Issuances of Securities

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Note 4. Issuances of Securities

Share issuances 2018

During the three months ended March 31, 2018, the Company issued an aggregate of 18,203,225 shares of common stock. The Company issued 50,000 shares of common stock valued at fair market value of $1.09 for services, 440,725 shares of common stock were sold for total proceeds of $276,100, $92,000 of proceeds were received for 133,333 shares of common stock not yet issued and recorded as liability for unissued shares, 62,500 shares of common stock were issued related to $5,000 of previously recorded liability for unissued shares and 14,150,000 shares of common stock with a fair market value of $15,423,500 were issued and placed in escrow. The 14,150,000 shares will be released from escrow upon the change of control of the Company, but would not be considered outstanding until and unless released from escrow(see “share issuances 2019” below). Management is unable to determine when a change of control will occur and $0 has been expensed as of March 31, 2018. The Company also issued 3,500,000 shares of common stock to convert $172,500 of notes payable and $10,000 of accrued interest. The shares were valued at their fair market value of $1.09 which resulted in a loss on debt settlement of $3,632,500.

Share issuances 2019

During the three months ended March 31, 2019, 150,000 shares of common stock were sold to non-affiliated investors in a private placement for total cash proceeds of $75,000, 200,000 shares of common stock were issued to securities counsel for services rendered with a fair value of $200,000 and 100,000 shares of common stock were issued to each of two directors for services rendered with a fair value of $200,000.

During the three months ended March 31, 2019, the following events occurred with respect to the aforementioned 14,150,000 shares held in escrow: During the period ended March 31, 2019, the Company issued (i)1,600,000 shares to Nate Knight who is the Chief Financial Officer of the Company, 500,000 shares to the office administrator, who is a person affiliated with the Company’s CEO and 50,000 shares to a Technical Product Supervisor, who is the son of the office administrator which had been held in escrow became vested by the Board of Directors for services provided. These shares had a fair market value of $1.09 per share at the date of issuance and $2,343,500 has been expensed during the three  month period ended March 31, 2019.

The Company canceled 12,000,000 shares of the aforementioned 14,150,000 shares issued (which were not considered outstanding) in the first quarter of 2019 to various officers, directors and consultants.

Restricted stock units

The Board approved restricted stock unit agreements with its officers, directors and consultants covering an aggregate of 50,100,000 shares of common stock to be issued and delivered to such persons upon the earlier of (i) a change in control of the Company by a cash tender offer, merger, acquisition or otherwise or (ii) the Company achieving gross revenues of $20,000,000 in gross revenues on a go forward basis, or (iii) the commencement of an event by a third party without the Board’s approval to effect, or seek to effect, a change in control of the Company or the Company’s management.

			Weighted
			Average
			Grant
	Number of		Date Fair
	Units		Value
Total awards outstanding at December 31, 2018		-	$	-
Units granted		50,100,000	$	0.94
Units Exercised/Released		-	$	-
Units Cancelled/Forfeited		-	$	-
Total awards outstanding at March 31, 2019		50,100,000	$	0.94

Management is unable to determine when a change of control will occur and as of March 31, 2019, there was $47,094,000 of unrecognized compensation cost related to unvested restricted stock unit awards.