Note 5 - Common Stock

3 Months Ended

Mar. 31, 2024

Notes to Financial Statements

Equity [Text Block]

NOTE 5 – COMMON STOCK

The Company is authorized to issue 75,000,000 shares of its capital stock, consisting of 10,000,000 shares of preferred stock, par value $0.001 per share, and 65,000,000 shares of common stock, par value $0.001 per share.

During 2022 and through June 30, 2023, the Company compensated each director with 4,000 shares of common stock per month (see discussion below of revised Board of Director compensation plan). For the years ended December 31, 2023 and 2022, the Company issued 72,000 and 156,000 shares of common stock for a total of $72,000 and $156,000, respectively, as board of director compensation related to this plan.

On September 2, 2022, the Company entered into a six-month agreement with a consultant that included the issuance of 60,000 common shares; such shares were issued as of December 31, 2022. During the years ended December 31, 2023 and 2022, the Company recognized $20,000 and $40,000, respectively, of expense related to this agreement.

On October 15, 2022, the Company entered into a one-year agreement with a consultant. Per the agreement, the Company will compensate the consultant $10,000 and issue 2,000 common shares per month. During the year ended December 31, 2023, the Company issued 18,000 common shares, recorded a subscription liability for $6,000 and expense of $24,000 related to this agreement. During the year ended December 31, 2022, the Company issued $5,000 shares and recorded $5,000 of expense related to this agreement.

On April 10, 2023, the Company issued 70,852 shares of common stock valued at $5.00 per share to settle outstanding consulting invoices owed to Jay Leaver, President for an aggregate amount of $354,260.

On July 1, 2023, the Company adopted a revised Board of Directors compensation plan, replacing the previous director compensation plan, which provided monthly grants to non-employee directors (see discussion above). Under the new plan, each director receives compensation for their service on the Board and reimbursements for certain expenses in accordance with the Company’s reimbursement policy. Until the Company’s common stock is listed on a national securities exchange, each non-employee director shall receive options to purchase shares of common stock valued at $150,000 by the Black-Scholes pricing model on an annual basis, payable quarterly, with an exercise price equal to the closing price of the Company’s common stock on the last business day of the quarter. See details of stock options below.

On January 12, 2024, the Company issued 40,000 shares of its common stock to Company director Mark Timm as a bonus effective December 31, 2023; this amount of $40,000 was recorded as a subscription liability – related party on the balance sheet as of year-end.

Stock Options

The following table summarizes the stock option activity for the nine months ended March 31, 2024:

	Number of Options		Weighted Average Exercise Price Per Share
Outstanding at December 31, 2023		134,145	$	2.86
Granted		37,875		3.33
Exercised		–		–
Forfeited and expired		–		–
Outstanding at March 31, 2024		172,020	$	3.10

On September 30, 2023, the Company granted a total of 96,060 options to the Company’s board of directors, or 19,212 options each to Robert J. Flynn, Jr., Lacie Kellogg, Mark Timm, Isaac Dietrich and Richard Nummi. The options have a ten-year term and have an exercise price of $2.01 per share. The fair value of the 96,060 options at issuance was $187,501. The Company valued the options using the Black-Scholes model with the following key assumptions: a fair value stock price of $2.01, an exercise price of $2.01, a term of ten years, volatility of 182%, a discount rate of 4.61% and a dividend yield of 0%.

On December 29, 2023, the Company granted a total of 38,085 options to the Company’s board of directors, or 7,617 options each to Robert J. Flynn, Jr., Lacie Kellogg, Mark Timm, Isaac Dietrich and Richard Nummi. The options have a ten-year term and have an exercise price of $5.00 per share. The fair value of the 38,085 options at issuance was $187,510. The Company valued the options using the Black-Scholes model with the following key assumptions: a fair value stock price of $5.00, an exercise price of $5.00, a term of ten years, volatility of 204%, a discount rate of 3.84% and a dividend yield of 0%.

On March 31, 2024, the Company granted a total of 37,875 options to the Company’s board of directors, or 7,575 options each to Robert J. Flynn, Jr., Lacie Kellogg, Mark Timm, Isaac Dietrich and Richard Nummi. The options have a ten-year term and have an exercise price of $5.00 per share. The fair value of the 37,875 options at issuance was $187,497. The Company valued the options using the Black-Scholes model with the following key assumptions: a fair value stock price of $5.00, an exercise price of $5.00, a term of ten years, volatility of 216%, a discount rate of 4.21% and a dividend yield of 0%.

As of March 31, 2024, the outstanding stock options have a weighted average remaining term of 9.3 years and have no aggregate intrinsic value.