| Capital Stock | Note 6 – Capital Stock The Company has authorized 100,000,000 shares of common stock, $0.0001 par value and 10,000 shares of a class of preferred stock called the "Series A Preferred Stock", par value $0.001. Each share of Series A Preferred Stock has a stated value of $1 per share and accrues 4% per annum for determination of liquidation, conversion or redemption. The shares convert at the option of the holder into shares of common stock at the market value of the common stock. The Series A Preferred Stock vote as a single class and maintain 66 2/3% of the total votes as long as any shares of Series A Preferred Stock remain outstanding. The Series A Preferred Stock contains liquidation preference (senior rank to all common) and are not to be amended without the holders' approval. At inception on August 22, 2016, the Company approved the issuance of 5,060,000 shares of common stock at par value and 1,000 shares of Series A Preferred Stock at par value to Jonah Meer, the Company's Chief Executive Officer, Chief Financial Officer and Secretary, for cash totaling $507 of which $506 was paid in respect to the issuance of the common stock and $1 was paid for the Series A Preferred Stock. At inception on August 22, 2016, the Company issued 5,060,000 shares of common stock at par value and subsequently issued 1,000 shares of Series A Preferred Stock at par value to Ido Merfeld, the Company's President, for cash totaling $507, of which $506 was paid in respect to the issuance of the common stock and $1 was paid for the Series A Preferred Stock.
As a result of the super voting rights allocated to the Series A Preferred Stock, management conducted a valuation of the fair value of the issued shares. Shares of the Series A Preferred Stock issued were valued based upon industry specific control premiums and the fair value of the Company's common stock at the time of the transaction applying Statement of Financial Accounting Standard ASC 820-10-35-37 Fair Value in Financial Instruments as of the issuance date of August 22, 2016. As a result of the third-party valuation of the fair value of the Series A Preferred Stock issued to our officers and directors, the Company recorded additional stock-based compensation as general and administrative expenses of $2,598 during the year ended December 31, 2016 with respect to the shares issued. The third party valuation report was based on the following inputs as at August 22, 2016: (1) price per share of common stock of $0.0001; (2) 10,120,000 common stock outstanding; (3) A 19.3% premium over the common stock for the voting preferences, representing $600 in control value at issuance; (4) On September 4, 2016, the Company's Board of Directors approved the sale and issuance of up to 1,200,000 shares of the Company's common stock, par value $.0001, at a subscription price of $0.25 per share. In addition to each two shares of common stock purchased, the holder shall receive an immediately exercisable warrant expiring December 31, 2019 to purchase the Company's common stock at a price of $0.40 per share. During the year ended December 31, 2016, the Company received total proceeds of $251,000 by way of private placement subscriptions for a total of 1,004,000 shares. During the three months ended March 31, 2017, the Company received total proceeds of $30,000 by way of private placement subscriptions for a total of 120,000 shares. All costs incurred with respect to the Form S-1 Registration Statement prior to its effective date on May 10, 2017 totaling $22,548 have been allocated to additional paid in capital. During the six months ended June 30, 2017, the Company received aggregate proceeds of $32,000 in private placement subscriptions, $2,000 of which was accepted On December 14, 2016, the Company's Board of Directors approved compensation for each of its two Science Advisors with a stock award of 440,000 shares of common stock effective as of December 14, 2016 (the "Grant Date"). Under the terms of the stock award, each advisor shall receive 150,000 shares of common stock which vest upon Grant Date. A further 145,000 shares shall vest each year thereafter until December 14, 2018, provided that such Science Advisor is still acting in said capacity for the Company. The 300,000 shares issued upon Grant Date were valued at $56,000, or $0.18667 per share, based on price allocation with respect to the aforementioned private placement as to each share of common stock, and recorded the associated cost as research and development expenses. Share Purchase Warrants In accordance with authoritative accounting guidance, the fair value of the aforementioned warrants was calculated using the Black-Scholes option-pricing model with the following assumptions at the measurement date(s):
Measurement date
Dividend yield
0
%
Expected volatility
97.90~119.33
%
Risk-free interest rate
1.47~1.60
%
Expected life (years)
2.71~2.92
Stock Price
$
0.25
Exercise Price
$
0.40
As of June 30, 2017, the following common stock purchase warrants were outstanding:
Warrants (1)
Weighted Average Exercise Price
Outstanding – August 22, 2016
-
-
Granted
502,000
$
0.40
Forfeited/Canceled
-
-
Exercised
-
-
Outstanding – December 31, 2016
502,000
$
0.40
Granted
64,000
0.40
Forfeited/Canceled
-
Exercised
-
Outstanding – June 30, 2017
566,000
$
0.40
(1) Each two shares of common stock purchased under the private placement provides for one warrant to acquire an additional share of common stock together with the payment of $0.40. |
