Shareholders’ Equity | Note 8. Shareholders’ Equity Common Stock On January 17, 2022, the Company issued a law firm 1,000,000 27,500 On January 31, 2022, the Company issued a consultant 121,212 4,000 On February 2, 2022, the Company issued Charles Hyatt, a director, 10,000,000 0.025 250,000 On February 2, 2022, the Company issued Grace Hyatt, the adult child of Charles Hyatt, a director, 600,000 shares from the exercise of a warrant at $ 0.025 per share in consideration of $ 15,000 . On February 28, 2022, the Company issued a consultant, 85,106 4,000 Preferred Stock During the second quarter of 2010, the holders of the majority of the Company’s outstanding shares of common stock approved an amendment to the Company’s Articles of Incorporation authorizing the issuance of 10,000,000 425,000 18.23 Series A Convertible Preferred Stock are entitled to 250 votes for each share held 425,000 Equity Incentive Plan On May 26, 2021 the Company adopted an Equity Incentive Plan (the “Plan”). Under the Plan, stock options may be granted to employees, directors, and consultants in the form of incentive stock options or non-qualified stock options, stock purchase rights, time vested and/performance invested restricted stock, and stock appreciation rights and unrestricted shares may also be granted under the Plan. 25,000,000 shares are reserved for issuance under the Plan. The term of the Plan is ten years Equity Compensation Plan Information as of March 31, 2022: Schedule of Equity Compensation Plan Information Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) Weighted – average exercise price of outstanding options, warrants and rights (b) Number of securities remaining available for future issuances under equity compensation plans (excluding securities reflected in column (a) (c) Equity Compensation Plans Approved by Security Holders 2,200,000 $ .0431 22,800,000 Equity Compensation Plans Not Approved by Security Holders — — — Total 2,200,000 $ .0434 22,800,000 Options On April 14, 2020, the Company entered into a Non-Qualified Stock Option Agreement with Richard Carmichael (the “Carmichael Option Agreement”). Under the terms of the Carmichael Option Agreement, as additional compensation, the Company granted Mr. Carmichael an option (the “Carmichael Option”) to purchase up to an aggregate of 125,000,000 0.045 75,000,000 50,000,000 ● the right to purchase 25,000,000 3,500,000 ● the right to purchase an additional 25,000,000 7,000,000 ● the right to purchase an additional 25,000,000 10,500,000 The Carmichael Option Agreement provides that the Carmichael Option is exercisable by Mr. Carmichael on a cashless basis. The Carmichael Option is not transferrable by Mr. Carmichael, and he must remain an employee of the Company as an additional term of vesting. Once a portion of the Carmichael Option vests, it is exercisable by Mr. Carmichael for 90 days. Any portion of the Carmichael Option which does not vest during the Net Revenue Period lapses and Mr. Carmichael has no further rights thereto. The fair value of the Carmichael Option on the date of the grant was $ 4,370,109 .26 1.5 0 320 25,000,000 25,000,000 218,505 On November 5, 2020, the Company entered into a Non-Qualified Stock Option agreement with Christopher Constable (the “Constable Option Agreement”) as part of his employment agreement. As part of the Constable Option Agreement, the Company granted Mr. Constable an option (the “Bonus Option”) to purchase up to an aggregate of 30,000,000 0.0184 10,000,000 20,000,000 As part of the Constable Option Agreement, the Company also granted Mr. Constable an option (the “Bonus Option”) to purchase up to an aggregate of 30,000,000 0.0184 10,000,000 20,000,000 ● the right to purchase 2,000,000 5,000,000 ● the right to purchase an additional 3,000,000 7,500,000 ● the right to purchase an additional 5,000,000 10,000,000 The Constable Option Agreement provides that the Compensation Options and Bonus Options are exercisable by Mr. Constable on a cashless basis. The Constable Option is not transferrable by Mr. Constable, and he must remain an employee of the Company as an additional term of vesting. Once a portion of the Constable Option vests, it is exercisable by Mr. Constable for four years. The fair value of the Bonus Options on the date of the grant was $ 578,082 .14 2.0 0 312.2 82,734 On June 14, 2021, the Company issued options to purchase up to an aggregate of 1,125,000 shares of common stock to various employees under the Plan. The options were issued pursuant to stock option grant agreements and are exercisable at $ 0.036 per share for a period of four years from the date of issuance, with 12.5 % of the options vesting each fiscal quarter over a period of two years . The fair value of the options totaled $ 38,369 using the Black-Scholes option pricing model with the following assumptions: (i) risk free interest rate of .21 %, (ii) expected life of 2 years, (iii) dividend yield of 0 %, (iv) expected volatility of 304.77 %. The stock options expense recognized for the three months ended March 31, 2022 was $ 4,142 . On August 1, 2021 as part of the Blake Carmichael Employment Agreement (as defined below), the Company granted Blake Carmichael a 5 3,759,400 0.0399 33.3% upon the execution of the agreement, 33% at the first anniversary date and 33% upon the second anniversary date. 149,076 .25 2.5 0 346.36 49,692 As part of the Blake Carmichael Agreement, the Company granted Blake Carmichael a 5 18,000,000 713,777 0.25 2.5 0 346.36 0.0399 500,000 During the third quarter of 2021 the Company issued options to purchase up to an aggregate of 175,000 shares of common stock to two employees under the Plan. The options were issued pursuant to stock option grant agreements and are exercisable at a range of $ .044 to $ .049 per share for a periods ranging from three to four years from the date of issuance, with quarterly vesting periods over one to two years . The fair value of the options totaled $ 7,149 using the Black-Scholes option pricing model with the following assumptions: (i) risk free interest rate from .155% to .20% , (ii) expected life of 1.5 to 2 years, (iii) dividend yield of 0 %, and (iv) expected volatility of 249.38 % to 287.12 %. The stock options expense recognized for the three months ended March 31, 2022 was $ 1,494 . On September 3, 2021, the Company issued options to purchase up to an aggregate of 300,000 0.053 five years 12.5 two years 15,814 0.315 2.5 0 339.21 1,977 As part of the Buban Agreement, the Company is also obligated to enter into a Non-Qualified Stock option agreement (the “Buban Bonus Options”) that will grant Ms. Buban a 5 7,110,000 374,786 .3150 2.5 0 339.21 0.0531 On September 3, 2021 the Company issued options to purchase up to an aggregate of 500,000 shares of common stock to various employees of SSI under the Plan. The options were issued pursuant to a stock option grant agreement and is exercisable at $ 0.0531 per share for a period of four years from the date of issuance, with 12.5 % of the options vesting each fiscal quarter over a period of two years . The fair value of the options totaled $ 25,201 using the Black-Scholes option pricing model with the following assumptions: (i) risk free interest rate of 0.21 %, (ii) expected life of 2 years, (iii) dividend yield of 0 %, (iv) expected volatility of 276.1 %. The stock options expense recognized for the three months ended March 31, 2022 was $ 3,150 . During the fourth quarter of 2021 the Company issued options to purchase up to an aggregate of 100,000 shares of common stock to two employees under the Plan. The options were issued pursuant to stock option grant agreements and are exercisable at a range of $ .040 to $ .0419 per share for a period of four years of from the date of issuance, with quarterly vesting periods over two years . The fair value of the options totaled $ 3,863 using the Black-Scholes option pricing model with the following assumptions: (i) risk free interest rate of .204 % (ii) expected life of 2 years, (iii) dividend yield of 0 %, (iv) expected volatility of 249.38 % to 287.12 %. The stock options expense recognized for the three months ended March 31, 2022 was $ 483 . On November 5, 2021 the Company entered into a non-qualified stock option agreement with Christopher Constable (the “Constable Option Agreement”) as part of his employment agreement. Under the terms of the option agreement, the Company granted Mr. Constable a 5 year option to purchase 2,403,846 shares of the Company’s common stock at an exercise price of $ 0.041 (the “Compensation Options”). The Compensation Options were immediately vested. The fair value of the options on the date of the grant was $ 98,976 using the Black-Scholes option pricing model with the following assumptions: (i) risk free interest rate of .53 %, (ii) expected life of 2.5 years, (iii) dividend yield of 0 %, and (iv) expected volatility of 269.12 %. This stock option was fully expensed as of December 31, 2021. On January 21, 2022 the Company issued options to purchase up to an aggregate of 75,000 shares of common stock to an employee under the Plan. The options were issued pursuant to stock option grant agreements and are exercisable at $ 0.032 per share for a period of four years from the date of issuance, with quarterly vesting periods over two years . The fair value of the options totaled $ 2,259 using the Black-Scholes option pricing model with the following assumptions: (i) risk free interest rate of 1.016 % (ii) expected life of 2 years, (iii) dividend yield of 0 %, and (iv) expected volatility of 266.8 %. The stock options expense recognized for the three months ended March 31, 2022 was $ 283 . A summary of the Company’s outstanding stock options as of December 31, 2021, and changes during the three months ended March 31, 2022 is presented below: Schedule of Option Activity Number of Weighted Weighted Aggregate Outstanding – December 31, 2021 233,128,266 $ 0.0362 2.23 $ 795,201 Granted 75,000 0.0320 Forfeited Exercised - - Outstanding – March 31, 2022 (unaudited) 233,203,266 $ 0.0362 1.98 Exercisable – March 31, 2022 (unaudited) 101,333,874 $ 0.0326 1.81 $ 1,063,526 Warrants On September 1, 2021, the Company issued Mr. Charles F. Hyatt, a member of our Board of Directors, 10,000,000 0.025 250,000 On September 1, 2021, the Company issued Ms. Grace Hyatt, the adult child of a member of our Board of Directors, 600,000 0.025 15,000 In September, 2021, the Company issued 4,000,000 0.025 100,000 On February 2, 2022, the Company issued Charles Hyatt, a director, 10,000,000 0.025 250,000 On February 2, 2022, the Company issued Grace Hyatt, the adult child of Charles Hyatt, a director, 600,000 shares from the exercise of a warrant at $ 0.025 per share in consideration of $ 15,000 . A summary of the Company’s warrants as of December 31, 2021 and changes during the three months ended March 31, 2022 is presented below: Schedule of Warrants Activity Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Life in Years Aggregate Intrinsic Value Outstanding – December 31, 2021 14,600,000 $ 0.025 1.67 $ 153,300 Granted Exercised (10,600,000 ) $ 0.025 Forfeited or Expired - Outstanding – March 31, 2022 4,000,000 $ 0.025 1.44 Exercisable – March 31, 2022 4,000,000 $ 0.025 1.44 $ 64,400 |