WARRANTS AND PREFERRED STOCKS

9 Months Ended

Sep. 30, 2023

WARRANTS AND PREFERRED STOCKS

WARRANTS AND PREFERRED STOCKS

NOTE 5 - WARRANTS AND PREFERRED STOCKS:

Warrants

2023 Extension of Warrant Terms

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 to March 7, 2026. The terms of the warrants, including the exercise price of $0.15 per share, remain in effect without modification. The warrants modification expense of $621,810 was recorded 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	4.66	%
Average expected life-years	3
Expected volatility	182.19	%
Expected dividends	0	%

	Number of Warrants			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)
Outstanding at December 31, 2022		6,909,000		$	0.15		0.18
Granted		—			—		—
Extended		6,909,000			0.15		3.00
Exercised		—			—		—
Forfeited/expired		(6,909,000	)		0.15		—
Outstanding at September 30, 2023		6,909,000		$	0.15		2.44
Exercisable at September 30, 2023		6,909,000		$	0.15		2.44

As of September 30, 2023 and December 31, 2022, the average remaining contractual life of the outstanding warrants was 2.44 years and 0.18 year, respectively. The warrants will expire on March 7, 2026. The intrinsic value of the warrants at September 30, 2023 was $0 due to the exercise price exceeding the fair market value of the common stock.

Series A 10% Convertible Preferred Stock

The Company has authorized 4,000,000 shares of Preferred Stock, of which 50,000 shares have been designated as Series A 10% Convertible Preferred Stock. As of September 30, 2023 and December 31, 2022, there was no preferred stock issued or outstanding.