Quarterly report pursuant to Section 13 or 15(d)

Stockholders' (Deficit)

Stockholders' (Deficit)
6 Months Ended
Jun. 30, 2020
Equity [Abstract]  
Stockholders' (Deficit)

Note 8 - Stockholders’ (Deficit)


Capital Stock


The Company has 260,000,000 authorized shares of capital stock, consisting of 250,000,000 shares of common stock, par value $0.001, and 10,000,000 shares of Preferred Stock, par value $0.001 per share. 


During the six months ended June 30, 2020, the Company received cash of $5,400 from the exercise of 100,000 options.


Common Stock Options


A summary of the Company’s option activity and related information follows:


    Number of
Under Options
    Range of
Option Price
Per Share
Exercise Price
Options Outstanding at December 31, 2019     8,425,824     $ 0.05 – 0.65     $ 0.17  
Options Granted     350,000       0.13       0.13  
Exercised     (100,000 )     0.54       0.54  
Expire/Cancelled     (250,000 )     0.36       0.36  
Options Outstanding at June 30, 2020     8,425,824     $ 0.05 – 0.65     $ 0.13  
Options Exercisable at June 30, 2020     4,441,433     $ 0.05 – 0.65     $ 0.20  


Share-based compensation expense for options totaling $74,388 was recognized in our results for the six months ended June 30, 2020 based on awards vested.


The valuation methodology used to determine the fair value of the options issued during the year was the Black-Scholes option-pricing model. The Black-Scholes model requires the use of a number of assumptions including volatility of the stock price, the average risk-free interest rate, and the weighted average expected life of the options.


The risk-free interest rate assumption is based upon observed interest rates on zero coupon U.S. Treasury bonds whose maturity period is appropriate for the term of the options.


Estimated volatility is a measure of the amount by which the Company’s stock price is expected to fluctuate each year during the expected life of the award. The Company’s calculation of estimated volatility is based on historical stock prices of these peer entities over a period equal to the expected life of the awards. The Company uses the historical volatility of peer entities due to the lack of sufficient historical data of its stock price.


As of June 30, 2020, there was $346,620 of total unrecognized compensation expense related to unvested employee options granted under the Company’s share-based compensation plans that is expected to be recognized over a weighted average period of approximately 3 year.


The weighted average fair value of options granted, and the assumptions used in the Black-Scholes model during the six months ended June 30, 2020 are set forth in the table below.


Weighted average fair value of options granted   $0.13
Risk-free interest rate   0.66% - 0.83%
Volatility   221% - 223%
Expected life (years)   10
Dividend yield   0.00%




Each share of Series A Preferred Stock, in preference to the holders of all Common Stock (as defined below), shall entitle its holder to receive, but only out of funds that are legally available therefore, cash dividends at the rate of ten percent (10%) per annum from the Original Issue Date on the Original Issue Price for such share of Series A Preferred Stock, compounding annually unless paid by the Corporation. Accrued dividends at June 30, 2020 and December 31, 2020 were $1,040,224 and $970,997 respectively.