WARRANTS AND PREFERRED STOCKS

9 Months Ended

Sep. 30, 2021

WARRANTS AND PREFERRED STOCKS

NOTE 5 - WARRANTS AND PREFERRED STOCKS:

NOTE 5 - WARRANTS AND PREFERRED STOCKS:

Warrants

2021 Extension of Warrant Terms

On September 7, 2021, the Company, acting by resolution of its Board of Directors, amended and extended the expiration date of its outstanding warrants to purchase up to 6,909,000 shares of common stock. In addition to extending the expiration date to March 7, 2023, the Company removed (i) a provision automatically exercising the Warrants on a “cashless” basis of its stock traded above the exercise price for the five (5) days prior to expiration and (ii) the right of warrant holders to participate in any distribution to its stockholders by the Company, to the extent the warrants were unexercised at the time of such a distribution; the exercise price and all other terms of the original warrant agreement remain the same. The warrants modification expense of $1,450,890 was computed as the incremental value of the modified warrants over the unmodified warrants on the modification date. Assumptions used in the Black Scholes option-pricing model for these warrants were as follows:

Average risk-free interest rate	0.15	%
Average expected life-years	1.5
Expected volatility	238.97	%
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		6,909,000			0.15		1.5
Exercised		—			—		—
Forfeited/expired		(6,909,000	)		0.15		—
Outstanding at September 30, 2021		6,909,000		$	0.15		1.43
Exercisable at September 30, 2021		6,909,000		$	0.15		1.43

As of September 30, 2021 and December 31, 2020, the average remaining contractual life of the outstanding warrants was 1.43 years and 0.68 year, respectively. The warrants will expire on March 7, 2023.

Series A 10% Convertible Preferred Stock

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