sinking fund or mandatory redemption and will remain outstanding indefinitely unless the Company decides to redeem or otherwise repurchase the Series X Preferred Stock; the Series X Preferred Stock is not redeemable prior to November 4, 2020. The Series X Preferred Stock will rank senior to all classes of the Company’s common stock and will accrue dividends at the rate of 10% on $25.00 per share. The Company reserves the right to pay the dividends in shares of the Company’s common stock at a price equal to the average closing price over the five days prior to the date of the dividend declaration. The Series X Preferred Stock will have “super” voting rights such that each share of Series X Preferred Stock will be entitled to 20,000 votes. The Series X Preferred Stock has a fair value of $34.73 as determined by the Company’s independent valuation consultant.

Series X Preferred Stock Transactions During the Three Months Ended March 31, 2020

During the three months ended March 31, 2020, the Company accrued dividends in the amount of $16,392 on the Series X Preferred Stock. At March 31, 2020, dividend payable on the Series X Preferred Stock was $16,392. At March 31, 2020, if management determined to pay these dividends in shares of the Company’s common stock, this would result in the issuance of 670,158 shares of common stock based upon the average price of $0.02446 per share for the five day period ended March 31, 2020.

Stock Options

A summary of options issued, exercised and cancelled are as follows:

	Shares		Weighted- Average Exercise Price ($)		Weighted- Average Remaining Contractual Term		Aggregate Intrinsic Value ($)
Outstanding at December 31, 2018		67,879	$	21.40		4.17	$	-
Granted		-		-		-		-
Cancelled		-		-		-		-

Outstanding at December 31, 2019		67,879	$	21.40		3.17	$	-

Granted		8,500,000	$	0.05		9.93		-
Cancelled		-		-		-		-
Outstanding at March 31, 2020		8,567,879	$	0.22		9.86	$	-

Exercisable at March 31, 2020		67,879	$	21.40		2.92	$	-

At March 31, 2020, the total stock-based compensation cost related to unvested awards not yet recognized was $331,201.

Stock Warrants

Subsequent to the restructuring of the Company and the spin-out, the Company had warrants to purchase common stock outstanding that were not terminated and have continued as part of the operations as detailed below. The warrants were adjusted for a one for 101 stock split due to the spin-out and restructuring plan as authorized. All warrants outstanding as of March 31, 2019 are scheduled to expire at various dates through 2019. A summary of warrants issued, exercised and expired are as follows:

	Shares			Weighted- Average Exercise Price ($)		Weighted- Average Remaining Contractual Term

Outstanding at December 31, 2018		1,167,653		$	2.18		4.36

Granted		400,000		$	0.00858		4.18
Additional warrants due to trigger of ratchet feature		6,659,382		$	0.00858		3.91
Exercised – cashless conversion		(3,514,900	)	$	0.00858		3.91
Forfeited		(2,769,482	)	$	0.00858		3.91
Expired		(142,653	)		17.42		-
Outstanding at December 31, 2019		1,800,000		$	0.00858		3.98

Granted		6,582,382		$	0.00858		3.70
Exercised		(5,480,938	)	$	0.00858		3.71
Outstanding at March 31, 2020		2,901,444		$	0.00858		3.93