Shareholders' Equity

12 Months Ended

Dec. 31, 2015

Shareholders' Equity [Abstract]

SHAREHOLDERS' EQUITY

6. SHAREHOLDERS’ EQUITY

On October 29, 2015 a 1:40 the Company effected a 1-for-40 reverse split of its common stock. The reverse split has been applied retroactively for disclosure purposes.

For the year ended December 31, 2015

The Company issued a total of 4,198,632 common shares during the 2015, adjusted for the October 29, 2015 1:40 reverse split, described further as follows:

The Company issued 215,750 shares of common stock between January 1 and March 31, 2015 pursuant to conversions of an aggregate of 86,300 shares of Series A preferred stock.

The Company issued 200,573 shares of common stock between April 1 and June 30, 2015 pursuant to conversions of an aggregate of 80,229 shares of Series A preferred stock.

The Company issued 25,500 shares of common stock between July 1 and September 30, 2015 pursuant to conversions of an aggregate of 10,200 shares of Series A preferred stock.

The Company issued 297,302 shares of common stock between October 1 and December 31, 2015 pursuant to conversions of an aggregate of 118,921 shares of Series A preferred stock.

The Company issued 1 share of common stock between July 1 and September 30, 2015 pursuant to conversions of an aggregate of 20 shares of Series B preferred stock.

The Company issued 8,116 shares of common stock between October 1 and December 31, 2015 pursuant to conversions of an aggregate of 324,651 shares of Series B preferred stock.

The Company issued 50,000 shares of common stock between April 1 and June 30, 2015 pursuant to conversions of an aggregate of 20,000 shares of Series C preferred stock.

The Company issued 25,000 shares of common stock between July 1 and September 30, 2015 pursuant to conversions of an aggregate of 10,000 shares of Series C preferred stock.

The Company issued 605,033 shares of common stock between October 1 and December 31, 2015 pursuant to conversions of an aggregate of 242,013 shares of Series C preferred stock.

The Company issued 210,000 shares of common stock between April 1 and June 30, 2015 pursuant to conversions of an aggregate of 8,400,000 shares of Series D preferred stock.

The Company issued 140,000 shares of common stock between July 1 and September 30, 2015 pursuant to conversions of an aggregate of 5,600,000 shares of Series D preferred stock.

The Company issued 501,250 shares of common stock between October 1 and December 31, 2015 pursuant to conversions of an aggregate of 20,050,000 shares of Series D preferred stock.

The Company issued 50,000 shares of common stock between July 1 and September 30, 2015 pursuant to conversions of an aggregate of 2,000,000 shares of Series E preferred stock.

The Company issued 85,000 shares of common stock between October 1 and December 31, 2015 pursuant to conversions of an aggregate of 3,400,000 shares of Series E preferred stock.

The Company issued 32,525 shares of common stock between October 1 and December 31, 2015 pursuant to conversions of an aggregate of 1,301,000 shares of Series F preferred stock

The Company issued 50,000 shares of common stock between October 1 and December 31, 2015 pursuant to conversions of an aggregate of 2,000,000 shares of Series G preferred stock

On June 1, 2015, the Company issued 50,000 shares of restricted common stock with monthly vesting provisions to the Chairman of the Board for twenty-four months services pursuant to a Director Agreement. The Chairman can earn a pro rata portion of the shares, calculated on a twenty-four month vesting period, in the event the Chairman relinquishes his position and board seat prior to the expiration date of the Director Agreement. The Company recognized a total of $157,500 expense for the pro rata portion of shares earned by the Chairman during 2015.

On August 27, 2014, the Company issued 50,000 shares of restricted common stock with monthly vesting provisions to two members of its Strategic Advisory Board for twelve months services. The advisors can earn a pro rata portion of the shares, calculated based on the twelve-month vesting period, in the event the service agreements are terminated prior to the expiration date as described in the agreements. The Company recognized a total of $213,333 expense for the pro rata portion of shares earned by the two advisors during 2015 and has recognized a total of $340,000 since August 27, 2014. The shares became fully vested on August 27, 2015.

On July 20, 2015, the Company issued 150,000 shares of restricted common stock valued at $1,260,000 to acquire assets from Adaptive Flight, Inc. as described above.

On September 4, 2015, the Company issued 450,000 shares of restricted common stock to four management employees and one director pursuant to stock award agreements. The shares will vest upon consummation of a $4,000,000 equity or debt financing provided that the holder remains engaged by the Company through the vesting date. Stock based compensation of $2,417,760 was recognized in 2015 based on management’s estimate that the shares will be fully vested by February 4, 2016 when the Board deemed vesting occurred with the issuance of $4,000,000 in common stock on November 20, 2015.

On November 17 and 19, 2015, the Company sold an aggregate of 745,000 shares of restricted common stock for a purchase price of $5.00 per share in a Private Placement for cash proceeds of $3,484,750 net of $240,250 financing fees. In connection with this sale, the Company issued an aggregate of 70,000 additional shares of common stock to holders of Series E preferred stock pursuant to the ‘most favored nations’ provisions governing the Series E preferred stock. Additionally, pursuant to the terms of the Series F preferred stock and Series G preferred stock, the Company was required to obtain consent to issue securities at a per share purchase price less than the purchase price of the Series F and Series G. In consideration for the consents, the company issued an aggregate of 182,525 shares of restricted common stock to the holders of Series F and Series G preferred stock.

On November 20, 2015, the Company entered into an Exchange Agreement with the holder of its outstanding shares of Series B-1 preferred stock pursuant to which the holder exchanged 68,731 shares of Series B-1 preferred stock for 55,000 shares of restricted common stock.

On October 29, 2015, the Company issued an aggregate of 57 restricted shares to various investors due to round factors associated with implementing the 1:40 reverse split.

For the year ended December 31, 2014

The Company issued 95,250 shares of common stock between June 3 and June 30, 2014, on a post-reverse split basis, pursuant to conversions of 38,100 shares of Series A Preferred Stock.

The Company issued 246,625 shares of common stock between July 1 and September 30, 2014, on a post-reverse split basis, pursuant to conversions of 98,650 shares of Series A Preferred Stock.

The Company issued 153,750 shares of common stock between October 1 and December 31, 2014, on a post-reverse split basis, pursuant to conversions of 61,500 shares of Series A Preferred Stock.

On July 1, 2014, the Company entered into a twelve-month consulting agreement for investor relations, marketing and public relations services. Pursuant to such agreement, the Company is obligated to pay the consultant for his services stock compensation of 6,250 shares of common stock, on a post-reverse split basis, immediately deliverable and an additional 6,250 shares of common stock deliverable after six months if the agreement is still in force. The 6,250 shares delivered in July were valued at $215,000. The agreement was terminated in December 2014 prior to the six month anniversary and, as a result, the Company is not obligated to deliver the remaining 6,250 shares of common stock.

On July 21, 2014, the Company issued a total of 42,500 shares of common stock, on a post-reverse split basis, to two consulting firms which held warrants issued on May 19, 2014 for services which were exercised at a $.40 strike price, on a post-reverse split basis, or a total of $17,000.

The Company issued 24,000 shares of common stock, on a post-reverse split basis, on August 25, 2014 pursuant to the conversion of 9,600 shares of Series C Preferred Stock.

On August 26, 2014, the Company issued an aggregate of 9,310 shares of restricted common stock, on a post-reverse split basis, to seven investors pursuant to the exercise of 100% of the warrants associated with Series E Preferred Stock.

On August 27, 2014, the Company issued 50,000 shares of restricted common stock, on a post-reverse split basis, with monthly vesting provisions to two members of its newly-formed Strategic Advisory Board for twelve months of service. The advisors can earn a pro rata portion of the shares, calculated based on the twelve-month vesting period, in the event the service agreements are terminated prior to the expiration date as described in the agreements. The Company recognized a total of $126,667 expense for the pro rata portion of shares earned by the two advisors during the year ended December 31, 2014.