Common Stock and Warrants | NOTE 5 - COMMON STOCK AND WARRANTS Common Stock During the nine-month period ended December 31, 2018 the Company issued 2,264,013 shares of common stock including: i) 478,662 shares were issued to the Company’s President, John Lai, to replace shares he placed into escrow in 2017 valued at $861,592; ii) 520,749 shares were to reduce debt valued at $296,521, 485,287 of these shares valued at $181,967 were recorded in our financial statements during fiscal year ended March 31, 2018; iii) 200,000 shares were issued as compensation to the Company’s former CEO, Wesley Hayne, valued at $42,000, these shares were granted and recorded to expense and Additional Paid in Capital during the fiscal year ended March 31, 2018; iv) 310,000 shares were issued for cash valued at $310,000, 250,000 were from a private offering to one individual in December of 2017 for $250,000, and 60,000 were from a private offering to one individual in September of 2016 for $60,000; v) 361,816 shares were issued for services valued at $626,951, 324,723 shares valued at $584,500 were issued to the Company’s President, John Lai, to replace shares given up to obtain financing in 2015; vi) 392,786 shares were issued pursuant to warrant exercises for cash amounting to $226,393, 60,000 warrants were exercised at $1.00 per share and 332,786 warrants were exercised at $.50 per share. During the nine-month period ended December 31, 2018 the Company entered into agreements to issue 1,587,912 shares of common stock that remain unissued as of the balance sheet date including: i) 56,333 shares of common stock pursuant to a production agreement with CMDG valued at $56,333; ii) 678,186 shares of common stock pursuant to discounted warrant exercise agreements in exchange for $203,456 in cash; iii) 100,054 shares of common stock pursuant to warrant exercises in exchange for $30,016 in cash; iv) 753,339 shares of common stock pursuant to bridge note conversions in exchange for $220,000 in cash and $6,002 in accrued interest. During the nine-month period ended December 31, 2018 the Company had 600,000 shares valued at $177,600 returned to the Company’s Treasury; these shares were being held in escrow to be issued to the Company’s former CEO, and upon his termination were immediately returned to Treasury. This entry was booked as an offset to Equity Instrument Expense, which resides in the General & Administrative section of the Company’s Profit and Loss Statement. During the nine-month period ended December 31, 2018, pursuant to stock transfer agreements and related discounted warrant exercise agreements, the Company’s President, John Lai transferred 259,413 shares of common stock to several warrant-holders as an incentive for early exercise of their warrants; these shares had a value of $77,354 and were booked against APIC. Warrants During the nine-month period ended December 31, 2018 the Company granted warrants to purchase a total of 955,531 shares of common stock including: i) warrants for 80,000 shares to two advisory board members for service, vested semi-annually over two years, and exercisable over a five-year term at $1.00/share; ii) warrants for 230,000 shares to John Carruth, the Company’s Acting CFO, in consideration of his employment, vested quarterly over two years, with a strike price of $.30 per share and exercisable over a five-year term; 80,000 of which were originally issued at $1.00 per share, and reissued on December 10, 2018 with a strike price of $.30 per share; iii) warrants for 30,000 shares to a lawyer for general legal counsel, fully-vested and exercisable over a five-year term at $1.00/share; iv) warrants for 60,000 shares to various information technology service providers for IT services, vested as billed, exercisable over a five-year term; v) warrants for 300,000 shares to three new Directors in consideration of their service, vested quarterly over two years, and exercisable over a five-year term at $1.00/share; vi) warrants for 142,500 shares to several note holders pursuant to their bridge note agreements, vested immediately, and exercisable over a three-year term at $1.00/share; vii) warrants for 113,031 shares to several note holders pursuant to their conversion of notes into equity, vested immediately, exercisable through December 31, 2018 at $.30 per share. During the nine-month period ended December 31, 2018 the Company reduced previous grants of warrants to purchase 100,000 shares of common stock including: i) warrants for 60,000 shares from a service provider due to the termination of a contract; ii) warrants for 40,000 shares from a former advisory board member due to the termination of a contract. During the nine-month period ended December 31, 2018 warrants to purchase 332,786 shares of common stock with a strike price of $.50 per share were exercised for $166,393 in cash. During December, 2018 the Company offered its warrant-holders the option to exercise their warrants at a discounted rate of $.30 per share if exercised within 15 days of the offer date. Pursuant to this discounted warrant exercise agreement (DWEA), warrant-holders are entitled to 1 share issued by way of stock transfer from a founder of the Company for every 3 shares received pursuant to the DWEA. Several warrant-holders entered into such agreements whereby they receive 678,187 shares of newly-issued common stock and 226,062 shares of common stock from a founder of the Company in exchange for $203,456 in cash. During December 2018, the Company offered its note-holders the option to convert their notes and receive 1 warrant for every $2.00 in outstanding balance of principal and interest converted. There were 113,031 of these warrants issued; 12,977 expired on December 31, 2018 and the remaining 100,054 were exercised in exchange for $30,016 in cash. Pursuant to these exercised warrants, each warrant-holder received 1 share of common stock from a founder, John Lai; the total number of shares transferred by John Lai to these warrant-holders was 33,351 shares. A summary of warrant activity for the periods ending March 31, 2018 and December 31, 2018 is as follows: Number of Warrants Weighted- Average Exercise Price Warrants Exercisable Weighted- Average Exercisable Price Outstanding, March 31, 2017 133,250 2.00 133,250 2.00 Granted 3,413,459 .54 Exercised 60,000 1.50 Outstanding, March 31, 2018 3,486,709 .59 2,433,601 .57 Granted 955,531 .75 Exercised 1,111,027 .36 Expired 12,977 .30 Cancelled 100,000 1.00 Outstanding, December 31, 2018 3,218,236 .64 2,293,187 .59 At December 31, 2018, the range of warrant prices for shares under warrants and the weighted-average remaining contractual life is as follows: Warrants Outstanding Warrants Exercisable Range of Warrant Exercise Price Number of Warrants Weighted- Average Exercise Price Weighted- Average Remaining Contractual Life (Years) Number of Warrants Weighted- Average Exercise Price .30-.50 2,139,986 .39 2.31 1,827,486 .41 .51-1.00 965,000 1.00 4.12 372,500 1.00 1.01-3.50 113,250 2.35 2.44 93,201 2.54 Total 3,218,236 .64 2.86 2,293,187 .59 |