| STOCKHOLDERS' EQUITY (DEFICIT) | NOTE 5 STOCKHOLDERS’ EQUITY (DEFICIT) Preferred Stock As of December 31, 2017,
the Company has 5,000,000 shares of preferred stock, par value $0.001, authorized and 610,000 shares issued and outstanding. On December 11, 2009, the
Company filed a Certificate of Designation with the State of Nevada, to designate 500,000 shares of preferred stock as Series B
Convertible Preferred Stock (“Series B Convertible Preferred Stock”). Effective November 5, 2014, the number of shares
designated as Series B Convertible Preferred Stock was increased to 1,000,000 shares. Each share of Series B
Convertible Preferred Stock has a par value of $0.001, and a stated value equal to $5.00 (“Stated Value”). Holders
of the Series B Convertible Preferred Stock are entitled to receive dividends or other distributions with the holders of the common
stock of the Company on an as converted basis when, as, and if declared by the directors of the Company. Holders of the Series
B Convertible Preferred Stock are entitled to convert each share of the Series B Convertible Preferred Stock into fifty (50) shares
of common stock. Upon any liquidation,
dissolution or winding-up of the Company, whether voluntary or involuntary, holders of the Series B Convertible Preferred Stock
are entitled to receive out of the assets, whether capital or surplus, of the Company an amount equal to the Stated Value, pro
rata with the holders of the common stock. Class A Common Stock As of March 31, 2018, the
Company has 50,000,000 shares of Class A common stock, par value $0.001, authorized and no shares issued and outstanding. In October
2003, the Company issued 50,000,000 shares of Class A common stock at par value ($50,000). These shares were converted into 50,000,000
shares of common stock in 2006. Common Stock The Company was incorporated
on December 18, 2002, with 45,000,000 shares of Common Stock, par value $0.001, authorized. The Articles of Incorporation were
amended in 2006 to increase the number of authorized shares to 100,000,000 shares, and in 2009 to increase the number of authorized
shares to 200,000,000. As a result of a screener’s error, the Company previously disclosed in its Quarterly Report on Form
10-Q for the quarters ended September 30, 2015 and December 31, 2015 that it increased the number of authorized shares of common
stock to 300,000,000. On March 31, 2016, our Board of Directors approved an amendment (the “Amendment”) to the Company’s
Articles of Incorporation to increase the total number of shares of authorized capital stock to 305,000,000 shares, par value $0.001
per share, consisting of (i) 300,000,000 shares of Common Stock, up from 200,000,000 shares of Common Stock, and (ii) 5,000,000
shares of Preferred Stock, subject to shareholder approval (the “Proposal”). On March 31, 2016, a majority of the Company’s
stockholders approved the Amendment. The Company filed a definitive information statement on Schedule 14C with the Securities and
Exchange Commission on May 4, 2016 (the “Information Statement”). The Information Statement was furnished to all of
the Company’s shareholders for the purpose of informing them of the action taken by a majority of the Company’s stockholders. As of March 31, 2018, the Company has 245,438,947 shares of common
stock issued and outstanding.
● During the three months ended September 30, 2016, the Company sold, for net proceeds of $155,991, units consisting of an aggregate of (i) 3,130,000 shares, (ii) warrants to purchase 1,956,250 shares at $0.70 per share, and (iii) warrants to purchase 985,950 shares at $1.00 per share. The warrants expire at various times through January 15, 2018.
● During the three months ended September 30, 2016, the Company issued an aggregate of 1,669,633 shares for consulting services valued at $84,400, based on the stock price at the time of the respective agreements underlying the services provided.
● During the three months ended December 31, 2016, the Company sold, for net proceeds of $272,904, units consisting of an aggregate of (i) 5,470,000 shares, (ii) warrants to purchase 3,418,750 shares at $0.70 per share, and (iii) warrants to purchase 1,723,050 shares at $1.00 per share. The warrants expire at various times through January 31, 2018.
● During the three months ended December 31, 2016, the Company issued an aggregate of 5,000,000 shares for consulting services valued at $550,000 based on the stock price at the time of the respective agreements underlying the services provided.
● During the three months ended March 31, 2017, the Company sold, for net proceeds of $127,247.50, units consisting of an aggregate of (i) 2,550,000 shares, (ii) warrants to purchase 1,593,750 shares at $0.70 per share, and (iii) warrants to purchase 803,250 shares at $1.00 per share. The warrants expire at various times through September 27, 2018.
● During the three months ended March 31, 2017, the Company issued an aggregate of 2,423,000 shares of common stock for consulting services valued at $283,955, based on the stock price at the time of the respective agreements underlying the services provided.
● During the three months ended June 30, 2017, the Company sold, for net proceeds of $242,157, units consisting of an aggregate of (i) 7,450,000 shares, (ii) warrants to purchase 3,031,250 shares at $0.70 per share, and (iii) warrants to purchase 1,527,750 shares at $1.00 per share. The warrants expire at various times through October 20, 2018.
● On September 11, 2017, we received a license to certain patents from Chaya Hendrick, our founder and CEO, related to our technologies until the expiration of the patents. As consideration, we issued Chaya Hendrick, or her assigns, (i) 200,000 shares of Series B Convertible Preferred Stock, (ii) a royalty equal to 5% of gross revenues derived from products sold related to the patents, and (iii) certain minimum required payments beginning at $50,000 and doubling each year thereafter. The Series B Preferred Shares may be converted at the election of holder on a basis for 50 common shares for each preferred share at any time or an aggregate of 10,000,000 common shares in exchange for all 200,000 preferred shares.
● During the three months ended September 30, 2017, the Company sold for cash 2,500,000 shares of common stock and warrants to purchase: (i) 937,500 shares at $0.70 per share, (ii) 500,000 shares at $0.20 per share, (iii) 472,500 shares at $1.00 per share and (iv) 252,000 shares at $0.50 per share for net proceeds of $114,625. The warrants expire at various times through September 28, 2019
●
During the three months ended September 30,
2017, the Company issued 362,864 shares of common stock for consulting services valued at $21,825, based on the stock price at
the time of the respective agreements underlying the services provided.
●
During the three months ended December 31,
2017, the Company sold for cash 8,319,000 shares of common stock and warrants to purchase: (i) 3,250,000 shares at $0.20 per share
and (ii) 1,638,000 shares at $0.50 per share, for net proceeds of $259,362. The warrants expire at various times through December
29, 2019 During the three months ended December 31,
2017, the Company issued 212,164 shares of common stock for consulting services valued at $15,000, based on the stock price at
the time of the respective agreements underlying the services provided.
●
During the three months ended March 31, 2018,
the Company sold for cash 2,850,000 shares of common stock and warrants to purchase: (i) 2,051,250 shares at $0.70 per share and
(ii) 929,250 shares at $1.00 per share, for net proceeds of $142,305. The warrants expire at various times through February 21,
2020. During the three months ended March 31, 2018,
the Company issued 508,620 shares of common stock for consulting services valued at $30,000, based on the stock price at the time
of the respective agreements underlying the services provided. Warrants From time to time the Company granted warrants
in connection with private placements of securities, as described herein. In July 2015, as consideration
for a consulting agreement, the Company issued warrants to purchase 300,000 shares of its common stock at an exercise price of
$0.01 per share. The warrants are fully vested and exercisable for five-years. The Company valued the warrants using the Black-Scholes
method with the following criteria: stock price of $0.14; volatility 150%; term 5 years; and risk-free rate of 1.71%. The criteria
yielded a per-warrant value of $0.14, resulting in a total value of $42,000 for the 300,000 warrants. The Company recorded the
charge to consulting expense over the three-month term of the consulting agreement. During the three months ended September 30,
2016, the Company recorded a charge of $35,000 to consulting expense, which is included in other general and administrative expenses
in the condensed consolidated statement of operations. In April 2016, as partial
consideration for consulting services rendered, the Company authorized to be issued warrants to purchase 1,000,000 shares of its
common stock at an exercise price of $0.03 per share (“$0.03 Warrants”), and 2,000,000 warrants to purchase shares
of its common stock at an exercise price of $0.08 per share (“$0.08 Warrants,” and, together with the $0.03 Warrants,
the “Warrants”). The Warrants are fully vested and exercisable for three-years. The Company valued the Warrants using
the Black-Sholes option pricing model with the following criteria: stock price of $0.11; volatility 136%; term 3 years; and risk-free
rate of 0.92%. The criteria yielded a per-warrant value of $0.10 for the $0.03 Warrants, and a per-warrant value of $0.09 for the
$0.08 Warrants, resulting in a total value of $280,000 for the Warrants. The expense has been included in other general and administrative
expenses in the consolidated statement of operations. As of March 31, 2018 and June 30, 2017, the
following is a breakdown of the warrant activity: March 31, 2018:
Outstanding - June 30, 2017 20,276,399
Issued 7,868,500
Exercised —
Expired 13,639,400
Outstanding - March 31, 2018 14,505,499 June 30, 2017:
Outstanding - June 30, 2016 12,540,199
Issued 15,040,000
Exercised —
Expired (7,303,800 )
Outstanding - June 30, 2017 20,276,399 At March 31, 2018, all
of the 14,505,499 warrants are vested and (i) 11,205,499 warrants expire at various times prior to February 2020,
(ii) 3,000,000 warrants expire in September 2019, (iii) and 300,000 warrants expire in July 2020. |
