Quarterly report pursuant to Section 13 or 15(d)

Note 5 - Commitments and Contingencies

v3.19.3
Note 5 - Commitments and Contingencies
9 Months Ended
Sep. 30, 2019
Notes to Financial Statements  
Commitments and Contingencies Disclosure [Text Block]
Note
5
– Commitments and Contingencies
 
Options
 
Stock options for employees, directors or consultants that vest immediately, are valued at the date of award, which does
not
precede the approval date, and compensation cost is recognized in the period the options are vested. Stock options generally become exercisable on the date of grant and expire based on the terms of each grant.
 
The estimated fair value of options for common stock granted is determined using the Black-Scholes option pricing model. The expected dividend yield is based on the average annual dividend yield as of the grant date. Expected volatility is based on the historical volatility of our stock. The risk-free interest rate is based on the U.S. Treasury Constant Maturity rates as of the grant date. The expected life of the option is based on historical exercise behavior and expected future experience.
 
In
August 2019,
the Directors of the Company authorized options to purchase common stock in the aggregate of
20,500,000
options to certain officers and consultants of the Company, the estimated value of which was
$840,500.
  The
$840,500
estimated fair value of options to purchase common stock was determined using the Black-Scholes option pricing model. The expected dividend yield of
$0
is based on the average annual dividend yield at the date issued. Expected volatility of
337.19%
is based on the historical volatility of the stock. The risk-free interest rate of
1.52%
is based on the U.S. Treasury Constant Maturity rates as of the issue date. The expected life of the option of
five
years is based on the life of the option.
 
The following table summarizes the Company’s option activity during the
nine
-month period
September 30, 2019:
 
   
 
 
 
 
 
 
 
 
Weighted
   
 
 
 
   
 
 
 
 
Weighted
   
Average
   
 
 
 
   
 
 
 
 
Average
   
Remaining
   
Aggregate
 
   
Number of
   
Exercise
   
Life
   
Intrinsic
 
   
Options
   
Price
   
In Years
   
Value
 
                                 
Outstanding, December 31, 2018
   
216,557
    $
3.51
     
8.26
    $
-
 
Granted
   
20,500,000
     
0.041
     
4.86
     
-
 
Outstanding, September 30, 2019
 
 
20,716,557
   
$
0.077
   
 
7.26
   
$
-
 
                                 
Exercisable, September 30, 2019
 
 
20,716,557
   
$
0.077
   
 
7.26
   
$
-
 
  
The following table summarizes the Company’s options as of
September 30, 2019:
 
Options Outstanding
   
Options Exercisable
 
 
 
 
 
 
 
 
 
Weighted
   
 
 
 
 
 
 
 
Outstanding
   
Average
   
Exercisable
 
Exercise
   
Number of
   
Remaining Life
   
Number of
 
Price
   
Options
   
In Years
   
Options
 
                             
$
0.24
     
208,160
     
7.75
     
208,160
 
$
52.50
     
4,383
     
.75
     
4,383
 
$
70.26
     
3,449
     
2.75
     
3,449
 
$
420.00
     
565
     
1.65
     
565
 
$
0.041
     
20,500,000
     
4.86
     
20,500,000
 
Total
   
 
20,716,557
   
 
4.89
   
 
20,716,557
 
 
 
Litigation, Claims, and Assessments
 
The Company
may
be involved in legal proceedings, claims and assessments arising in the ordinary course of business. In the opinion of management, such matters are currently
not
expected to have a material impact on the Company’s condensed consolidated financial statements. The Company records legal costs associated with loss contingencies as incurred and accrues for all probable and estimable settlements. 
 
Office Lease
 
The Company has an office lease in Tulsa, Oklahoma.  As the lease is month-to-month and cancellable at any time, it is
not
included as a right-of-use asset or liability.  Rent expense for the lease was
$17,820
and
$17,358
for the
nine
-month periods ended
September 30, 2019
and
2018
respectively.