Common Stock

9 Months Ended

Sep. 30, 2016

Common Stock [Abstract]

COMMON STOCK

NOTE 12 – COMMON STOCK

Common Stock Issued to Employees

On May 17, 2016, pursuant to the Kahn Employment Agreement, the Company’s Chief Executive Officer Jonathan Kahn was granted 6,067,931 fully-vested shares of the Company’s common stock. The Company recognized a total expense of $180,824 related to this issuance. These shares were valued based on the closing price on the grant date and were issued pursuant to the Company’s Amended and Restated Incentive Compensation Plan as amended (the “Plan”).

In addition, on each of May 1, 2017 and May 1, 2018, respectively, pursuant to the Kahn Employment Agreement, Mr. Kahn will receive an additional grant of fully-vested common stock, such additional grants each representing 0.75% of the Company’s shares of common stock on a fully diluted basis as of May 1, 2017 and May 1, 2018, respectively. The Company expensed $13,879 through Sept 30, 2016 for stock compensation related to the May 1, 2017 and May 1, 2018 additional grants. The Company will expense a portion of this compensation quarterly until the grants are made at their respective due dates.

Common Stock Issued to Directors

On February 24, 2015, the Company issued 576,924 shares of common stock to its three non-executive directors at such time (192,308 shares each) Brian Israel, Morris Garfinkle and Dan Jeffery pursuant to the Plan. The Company recognized a total expense of $150,000 related to these issuances. These shares were valued based on the closing price on the grant date.

On January 2, 2015, the Company issued 285,716 shares of common stock to its four non-executive directors (71,429 shares each) Mark Hershhorn, Brian Israel, Morris Garfinkle and Edward B. Smith III pursuant to the Plan. The Company recognized a total expense of $160,001 related to these issuances. These shares were valued based on the closing price on the grant date.

On June 21, 2016, the Company issued 2,013,423 shares of common stock to its Chairman Morris Garfinkle pursuant to the Plan. The Company recognized a total expense of $160,001 related to this issuance. These shares were valued based on the closing price on the grant date.

Common Stock Issued on the Exercise of Stock Warrants and/or Options for Cash

During the three month and nine month periods ended September 30, 2016 and 2015, respectively, there were no warrants or options exercised for cash.

Common Stock Issued on the Cashless Exercise of Warrants and/or Stock Options

During the three months and nine months ended September 30, 2016, the Company did not issue any shares of common stock on the cashless exercise of warrants or options.

On April 22, 2016, the Company purchased 4,610,179 warrants from their holders for an aggregate price of $122,986.

During the three months and nine months ended September 30, 2015, the Company did not issue any shares of common stock on the cashless exercise of options.

On April 29, 2015, the Company sent a proposal to all warrant holders (as of September 30, 2014)  to participate in a warrant exchange program whereby each warrant holder will be able to 1) exchange their warrants for common stock, on a cashless basis, at a reduced exercise price of $0.00005 per share, 2) if applicable, receive the right to 17.5% more warrants and a two year extension on all of their warrants in return for waiving their anti-dilution rights on a one-time basis for the exchange, or 3) elect to take advantage of (1) and (2) by (i) exchanging a portion of their Warrants that they so designate for shares of Common Stock in accordance with the applicable terms in (1) and (ii) the remainder of the Warrant not exchanged will be retained and amended pursuant to the applicable provisions of (2). As of April 29, 2015, there were 55,334,490 warrants outstanding that were eligible to participate in the proposal inclusive of 38,888,147 warrants associated with anti-dilution provisions resulting from the January 8, 2015 private placement.

As of September 30, 2015, the results of this exchange were warrant holders elected to receive 52,110,896 shares of Common Stock under alternative (1), 318,750 additional warrants were issued under alternative (2) and a combination of 974,826 shares of Common Stock and 73,125 warrants were issued from elections made under alternative (3). The Company recorded a loss on exchange of warrants of $12,959,654 for the nine months ended September 30, 2015.

Common Stock Issued for Services

On March 1, 2015, the Company entered into a Business Development Agreement with Steeltown Consulting Group, LLC, pursuant to which Steeltown agreed to assist in evaluating various business and financial matters. The Company issued 400,000 restricted shares of common stock as consideration for the services being rendered in this agreement pursuant to the Plan. The common stock was valued at $104,000 based on the closing prices of the stock on the date the agreement was executed. This agreement terminated on March 1, 2016.

There were no shares issued for services during the nine months ended September 30, 2016.