Quarterly report pursuant to Section 13 or 15(d)

STOCKHOLDERS' DEFICIT

v3.4.0.3
STOCKHOLDERS' DEFICIT
 3 Months Ended
Mar. 31, 2016
STOCKHOLDERS' DEFICIT  
STOCKHOLDERS' DEFICIT

NOTE 6 - STOCKHOLDERS’ DEFICIT

 

Board of Directors fees

 

As compensation for serving as a member of the board of directors, the Company granted warrants to purchase 50,000 shares of common stock to Philip M. Rice (CFO and a Director) in January, 2015, at an exercise price of $.09 per share.  The warrants have a term of three years and vested or will vest as follows: 12,500 vested on the grant date and the remaining 37,500 shall vest quarterly (12,500 per quarter). The warrants were valued at $3,664 using the Black Scholes pricing model relying on the following assumptions: volatility 128.38%; annual rate of dividends 0%; discount rate 0.68%.  In addition, Mr. Rice will receive $10,000 for each annual term served, paid quarterly.

 

The Company recorded directors’ fees of $4,991 during the three months ended March 31, 2015, representing the fees expensed and the value of the vested warrants.

 

As compensation for serving as a member of the board of directors, the Company granted warrants to purchase 125,000 shares of common stock to Robert O. Rondeau, a new Director, in March 2016, at an exercise price of $.09 per share.  The warrants have a term of five years and vest immediately.  The warrants were valued at $10,588 using the Black Scholes pricing model relying on the following assumptions: volatility 168.01%; annual rate of dividends 0%; discount rate 0.97%.  In addition, Mr. Rondeau will receive $10,000 for each annual term served, paid quarterly.

 

Stock Issuances

 

During the three months ended March 31, 2015, the Company received proceeds of $48,500 from the issuance of 970,000 shares of common stock.

 

During the three months ended March 31, 2015, in connection with the issuance of $362,500 in principal, of 11% Convertible Debenture the Company also issued 151,329 shares of common stock valued at $13,050 and a warrant to purchase 362,500 shares of common stock at an exercise price of $.10 per share.

 

During the three months ended March 31, 2016, in connection with the issuance of $1,000,000 in principal, of 11% Convertible Debenture the Company issued 517,500 shares of common stock valued at $36,000 and a warrant to purchase 1,000,000 shares of common stock at an exercise price of $.10 per share.

 

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

 

 

March 31, 2016

December 31, 2015

  

Number of

Warrants

Weighted

Average

Exercise

Price

Number of

Warrants

Weighted

Average

Exercise

Price

 

 

 

 

 

Outstanding, beginning of year

14,705,818

$       0.13

9,053,005

$         0.16

Issued

1,175,000

0.10

7,192,500

0.09

Exercised

-

-

-

-

Cancelled

-

-

(96,575)

0.14

Expired

(100,000)

0.12

(1,443,112)

0.13

Outstanding, end of period

15,780,818

$      0.13

14,705,818

$         0.13

 

Warrants outstanding and exercisable by price range as of March 31, 2016 were as follows:

 

 

Outstanding Warrants

 

Exercisable Warrants

 

Range of

 

Number

 

Average

Weighted

Remaining

Contractual

Life in

Years

 

Exercise

Price

 

Number

 

Weighted

Average

Exercise

Price

 

 

 

 

 

 

 

 

 

 

 

 

$

0.08

 

3,225,000

 

4.41

$

0.08

 

3,225,000

$

0.08

 

0.085

 

50,000

 

4.02

 

0.085

 

50,000

 

0.085

 

0.088

 

50,000

 

4.12

 

0.088

 

50,000

 

0.088

 

0.09

 

209,110

 

3.44

 

0.09

 

209,110

 

0.09

 

0.10

 

4,802,200

 

4.87

 

0.10

 

4,802,200

 

0.10

 

0.12

 

2,635,368

 

1.28

 

0.12

 

2,635,368

 

0.12

 

0.14

 

50,000

 

3.37

 

0.14

 

50,000

 

0.14

 

0.15

 

2,485,274

 

2.05

 

0.15

 

2,485,274

 

0.15

 

0.17

 

50,000

 

3.00

 

0.17

 

50,000

 

0.17

 

0.19

 

100,000

 

1.87

 

0.19

 

100,000

 

0.19

 

0.20

 

250,000

 

1.08

 

0.20

 

250,000

 

0.20

 

0.22

 

477,004

 

0.59

 

0.22

 

477,004

 

0.22

 

0.25

 

707,000

 

2.27

 

0.25

 

707,000

 

0.25

 

0.30

 

250,000

 

2.66

 

0.30

 

250,000

 

0.30

 

0.33

 

250,000

 

2.25

 

0.33

 

250,000

 

0.33

 

0.36

 

39,863

 

0.59

 

0.36

 

39,863

 

0.36

 

0.38

 

100,000

 

0.53

 

0.38

 

100,000

 

0.38

 

0.40

 

50,000

 

0.69

 

0.40

 

50,000

 

0.40

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

15,780,818

 

1.78

 

 

 

15,780,818

$

0.13