NOTE I – CAPITAL STOCK

The Company has authorized 15,000,000 shares of preferred stock (designated and undesignated), with a par value of $.001 per share. The Company has designated 215 shares as Series A preferred stock and 538 shares as Series B preferred stock. At December 31, 2018 and 2017, there were 185 shares of Series A and 52 shares of Series B outstanding, respectively.

The Company has authorized 190,000,000 shares of common stock with a par value of $.001 per share. As of December 31, 2018 and 2017, the Company had 134,793,211 and 133,695,111 common shares issued and outstanding, respectively.

During the years ended December 31, 2018 and 2017, the Company issued 1,098,100 and 920,636 shares of common stock, respectively to directors for services performed during 2018 and 2017. These shares were valued at $144,000 and $144,000, respectively, which approximated the fair value of the shares when they were issued.

During the years ended December 31, 2018 and 2017, no warrants were exercised. These warrants were originally granted to shareholders of the April 8, 2011 Series B preferred stock issuance.

During the years ended December 31, 2018 and 2017, no shares of Series A or B preferred stock were converted to shares of common stock.