NOTE 12. STOCKHOLDERS’ EQUITY

Dividends

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

Accrued dividends payable included in accrued expenses are as follows:

Subscription Receivable

As of September 30, 2018, 194,049 shares of common stock issued to employees were vested at a fair value of $5,975. As of September 30, 2018, 128,872 shares that were previously issued to employees with a fair value of $2,682 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.

Equity Transactions (in whole dollars)

Settlement of debt and related costs

During the nine months ended September 30, 2018, the Company issued 559,099 shares of its common stock with a fair value of $10,505,000 to settle obligations.

During the nine months ended September 30, 2018, the Company issued 92,568 shares of its common stock with a fair value of $1,558,000 for debt related costs.

Consultants

During the nine months ended September 30, 2018, the Company issued 100,986 shares of its common stock with a fair value of $1,408,000 pursuant to consulting agreements.

Sale of Common Stock

During the nine months ended September 30, 2018, the Company issued 902,784 shares of its common stock to individual investors, which resulted in net proceeds to the Company of $6,856,000.

Board of Directors

During the nine months ended September 30, 2018, the Company issued 33,750 shares of its common stock with a fair value of $551,000 to members of the Board of Directors per their agreements.

Settle Legal Matters

During the nine months ended September 30, 2018, the Company issued 13,177 shares of its common stock with a fair value of $273,000 to settle certain legal matters.

Share- Based Compensation

During the nine months ended September 30, 2018, the Company issued 18,003 shares of its common stock with a fair value of $281,000 to employees under employment agreements.

Exercise of Warrant Shares

During the nine months ended September 30, 2018, the Company issued 250,717 shares of its common stock for the exercise of warrant shares.

Shares Returned

During the nine months ended September 30, 2018, 70,114 shares of its common stock was returned to the Company.