WARRANTS AND PREFERRED STOCKS

6 Months Ended

Jun. 30, 2021

WARRANTS AND PREFERRED STOCKS

NOTE 5 - WARRANTS AND PREFERRED STOCKS:

NOTE 5 - WARRANTS AND PREFERRED STOCKS:

Warrants

2019 Extension of Warrant Terms

On July 9, 2019, 6,909,000 common share purchase warrants issued by the Company were modified to extend their maturity date to September 7, 2021. The exercise price and all other terms of the original warrant agreement remain the same. The warrants modification expense of $567,194 was computed as the incremental value of the modified warrants over the unmodified warrants on the modification date using a per share price of $0.15 per share, which was the contemporaneous private placement offering price. Assumptions used in the Black Scholes option-pricing model for these warrants were as follows:

Average risk-free interest rate	1.58	%
Average expected life-years	2
Expected volatility	172.88	%
Expected dividends	0	%

	Number of Warrants		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)
Outstanding at December 31, 2020		6,909,000	$	0.15		0.68
Granted		—		—		—
Extended		—		—		—
Exercised		—		—		—
Forfeited/expired		—		—		—
Outstanding at June 30, 2021		6,909,000	$	0.15		0.19
Exercisable at June 30, 2021		6,909,000	$	0.15		0.19

As of June 30, 2021 and December 31, 2020, the average remaining contractual life of the outstanding warrants was 0.19 years and 0.68 year, respectively. The warrants will expire on September 7, 2021.

Series A 10% Convertible Preferred Stock

The Company has authorized 4,000,000 shares of Series A 10% Convertible Preferred Stock. As of June 30, 2021 and December 31, 2020, there was no preferred stock outstanding.