NOTE 6 - EQUITY | NOTE 6 EQUITY Preferred Stock The Companys certificate of incorporation authorizes the issuance of 1,000,000 shares of preferred stock with designations, rights and preferences determined from time to time by its board of directors. Accordingly, the Companys board of directors is empowered, without stockholder approval, to issue shares of preferred stock with voting, liquidation, conversion, or other rights that could adversely affect the rights of the holders of the common stock. In May 2011, the Company issued 1,000,000 shares of preferred stock to Paul Tidwell. Each share of preferred stock is convertible into 50 shares of common stock. These preferred shares have the rights to receive dividends, preferences in liquidation and conversion rights. Common Stock On March 7, 2018, the Company issued 2,000,000 shares to a consultant for services. In June 2018, the Company issued 1,000,000 additional shares to the same consultant. The shares were valued at $0.01 and $0.006, respectively, per share using the stock price on issuance date. The shares issued were recorded as prepaid consulting fees and are being amortized during the contract period of one year. During the fiscal year ended January 31, 2019, the Company recorded $22,873 stock-based compensation based on the amortization. The Company also recorded $86,698 stock-based compensation for the shares issued to an independent advisor in the year ended January 31, 2018. At January 31, 2019, there was $8,286 of unamortized stock-based compensation expense to be recognized in future periods. During the year ended January 31, 2018, the Company issued 9,000,000 shares, including 2,000,000 shares to the Companys President, for services. These shares were valued at $154,600. Non-Statutory Stock Compensation Plan In July 2017, the Company established a Non-Statutory Stock Compensation Plan which, as adjusted, provides for the issuance of up to 33,000,000 shares of the Companys common stock. The plan expires on July 25, 2027. Number of Units Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value Outstanding, January 31, 2017 - $ - - - Granted 9,250,000 0.006 Cashless Exercised (9,250,000) 0.006 Outstanding, January 31, 2018 - - - - Exercisable, January 31, 2018 - - - - In August 2017, the Company granted options for 9,250,000 shares under the plan to an employee, consultants, and advisors for services, including 4,000,000 to the Companys President. The shares had an exercise price of $0.006, a term of 10 years, and vested immediately. The aggregate fair value of the options on the date of grant, using the Black-Scholes model, was $55,500. Variables used in the Black-Scholes option-pricing model for the options issued included: (1) a discount rate of 1.77% based on the daily yield curve rates for U.S. Treasury obligations, (2) expected term of five years based on the simplified method provided in Staff Accounting Bulletin, (3) expected volatility of 270% based on the historical volatility, (4) zero expected dividends, and (5) fair market value of the Company's stock at $0.006 per share. The Company recognized $55,500 stock-based compensation expense related to these issuances. No options were granted during the year ended January 31, 2019. |