NOTE 7 - STOCKHOLDERS’ DEFICIT

Board of Directors fees

The Company recorded directors’ fees of $10,000 and $10,000 during the three months ended March 31, 2019 and 2018, representing the cash fees.

Stock Issuances

During the three months ended March 31, 2019, the Company issued 1,500,000 shares at $.10 per share for proceeds of $150,000. In addition, the Company issued 4,649,291 shares of the Company’s common stock for the conversion of $464,929 of accounts / loans payable – related party at $.10 per share.

During the three months ended March 31, 2018, in connection with the issuance of $500,000 in principal of 11% Convertible Debenture the Company issued to HEP Investments 180,000 shares of common stock valued at $18,000 and a five-year warrant to purchase 500,000 shares of common stock at an exercise price of $.10 per share.

On January 16, 2018, the Company issued to a newly hired employee warrants to purchase 500,000 shares of common stock at $.10. The warrants were valued at $33,045 using the Black Scholes pricing model relying on the following assumptions: volatility 175.59%; annual rate of dividends 0%; discount rate 2.36%.

On June 19, 2018, the Company issued a warrant pursuant to an offer of employment with an employee to purchase 1,000,000 shares of common stock at an exercise price of $.11 with a term of 5 years (these warrants were valued at $163,798 using the Black Scholes pricing model relying on the following assumptions: volatility 176.10%; annual rate of dividends 0%; discount rate 2.77%). These warrants will vest one year from issuance (the Company has recorded $19,745 as stock-based compensation during the months ended March 31, 2019).

Executive Compensation

As compensation for serving as Chief Financial Officer, the Company, quarterly, issues warrants to purchase 50,000 shares of common stock to Philip M. Rice at the prevailing market price with a term of 5 years, provided that the preceding quarterly and annual filings were submitted in a timely and compliant manner, at which time such warrants would vest.

On February 12, 2019, the Company issued the CFO warrants to purchase 50,000 shares of common stock at $.10. The warrants were valued at $4,766 using the Black Scholes pricing model relying on the following assumptions: volatility 180.46%; annual rate of dividends 0%; discount rate 2.53%.

On February 21, 2018, the Company issued the CFO warrants to purchase 50,000 shares of common stock at $.11. The warrants were valued at $5,255 using the Black Scholes pricing model relying on the following assumptions: volatility 177.09%; annual rate of dividends 0%; discount rate 2.69%.

Common Stock Warrants

A summary of the status of the Company’s warrants is presented below:

Warrants outstanding and exercisable by price range as of March 31, 2019 were as follows: