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Equity and Equity Incentive Plan
12 Months Ended
Dec. 31, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Equity and Equity Incentive Plan

15. EQUITY AND EQUITY INCENTIVE PLAN

 

Royalties expense – related parties – The Company has Exclusive License Agreements with 940 Associates, Inc. (hereinafter referred to as “940A”), an entity owned by the Company’s Chief Executive Officer, to license the trademark “Brownies Third Lung”, “Tankfill”, “Brownies Public Safety” and various other related trademarks as listed in the agreement. Based on this license agreement, the Company pays 940A 2.5% of gross revenues per quarter. Total royalty expense for the above agreements for the years ended December 31, 2016 and 2015, as disclosed on the face of the Company’s Consolidated Statements of Operations totaled $56,054 and $67,849, respectively. As of December 31, 2015, the Company was approximately 27 months in arrears on royalty payments due. In November 2016, the Company entered into a conversion agreement under which the Company issued 10,000,000 shares of restricted common stock in satisfaction of $88,850 past due and payable to 940A. As of the date of the conversion agreement, the Company was more than 31 months in arrears on its royalty payments totaling approximately $151,000. In addition, 940A has agreed to forebear on any default under the License Agreement due to the Company’s remaining past due amount for a period of three months from the effective date of the conversion agreement. The shares issued were valued at $0.008885 per share, the closing price of the stock on the effective date of the conversion agreement. No default notice had been received and prior to the conversion agreement. 

 

On August 22, 2007, the Company adopted an Equity Incentive Plan (the “Plan”). Under the Plan, Stock Options may be granted to Employees, Directors, and Consultants in the form of Incentive Stock Options or Nonstatutory Stock Options. Stock Purchase Rights, time vested and/performance invested Restricted Stock, and Stock Appreciation Rights and Unrestricted Shares may also be granted under the Plan. The initial maximum number of shares that may be issued under the Plan shall be 297 shares, and no more than 75 Shares of Common Stock may be granted to any one Participant with respect to Options, Stock Purchase Rights and Stock Appreciation Rights during any one calendar year period. Common Stock to be issued under the Plan may be either authorized and unissued or shares held in treasury by the Company. The term of the Plan shall be ten years. The Board of Directors may amend, alter, suspend, or terminate the Plan at any time. All 297 options were issued under the plan prior to January 1, 2010, with an exercise price of $1,350 per share and to-date all remain outstanding.

 

Effective April 15, 2016, Trebor, the wholly-owned subsidiary of the Company, entered into an employment agreement with Mr. Purdon, a former employee of Trebor and affiliate of the Company. Under the terms of the agreement Mr. Purdon agreed to provide business and sales services to the Company through August 31, 2016. Wages due to Mr. Purdon were payable at the sole discretion of the Company in shares of its restricted common stock at a price per share of $0.10 cents per share. Mr. Purdon received 360,000 shares of restricted common stock for services performed under the agreement during 2016 which was valued at $36,000. Furthermore, as additional consideration for the Company to enter into the agreement, Mr. Purdon tendered 28,403,252 shares of the Company’s common stock beneficially owned by Mr. Purdon to the Company. The shares were retired and returned to the Company’s treasury without further consideration.