| COMMON SHARES | NOTE 8 – COMMON SHARES On January 26, 2016, the Company
issued 1,000,000 shares of common stock pursuant to a subscription agreement dated June 12, 2015. On February 1, 2016 the Company issued 540,000 shares of common stock to a consultant in respect of his consulting
services for the Company. The Company has estimated the fair value of such shares, and recorded an expense of $108,327. In February 2016, the Company
conducted an offering (the “February Offering”) consisting of (a) up to USD $1,925,000 of the Company’s shares
of common stock, par value $0.001 per share (“Common Stock”), priced at the closing price for shares of Common Stock,
as reported on the OTCQB Venture Marketplace, on the trading day prior to the closing of the February Offering, and (b) 5-year
warrants to purchase shares of Common Stock in an amount equal to 50% of the number of shares of Common Stock so purchased by the
subscriber (the “February Warrants”, together with the shares of Common Stock subscribed for, the “February Securities”).
The February Securities have been offered pursuant to subscription agreements with each investor (the “February Subscription
Agreement”). In addition to other customary provisions, each February Subscription Agreement provides that the Company will
use its reasonable commercial efforts to register all shares of Common Stock sold in the February Offering, including all shares
of Common Stock underlying the February Warrants, within 60 days of the closing of the February Offering. The February Warrants
are exercisable for 5 years from the date of issuance at $0.10 per share, include an option by which the holder may exercise the
February Warrant by means of a cashless exercise, and include customary weighted-average price adjustment and anti-dilution terms.
On February 15, 2016, the Company completed the only closing of the February Offering, representing aggregate gross proceeds to
the Company of $1,925,000. In connection with the closing, the Company and subscribers entered into (a) February Subscription Agreements
for, in the aggregate, 35,000,000 shares of Common Stock at $0.055 per share, and (b) February Warrants to purchase, in the aggregate,
up to 17,500,000 shares of Common Stock at an exercise price of $0.10 per share. The warrants were accounted for as derivative
liabilities. The Company has estimated the fair value of such warrants at a value of $933,358 at the date of issuance and using
the Black-Scholes option pricing model using the following assumptions:
%
Dividend yield 0
Risk-free interest rate 1.20 %
Expected term (years) 5
Volatility 203 % The Company engaged Maxim Group
LLC (“Maxim”) to assist in the February Offering. Pursuant to the terms of an engagement letter between Maxim and the
Company, Maxim received commissions equal to 7% of the gross proceeds raised by Maxim in the February Offering, warrants to purchase,
in the aggregate, up to 2,800,000 shares of Common Stock at an exercise price of $0.0605 per share and to purchase, in the aggregate,
up to 1,400,000 shares of Common Stock at an exercise price of $0.11 per share. The Company has estimated the fair value of such
warrants at a value of $224,413 at the date of issuance and using the Black-Scholes option pricing model using the following assumptions:
%
Dividend yield 0
Risk-free interest rate 1.20 %
Expected term (years) 5
Volatility 203 % On March 15, 2016, the Company
issued 85,000 shares of Common Stock to a consultant in respect of his consulting services for the Company. The Company has estimated
the fair value of such shares, and recorded an expense of $5,685. On April 13, 2016, the Company issued 1,000,000 shares of Common Stock of the Company to a consultant in consideration
for corporate finance, investor communications and financial and investor public relations services. The Company has estimated
the fair value of such shares, and recorded an expense of $72,733. On June 13, 2016 and per the
consulting agreement the Company issued an additional 1,000,000 shares of Common Stock as a service bonus since the agreement
was not terminated prior to June 9, 2016. The Company has estimated the fair value of such shares, and recorded an expense of
$89,000. On April 13, 2016, we issued an aggregate of 875,000 shares of our Common Stock to a consultant, pursuant
to consulting agreements dated September 1, 2015 and March 1, 2016, in consideration for investor relations and communications
services. The Company has estimated the fair value of such shares, and recorded an expense of $42,467. On May 18, 2016, a 1.5-year warrant
to purchase shares of Common Stock, dated May 4, 2015, was exercised into 700,000 shares of common stock at an exercise price of
$0.058 per share, for total consideration of $40,235. On June 2, 2016, we issued
13,930,742 shares of our Common Stock in consideration of $145,525 pursuant to all but one of the July 2015 Offering Subscription
Agreements, with the issuance of the remaining 7,658,129 shares of our Common Stock currently in process. On June 13, 2016, the Company
issued 7,103,467 shares of Common Stock to several officers, directors, employees and/or consultants of the Company.
All shares were issued pursuant to the Company’s Global Share and Options Incentive Enhancement Plan (2014) (the “2014
Incentive Plan”) and the Company’s Global Share Incentive Plan (2010). The Company has estimated and recorded the
fair value of such shares as an expense of $632,208 which was recorded through the vesting periods. On June 26, 2016, the Company
issued 500,000 shares of Common Stock in order to complete its obligations under the Share Purchase Agreement from 2014. |
