CAPITAL STOCK AND STOCKHOLDERS' DEFICIT | NOTE 9 – CAPITAL STOCK AND STOCKHOLDERS’ EQUITY Preferred Stock As of December 31, 2019, there were outstanding 133.8 shares of Series A Preferred Stock, 71 shares of Series B Preferred Stock, 290.4 shares of Series C Preferred Stock and 5,000 shares of Series D Preferred Stock. During December 2018, we designated 5,000 shares of preferred stock as Series D 0% Convertible Preferred Stock (the “Series D Preferred Stock”). Each share of Preferred Stock has a par value of $0.0001 per share and a stated value equal to $1.00 (the “Stated Value”). With respect to a vote of stockholders to approve a reverse split of the Common Stock to occur no later than December 31, 2019, only, each share of Series D Preferred Stock held by a Holder, as such, was entitled to 30,001 votes. On any matter presented to the stockholders of the Corporation for their action or consideration at any meeting of stockholders of the Corporation (or by written consent of stockholders in lieu of meeting), each holder of outstanding shares of Series D Preferred Stock shall be entitled to cast the number of votes equal to the number of whole shares of Common Stock into which the shares of Series D Preferred Stock held by such holder are convertible as of the record date for determining stockholders entitled to vote on such matter. Except as provided by law or by the other provisions of the certificate of incorporation, holders of the Series D Preferred Stock shall vote together with the holders of Common Stock as a single class. Each share of Series D Preferred Stock shall be convertible, at any time and from time to time from and after the Original Issue Date at the option of the Holder thereof, into that number of shares of Common Stock (subject to the limitations set forth in Section 6(d)) determined by dividing the Stated Value of such share of Series D Preferred Stock by the Conversion Price. As of December 31, 2019, the Conversion Price is $0.125 per share of Series D Preferred Stock. In December 2015, we issued 1,853 shares of our Series A 0% Convertible Preferred Stock (the “Series A Preferred Stock”), with a stated value of $1,000 per share and the common shares are issuable pursuant to conversion of the Series A Preferred Stock at a conversion price of $112.50 per share as of December 31, 2019, subject to a 9.99% beneficial ownership limitation and subject to adjustment pursuant to stock splits and dividends. The Series A Preferred Stock was subject to adjustment pursuant to anti-dilution protection for subsequent equity sales for a period of 18 months from the effective date of the registration statement registering the shares underlying the Series A Preferred Stock, or until July 29, 2017. In December 2016, we issued 1,000 shares of our Series B 0% Convertible Preferred Stock (the “Series B Preferred Stock”), with a stated value of $1,000 per share and the common shares are issuable pursuant to conversion of the Series B Preferred Stock at a conversion price of $18.75 per share as of December 31, 2019, subject to beneficial ownership limitations and subject to adjustment pursuant to stock splits and dividends, and subject to adjustment pursuant to anti-dilution protection for subsequent equity sales and other conversion price adjustments. In March and April 2017, issued 290.43148 shares of Series C 0% Convertible Preferred Stock (the “Series C Preferred Stock”). The Series C Preferred Stock has a stated value of $1,000 and the common shares issuable pursuant to conversion of the Series C Preferred Stock at a conversion price of $18.75 per share as of December 31, 2019, subject to certain beneficial ownership limitations and subject to adjustment pursuant to stock splits and dividends, and pursuant to anti-dilution protection for subsequent equity sales for a period of twelve (12) months from the issuance of the Series C Preferred Stock. During January 2019, we issued the 5,000 shares of Series D Convertible Preferred Stock for proceeds of $5,000. As a result past equity financings and conversions of debentures, the conversion prices of (i) our Series A Preferred Stock has been reduced to $13.25 per share at December 31, 2019, (ii) our Series B Preferred Stock has been reduced to $0.01 per share at December 31, 2019, (iii) 200 shares of our Series C preferred stock has been reduced to $0.50 per share at December 31, 2019, (iv) 90.43418 shares of our Series C Preferred Stock has been reduced to $0.25 per share at December 31, 2019, and (v) our Series D Preferred stock has been reduced to $0.125 per share at December 31, 2019. Equity Financings March 2017 Offering In March, 2017, we sold $200,000 of the Company’s securities consisting of 200 shares of Series C Preferred Stock and an aggregate of 32,001 common stock purchase warrants as described below. The Series C Preferred Stock has a stated value of $1,000 and as of December 31, 2019, is convertible into 400,000 shares of the Company’s common stock, subject to certain beneficial ownership limitations, at a conversion price equal to $0.50 per share for 200 shares of Series C Preferred stock and $0.25 per share for 90.43418 shares of Series C Preferred stock, subject to adjustment. The Conversion Price is subject to adjustment pursuant to stock splits and dividends. The Series C Preferred Stock has anti-dilution protection until the twelve (12) month anniversary of the issuance of the Series C Preferred Stock. The Investors also received an aggregate of approximately: (i) 10,667 Series M common stock purchase warrants (“Series M Warrants”), (ii) 10,667 Series N common stock purchase warrants (“Series N Warrants”) and (iii) 10,667 Series O common stock purchase warrants (“Series O Warrants”) (collectively, the “Warrants”). The Series M Warrants have an exercise price of $0.50 per share (as of December 31, 2019), subject to adjustment, and a term of five (5) years from the date of issuance, the Series N Warrants had an exercise price of $18.75 per share upon issuance, subject to adjustment, and a term of six (6) months from the date of issuance and the Series O warrants had an exercise price of $18.75 upon issuance, subject to adjustment, and a term of twelve (12) months from the date of issuance. The Series N and Series O Warrants have both expired. The Warrants are immediately exercisable and separately transferable from the Series C Preferred Stock. In the event that the shares underlying the Warrants are not subject to a registration statement at the time of exercise, the Warrants may be exercised on a cashless basis after 6 months from the issuance date. The Warrants also contain provisions providing for an adjustment in the underlying number of shares and exercise price in the event of stock splits or dividends and fundamental transactions. Additionally, the Warrants contain anti-dilution protection until the twelve (12) month anniversary of the issuance date. April 2017 Offering In April 2017, we sold $90,431 of the Company’s securities consisting of 90.43148 shares of Series Preferred Stock and an aggregate of 14,469 common stock purchase warrants as described below. The Series C Preferred Stock has a stated value of $1,000 and as of December 31, 2019, is convertible into approximately 361,737 shares of the Company’s common stock, subject to certain beneficial ownership limitations, at a conversion price equal to $0.25, subject to adjustment. The Conversion Price is subject to adjustment pursuant to stock splits and dividends. The Series C Preferred Stock has anti-dilution protection until the twelve (12) month anniversary of the issuance of the Series C Preferred Stock. The Investors also received an aggregate of approximately: (i) 4,823 Series M Warrants, (ii) 4,823 Series N Warrants and (iii) 4,823 Series O Warrants. The Series M Warrants have an exercise price of $0.25 per share (as of December 31, 2019), subject to adjustment, and a term of five (5) years from the date of issuance, the Series N Warrants had an exercise price of $18.75 per share upon issuance, subject to adjustment, and a term of six (6) months from the date of issuance and the Series O warrants had an exercise price of $18.75, upon issuance subject to adjustment, and a term of twelve (12) months from the date of issuance. The Series N and Series O Warrants have both expired. The Warrants are immediately exercisable and separately transferable from the Series C Preferred Stock. In the event that the shares underlying the Warrants are not subject to a registration statement at the time of exercise, the Warrants may be exercised on a cashless basis after 6 months from the issuance date. The Warrants also contain provisions providing for an adjustment in the underlying number of shares and exercise price in the event of stock splits or dividends and fundamental transactions. Additionally, the Warrants contain anti-dilution protection until the twelve (12) month anniversary of the issuance date. Conversion and exercise price resets As a result past equity financings and conversions of debentures, the conversion prices of (i) our Series A Preferred Stock has been reduced to $13.25 per share at December 31, 2019, (ii) 200 shares of our Series C preferred stock has been reduced to $0.50 per share at December 31, 2019, (iii) 90.43418 shares of our Series C Preferred Stock has been reduced to $0.25 per share at December 31, 2019, (iv) our Series D Preferred stock has been reduced to $0.125 per share at December 31, 2019, and (v) our Series B Preferred Stock has been reduced to $0.01 per share at December 31, 2019. The exercise prices of the outstanding warrants issued in conjunction with (i) the Series B Preferred Stock have been reduced to $0.01 per share, (ii) 200 shares of Series C Preferred Stock have been reduced to $0.50 per share, and (iii) 91.43418 shares of Series C preferred Stock have been reduced to $0.25 per share, respectively, as of December 31, 2019. As a result of the reductions of the conversion prices of our preferred stock and warrants, we have recorded deemed dividends of approximately $54,000 and $196,000 during the years ended December 31, 2019 and 2018, respectively. Common Stock On September 17, 2019, the Company’s Board of Directors approved a one-for-twenty five (1-for-25) reverse stock split of the Company’s common stock (“Reverse Stock Split”). In furtherance of the Reverse Stock Split, the Company has filed an amended and restated certificate of incorporation with the Secretary of State of Delaware to effect the Reverse Stock Split effective as of 5:00 p.m. Eastern Time on September 30, 2019 (“Effective Time”). Accordingly, at the Effective Time, each of the Company’s common stock shareholders will receive one new share of common stock for every twenty five shares such shareholder held immediately prior to the Effective Time. The Reverse Stock Split will also affect the Company’s outstanding stock options, warrants and other exercisable or convertible instruments and will result in the shares underlying such instruments being reduced and the exercise price being increased proportionately to the Reverse Stock Split ratio. All share and per share data has been retroactively restated in the accompanying consolidated financial statements and footnotes for all periods presented to reflect the effects of the September 30, 2019 amendment. During the year ended December 31, 2019, we issued a total of 15,265,468 shares of common stock, valued at $471,583, upon the conversion of $331,415 principal amount of our convertible debentures During the year ended December 31, 2018, we issued a total of 2,947,000 shares of common stock, valued at $503,308, upon the conversion of $361,255 principal amount of our convertible debentures. |