Note 8 - Common Stock

12 Months Ended

Dec. 31, 2016

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

NOTE

8

– COMMON STOCK

As previously disclosed, in

January

2013,

the Company revised its then existing agreement with the law firm of Brownstein Hyatt Farber Schreck LLP (“Brownstein”).  Under this agreement, the Company is to issue up to a total of

400,000

shares of the Company’s common stock, with

100,000

shares earned upon the achievement of each of

four

enumerated milestones as follows:

i. 100,000 shares earned upon the execution of the revised agreement;

ii. 100,000 shares earned upon receipt by the Company of a final judicial order dismissing all legal challenges to the Final Environmental Impact Report for the Project;

iii. 100,000 shares earned upon the signing of binding agreements for more than 51% of the Project’s annual capacity; and

iv. 100,000 shares earned upon the commencement of construction of all of the major facilities contemplated in the Final Environmental Impact Report necessary for the completion and delivery of the Project.

All shares earned upon achievement of any of the

four

milestones will be payable

three

years from the date earned.  

The

first

of the

four

milestones was satisfied in

January

2013,

and at that time, the Company recorded a stock compensation expense for the

first

100,000

shares earned.  In

May

2016,

the

second

milestone was earned when a

three

-judge Appellate judge panel unanimously sustained the

six

trial court decisions and validated the Project's environmental review and approvals.  As a result, the Company accrued and recognized stock compensation during the

third

quarter in the amount of

$520,000

for the

second

of the

four

milestones.  Because the shares are payable

three

years from the date earned, the fair value of these shares was measured by applying a discount which was determined by using the Finnerty model for discounts for lack of marketability.

As previously disclosed, in

June

2014,

the Company entered into amended and restated employment agreements with certain senior management that provided for long-term equity incentive milestone awards of

200,000

shares of the Company’s common stock in the form of

200,000

Restricted Stock Units (“RSUs”). These RSUs will vest once construction financing necessary for the implementation of the Water Project is secured. These RSUs were granted on

July

1,

2014

and will expire on

June

10,

2017,

if the milestone has not been achieved by such date.