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SUBSEQUENT EVENTS
3 Months Ended
Mar. 31, 2015
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS
On April 28, 2015, pursuant to the Feinsod Agreement, the Company issued 1,000,000 shares of its stock to Infinity Capital as a result of the uplisting of the Company’s stock to the OTC Market's Pink Sheets on April 28, 2015. In connection with the Feinsod Agreement (see Note 16), the Company expects to record accrued stock payable and stock compensation expense of approximately $3,490,000, based on a closing price per share of $3.49 at April 27, 2015.
On April 30, 2015, Infinity Capital amended the Infinity Note with the Company (see Note 15). The aggregate principal amount of the Infinity Note was increased to $300,000, interest will continue to accrue on the then-outstanding principal amount and will be payable monthly in arrears commencing June 30, 2015, until the Infinity Note’s maturity date on August 31, 2015. Interest on the Infinity Note will continue to accrue at 5.0%. At May 9, 2015, the balance of the Infinity Note was $239,000. Pursuant to the amended agreement, the Company shall use any proceeds in excess of $750,000 from any incremental capital raises to pay any outstanding principal and interest due under the Infinity Note.

On May 1, 2015, the Company and Robert L. Frichtel entered into an Executive Employment Agreement (the “Frichtel Agreement”) in order to secure Mr. Frichtel’s continued employment as the Company’s President and Chief Executive Officer.  Under the terms of the Frichtel Agreement, Mr. Frichtel will receive a base salary of $150,000 per year, which may be increased (but not decreased) subject to annual review by the Board. Mr. Frichtel will be eligible for an annual bonus pursuant to the Company’s Executive Bonus Plan and is entitled to participate in any employee benefit plan that Company has adopted or may adopt. The term of the Frichtel Agreement expires on December 31, 2018.

In addition, the Company and Mr. Frichtel entered into an Option Agreement (the “Frichtel Option Agreement”), pursuant to which Mr. Frichtel will receive options to purchase 300,000 shares of the Company’s common stock at a price of $3.75 per share (which price was based on the closing price of the Company’s common stock on May 1, 2015), 100,000 of which vested upon execution of the Frichtel Agreement, and provided that Mr. Frichtel remains an employee of the Company on each date, 100,000 of which will vest on May 1, 2016, and the remaining 100,000 will vest on May 1, 2017.  

On May 1, 2015, the Company and Full Circle entered into Amendment No. 2 to the Series C Warrants, pursuant to which Full Circle cashlessly exercised 160,000 warrants and received 100,000 shares of the Company’s common stock. On May 4, 2015, Full Circle exercised its remaining warrants under the Series C Warrants to purchase 25,000 shares of the Company’s common stock for $4.00 per share. There are no more warrants under the Series C Warrants outstanding. Immediately preceding Full Circle’s exercise of its 185,000 warrants, the fair value of the warrants was determined to be $593,530. The fair values of the 25,000 restricted shares and 100,000 unrestricted shares issued were determined to be approximately $80,000 and $375,000, respectively, based on a closing price per share of $3.75 on May 1, 2015.
On May 7, 2015, the Company raised capital of $200,000 through its Promissory Note and Warrant Purchase Agreement (the “10% Notes”). Under the 10% Notes, the Company can sell up to $2,000,000 of notes to investors, each note with a denomination of a minimum of $50,000. The 10% Notes mature on May 1, 2016 and carry an interest rate of 10% per annum, with interest payable quarterly beginning on June 30, 2015. Subject to the terms and conditions of the 10% Notes, each investor is granted warrants equal to their note principal divided by 2 (the “10% Note Warrants”). The 10% Note Warrants shall be exercisable for a period of one year after grant date and have an exercise price of the Company’s closing price per share on the date of grant. In connection with the balance of the 10% Notes issued at May 7, 2015, the Company granted 100,000 warrants, which had a fair value of approximately $90,000 on the grant date. The Company expects to record the fair value of the warrants as a debt discount and amortize the value through interest expense through the maturity date of these notes. The Company’s agreements with each of the investors are separate agreements, and the sales of the 10% Notes and the 10% Note Warrants to each of the investors are separate sales.
In accordance with ASC Topic 855, Subsequent Events, the Company has evaluated events that occurred subsequent to the balance sheet date through April 27, 2015, the date of available issuance of these unaudited financial statements. The Company determined that other than as disclosed above, there were no material reportable subsequent events to be disclosed.