Note 9. Common Stock

9 Months Ended

Sep. 30, 2015

Notes

Note 9. Common Stock

Note 9.            Common Stock

            In October 2012, the Company issued 300,000 shares of common stock and granted 150,000 stock warrants to Strategic Asset Management, Inc., or SAMI, to extend the period of services performed in connection with a December 2010 Financial Public Relations Agreement for an additional two years, through December 2015.  To reflect the entire value of the stock and warrants issued, the Company was recording a non-cash charge to earnings of $421,300 starting in 2013, over a 36 month period.  In July 2015, the Company notified SAMI that it was terminating its contract early, and took a non-cash charge to earnings in the quarter ended June 30, 2015 for the balance of the unamortized cost of the contract.  For the nine months ended September 30, 2015 and 2014, the charge to earnings was approximately $125,200 and $102,500, respectively.  For the three months ended September 30, 2015 and 2014, the charge to earnings was approximately $-0- and $34,200, respectively.

            In April 2013, the Company executed a Consulting Agreement with Rakgear, Inc.  The Company engaged Rakgear to provide financial consulting services for a term of one year.  For its services, the Company issued Rakgear 150,000 shares of the Company's unregistered common stock and 150,000 warrants to purchase unregistered shares of common stock at a price of $1.49 per warrant.  To reflect the entire value of the stock issued, the Company recorded a non-cash charge to earnings of $487,900 ratably through March 2014, the ending date of the agreement.  For the nine months ended September 30, 2015 and 2014, the charge to earnings was $-0- and $122,000, respectively.  For each of the three months ended September 30, 2015 and 2014, there was a $-0- charge to earnings.

            In September 2014, the Company executed a Financial Public Relations Agreement with Dynasty Wealth, Inc., for a one year term.  For its services, the Company issued Dynasty Wealth 350,000 warrants to purchase the Company's unregistered common stock at an exercise price of $1.50 per share, and $10,000 per month, to be paid in either cash or shares of the Company’s unregistered common stock at the Company’s discretion.  To reflect the entire value of the warrants issued, the Company is recording a non-cash charge to earnings of $460,700 ratably through September 14, 2015, the ending date of the agreement.  For the nine months ended September 30, 2015 and 2014 the charge to earnings for the entire agreement was approximately $411,300 and $24,200, respectively, of which the non-cash portion of the agreement was approximately $326,300 and $11,400, respectively.  For the three months ended September 30, 2015 and 2014 the charge to earnings for the entire agreement was approximately $121,000 and $24,200, respectively, of which the non-cash portion of the agreement was approximately $96,000 and $19,200, respectively.  In August 2015, the Company notified Dynasty that it was not renewing its contract.

            In November 2014, the Company executed a Public Relations Agreement with Global IR Group, Inc., for a one year term.  For its services, the Company issued Global IR 100,000 shares of the Company’s unregistered common stock.  To reflect the entire value of the stock issued, the Company was recording a non-cash charge to earnings of $165,000 ratably through November 19, 2015, the original ending date of the agreement.  In July 2015, the Company notified Global IR that it was terminating its contract early, and took a non-cash charge to earnings in the quarter ended June 30, 2015 for the balance of the unamortized cost of the contract.  For the nine months ended September 30, 2015 and 2014, the charge to earnings was approximately $146,200 and $-0-, respectively.  For both the three months ended September 30, 2015 and 2014, there was a $-0- charge to earnings.

            In July 2015, the Company executed a Public Relations Agreement with Financial Genetics, LLC, for a one year term.  For its services, the Company issued Financial Genetics 100,000 shares of the Company’s unregistered common stock.  To reflect the entire value of the Agreement, the Company is recording a non-cash charge to earnings of $100,000 ratably through July 2016, the ending date of the agreement.  For the nine months and three months ended September 30, 2015 and 2014, the charge to earnings was approximately $20,800 and $-0-, respectively.

            In April 2015, the Company issued a total of 1,314 shares of unregistered common stock, valued at a total of $3,000, to six independent directors in lieu of cash owed for a board meeting attended.  To reflect the value of the stock issued, the Company recorded a charge to earnings totaling $3,000 in the second quarter of 2015.

            In July 2015, the Company issued a total of 3,935 shares of unregistered common stock, valued at a total of $5,000, to five independent directors in lieu of cash owed for a board meeting attended.  To reflect the value of the stock issued, the Company recorded a charge to earnings totaling $5,000 in the third quarter of 2015.

            Between January and April 2015, the Company entered into share purchase agreements with a total of fourteen Purchasers pursuant to which the Company sold 410,000 shares of its common stock (the “Shares”) to the Purchasers for a total of $410,000, or a purchase price of $1.00 per share, to provide operating capital.  All but 30,000 shares were restricted and have limited “piggy-back” registration rights in connection with certain registration statement filings of the Company under the Securities Act of 1933 as amended (the “Securities Act”).  The Company issued 30,000 shares in 2015 it held in its treasury.  All of the transactions were exempt from the registration requirements under the Securities Act pursuant to section 4(a)(2) as a transaction by an issuer not involving a public offering.

            In June 2015, the Company entered into share purchase agreement with a Purchaser pursuant to which the Company sold 100,000 shares of its common stock (the “Shares”) to the Purchaser for a total of $125,000, or a purchase price of $1.25 per share, and 50,000 warrants to purchase stock for $1.50 per share, to provide operating capital.  All the shares issued were restricted and have limited “piggy-back” registration rights in connection with certain registration statement filings of the Company under the Securities Act of 1933 as amended (the “Securities Act”).  The transaction was exempt from the registration requirements under the Securities Act pursuant to section 4(a)(2) as a transaction by an issuer not involving a public offering.

            In June 2015, the Company issued a consultant 13,028 shares of registered common stock on the exercise of 22,400 warrants that were issued in 2010.  The exercise did not provide the Company with cash as they were “cashless” per the agreements involved providing for the warrants and subsequent stock issuance.

In June 2015, the Company issued Deerpoint Development Company Ltd., the landlord of its administrative office, 16,106 shares of unregistered common stock at a price of $1.43 per share in exchange for six months rent, resulting in net additional expense of approximately $2,700 above the contracted amount, but saving approximately $20,400 of cash.

In June 2015, the Company issued D&B Colon Leasing, LLC, the landlord of a former satellite office, 20,997 shares of unregistered common stock at a price of $1.48 per share in exchange for the remaining eleven months rent owed, resulting in net additional expense of approximately $3,600 above the contracted amount, but saving $27,500 of cash.