Stockholders' Equity (Deficit) | 10. Stockholders Equity (Deficit) Our authorized capital stock consists of 50,000,000 shares of common stock, par value $0.0001 per share, and 5,000,000 shares of blank check preferred stock, par value $0.0001 per share. As of December 31, 2020 and 2019, there are 11,599,830 and 11,399,830 shares of common stock outstanding, respectively and there are no shares of preferred stock issued and outstanding at either date. Contributed Capital On September 21, 2020, Mr. Mannine voluntarily agreed to cancel his employment agreement and waive all cash due and any related accruals. The salary forgiven for the year ended December 31, 2020 and 2019 of $116,443 and $116,442 is treated as in-kind contribution of service and reflected as contributed capital in the financial statements. During the year ended December 31, 2020, Mr. Mannine personally paid $3,040 of company expenses. This is reflected as contributed capital in the financial statements. Consulting Agreement On February 12, 2020, we entered a consulting agreement with Primoris Group Inc (Primoris). Primoris was issued 200,000 common shares at a fair value of $45,000 ($0.225 per share) on June 30, 2020. 100,000 shares are restricted from resale or transfer by Primoris per the consulting agreement until February 12, 2021. The consultant has an option to register 100,000 on any future registration statement. In addition to any restrictions imposed by the agreement, all the shares require an exemption for resale to the public. For the year ended December 31, 2020, we have recorded stock-based compensation of $39,375. As of December 31, 2020, $5,625 is recorded in prepaid expense related to the consulting agreement. Preferred Stock Our board of directors, without further stockholder approval, may issue preferred stock in one or more series from time to time and fix or alter the designations, relative rights, priorities, preferences, qualifications, limitations and restrictions of the shares of each series. The rights, preferences, limitations and restrictions of different series of preferred stock may differ with respect to dividend rates, amounts payable on liquidation, voting rights, conversion rights, redemption provisions, sinking fund provisions and other matters. Our board of directors may authorize the issuance of preferred stock, which ranks senior to our common stock for the payment of dividends and the distribution of assets on liquidation. In addition, our board of directors can fix limitations and restrictions, if any, upon the payment of dividends on both classes of our common stock to be effective while any shares of preferred stock are outstanding. Warrants On October 10, 2017, we entered into the Financing Agreement with CRG, as more fully described in Notes 4 and 8. In connection with the related equity financing as of December 31, 2017, CRG had earned 368,111 fully vested five-year warrants with an exercise price of $0.225. The related warrants were issued in January 2018. We determined that the warrant had an initial fair value of $34,405 and was recorded as a direct offering cost in Stockholders equity with a net effect of zero. We estimated the fair value of this warrant using the Black-Scholes option pricing model, based on the following assumptions: the recent cash offering price of $0.225 as the estimated fair value of the underlying common stock at the valuation measurement date; no dividend yield for all of the years; expected volatility of 45%; risk-free interest rate of 2.2% and an expected life of 5 years. During January 2018, as part of the Private Placement more fully described in Note 4, CRG earned an additional 17,655 fully vested common stock warrants with an exercise price of $0.225. These additional warrants were issued to CRG on January 30, 2018. We determined that the warrant had an initial fair value of $1,670 and was recorded as a direct offering cost in Stockholders equity with a net effect of zero. We estimated the fair value of this warrant using the Black-Scholes option pricing model, based on the following assumptions: the recent cash offering price of $0.225 as the estimated fair value of the underlying common stock at the valuation measurement date; no dividend yield for all of the years; expected volatility of 45%; risk-free interest rate of 2.51% and an expected life of 5 years. On March 8, 2018, we entered into an advisory agreement with a scientific advisor to provide certain services to us. Pursuant to the agreement, we issued 100,000 five-year common stock warrants at an exercise price of $0.90. Such warrants vest subject to certain milestones. As of December 31, 2020 and 2019, 100,000 and 66,666 of these warrants have vested. We determined that the warrant had an initial fair value of $1,905. We estimated the fair value of this warrant using the Black- Scholes option pricing model, based on the following assumptions: the recent cash offering price of $0.225 as the estimated fair value of the underlying common stock at the valuation measurement date; no dividend yield for all of the years; expected volatility of 45%; risk-free interest rate of 2.63% and an expected life of 5 years. During the years ended December 31, 2020 and 2019, we have recorded stock-based compensation expense of $224 and $571, respectively which is included in our selling, general and administrative expense on the accompanying Statements of Operations. As of December 31, 2020, the intrinsic value for warrants outstanding and exercisable is $144,662. The following table summarizes information about the warrants outstanding and exercisable as of December 31, 2020 and 2019: 2020 2019 Warrants Weighted Average Exercise Price Warrants Weighted Average Exercise Price Outstanding, beginning of year 485,766 $ 0.364 485,766 $ 0.364 Granted Exercised Forfeited Expired Outstanding, end of year 485,766 $ 0.364 485,766 $ 0.364 Exercisable, end of year 485,766 $ 0.364 452,432 $ 0.324 As of December 31, 2020 Warrants Outstanding Warrants Exercisable Range of Exercise Price Number Outstanding Remaining Average Contractual Life (In Years) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price $0.225 -$0.90 485,766 2.10 $0.364 485,766 $0.364 As of December 31, 2019 Warrants Outstanding Warrants Exercisable Range of Exercise Price Number Outstanding Remaining Average Contractual Life (In Years) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price $0.225 -$0.90 485,766 4.12 $0.364 452,432 $0.324 |