Note 4 - Short-term Notes Payable

12 Months Ended

Dec. 31, 2016

Notes to Financial Statements

Short-term Debt [Text Block]

NOTE

4

– SHORT-TERM NOTES PAYABLE

 

From

July

through

September

2014,

we entered into a series of securities purchase agreements pursuant to which we issued approximately

$1.8

million original principal amount (subsequently reduced to approximately

$1.6

million aggregate principal amount in accordance with their terms) of convertible promissory notes (the

“2014

Convertible Notes”) and warrants exercisable for shares of our common stock for an aggregate purchase price of

$1,475,000.

Of this amount, we issued to SOK Partners, LLC, an affiliate of the Company,

$122,196

original principal amount of the

2014

Convertible Notes and warrants exercisable for

5,431

shares of our common stock for an aggregate purchase price of

$100,000.

In

April

and

May

2015,

we issued and sold to a private investor additional Convertible Notes in an aggregate original principal amount of

$275,000

for an aggregate purchase price of

$250,000,

containing terms substantially similar to the

2014

Convertible Notes (the

“2015

Convertible Notes” and, together with the

2014

Convertible Notes, the “Convertible Notes”). No warrants were issued with the

2015

Convertible Notes.

Under a provision in the existing agreements, upon effectiveness of a resale registration statement covering certain shares, on

September

9,

2014,

the principal amount of the notes was reduced by

11%,

to

$1,603,260

and the number of Warrants was reduced by

11%,

to

2,851

shares.

In connection with the Offering, the holders of the Convertible Notes agreed to not exercise their right to convert the Convertible Notes into shares of the Company’s common stock, in exchange for the Company’s agreement to redeem all of the outstanding Convertible Notes promptly following the consummation of the Offering at a redemption price equal to

140%

of the principal amount, plus accrued and unpaid interest to the redemption date. On

August

31,

2015,

the closing date of the offering, the Company redeemed the remaining

$933,074

aggregate principal amount of Convertible Notes plus interest and a

40%

redeemable premium, for a total payment of

$1,548,792.

Of this amount, approximately

$167,031

was paid to its affiliates in redemption of their Convertible Notes. Each holder of the Convertible Notes agreed to the foregoing terms and entered into an Amendment to Senior Convertible Notes and Agreement with the Company. As of

December

31,

2015,

none of the Convertible Notes were outstanding.