Note 16 - Subsequent Events

12 Months Ended

Dec. 31, 2016

Notes to Financial Statements

Subsequent Events [Text Block]

NOTE

16:

SUBSEQUENT EVENTS

In

February

2017,

the Company issued

$400

in demand promissory notes and

five

year warrants to purchase

333,333

shares of common stock at $

0.70,

per share.

In

February

16,

2017

, the holder of the

$100

in demand promissory notes agreed to cancel its demand promissory note for the purchase of

166,667

shares of Common Stock at

$0.60

per share

.

In

February

23,

2017,

the holders of the

$300

in demand promissory notes agreed to cancel their demand promissory notes to purchase of

500,000

shares of Common Stock at

$0.60

per share

.

On

March

9,

2017,

the Company entered into a Preferred Stock Purchase Agreement with Philou, the majority stockholder of the Company and of which Kristine Ault, a director of the Company, is the managing member of MCKEA which, in turn, is the Manager of Philou. Pursuant to the terms of the Preferred Stock Purchase Agreement, Philou

may

invest up to

$5,000,000

in the Company through the purchase of Series B Preferred Stock over the term of

36

months.

In addition, for each share of Series B Preferred Stock purchased, Philou will receive warrants to purchase shares of common stock in a number equal to the stated value of each share of Series B Preferred Stock of

$10.00

purchased divided by

$0.70

at an exercise price equal to

$0.70

per share of common stock

Further, Philou shall have the right to participate in the Company’s future financings under substantially the same terms and conditions as other investors in those respective financings in order to maintain its then percentage ownership interest in the Company. Philou’s right to participate in such financings shall accrue and accumulate provided that it still owns at least

100,000

shares of Series B Preferred Stock.

On

March

15,

2017,

Company entered into a subscription agreement with an investor for the sale of

500,000

shares of common stock at

$0.60

per share for the aggregate purchase price of

$300.

On

March

24,

2017,

Philou purchased

25,000

shares of Series B Preferred Stock pursuant to the Preferred Stock Purchase Agreement in consideration of the cancellation of the Company debt due to an affiliate of Philou in the amount of

$250

. 

On

March

28,

2017,

the Company issued

$270

in demand promissory notes to several investors. These demand promissory notes bear interest at the rate of

6%

per annum. On

April

5,

2017,

the Company canceled these promissory notes by issuing

360,000

shares of common stock at

$0.75

per share. In addition, the Company also issued warrants to purchase

180,000

shares of common stock at

$0.90

per share to these investors.