Quarterly report pursuant to Section 13 or 15(d)

EQUITY

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EQUITY
 3 Months Ended
Mar. 31, 2017
Notes to Financial Statements  
Note 12. EQUITY

Preferred Stock

 

Series A Preferred Stock is convertible on a one-for-one basis into common stock and has all of the voting rights of the Company’s common stock.

 

Each share of Series B Preferred Stock: (i) is entitled to 100 votes for each share of common stock into which a share of Series B Preferred Stock is convertible and (ii) is convertible, at the option of the holder, on a 1-for-5.384325537 basis, into shares of the Company’s common stock.

 

During the three months ended March 31, 2017, the Company issued 600,000 shares of Series B preferred stock for compensation in the amount of $1,035,406.

 

Common Stock

 

During the three months ended March 31, 2017, senior secured convertible promissory notes and accrued interest in the amount of $3,688,963 were converted into 16,281,088 shares of common stock.

 

During the three months ended March 31, 2017, the Company sold 6,185,395 shares of common stock for the net amount of $1,700,000 pursuant to an equity financing facility with an accredited investor.

 

During the three months ended March 31, 2017, the Company issued 125,000 shares of common stock for director fees in the amount of $37,500, issued 467,647 shares of common stock for services performed in the amount of $145,011 and issued 100,000 shares of common stock for compensation in the amount of $26,100.

 

During the three months ended March 31, 2016, senior secured convertible promissory notes and accrued interest in the amount of $961,740 were converted into 13,906,149 shares of common stock.

 

During the three months ended March 31, 2016, the Company sold 25,715,674 shares of common stock for the net amount of $3,208,134 pursuant to an equity financing facility with an accredited investor.

 

Stock-Based Compensation Expense

 

A summary of stock based compensation for the three months ended March 31, 2017 and 2016 is as follows:

 

    March 31, 2017     March 31, 2016  
Type of Award   Number of Shares or Options Granted     Stock-Based Compensation Expense     Number of Shares or Options Granted     Stock-Based Compensation Expense  
                         
Stock Options     –     $ 47,589       6,700,000     $ 47,589  
                                 
Stock Grants:                                
Employees (Common Stock)     100,000       26,100       –       –  
Employees (Series B Preferred Stock)     600,000       1,035,406       –       –  
Directors (Common Stock)     125,000       37,500       350,000       60,550  
Non-Employee Consultants (Common Stock)     467,647       145,011       –       –  
                                 
Total Stock-Based Compensation Expense     1,292,647     $ 1,291,606       7,050,000     $ 108,139