STOCKHOLDERS EQUITY

12 Months Ended

Dec. 31, 2015

Equity [Abstract]

STOCKHOLDERS EQUITY

NOTE 10 - STOCKHOLDERS' EQUITY

Common stock

During the year ended December 31, 2014, the Company issued 1,650,000 fully vested shares to the CEO, the board of directors and two individuals for services provided.  The shares have a fair value of $1,125,000 which was recognized as stock based compensation for the year ended December 31, 2014.

During the fourth quarter of 2014 the Company paid $250,122 to purchase 716,990 of its common shares. As of December 31, 2014 the certificates were held in the Company's brokerage account and had not been returned to the transfer agent for cancelation. Therefore they were carried on the Company's balance sheet as treasury stock.

During the year ended December 31, 2015, the Company paid  $135,276, to acquire an additional 442, 140 common shares, for a total cost of $358,398 and canceled the 1,161,130 common shares which had been purchased,  on the open market, at a total cost of $385,398.

There were no common shares issued during the year ended December 31, 2015.

Redeemable Series A Preferred Stock

The Company is authorized to issue 5,500,000 shares of Series A preferred stock.

The holders of Series A preferred stock have no dividend rights, no voting rights and no conversion rights. The Corporation has the right, but not the obligation, to the extent it may lawfully do so, at any time and from time to time to repurchase and redeem from the holders all or any portion of the then outstanding shares of Series A preferred stock at $1 per share.

On January 14, 2015, the Company paid $2,215,000 to the holder of the preferred A stock to redeem the entire outstanding shares.

There were no issuances of the Redeemable Series A preferred stock for the years ended December 31, 2015 or December 31, 2014.

Convertible Series B Preferred Stock

The Company is authorized to issue 5,000,000 shares of Series B preferred stock.

The holders of Series B preferred stock shall have the right to receive dividends at the rate of $0.12 per share, when and if declared by the board. These dividends will be cumulative. Each share of Series B shall be convertible into common stock at the option of the holder at any time after the date of issuance.

There were no issuances of the Convertible Series B preferred stock for the year ended December 31, 2015 and 2014.

Convertible Series D Preferred Stock

On September 29, 2014, the Board of Directors established the Series D Preferred Stock, consisting of 8,000,000 shares with no par value.  The Series D Preferred shareholders are entitled to receive cumulative quarterly dividends at the rate of $0.15 per share per annum and will share in any liquidation, or dissolution, preference to any other distribution to the holders of common shares, an amount equal to $1.25 for each outstanding share.  The holders of the Series D Preferred Stock shall have the right to convert, at their option, 24 months after the date of issuance, into common shares at a price equivalent to 40% of the Company's average market price for ten trading days prior to conversion.  The Series D Preferred Stock will automatically convert to common stock upon the earlier of (i) 24 months from the purchase date or (ii) the date specified by written consent or agreement of the holders of a majority of the outstanding shares of Series D Preferred Stock.

On September 30, 2014, a member of our Board of Directors subscribed to 1,600,000 preferred shares at a cost of $1.25 per share. The proceeds from the subscription were received in October 1, 2014. On December 31, 2014, the same director subscribed to an additional 2,800,000 preferred shares on the same terms and conditions as the previous transaction. The Company has determined that as of September 30, 2014, the Series D Preferred Stock is convertible because of the "automatic conversion" feature in the stock.  The Company evaluated the embedded conversion option of the preferred stock under FASB ASC 815-15 and determined that it is clearly and closely related to the host contract, the preferred stock, and does not require to be bifurcated.   The Company evaluated the preferred stock for a beneficial conversion feature under FASB ASC 470-20 and determined that a beneficial conversion feature of $5,375,969 existed which has been fully recognized as a deemed dividend to the preferred shareholder.