Common and Preferred Stock

6 Months Ended

Jun. 30, 2016

Equity [Abstract]

Common and Preferred Stock

Note 8 – Common and Preferred Stock  

On May 23, 2016, the Company filed a certificate of amendment (a “Certificate of Amendment”), increasing the authorized capital of the Company to 1,001,000,000 shares of capital stock; consisting of 1,000,000,000 shares of common stock par value $0.0001 and 1,000,000 shares of preferred stock, par value $0.01. The majority of the Company’s shareholders consented to the Certificate of Amendment increasing the authorized capital.

Common Stock

During the six months ended June 30, 2016, the Company issued the following shares of common stock upon the conversions of portions of the convertible notes:

Date		Principal Conversion		Interest Conversion		Total Conversion		Conversion Price		Shares Issued		Issued to
	6/22/16	$	5,000	$	973	$	5,973	$	0.001450		4,119,414	GW
	6/20/16	$	10,500	$	1,003	$	11,503	$	0.001450		7,933,377	Cerberus
	6/20/16	$	5,000	$	967	$	5,967	$	0.001450		4,114,879	GW
	6/20/16	$	6,000	$	589	$	6,589	$	0.001450		4,544,241	LG
	6/10/16	$	6,075	$	1,134	$	7,209	$	0.001798		4,009,701	GW
	6/9/16	$	5,000	$	479	$	5,479	$	0.001798		3,047,219	LG
	6/2/16	$	9,000	$	848	$	9,848	$	0.002378		4,141,387	Cerberus
	5/23/16	$	5,000	$	460	$	5,460	$	0.002436		2,241,490	LG
	3/17/16	$	9,000	$	696	$	9,696	$	0.002436		2,668,309	LG
	3/17/16	$	3,000	$	138	$	3,138	$	0.000638		2,463,045	Service
	3/8/16	$	7,425	$	928	$	8,353	$	0.00174		1,869,187	GW
	3/7/16	$	6,500	$	489	$	6,989	$	0.00174		4,016,471	LG
		$	77,500	$	8,704	$	86,204				45,168,720

Preferred Stock

On June 26, 2015, the Company filed with the Delaware Secretary of State the Amended and Restated Designation Preferences and Rights (the “Certificate of Designation”) of Class B Preferred Stock (the “Series B Preferred Stock”). Pursuant to the Certificate of Designation, 1,000 shares constitute the Series B Preferred Stock. The Series B Preferred Stock and any accrued and unpaid dividends thereon shall, with respect to rights on liquidation, winding up and dissolution, rank senior to the Company’s issued and outstanding common stock and Series A preferred stock.

The SeriesB Preferred Stockhas the right to vote in aggregate, on all shareholder matters equal to 51% of the total vote, no matter how many shares of common stock or other voting stock of the Company are issued or outstanding in the future.The Series B Preferred Stock has a right to vote on all matters presented or submitted to the Company’s stockholders for approval in pari passu with the common stockholders, and not as a separate class. The holders of Series B Preferred Stock have the right to cast votes for each share of Series B Preferred Stock held of record on all matters submitted to a vote of common stockholders, including the election of directors. There is no right to cumulative voting in the election of directors. The holders of Series B Preferred Stock vote together with all other classes and series of common stock of the Company as a single class on all actions to be taken by the common stockholders except to the extent that voting as a separate class or series is required by law. As of June 30, 2016 and December 31, 2015, there were 1,000 shares of Class B Preferred Stock outstanding.

Warrants and Options

On April 14, 2015, in connection with the appointment of Dr. Stephen Holt to the advisory board, the Company agreed the advisor shall receive a non-qualified stock option to purchase 1,000,000 shares (“Option Shares”) of the Company’s common stock at an exercise price equal to $0.05 per share and expiring April 14, 2018. Option Shares of 400,000 vested immediately and 50,000 Option Shares vest each month from April 2015 through March 2016. Accordingly, as of June 30, 2016, 1,000,000 Option Shares have vested and the Company recorded $2,317 as stock compensation expense for the six months ended June 30, 2016, based on Black-Scholes.

On April 26, 2013 and in connection with the appointment of Mr. James Canton to the Company’s advisory board, the Company issued a warrant to Mr. Canton to purchase 300,000 shares of common stock. The warrant expired April 26, 2016.

Additionally, the Company also evaluated all outstanding warrants to determine whether these instruments may be tainted. All warrants outstanding were considered tainted as a result of the Company not having reserved the underlying shares of common stock of the warrants. The Company valued the embedded derivatives within the warrants using the Black-Scholes valuation model.  As of June 30, 2016, the Company estimated the fair value of the derivative using the Black-Scholes valuation method with assumptions including: (1) term of .08 to 2.0 years; (2) a computed volatility rate of 263%; (3) a discount rate of .18% to .73%; and (4) zero dividends. The valuation of this embedded derivative was recorded with an offsetting gain/loss on derivative liability.