Shareholders' Equity

12 Months Ended

Dec. 31, 2014

Shareholders' Equity [Abstract]

Shareholders' Equity

Note 6: Shareholders' Equity

On May 22, 2013, the Company entered into an investment agreement. Pursuant to the investment agreement, the Company could issue and sell to the investor, up to that number of shares of the Company's common stock having an aggregate purchase price of $2.5 million, over a period of 36 months from the first trading day following the effectiveness of the registration statement registering the resale of shares. The purchase price was set at 92% of the lowest daily volume weighted average price of the Common Stock during the five consecutive trading day period beginning on the date of delivery of the applicable draw down notice.

On June 20, 2013, as part of the investment agreement, the Company filed with the Securities Exchange Commission a Form S-1 for the registration of its Common Stock, $0.001 par value. The amount of shares to be registered was 500,000 shares. The S-1 became effective on June 27, 2013. Since June 27, 2013, the date the Registration Statement was declared effective, through December 5, 2013, the date the Company terminated the Investment Agreement, the Company sold 84,669 shares of its common stock to Dutchess Opportunity Fund II, LP, for total net proceeds of $397,678.

During 2012, the Company paid $386,563 of dividends in excess of retained earnings which created an accumulated deficit of $386,563 as of December 31, 2012 in the statement of Stockholders' equity. According to SAB Topic 3.C. Question 1, for SEC registrants, if an accumulated deficit exists, the charge for dividends paid should be to additional paid in capital. Therefore, the Company reclassified $386,563 of dividends from accumulated deficit to additional paid in capital for the three month period ended March 31, 2014. Management has concluded that the reclassification of dividends would not require a retrospective adjustment to the consolidated financial statements presented in the form 10 – K for the years ended December 31, 2013 and 2012. The reclassification has no impact on the historical net income, total equity, total assets and total liabilities.  

For the years ending December 31, 2014 and 2013, the Company paid quarterly dividends of $2,459,711 and $1,255,936, respectively.

On December 26, 2013, the Company filed with the Securities Exchange Commission a Form S-1 registration statement. The S-1 became effective on January 30, 2014. Pursuant to the Form S-1, in February, 2014, the Company registered and sold 1,840,000 shares of common stock, $0.001 par value, in exchange for $11,500,000 in gross proceeds.  

On October 17, 2014, the Company issued 423,426 unregistered shares of common stock which represented the $2.7 million portion of the consideration of the GraphicMail acquisition.