Quarterly report pursuant to Section 13 or 15(d)

Stockholders' Equity (Tables)

v3.7.0.1
Stockholders' Equity (Tables)
 3 Months Ended
Mar. 31, 2017
Equity [Abstract]  
Dividends Preferred Stock

Dividend charges recorded during the three months ended March 31, 2017 and 2016 are as follows:

 

    For the three Months Ended  
    March 31,  
    2017     2016  
             
Series                
A   $ 12,510     $ 12,510  
A-1     7,381       7,380  
Total   $ 19,891     $ 19,890  

Schedule of Accrued Liabilities

Accrued dividends payable at March 31, 2017 and December 31, 2016 are comprised of the following:

 

    March 31, 2017     December 31, 2016  
Series                
A   $ 322,200     $ 304,129  
A-1     228,385       226,565  
Total   $ 550,585     $ 530,694  

Schedule of Warrants and Derivative Warrant Liability

As of March 31, 2017, the following warrants were outstanding:

 

Issued to   Amount     Issue Date   Expiration Date   Exercise Price  
Term Note Lender(1)     2,343,750     9/30/2016   9/30/2021     0.80  
Investment Bank     1,969,837     12/9/2012   12/9/2019     0.20  
Investment Bank     2,434,539     10/31/2014   10/31/2021     0.20  
Equity Investors     2,487,000     9/8/2016   9/8/2021     0.80  
Equity Investors     2,423,688     9/29/2016   9/29/2021     0.80  
Equity Investors     2,589,312     10/12/2016   10/12/2021     0.80  
Term Note Lender (1)     2,500,000     11/11/2016   11/11/2021     0.40  
Term Note Lender (1)     3,750,000     1/3/2017   1/3/2012     0.40  
      20,498,126                  

 

  (1) Warrant was determined to be a derivative subject to fair value accounting and is booked as a warrant liability.

Schedule of Warrants Activity

A summary of the warrant activity during the three months ended March 31, 2017 is presented below:

 

          Weighted     Weighted        
          Average     Average        
    Number of     Exercise     Remaining     Intrinsic  
    Warrants     Price     Life in Years     Value  
Outstanding, December 31, 2016     16,748,126     $ 0.55       4.6     $ 3,435,494  
Issued     3,750,000       0.40       4.8       1,387,500  
Exercised     -       -       -       -  
Expired     -       -       -       -  
Outstanding, March 31, 2017     20,498,126     $ .55       4.4     $ 4,822,994  
Exercisable, March 31, 2017     20,498,126     $ .55       4.4     $ 4,822,994  

Schedule of Fair Value Assumptions of Warrant Derivative Liability

The following table summarizes the calculated aggregate fair values for the warrant derivative liabilities using the Lattice Model method based on the following assumptions:

 

    January 2017     January 2017     November 2016     September 2016  
    Warrants at     Warrants as of     Warrants as of     Warrants as of  
    Inception     March 31, 2017     March 31, 2017     March 31, 2017  
Risk free rate     1.94 %     1.913 %     1.907 %     1.904 %
Volatility     37.46 %     37.31 %     37.37 %     37.08 %
Dividends     0       0       0       0  
Time to maturity     5 years       4.76 years       4.62 years       4.50 years  
Fair value per share price     .1502       .4448       .4427       .2484  
Fair value of warrants     563,300       1,668,000       1,106,800       582,200  
Market price on date of issuance     0.41                          

Schedule of Change in the Fair Value of Warrants

The following table summarizes the change in fair value of the warrants from December 31, 2016 through March 31, 2017.

 

    Fair value                 Fair value  
    as of     New     Change in Fair Value     as of  
    12/31/2016     Issuances     gain (loss)     3/31/2017  
Investor warrants (9/30/16)   $ (169,700 )   $ -     $ (412,500 )   $ (582,200 )
Investor warrants (11/11/16)   $ (424,300 )   $ -     $ (682,500 )   $ (1,106,800 )
Investor warrants (1/3/17)   $ -     $ (563,300 )   $ (1,104,700 )   $ (1,668.000 )
Totals   $ (594,000 )   $ (563,300 )   $ (2,199,700 )   $ (3,357,000 )