NOTE 11. STOCKHOLDERS’ EQUITY

Dividends

Dividend charges recorded during the three and six months ended June 30, 2018 and 2017 are as follows:

Accrued dividends payable included in accrued expenses are as follows:

Subscription Receivable

As of June 30, 2018, 167,139 shares of common stock issued to employees were vested at a fair value of $5,522. As of June 30, 2018, 155,782 shares that were previously issued to employees with a fair value of $3,134 remained unvested. Because these common shares are subject to forfeiture if the employees are no longer employed with the company at the end of their employment agreements, their unvested value is carried in subscriptions receivable in stockholders’ equity.

Shares to be Issued to Investors

During the six months ended June 30, 2018, the Company sold shares of its common stock to individual investors. Net cash proceeds received by the Company was $5,437 and 807,531 shares of its common stock were sold. Stock issuances costs totaled $619. All of the shares were issued to the investors during May 2018.

Equity Transactions (in whole dollars)

Settlement of debt and related costs

During the six months ended June 30, 2018, the Company issued 441,362 shares of its common stock with a fair value of $8,847,000 to settle debt.

During the six months ended June 30, 2018, the Company issued 74,168 shares of its common stock with a fair value of $1,341,000 for related costs.

Consultants

During the six months ended March 31, 2018, the Company issued 40,336 shares of its common stock with a fair value of $734,000 pursuant to consulting agreements.

Sale of Common Stock

During the six months ended June 30, 2018, the Company issued 873,198 shares of its common stock to individual investors, which resulted in net proceeds to the Company of $6,357,000.

Board of Directors

During the six months ended June 30, 2018, the Company issued 25,750 shares of its common stock with a fair value of $447,000 to members of the Board of Directors.

Settle Legal Matters

During the six months ended June 30, 2018, the Company issued 14,277 shares of its common stock with a fair value of $300,000 to settle certain legal matters.

Share- Based Compensation

During the six months ended June 30, 2018, the Company issued 18,003 shares of its common stock with a fair value of $309,000 to employees under employment agreements for services rendered.

Exercise of Warrant Shares

During the six months ended June 30, 2018, the Company issued 185,767 shares of its common stock for the exercise of warrant shares.

Shares Retired

During the six months ended June 30, 2018, the Company retired 69,484 shares of its common stock.