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STOCKHOLDERS' EQUITY
3 Months Ended
Mar. 31, 2018
Equity [Abstract]  
Stockholders' Equity
NOTE 6 – STOCKHOLDERS’ EQUITY
 
For the three months ended March 31, 2018 and 2017, the Company expensed $8,376 and $0 relative to restricted stock units.
 
For the three months ended March 31, 2018 and 2017, the Company expensed $42,914 and $0 relative to restricted stock awards.  During the quarter ended March 31, 2018, the Company granted 300,000 restricted stock awards to a director of the company for their services, vesting equally over a one year period.
 
On September 8, 2017, the Company entered into a consulting agreement stipulating partial payment in restricted common stock.  During the quarter ended March 31, 2018, 120,000 shares have been issued in relation to this agreement.  These shares were valued at the closing price of the Company’s common stock as they became due for a total of $32,644 for the three months ended March 31, 2018.


In 2017 the Company authorized a private placement with a maximum offering amount of $2,100,000 allowing investors to purchase units consisting of 715,000 shares of common stock and 715,000 five-year warrants exercisable at $0.15 per share.  In January 2018 the Company’s Board of Directors increased the size of the private placement by an additional amount beyond the $2,100,000 limit. For the three months ended March 31, 2018, the Company has raised gross proceeds of $1,154,777 for the purchase of 16,513,311 shares of common stock and 16,513,311 warrants. Of these amounts, gross proceeds of $530,777 for the purchase of 7,590,111 shares of common stock and 7,590,111 warrants related to directors of and relatives of the directors of the Company.
In January 2018, the Chairman of the Board of Directors, made a cashless exercise of 5,000,000 options related to services in 2017, whereby the Chairman disposed of 972,222 shares to the Company as part of his exercise, amounting to an issuance of 4,027,778 shares, see Note 7.
  
On January 30, 2018, the Company authorized a 30-day offer, beginning on February 20, 2018, to the holders of the Company’s outstanding warrants exercisable at $0.15 to exercise their warrants at $0.10.  This authorization was since extended until the latter of 30 days after the receipt of all Investment Letters, as defined below, in connection with the Settlement Shares, as defined below, or June 30, 2018.  For the three months ended March 31, 2018, 14,607,583 shares of warrants were exercised and a total of 14,607,583 shares of common stock were issued for gross proceeds of $1,460,758. Included in the above amounts are gross proceeds of $1,089,098 from directors which resulted in 10,890,983 warrants converted into the issuance of 10,890,983 common stock.

In January 2018, a member of the Board exercised 104,876 warrants with an exercise price of $0.15 and a total of 104,876 shares of common stock were issued for gross proceeds of $15,731.

On March 31, 2018, the Company entered into a Confidential Settlement Agreement (the “Settlement Agreement”) with Paul Klapper, a member of the Company’s Board, Stephen Silver, PFK Development Group, Ltd. (“PFKD”) and certain other parties named in the Settlement Agreement. Pursuant to the terms of the Settlement Agreement, the Company (i) paid a total of $500,000 (the “Settlement Amount”) to PFKD and Mr. Silver and (ii) issued them each 500,000 shares of the Company’s common stock (the “Settlement Shares”). The shares were valued at $279,000 whereby $139,500 related to common stock issued to a related party and $139,500 related to common stock issued to a third party. The Settlement Agreement provides for cancellation as of March 31, 2018 of certain revenue sharing agreements between the Company and each of Mr. Klapper, Mr. Silver and PFKD, and terminates the Company’s obligation to issue warrants to purchase 3.7 million shares of the Company’s common stock at an exercise price of $0.40 per share.
Mr. Klapper joined the Board of Directors on July 14, 2017 and resigned as of March 31, 2018.

The Company is currently in the process of collecting letters (the “Investment Letters”), mailed by Mr. Klapper to the investors in Mr. Klapper’s funds, in order to insure that the transfer of the securities under Section 4(a)(1½) of the Securities Act of 1933 is valid.
 
The Settlement Shares were issued pursuant to a Stock Purchase Agreement entered into in connection with the closing of the Settlement Agreement. The Company also entered into a Registration Rights Agreement with certain parties named therein with respect to the Settlement Shares and certain other shares of the Company’s common stock specified in the Registration Rights Agreement and the Settlement Agreement.
 
In January 2018, the Company issued 1,749,683 shares of common stock and 1,749,683 shares of warrants with an exercise price of $0.15 to Mr. Klapper relating to the Note payable conversion that took place in June 2017. See Note 4.
 
On March 28, 2018, the Company accelerated the vesting of 150,000 shares of restricted common stock owned by Mr.  Klapper.