Note 5. Stockholders’ Equity

(A) Common Stock

The Company is presently authorized to issue 500,000,000 shares of common stock. The Company had 14,577,232 shares of common stock issued and outstanding as of September 30, 2017, an increase of 6,200,964 shares from December 31, 2016, partly due to the shares issued in connection with the public offering described above, which closed on March 15, 2017 as well as other common stock issuances. As per September 30, 2017 the Company has accrued a reserve for 716,590 shares pending to be issued of which 338,419 are relating to the conversion of the Series A and Series A-1 Preferred Stock (see Note 5 (B)) and various other non-cash compensation.

Reconciliation with Stock Transfer Agent Records:

The shares issued and outstanding as of September 30, 2017 and December 31, 2016 according to the Company’s stock transfer agent’s records were 14,587,068 and 8,386,103, respectively. The difference in number of issued shares recognized by the Company of 14,577,232 amounts to 9,836 and it is the result of the exclusion of the 9,356 unreturned shares from ‘cancelled’ acquisitions (pre-2006) and 480 treasury shares issued under the former employee benefits plan.

(B) Preferred Stock

The Company’s Certificate of Incorporation authorizes the issuance of 50,000,000 shares of preferred stock, $0.00001 par value per share. No shares of preferred stock are issued and outstanding as of September 30, 2017 compared to 249 shares of preferred stock outstanding as of December 31, 2016, a decrease of 249 shares. Under the Company’s Certificate of Incorporation, the Board of Directors has the power, without further action by the holders of the common stock, subject to the rules of the NYSE MKT, to designate the relative rights and preferences of the preferred stock, and issue the preferred stock in such one or more series as designated by the Board of Directors. The designation of rights and preferences could include preferences as to liquidation, redemption and conversion rights, voting rights, dividends or other preferences, any of which may be dilutive of the interest of the holders of the common stock or the preferred stock of any other series. The issuance of preferred stock may have the effect of delaying or preventing a change in control of the Company without further stockholder action and may adversely affect the rights and powers, including voting rights, of the holders of Common Stock. In certain circumstances, the issuance of preferred stock could depress the market price of the common stock.

On March 7, 2017, the Company received conversion notices from holders of an aggregate of $1,910,000, or 191 Preferred Shares. The Preferred Shares converted into shares of common stock, of the Company at a 13% discount to a public offering and became effective upon the filing by the Company of a prospectus supplement disclosing the terms of an offering. The closing of the public offering took place March 15, 2017 and the public offering price was set at $1.50, therefore the discounted conversion price for the preferred shareholders was calculated at $1.305. The number of shares of common stock issued was approximately 1,463,601.

On September 28, 2017 the Company notified the remaining holders of the Preferred Shares that the Company had elected to exercise its right to force conversion of the Preferred Shares still outstanding as permitted under the terms of the agreement. The conversion resulted in the issuance of 338,419 shares of common stock as per September 30 those shares were pending to be issued.

For the nine month period ended September 30, 2017, the Company did not issue any additional shares of preferred stock, and -0- shares of preferred stock are outstanding.

(C) Warrants

Throughout the years, the Company has issued warrants with varying terms and conditions related to multiple financing rounds, acquisitions and other transactions. The number of warrants outstanding at September 30, 2017 (unaudited) and December 31, 2016 have been recorded and classified as equity is 6,619,233 and 2,204,651 respectively. As of September 30, 2017, and December 31, 2016, the Company has classified 6,619,233 and 700,373, in the balance sheet for the equity warrants issued and -0- and 1,504,278, in the balance sheet for the liability warrants issued in connection with the various offerings in previous and current year. The Weighted Average Exercise Price for the currently outstanding warrants in the table below is $1.72. The table below summarizes the warrants outstanding as of September 30, 2017 and as of December 31, 2016:

Outstanding Warrants	Exercise/ Conversion price(s) (range)		Expiring	September 30, 2017		December 31, 2016
Equity Warrants – Fundraising		$0.64 - $5.375	2017 - 2023		6,513,061		700,373
Liability Warrants – Fundraising		$3.25 - $11.25	2019 - 2021		96,520		1,504,278
					6,609,581		2,204,651