10-Q

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________

FORM 10-Q

[Mark One]

[X]              QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the quarterly period ended June 30, 2016

[   ]              TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the transition period from _______ to ________

Commission File Number: 0-25203
OmniComm Systems, Inc.
(Exact name of registrant as specified in its Charter)
Delaware	11-3349762
(State or other jurisdiction of Incorporation or organization)	(IRS Employer Identification Number)
2101 W. Commercial Blvd. Suite 3500, Fort Lauderdale, FL	33309
Address of principal executive offices	Zip Code
954.473.1254
(Registrant’s Telephone Number including area code)

No Changes

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [√] No [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes [√] No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act

Large accelerated filer	[ ]	Accelerated filer	[ ]
Non-accelerated filer	[ ]	Smaller reporting company	[√]
(Do not check if smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [√]

The number of shares outstanding of each of the issuer’s classes of common equity as of August 11, 2016: 147,686,917 common stock $.001 par value.

1

Table of Contents to the Quarterly Report on Form 10-Q for the Six month period ended June 30, 2016

PART I. FINANCIAL INFORMATION		3
	ITEM 1. FINANCIAL STATEMENTS	3
	ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	38
	ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	55
	ITEM 4. CONTROLS AND PROCEDURES	55
PART II. OTHER INFORMATION		56
	ITEM 1. LEGAL PROCEEDINGS	56
	ITEM 1A. RISK FACTORS	56
	ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	56
	ITEM 3. DEFAULTS UPON SENIOR SECURITIES	56
	ITEM 4. MINE SAFETY DISCLOSURES	56
	ITEM 5. OTHER INFORMATION	56
	ITEM 6. EXHIBITS	57
SIGNATURES		58

2

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

OMNICOMM SYSTEMS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

	June 30, 2016			December 31, 2015
	(unaudited)
ASSETS
CURRENT ASSETS
Cash	$	857,101		$	835,219
Accounts receivable, net of allowance for doubtful accounts of $125,593 and $116,834, respectively		4,327,935			4,092,472
Prepaid expenses		181,687			170,173
Prepaid stock compensation, current portion		179,950			175,858
Other current assets		9,648			14,351
Total current assets		5,556,321			5,288,073
Property and equipment, net		703,799			683,712
Other assets
Intangible assets, net		130,884			148,877
Prepaid stock compensation		117,526			150,085
Other assets		53,354			46,565
TOTAL ASSETS	$	6,561,884		$	6,317,312
LIABILITIES AND SHAREHOLDERS' (DEFICIT)
CURRENT LIABILITIES
Accounts payable and accrued expenses	$	1,657,931		$	1,957,270
Deferred revenue, current portion		6,498,382			7,054,614
Convertible notes payable, current portion, net of discount of $-0- and $-0-, respectively		75,000			75,000
Patent settlement liability, current portion		862,500			962,500
Conversion feature liability, related parties		1,763,485			535,835
Conversion feature liability		549,843			365,408
Warrant liability, related parties		2,601,315			1,353,786
Warrant liability		1,211,375			561,137
Total current liabilities		15,219,831			12,865,550
LONG TERM LIABILITIES
Line of credit, long term		5,000,000			4,200,000
Notes payable, related parties, long term, net of current portion, net of discount of $290,478 and $-0-, respectively		179,522			20,000
Notes payable, long term, net of current portion, net of discount of $525,329 and $-0-, respectively		267,171			792,500
Deferred revenue, long term, net of current portion		2,504,740			2,193,163
Convertible notes payable, related parties, long term, net of current portion		5,850,000			5,850,000
Convertible notes payable, long term, net of current portion		1,350,000			1,350,000
Patent settlement liability, long term, net of current portion		291,895			464,573
TOTAL LIABILITIES		30,663,159			27,735,786
COMMITMENTS AND CONTINGENCIES (See Note 10)
SHAREHOLDERS' (DEFICIT)
Preferred stock, $0.001 par value, 10,000,000 shares authorized, 3,772,500 shares undesignated		-0-			-0-
Series B convertible preferred stock, 230,000 shares authorized, -0- and -0- issued and outstanding, respectively at $0.001 par value; liquidation preference $-0- and $-0-, respectively		-0-			-0-
Series C convertible preferred stock, 747,500 shares authorized, -0- and -0- issued and outstanding, respectively at $0.001 par value; liquidation preference $-0- and $-0-, respectively		-0-			-0-
Series A convertible preferred stock, 5,000,000 shares authorized, -0- and 3,637,724 issued and outstanding, respectively at $0.001 par value; liquidation preference $-0- and $3,637,724, respectively		-0-			3,637
Series D preferred stock, 250,000 shares authorized, 250,000 and 250,000 issued and outstanding, respectively at $0.001 par value		250			250
Common stock, 500,000,000 shares authorized, 147,683,879 and 131,703,577 issued and outstanding, respectively, at $0.001 par value		147,685			131,704
Additional paid in capital - preferred		999,750			4,230,792
Additional paid in capital - common		53,400,305			49,974,415
Accumulated other comprehensive (loss)		(384,142	)		(366,355	)
Accumulated (deficit)		(78,265,123	)		(75,392,917	)
TOTAL SHAREHOLDERS' (DEFICIT)		(24,101,275	)		(21,418,474	)
TOTAL LIABILITIES AND SHAREHOLDERS' (DEFICIT)	$	6,561,884		$	6,317,312

See accompanying summary of accounting policies and notes to unaudited condensed consolidated financial statements

3

OMNICOMM SYSTEMS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

	For the six months ended June 30,						For the three months ended June 30,
	2016			2015			2016			2015
Revenues	$	9,822,270		$	9,175,614		$	4,930,261		$	4,788,160
Reimbursable revenues		638,729			497,412			373,227			46,739
Total revenues		10,460,999			9,673,026			5,303,488			4,834,899
Cost of goods sold		1,911,030			1,969,075			940,859			1,009,580
Reimbursable expenses-cost of goods sold		639,293			432,470			435,437			40,368
Total cost of sales		2,550,323			2,401,545			1,376,296			1,049,948
Gross margin		7,910,676			7,271,481			3,927,192			3,784,951
Operating expenses
Salaries, benefits and related taxes		5,443,425			5,542,217			2,710,513			2,764,113
Rent and occupancy expenses		501,058			482,711			244,458			227,480
Consulting services		48,000			176,740			24,000			81,311
Legal and professional fees		203,296			218,128			80,459			98,592
Travel		400,062			471,670			231,264			184,723
Telephone and internet		83,667			83,955			43,183			52,576
Selling, general and administrative		824,775			827,607			441,721			467,786
Bad debt expense		33,307			(5,402	)		33,455			14,972
Depreciation expense		146,577			108,505			76,111			56,343
Amortization expense		20,253			20,237			10,164			10,057
Total operating expenses		7,704,420			7,926,368			3,895,328			3,957,953
Operating income/(loss)		206,256			(654,887	)		31,864			(173,002	)
Other income/(expense)
Interest expense, related parties		(443,686	)		(1,299,785	)		(235,084	)		(672,649	)
Interest expense		(175,373	)		(145,897	)		(87,470	)		(73,161	)
Interest income		2			-0-			1			-0-
Change in derivative liabilities		(2,458,836	)		4,072,798			(1,696,825	)		5,590,517
Transaction gain/(loss)		(510	)		(48,076	)		(7,732	)		7,248
Income/(loss) before income taxes		(2,872,147	)		1,924,153			(1,995,246	)		4,678,953
Income tax (expense)		(59	)		(385	)		-0-			-0-
Net income/(loss)		(2,872,206	)		1,923,768			(1,995,246	)		4,678,953
Preferred stock dividends
Preferred stock dividends in arrears Series A preferred		(1,870	)		(102,283	)		-0-			(51,424	)
Total preferred stock dividends		(1,870	)		(102,283	)		-0-			(51,424	)
Net income/(loss) attributable to common stockholders	$	(2,874,076	)	$	1,821,485		$	(1,995,246	)	$	4,627,529
Net income/(loss) per share
Basic	$	(0.02	)	$	0.02		$	(0.01	)	$	0.05
Diluted	$	(0.02	)	$	0.01		$	(0.01	)	$	0.03
Weighted average number of shares outstanding
Basic		144,029,335			91,999,079			146,978,378			92,350,506
Diluted		144,029,335			103,712,786			146,978,378			120,664,362

See accompanying summary of accounting policies and notes to unaudited condensed consolidated financial statements

4

OMNICOMM SYSTEMS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)

(unaudited)

	For the six months ended June 30,						For the three months ended June 30,
	2016			2015			2016			2015
Net income/(loss) attributable to common stockholders	$	(2,874,076	)	$	1,821,485		$	(1,995,246	)	$	4,627,529
Other comprehensive income/(loss)
Change in foreign currency translation adjustment		(17,787	)		(83,531	)		(14,631	)		21,926
Other comprehensive income/(loss)		(17,787	)		(83,531	)		(14,631	)		21,926
Comprehensive income/(loss)	$	(2,891,863	)	$	1,737,954		$	(2,009,877	)	$	4,649,455

See accompanying summary of accounting policies and notes to unaudited condensed consolidated financial statements

5

OMNICOMM SYSTEMS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' (DEFICIT)

FOR THE YEAR ENDED DECEMBER 31, 2015 AND THE SIX MONTHS ENDED JUNE 30, 2016

(unaudited)

	Preferred Stock													Common Stock
	5% Series A Convertible						Series D Preferred				Additional							Additional						Accumulated
	Number of shares			$ 0.001 Par value			Number of shares		$ 0.001 Par value		paid in capital preferred			Number of shares		$ 0.001 Par value		paid in capital common			Accumulated deficit			other comprehensive (loss)			Total shareholders' (deficit)
Balances at December 31, 2014		4,125,224		$	4,125			250,000	$	250	$	4,717,804			91,561,802	$	91,562	$	37,634,555		$	(77,979,301	)	$	(243,827	)	$	(35,774,832	)
Employee stock option expense																			43,090									43,090
Foreign currency translation adjustment																									(122,528	)		(122,528	)
Restricted stock issuance/forfeiture															908,330		908		226,875									227,783
Issuance of common stock, stock option exercise															252,500		253		26,997									27,250
Cashless issuance of common stock, stock option exercise															7,428		7		(7	)								-0-
Issuance of common stock, in exchange for Series A Preferred Stock		(487,500	)		(488	)						(487,012	)		1,950,000		1,950		485,550									-0-
Issuance of common stock in exchange for converted and cancelled debt and cancelled warrants															37,023,517		37,024		11,557,355									11,594,379
Net income/(loss) for the year ended December 31, 2015		-0-			-0-			-0-		-0-		-0-			-0-		-0-		-0-			2,586,384			-0-			2,586,384
Balances at  December 31, 2015		3,637,724			3,637			250,000		250		4,230,792			131,703,577		131,704		49,974,415			(75,392,917	)		(366,355	)		(21,418,474	)
Employee stock option expense																			13,792									13,792
Foreign currency translation adjustment																									(17,787	)		(17,787	)
Restricted stock issuance/forfeiture															360,000		360		68,040									68,400
Issuance of common stock, stock option exercise															1,000,000		1,000		124,000									125,000
Cashless issuance of common stock, stock option exercise															4,606		5		(5	)								-0-
Issuance of common stock, in exchange for Series A Preferred Stock		(3,637,724	)		(3,637	)						(3,231,042	)		14,615,696		14,616		3,220,063									-0-
Net income/(loss) for the period ended June 30, 2016		-0-			-0-			-0-		-0-		-0-			-0-		-0-		-0-			(2,872,206	)		-0-			(2,872,206	)
Balances at
June 30, 2016		-0-		$	-0-			250,000	$	250	$	999,750			147,683,879	$	147,685	$	53,400,305		$	(78,265,123	)	$	(384,142	)	$	(24,101,275	)

See accompanying summary of accounting policies and notes to unaudited condensed consolidated financial statements

6

OMNICOMM SYSTEMS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

	For the six months ended June 30,
	2016			2015
CASH FLOWS FROM OPERATING ACTIVITIES
Net income/(loss)	$	(2,872,206	)	$	1,923,768
Adjustment to reconcile net income/(loss) to net cash provided by/(used in) operating activities
Change in derivative liabilities		2,458,836			(4,072,798	)
Interest expense from derivative instruments		35,209			330,266
Employee stock compensation		110,659			116,920
Provision for doubtful accounts		33,307			(5,402	)
Depreciation and amortization		166,830			128,742
Changes in operating assets and liabilities
Accounts receivable		(268,770	)		418,215
Prepaid expenses		(11,514	)		63,497
Other current assets		4,703			5,658
Other assets		(6,789	)		1,222
Accounts payable and accrued expenses		150,661			900,005
Patent settlement liability		(272,678	)		(160,177	)
Deferred revenue		(244,655	)		329,986
Net cash provided by/(used in) operating activities		(716,407	)		(20,098	)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment		(164,449	)		(298,489	)
Net cash (used in) investing activities		(164,449	)		(298,489	)
CASH FLOWS FROM FINANCING ACTIVITIES
Repayments of notes payable		-0-			(25,000	)
Proceeds from revolving line of credit		800,000			1,000,000
Proceeds from exercise of stock options		125,000			27,250
Net cash provided by/(used in) financing activities		925,000			1,002,250
Effect of exchange rate changes on fixed and intangible assets		(4,475	)		63,042
Effect of exchange rate changes on cash and cash equivalents		(17,787	)		(83,531	)
Net increase/(decrease) in cash and cash equivalents		21,882			663,174
Cash and cash equivalents at beginning of period		835,219			522,914
Cash and cash equivalents at end of period	$	857,101		$	1,186,088
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Income taxes	$	59		$	385
Interest	$	774,746		$	528,823
Non-cash transactions:
Notes payable issued in exchange for existing notes payable	$	7,652,500		$	14,874,000
Promissory notes issued for accrued interest	$	450,000		$	670,000
Restricted stock issuance/forfeiture	$	68,400		$	247,950
Common stock issued in exchange for 5% Series A Preferred Stock	$	3,637,724		$	-0-

See accompanying summary of accounting policies and notes to unaudited condensed consolidated financial statements

7

OMNICOMM SYSTEMS, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2016 AND JUNE 30, 2015

(unaudited)

NOTE 1: ORGANIZATION AND NATURE OF OPERATIONS

OmniComm Systems, Inc. (“OmniComm” or the “Company”) is a healthcare technology company that provides web-based electronic data capture (“EDC”) solutions and related value-added services to pharmaceutical and biotech companies, contract research organizations (“CROs”), and other clinical trial sponsors principally located in the United States and Europe as well as in East Asia. Our proprietary EDC software applications; TrialMaster^®, TrialOne^®, eClinical Suite, and Promasys^® (the “EDC Software”) allow clinical trial sponsors and investigative sites to securely collect, validate, transmit and analyze clinical trial data.

Our ability to compete within the EDC industry is predicated on our ability to continue enhancing and broadening the scope of solutions offered through our EDC Software and services. Our research and product development efforts are focused on developing new and complementary software solutions, as well as enhancing our existing software solutions through the addition of increased functionality. During the six month periods ended June 30, 2016 and June 30, 2015 we spent approximately $1,315,525 and $1,355,783, respectively, on research and product development activities, which are primarily comprised of salaries to our developers and other research and product development personnel and related costs associated with the development of our software products.

NOTE 2:  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION

The Company’s accounts include those of all its wholly-owned subsidiaries, which are more fully described in the Company’s 2015 Annual Report filed on Form 10-K with the Securities and Exchange Commission, and have been prepared in conformity with (i) accounting principles generally accepted in the United States of America; and (ii) the rules and regulations of the United States Securities and Exchange Commission. All significant intercompany accounts and transactions between the Company and its subsidiaries have been eliminated in consolidation.

UNAUDITED FINANCIAL STATEMENTS

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information, pursuant to the rules and regulations of the Securities and Exchange Commission. Pursuant to such rules and regulations, certain financial information and footnote disclosures normally included in the consolidated financial statements have been condensed or omitted. The results for the periods indicated are unaudited, but reflect all adjustments (consisting only of normally recurring adjustments) which management considers necessary for a fair presentation of operating results.

The operating results for the six month period ended June 30, 2016 are not necessarily indicative of the results that may be expected for the year-ended December 31, 2016. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year-ended December 31, 2015.

ESTIMATES IN FINANCIAL STATEMENTS

The preparation of the unaudited condensed consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and footnotes thereto. Significant estimates incorporated in our financial statements include the recorded allowance for doubtful accounts, the estimate of the appropriate amortization period of our intangible assets, the evaluation of whether our intangible assets have suffered any impairment, the allocation of revenues under multiple-element customer contracts, royalty-based patent liabilities, the value of derivatives associated with debt issued by the Company and the valuation of any corresponding discount to the issuance of our debt. Actual results may differ from those estimates.

8

OMNICOMM SYSTEMS, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2016 AND JUNE 30, 2015

(unaudited)

Reclassifications

Certain reclassifications have been made in the 2015 financial statements to conform to the 2016 presentation. These reclassifications did not have any effect on our net income/(loss) or shareholders’ deficit.

foreign currency translation

The financial statements of the Company’s foreign subsidiaries are translated in accordance with Accounting Standards Codification (“ASC”) 830-30, Foreign Currency Matters—Translation of Financial Statements. The reporting currency for the Company is the U.S. dollar. The functional currency of the Company’s subsidiaries, OmniComm Europe GmbH in Germany, OmniComm Spain S.L. in Spain and OmniComm Promasys B.V. in the Netherlands is the Euro. The functional currency of the Company’s subsidiary, OmniComm Ltd. in the United Kingdom, is the British Pound Sterling. Accordingly, the assets and liabilities of the Company’s foreign subsidiaries are translated into U.S. dollars using the exchange rate in effect at each balance sheet date. Revenue and expense accounts of the Company’s foreign subsidiaries are translated using an average rate of exchange during the period. Foreign currency translation adjustments are accumulated as a component of other comprehensive income/(loss) as a separate component of stockholders’ equity. Gains and losses arising from transactions denominated in foreign currencies are primarily related to intercompany accounts that have been determined to be temporary in nature and accordingly, are recorded directly to the statement of operations. We record translation gains and losses in accumulated other comprehensive income as a component of stockholders’ equity. We recorded translation losses of $17,787 and $83,531 for the six month periods ended June 30, 2016 and June 30, 2015 respectively.

REVENUE RECOGNITION POLICY 

The Company derives revenues from software licenses and services of its EDC products and services which can be purchased on a stand-alone basis. License revenues are derived principally from the sale of term licenses for the following software products offered by the Company: TrialMaster, TrialOne, eClinical Suite and Promasys. Service revenues are derived principally from the Company's delivery of the hosted solutions of its TrialMaster and eClinical Suite software products, and consulting services and customer support, including training, for all of the Company's products.

The Company recognizes revenues when all of the following conditions are satisfied: (1) there is persuasive evidence of an arrangement; (2) the product or service has been provided to the customer; (3) the collection of fees is probable; and (4) the amount of fees to be paid by the customer is fixed or determinable.

The Company operates in one reportable segment which is the delivery of EDC Software and services to clinical trial sponsors. The Company segregates its revenues based on the activity cycle used to generate its revenues. Accordingly, revenues are currently generated through four main activities, including hosted applications, licensing, professional services and maintenance-related services.

Hosted Application Revenues

The Company offers its TrialMaster and eClinical Suite software products as hosted application solutions delivered through a standard web-browser, with customer support and training services. The Company's TrialOne and Promasys solutions are presently available on a licensed basis. To date, hosted applications revenues have been primarily related to TrialMaster and eClinical Suite.

Revenues resulting from TrialMaster and eClinical Suite application hosting services consist of three components of services for each clinical trial. The first component is comprised of application set up, including design of electronic case report forms and edit checks, installation and server configuration of the system. The second component involves application hosting and related support services as well as billable change orders which consist of amounts billed to customers for functionality changes made. The third component involves services required to close out, or lock, the database for the clinical trial.

9

OMNICOMM SYSTEMS, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2016 AND JUNE 30, 2015

(unaudited)

Fees charged for the trial system design, set up and implementation are amortized and recognized ratably over the estimated hosting period. Work performed outside the original scope of work is contracted for separately as an additional fee and is generally recognized ratably over the remaining term of the hosting period. Fees for the first and third stages of the service are typically billed based upon milestones. Revenues earned upon completion of a contractual milestone are deferred and recognized over the estimated remaining hosting period. Fees for application hosting and related services in the second stage are generally billed monthly or quarterly in advance. Revenues resulting from hosting services for the eClinical Suite products consist of installation and server configuration, application hosting and related support services. Revenues are recognized ratably over the period of the service.

Licensing Revenues

The Company's software license revenues are earned from the sale of off-the-shelf software. From time-to-time a client might require significant modification or customization subsequent to delivery to the customer. The Company generally enters into software term licenses for its EDC Software products with its customers for three to five year periods, although customers have entered into both longer and shorter term license agreements. These arrangements typically include multiple elements: software license, consulting services and customer support. The Company bills its customers in accordance with the terms of the underlying contract. Generally, the Company bills license fees in advance for each billing cycle of the license term, which typically is either on a quarterly or annual basis. Payment terms are generally net 30 days.

The Company has sold perpetual licenses for EDC Software products in certain situations to existing customers with the option to purchase customer support, and may, in the future, do so for new customers based on customer requirements or market conditions. The Company has established vendor specific objective evidence of fair value for the customer support. Accordingly, license revenues are recognized upon delivery of the software and when all other revenue recognition criteria are met. Customer support revenues are recognized ratably over the term of the underlying support arrangement. The Company generates customer support and maintenance revenues from its perpetual license customer base.

Professional Services

The Company may also enter into arrangements to provide consulting services separate from a license arrangement. In these situations, revenue is recognized on a time-and-materials basis. Professional services can be deemed to be as essential to the functionality of the software at inception and typically are for initial trial configuration, implementation planning, loading of software, building simple interfaces, running test data and documentation of procedures. Subsequent additions or extensions to license terms do not generally include additional professional services.

Pass-through Revenue and Expense

The Company accounts for pass-through revenue and expense in accordance with ASC 605-45, Principal Agent Considerations (“ASC 605-45”). In accordance with ASC 605-45 these amounts are recorded as revenue in the statement of operations with a corresponding expense recorded in cost of goods sold. Pass-through revenues and expenses include amounts associated with third-party services provided to our customers by our service and product partners. These third-party services are primarily comprised of Interactive Voice and Web Response software services (IVR and IWR), travel and shipping that are incurred on our clients’ behalf.

Maintenance Revenues

Maintenance includes telephone-based help desk support and software maintenance. The Company generally bundles customer support with the software license for the entire term of the arrangement. As a result, the Company generally recognizes revenues for both maintenance and software licenses ratably over the term of the software license and support arrangement. The Company allocates the revenues recognized for these arrangements to the different elements based on management's estimate of the relative fair value of each element. The Company generally invoices each of the elements based on separately quoted amounts and thus has a fairly accurate estimate of the relative fair values of each of the invoiced revenue elements.

10

OMNICOMM SYSTEMS, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2016 AND JUNE 30, 2015

(unaudited)

The fees associated with each business activity for the periods ended June 30, 2016 and June 30, 2015, respectively are:

	For the six months ended
Revenue activity	June 30, 2016		June 30, 2015
Set-up fees	$	3,312,733	$	2,882,153
Change orders		669,899		354,808
Maintenance		2,337,965		2,501,407
Software licenses		2,202,288		1,527,374
Professional services		1,398,136		1,924,967
Hosting		539,978		482,317
Total	$	10,460,999	$	9,673,026

	For the three months ended
Revenue activity	June 30, 2016		June 30, 2015
Set-up fees	$	1,793,399	$	1,617,609
Change orders		392,146		212,767
Maintenance		1,136,745		1,269,530
Software licenses		1,001,374		786,437
Professional services		745,816		707,970
Hosting		234,008		240,586
Total	$	5,303,488	$	4,834,899

COST OF REVENUES

Cost of revenues primarily consists of costs related to hosting, maintaining and supporting the Company’s application suite and delivering professional services and support. These costs include salaries, benefits, and bonuses for the Company’s professional services staff. Cost of revenues also includes outside service provider costs. Cost of revenues is expensed as incurred.

CASH AND CASH EQUIVALENTS

Cash equivalents consist of highly liquid, short-term investments with maturities of 90 days or less. The carrying amount reported in the accompanying consolidated balance sheets approximates fair value.

ACCOUNTS RECEIVABLE

Accounts receivable are judged as to collectability by management and an allowance for bad debts is established as necessary. The allowance is based on an evaluation of the collectability of accounts receivable and prior bad debt experience. The Company had recorded an allowance for uncollectible accounts receivable of $125,593 as of June 30, 2016 and $116,834 as of December 31, 2015, respectively.

11

OMNICOMM SYSTEMS, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2016 AND JUNE 30, 2015

(unaudited)

The following table summarizes activity in the Company's allowance for doubtful accounts for the periods presented.

	June 30, 2016			December 31, 2015
Beginning of period	$	116,834		$	186,085
Bad debt expense		33,307			14,939
Write-offs		(24,548	)		(84,190	)
End of period	$	125,593		$	116,834

Concentration of Credit Risk

Cash and cash equivalents and restricted cash are deposited with major financial institutions and, at times, such balances with any one financial institution may be in excess of FDIC-insured limits. As of June 30, 2016, $560,865 was deposited in excess of FDIC-insured limits. Management believes the risk in these situations to be minimal.

Except as follows, the Company has no significant off-balance-sheet risk or credit risk concentrations. Financial instruments that subject the Company to potential credit risks are principally cash equivalents and accounts receivable. Concentrated credit risk with respect to accounts receivable is limited to creditworthy customers. The Company's customers are principally located in the United States and Europe as well as in East Asia. The Company is directly affected by the overall financial condition of the pharmaceutical, biotechnology and medical device industries and management believes that credit risk exists and that any credit risk the Company faces has been adequately reserved for as of June 30, 2016. The Company maintains an allowance for doubtful accounts based on accounts past due according to contractual terms and historical collection experience. Actual losses, when incurred, are charged to the allowance. The Company's losses related to collection of accounts receivable have consistently been within management's expectations. As of June 30, 2016, the Company believes no additional credit risk exists beyond the amounts provided for in our allowance for uncollectible accounts. The Company evaluates its allowance for uncollectable accounts on a quarterly basis based on a specific review of receivable aging and the period that any receivables are beyond the standard payment terms. The Company does not require collateral from its customers in order to mitigate credit risk.

One customer accounted for 20% of our revenues during the six month period ended June 30, 2016 or approximately $2,102,000. One customer accounted for 13% of our revenues during the six month period ended June 30, 2015 or approximately $1,249,000. The following table summarizes the number of customers who individually comprise greater than 10% of total revenue and/or total accounts receivable and their aggregate percentage of the Company's total revenue and gross accounts receivable for the periods presented.

	Revenues				Accounts receivable
For the period ended	Number of customers		Percentage of total revenues		Number of customers		Percentage of accounts receivable
June 30, 2016		1		20%		1		13%
December 31, 2015		1		16%		3		42%
June 30, 2015		1		13%		2		31%

The table below provides revenues from European customers for the six month periods ended June 30, 2016 and June 30, 2015, respectively.

European revenues For the six months ended
June 30, 2016				June 30, 2015
European revenues		% of Total revenues		European revenues		% of Total revenues
$	899,293		9%	$	1,084,178		11%

12

OMNICOMM SYSTEMS, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2016 AND JUNE 30, 2015

(unaudited)

The Company serves all of its hosting customers from third-party web hosting facilities located in the United States. The Company does not control the operation of these facilities, and they are vulnerable to damage or interruption. The Company maintains redundant systems that can be used to provide service in the event the third-party web hosting facilities become unavailable, although in such circumstances, the Company's service may be interrupted during the transition.

PROPERTY AND EQUIPMENT

Property and equipment are recorded at cost. Additions and betterments are capitalized; maintenance and repairs are expensed as incurred. Depreciation is calculated using the straight-line method over the asset’s estimated useful life, which is 5 years for leasehold improvements, computers, equipment and furniture and 3 years for software. Gains or losses on disposal are charged to operations.

ASSET IMPAIRMENT

Acquisitions and Intangible Assets 

We account for acquisitions in accordance with ASC 805, Business Combinations (“ASC 805”) and ASC 350, Intangibles- Goodwill and Other (“ASC 350”). The acquisition method of accounting requires that assets acquired and liabilities assumed be recorded at their fair values on the date of a business acquisition. Our consolidated financial statements and results of operations reflect an acquired business from the completion date of an acquisition.

The judgments that we make in determining the estimated fair value assigned to each class of assets acquired and liabilities assumed, as well as asset lives, can materially impact net income in periods following an asset acquisition. We generally use either the income, cost or market approach to aid in our conclusions of such fair values and asset lives. The income approach presumes that the value of an asset can be estimated by the net economic benefit to be received over the life of the asset, discounted to present value. The cost approach presumes that an investor would pay no more for an asset than its replacement or reproduction cost. The market approach estimates value based on what other participants in the market have paid for reasonably similar assets. Although each valuation approach is considered in valuing the assets acquired, the approach ultimately selected is based on the characteristics of the asset and the availability of information.

Long-lived Assets 

We review long-lived assets for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable. Determining whether an impairment has occurred typically requires various estimates and assumptions, including determining which cash flows are directly related to the potentially impaired asset, the useful life over which cash flows will occur, their amount and the asset’s residual value, if any. In turn, measurement of an impairment loss requires a determination of fair value, which is based on the best information available. We use quoted market prices when available and independent appraisals and management estimates of future operating cash flows, as appropriate, to determine fair value.

FAIR VALUE MEASUREMENT

OmniComm’s capital structure includes the use of warrants and convertible debt features that are classified as derivative financial instruments. Derivative financial instruments are recognized as either assets or liabilities and are measured at fair value under ASC 815, Derivatives and Hedging (“ASC 815”). ASC 815 requires that changes in the fair value of derivative financial instruments with no hedging designation be recognized as gains/(losses) in the earnings statement. The fair value measurement is determined in accordance with ASC 820, Fair Value Measurements and Disclosures (“ASC 820”).

13

OMNICOMM SYSTEMS, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2016 AND JUNE 30, 2015

(unaudited)

DEFERRED REVENUE

Deferred revenue represents cash advances and amounts in accounts receivable as of the balance sheet date received in excess of revenue earned on on-going contracts. Payment terms vary with each contract but may include an initial payment at the time the contract is executed, with future payments dependent upon the completion of certain contract phases or targeted milestones. In the event of contract cancellation, the Company is generally entitled to payment for all work performed through the point of cancellation. As of June 30, 2016, the Company had $9,003,122 in deferred revenues relating to contracts for services to be performed over periods ranging from one month to 5 years. The Company had $6,498,382 in deferred revenues that are expected to be recognized in the next twelve fiscal months.

ADVERTISING

Advertising costs are expensed as incurred. Advertising costs were approximately $432,837 and $406,502 for the six month periods ended June 30, 2016 and June 30, 2015, respectively and are included under selling, general and administrative expenses in our unaudited condensed consolidated financial statements.

RESEARCH AND DEVELOPMENT EXPENSES

Software development costs are expensed as incurred. ASC 985-20, Software Industry Costs of Software to Be Sold, Leased or Marketed (“ASC 985-20”), requires the capitalization of certain development costs of software to be sold once technological feasibility is established, which the Company defines as completion to the point of marketability. The capitalized cost is then amortized on a straight-line basis over the estimated product life. To date, the period between achieving technological feasibility and the general availability of such software has been short and software development costs qualifying for capitalization have been immaterial. Accordingly, the Company has not capitalized any software development costs under ASC 985-20. During the six month periods ended June 30, 2016 and June 30, 2015 we spent approximately $1,315,525 and $1,355,783 respectively, on research and product development activities, which include costs associated with the development of our software products and services for our clients’ projects and which are primarily comprised of salaries and related expenses for our software developers and consulting fees paid to third-party consultants. Research and product development costs are primarily included under Salaries, benefits and related taxes in our Statement of Operations.

EMPLOYEE EQUITY INCENTIVE PLANS

The OmniComm Systems, Inc. 2016 Equity Incentive Plan (the “2016 Plan”) was approved at our Annual Meeting of Shareholders on June 16, 2016. The 2016 Plan provides for the issuance of up to 10,000,000 shares of our common stock. In addition, the number of shares of common stock available for issuance under the 2016 Plan shall automatically increase on January 1st of each year for a period of nine (9) years commencing on January 1, 2017 and ending on (and including) January 1, 2025, in an amount equal to five percent (5%) of the total number of shares authorized under the 2016 Plan.

The predecessor plan, the OmniComm Systems, Inc. 2009 Equity Incentive Plan (the “2009 Plan”) was approved at our Annual Meeting of Shareholders on July 10, 2009 and terminated on June 16, 2016 upon the approval of the 2016 Plan. The 2009 Plan provided for the issuance of up to 7,500,000 shares to employees, directors and key consultants. The 2016 and 2009 Plans are more fully described in “Note 13, Employee Equity Incentive Plans”.

The Company accounts for its employee equity incentive plans under ASC 718, Compensation – Stock Compensation, (“ASC 718”) which addresses the accounting for transactions in which an entity exchanges its equity instruments for goods or services, with a primary focus on transactions in which an entity obtains employee services in share-based payment transactions. ASC 718 requires companies to estimate the fair value of share-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods in the Company’s consolidated statements of operations. The Company currently uses the Black Scholes option pricing model to determine grant date fair value.

EARNINGS PER SHARE

The Company accounts for Earnings per Share using ASC 260, Earnings per Share, (“ASC 260”). Unlike diluted earnings per share basic earnings per share excludes any dilutive effects of options, warrants, and convertible securities.

14

OMNICOMM SYSTEMS, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2016 AND JUNE 30, 2015

(unaudited)

INCOME TAXES

The Company accounts for income taxes in accordance with ASC 740, Income Taxes (“ASC 740”). ASC 740 has as its basic objective the recognition of current and deferred income tax assets and liabilities based upon all events that have been recognized in the financial statements as measured by the provisions of the enacted tax laws.

Valuation allowances are established, when necessary, to reduce deferred tax assets to the estimated amount to be realized. Income tax expense represents the tax payable for the current period and the change during the period in the deferred tax assets and liabilities.

IMPACT OF NEW ACCOUNTING STANDARDS

During the first six months of 2016, we adopted the following new accounting pronouncements:

In February 2016, the FASB issued accounting standard update (“ASU”) No. 2016-02, “Leases (Topic 842)”, (“ASU 2016-02”). This ASU requires that an entity should recognize assets and liabilities for leases with a maximum possible term of more than 12 months. A lessee would recognize a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the leased asset (the underlying asset) for the lease term. This guidance also provides accounting updates with respect to lessor accounting under a lease arrangement. This new lease guidance is effective for fiscal years beginning after December 15, 2019. Entities have the option of using either a full retrospective or a modified approach (cumulative effect adjustment in period of adoption) to adopt the new guidance. Early adoption is permitted for all entities. We are currently evaluating the impact of the adoption of this guidance in our consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-09, “Compensation – Stock Compensation (Topic 718)”, (“ASU 2016-09”). This guidance which simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. This guidance is effective for annual periods beginning after December 15, 2016, including interim periods within those annual reporting periods. Early adoption is permitted. We are currently evaluating the full impact of the new standard.

Accounting standards-setting organizations frequently issue new or revised accounting rules. We regularly review all new pronouncements to determine their impact, if any, on our financial statements.

NOTE 3:  EARNINGS/(LOSS) PER SHARE

Basic earnings/(loss) per share were calculated using the weighted average number of shares outstanding of 144,029,335 and 91,999,079 for the six month periods ended June 30, 2016 and June 30, 2015, respectively.

The outstanding share balance as of June 30, 2016 and June 30, 2015, respectively, includes 1,943,343 and 2,866,681 restricted shares that have been issued but are still at risk of forfeiture as the restrictions have not lapsed.

Antidilutive shares of 44,902,516 and 71,302,468 have been omitted from the calculation of dilutive earnings/(loss) per share for the six month periods ended June 30, 2016 and June 30, 2015, respectively, as the shares were antidilutive. Provided below is the reconciliation between numerators and denominators of the basic and diluted earnings per shares. The table below provides a reconciliation of anti-dilutive securities outstanding as of June 30, 2016 and June 30, 2015, respectively.

15

OMNICOMM SYSTEMS, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2016 AND JUNE 30, 2015

(unaudited)

Anti-dilutive security	June 30, 2016		June 30, 2015
Preferred stock		-0-		2,750,149
Employee stock options		982,500		1,563,793
Warrants		27,860,000		52,263,517
Convertible notes		15,910,000		13,850,000
Shares issuable for accrued interest		150,016		875,009
Total		44,902,516		71,302,468

The employee stock options are exercisable at prices ranging from $0.045 to $0.30 per share. The exercise prices on the warrants range from $0.25 to $0.60 per share. Shares issuable upon conversion of Convertible Debentures or accrued interest have conversion prices ranging from $0.25 to $1.25 per share.

Some of the Company’s convertible debt and convertible preferred stock have an anti-dilutive effect on net income/(loss) per share and were not included in the computation of diluted earnings per share.

	For the six months ended
	June 30, 2016								June 30, 2015
	Income/(loss) numerator			Shares denominator		Per-share amount			Income/(loss) numerator			Shares denominator		Per-share amount
Basic EPS	$	(2,874,076	)		144,029,335	$	(0.02	)	$	1,821,485			91,999,079	$	0.02
Effect of dilutive securities		-0-			-0-		-0-			(387,828	)		11,713,707		(0.03	)
Diluted EPS	$	(2,874,076	)		144,029,335	$	(0.02	)	$	1,433,657			103,712,786	$	0.01

	For the three months ended
	June 30, 2016								June 30, 2015
	Income/(loss) numerator			Shares denominator		Per-share amount			Income/(loss) numerator			Shares denominator		Per-share amount
Basic EPS	$	(1,995,246	)		146,978,378	$	(0.01	)	$	4,627,529			92,350,506	$	0.05
Effect of dilutive securities		-0-			-0-		-0-			(1,460,161	)		28,313,856		(0.05	)
Diluted EPS	$	(1,995,246	)		146,978,378	$	(0.01	)	$	3,167,368			120,664,362	$	0.03

NOTE 4: PROPERTY AND EQUIPMENT, NET

Property and equipment consists of the following:

	June 30, 2016						December 31, 2015
	Cost		Accumulated depreciation		Net book value		Cost		Accumulated depreciation		Net book value		Estimated useful life (years)
Computer & office equipment	$	2,105,691	$	1,683,685	$	422,006	$	2,055,956	$	1,605,473	$	450,483		5
Leasehold improvements		105,929		87,105		18,824		91,452		85,895		5,557		5
Computer software		1,884,873		1,671,897		212,976		1,843,483		1,621,492		221,991		3
Office furniture		159,292		109,299		49,993		111,660		105,979		5,681		5
Total	$	4,255,785	$	3,551,986	$	703,799	$	4,102,551	$	3,418,839	$	683,712

Depreciation expense for the six month periods ended June 30, 2016 and June 30, 2015 was $146,577 and $108,505, respectively.

16

OMNICOMM SYSTEMS, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2016 AND JUNE 30, 2015

(unaudited)

NOTE 5: INTANGIBLE ASSETS, NET

Intangible assets consist of the following:

	June 30, 2016						December 31, 2015
Asset	Cost		Accumulated amortization		Net book value		Cost		Accumulated amortization		Net book value		Estimated useful life (years)
eClinical Suite customer lists	$	1,392,701	$	1,392,701	$	-0-	$	1,392,701	$	1,392,701	$	-0-		3
Promasys B.V. customer lists		110,314		19,611		90,703		108,051		15,607		92,444		15
Promasys B.V. software code		72,837		38,846		33,991		72,837		31,563		41,274		5
Promasys B.V. URLs/Website		55,714		49,524		6,190		54,572		39,413		15,159		3
Total	$	1,631,566	$	1,500,682	$	130,884	$	1,628,161	$	1,479,284	$	148,877

Amortization expense was $20,253 and $20,237 for the six month periods ended June 30, 2016 and June 30, 2015, respectively.

Remaining amortization expense for the Company’s intangible assets is as follows:

2016	$	17,151
2017		21,922
2018		19,494
2019		7,354
2020		7,354
Thereafter		57,609
Total	$	130,884

NOTE 6: ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consist of the following:

Account	June 30, 2016		December 31, 2015
Accounts payable	$	712,580	$	515,764
Accrued payroll and related costs		583,534		473,108
Other accrued expenses		141,306		105,562
Accrued interest		220,511		862,836
Total accounts payable and accrued expenses	$	1,657,931	$	1,957,270

NOTE 7: LINE OF CREDIT, NOTES PAYABLE AND LIQUIDITY

On March 18, 2013, the Company entered into a $2,000,000 revolving Line of Credit (“Line of Credit”) with The Northern Trust Company guaranteed by our Chief Executive Officer and Director, Cornelis F. Wit. Mr. Wit receives 2.0% interest (approximately $9,500 per month) from the Company on the assets pledged for the Line of Credit. On December 18, 2013 the Company renewed the Line of Credit and increased the available balance to $4,000,000. On February 3, 2015 the Company renewed the Line of Credit and increased the available balance to $5,000,000. The Line of Credit matures on February 2, 2018 and carries a variable interest rate based on the prime rate. At June 30, 2016, $5,000,000 was outstanding on the Line of Credit at an interest rate of 2.5%.

Our primary sources of working capital are funds from operations and borrowings under our revolving Line of Credit. In the event that the Line of Credit is called for any reason, Mr. Wit has pledged to replace the borrowing capacity under the Line of Credit with a promissory note that utilizes the same maturity date and interest rate as the Line of Credit.  

17

OMNICOMM SYSTEMS, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2016 AND JUNE 30, 2015

(unaudited)

To satisfy our capital requirements, we may seek additional financing. There can be no assurance that any such funding will be available to us on favorable terms or at all. If adequate funds are not available when needed, we may be required to delay, scale back or eliminate some or all of our research and product development and marketing programs. If we are successful in obtaining additional financings, the terms of such financings may have the effect of diluting or adversely affecting the holdings or the rights of the holders of our securities or result in increased interest expense in future periods.

At June 30, 2016, the Company owed $1,262,500 in notes payable all of which are unsecured. The table below provides details as to the terms and conditions of the notes payable.

				Ending		Non related party					Related party
Origination date	Maturity date	Interest rate		principal June 30, 2016		Current		Long term			Current		Long term
4/1/2015	4/1/2018		12%	$	20,000	$	-0-	$	-0-		$	-0-	$	20,000
2/29/2016	4/1/2019		12%		450,000		-0-		-0-			-0-		450,000
6/30/2016	4/1/2020		10%		420,000		-0-		420,000			-0-		-0-
6/30/2016	4/1/2020		12%		372,500		-0-		372,500			-0-		-0-
Discount on notes payable							-0-		(525,329	)		-0-		(290,478	)
Total				$	1,262,500	$	-0-	$	267,171		$	-0-	$	179,522

At December 31, 2015, the Company owed $812,500 in notes payable all of which were unsecured. The table below provides details as to the terms and conditions of the notes payable.

				Ending		Non related party				Related party
Origination date	Maturity date	Interest rate		principal December 31, 2015		Current		Long term		Current		Long term
4/4/2014	4/1/2017		12%	$	45,000	$	-0-	$	45,000	$	-0-	$	-0-
4/4/2014	4/1/2017		12%		137,500		-0-		137,500		-0-		-0-
4/4/2014	4/1/2017		10%		120,000		-0-		120,000		-0-		-0-
12/1/2014	4/1/2017		10%		300,000		-0-		300,000		-0-		-0-
12/1/2014	4/1/2017		12%		90,000		-0-		90,000		-0-		-0-
12/1/2014	4/1/2017		12%		100,000		-0-		100,000		-0-		-0-
4/1/2015	4/1/2018		12%		20,000		-0-		-0-		-0-		20,000
Discount on notes payable							-0-		-0-		-0-		-0-
Total				$	812,500	$	-0-	$	792,500	$	-0-	$	20,000

On June 30, 2016, the Company issued promissory notes in the principal amount of $372,500 and warrants to purchase 1,490,000 shares of common stock of the Company at an exercise price of $0.25 per share with an expiration date of April 1, 2020 to two investors, in exchange for existing promissory notes in the same amount. The notes carry an interest rate of 12% per annum and have a maturity date of April 1, 2020.

This issuance caused us to calculate and record a derivative liability for the warrant liability. The warrants were valued using the Black Scholes option pricing model. A value of $246,921 was calculated and allocated to the warrants and recorded as a liability to the issuance of the note payable. As a result of the liability we recorded a discount to the note payable. The carrying amount of the note at the time of issuance was therefore $125,579. The warrant liability (discount) will be amortized over the 45 month duration of the note payables. The Company will continue to perform a fair value calculation quarterly on the warrant liability and accordingly the warrant liability is increased or decreased based on the fair value calculation. The resulting increase or decrease is reflected in operations as an unrealized gain or loss on changes in derivative liabilities.

On June 30, 2016, the Company issued promissory notes in the principal amount of $420,000 and warrants to purchase 1,680,000 shares of common stock of the Company at an exercise price of $0.25 per share with an expiration date of April 1, 2020 to two investors, in exchange for existing promissory notes in the same amount. The notes carry an interest rate of 10% per annum and have a maturity date of April 1, 2020.

18

OMNICOMM SYSTEMS, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2016 AND JUNE 30, 2015

(unaudited)

This issuance caused us to calculate and record a derivative liability for the warrant liability. The warrants were valued using the Black Scholes option pricing model. A value of $278,408 was calculated and allocated to the warrants and recorded as a liability to the issuance of the note payable. As a result of the liability we recorded a discount to the note payable. The carrying amount of the note at the time of issuance was therefore $141,592. The warrant liability (discount) will be amortized over the 45 month duration of the note payables. The Company will continue to perform a fair value calculation quarterly on the warrant liability and accordingly the warrant liability is increased or decreased based on the fair value calculation. The resulting increase or decrease is reflected in operations as an unrealized gain or loss on changes in derivative liabilities.

On February 29, 2016, the Company issued a promissory note in the principal amount of $450,000 and warrants to purchase 1,800,000 shares of common stock of the Company at an exercise price of $0.25 per share with an expiration date of April 1, 2019 to our Chief Executive Officer and Director, Cornelis F. Wit (“Mr. Wit”), in exchange for accrued interest in the amount of $450,000. The note carries an interest rate of 12% per annum and has a maturity date of April 1, 2019.

This issuance caused us to calculate and record a derivative liability for the warrant liability. The warrants were valued using the Black Scholes option pricing model. A value of $325,689 was calculated and allocated to the warrants and recorded as a liability to the issuance of the note payable. As a result of the liability we recorded a discount to the note payable. The carrying amount of the note at the time of issuance was therefore $124,311. The warrant liability (discount) will be amortized over the 37 month duration of the note payable. The Company will continue to perform a fair value calculation quarterly on the warrant liability and accordingly the warrant liability is increased or decreased based on the fair value calculation. The resulting increase or decrease is reflected in operations as an unrealized gain or loss on changes in derivative liabilities.

On October 15, 2015 the Company issued a promissory note in the amount of $980,000 to Mr. Wit in exchange for an existing promissory note in the same amount. The promissory note carries an interest rate of 12% and has a maturity date of January 1, 2019. The expiration date of the warrants associated with the promissory note was also extended to January 1, 2019. On November 19, 2015 the promissory note and the related warrants were cancelled in exchange for 3,920,000 shares of our common stock.

On October 15, 2015 the Company issued a promissory note in the amount of $1,600,000 to Mr. Wit in exchange for an existing promissory note in the same amount. The promissory note carries an interest rate of 12% and has a maturity date of January 1, 2019. The expiration date of the warrants associated with the promissory note was also extended to January 1, 2019. On November 19, 2015 the promissory note, 400,000 related warrants and 6,000,000 unrelated warrants were cancelled in exchange for 6,400,000 shares of our common stock. On November 23, 2015 Mr. Wit sold 4,000,000 of the related warrants to three employees of the Company. On December 17, 2015 Mr. Wit sold 2,000,000 of the related warrants to a fourth employee of the Company.

On April 1, 2015 the Company issued a promissory note in the amount of $20,000 to our Chairman and Chief Technology Officer, Randall G. Smith (“Mr. Smith”) in exchange for an existing promissory note in the same amount. The promissory note carries an interest rate of 12% and has a maturity date of April 1, 2018.

On January 31, 2015 the Company issued a promissory note in the amount of $529,000 to Mr. Wit in exchange for an existing promissory note in the same amount. The promissory note carries an interest rate of 12% and has a maturity date of April 1, 2017. The expiration date of the warrants associated with the promissory note was also extended to April 1, 2017. On October 15, 2015 the Company issued a promissory note in the amount of $529,000 to Mr. Wit in exchange for the existing promissory note in the same amount. The promissory note carries an interest rate of 12% and has a maturity date of January 1, 2019. The expiration date of the warrants associated with the promissory note was also extended to January 1, 2019. On November 19, 2015 the promissory note and the related warrants were cancelled in exchange for 2,116,000 shares of our common stock.

19

OMNICOMM SYSTEMS, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2016 AND JUNE 30, 2015

(unaudited)

On January 31, 2015 the Company issued a promissory note in the amount of $2,860,000 and paid $6,879 in principal to Mr. Wit in exchange for an existing promissory note in the same amount. The promissory note carries an interest rate of 12% and has a maturity date of April 1, 2017. The expiration date of the warrants associated with the promissory note was also extended to April 1, 2017. On October 15, 2015 the Company issued a promissory note in the amount of $2,860,000 to Mr. Wit in exchange for the existing promissory note in the same amount. The promissory note carries an interest rate of 12% and has a maturity date of January 1, 2019. The expiration date of the warrants associated with the promissory note was also extended to January 1, 2019. On November 19, 2015 the Company and Mr. Wit agreed to cancel the promissory note and 11,440,000 warrants related to the promissory note in exchange for 11,440,000 shares of our common stock.

On January 31, 2015, the Company issued a promissory note in the principal amount of $950,000 and warrants to purchase 3,800,000 shares of common stock of the Company at an exercise price of $0.25 per share with an expiration date of April 1, 2017 to Mr. Wit in exchange for an existing promissory note in the amount of $280,000 and accrued interest in the amount of $670,000. The note carries an interest rate of 12% per annum and is due on April 1, 2017. On October 15, 2015 the Company issued a promissory note in the amount of $950,000 to Mr. Wit in exchange for the existing promissory note in the same amount. The promissory note carries an interest rate of 12% and has a maturity date of January 1, 2019. The expiration date of the warrants associated with the promissory note was also extended to January 1, 2019. On November 19, 2015 the Company and Mr. Wit agreed to cancel the promissory note and the warrants related to the promissory note in exchange for 3,800,000 shares of our common stock.

NOTE 8: CONVERTIBLE NOTES PAYABLE

The following table summarizes the convertible debt outstanding as of June 30, 2016.

								Carrying amount
Date of	Maturity	Interest		Original		Principal at		Short term				Long term
issuance	date	rate		principal		June 30, 2016		Related		Non related		Related		Non related
8/1/1999	6/30/2004		10%	$	862,500	$	75,000	$	-0-	$	75,000	$	-0-	$	-0-
8/29/2008	4/1/2018		10%		150,000		150,000		-0-		-0-		-0-		150,000
8/29/2008	4/1/2020		10%		2,120,000		1,770,000		-0-		-0-		1,770,000		-0-
12/16/2008	4/1/2018		12%		375,000		375,000		-0-		-0-		-0-		375,000
12/16/2008	4/1/2018		12%		25,000		25,000		-0-		-0-		25,000		-0-
12/16/2008	4/1/2020		12%		100,000		100,000		-0-		-0-		-0-		100,000
12/16/2008	4/1/2020		12%		4,570,000		4,055,000		-0-		-0-		4,055,000		-0-
9/30/2009	4/1/2018		12%		100,000		100,000		-0-		-0-		-0-		100,000
9/30/2009	4/1/2020		12%		1,300,000		625,000		-0-		-0-		-0-		625,000
Total				$	9,602,500	$	7,275,000	$	-0-	$	75,000	$	5,850,000	$	1,350,000

The following table summarizes the convertible debt outstanding as of December 31, 2015.

								Carrying amount
Date of	Maturity	Interest		Original		Principal at		Short term				Long term
issuance	date	rate		principal		December 31, 2015		Related		Non related		Related		Non related
8/1/1999	6/30/2004		10%	$	862,500	$	75,000	$	-0-	$	75,000	$	-0-	$	-0-
8/29/2008	4/1/2017		10%		150,000		150,000		-0-		-0-		-0-		150,000
8/29/2008	4/1/2017		10%		2,120,000		1,770,000		-0-		-0-		1,770,000		-0-
12/16/2008	4/1/2017		12%		260,000		260,000		-0-		-0-		-0-		260,000
12/16/2008	4/1/2017		12%		4,570,000		4,055,000		-0-		-0-		4,055,000		-0-
12/16/2008	4/1/2018		12%		215,000		215,000		-0-		-0-		-0-		215,000
12/16/2008	4/1/2018		12%		25,000		25,000		-0-		-0-		25,000		-0-
9/30/2009	4/1/2017		12%		1,300,000		625,000		-0-		-0-		-0-		625,000
9/30/2009	4/1/2018		12%		100,000		100,000		-0-		-0-		-0-		100,000
Total				$	9,602,500	$	7,275,000	$	-0-	$	75,000	$	5,850,000	$	1,350,000

20

OMNICOMM SYSTEMS, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2016 AND JUNE 30, 2015

(unaudited)

10% Convertible Notes

During 1999, the Company issued 10% Convertible Notes payable in the amount of $862,500 pursuant to a Confidential Private Placement Memorandum. There were costs of $119,625 associated with this offering. The net proceeds to the Company were $742,875. The notes bear interest at 10% annually, payable semi-annually. The notes were convertible after maturity, which was June 30, 2004, into shares of common stock of the Company at $1.25 per share. We are in default in the payment of principal and interest. As of June 30, 2016, approximately $787,500 of the Convertible Notes had been repaid in cash or converted into 1,495,179 shares of common stock of the Company leaving an outstanding principal balance of $75,000. There was $128,488 of accrued interest at June 30, 2016.

Secured Convertible Debentures

On September 30, 2009, the Company sold an aggregate of $1,400,000 principal amount 12% Secured Convertible Debentures (the “Debentures”) and common stock purchase warrants (the “Warrants”) to purchase an aggregate of 5,600,000 shares of our common stock exercisable at a price of $0.25 per share for four years subsequent to the closing of the transaction to four accredited investors including our Chief Executive Officer and Director, Cornelis F. Wit (“Mr. Wit”). The Company received net proceeds of $1,400,000. The Debentures, which bear interest at 12% per annum, matured on March 30, 2011. The Debentures are convertible at any time at the option of the holder into shares of our common stock based upon a conversion rate of $0.25 per share.

On March 30, 2011, the Company repaid $200,000 of the outstanding principal amounts owed and extended $1,200,000 of the convertible notes until April 1, 2013, including $1,100,000 in convertible notes held by Mr. Wit. The Company also extended the expiration date of the warrants associated with the September 2009 offering.

On February 22, 2013, the Company and two holders extended $1,200,000 of the convertible notes until January 1, 2016, including $1,100,000 in convertible notes held by Mr. Wit. Mr. Wit also waived all his rights to the security interest under his $1,100,000 convertible notes. The expiration date of the warrants associated with the September 2009 offering was also extended to January 1, 2016.

On January 31, 2015 the Company and Mr. Wit extended the maturity date of $1,100,000 of convertible debentures to Mr. Wit. The debentures carry an interest rate of 12% and have a maturity date of April 1, 2017. The expiration date of the warrants associated with the debentures was also extended to April 1, 2017. On November 19, 2015 Mr. Wit converted $475,000 of the convertible debentures into 1,900,000 shares of our common stock. On November 19, 2015 the Company and Mr. Wit agreed to cancel the 1,900,000 warrants related to the $475,000 in convertible debentures and $475,000 of unrelated promissory notes in exchange for 1,900,000 shares of our common stock. On November 23, 2015 Mr. Wit sold the remaining $625,000 of convertible debentures and the related warrants to two unrelated non-affiliate shareholders.

On April 1, 2015 the Company and the holder extended the maturity date of $100,000 of convertible debentures to April 1, 2018. The expiration date of the warrants associated with the debentures was also extended to April 1, 2018.

On June 30, 2016 the Company and two holders extended the maturity date of $625,000 of convertible debentures to April 1, 2020. The expiration date of the warrants associated with the debentures was also extended to April 1, 2020.

Convertible Debentures

August 2008

On August 29, 2008, the Company sold $2,270,000 of convertible debentures and warrants to purchase an aggregate of 4,540,000 shares of our common stock to four accredited investors including our Chief Executive Officer and Director, Cornelis F. Wit (“Mr. Wit”), and one of our Directors. The convertible debentures, which bear interest at 10% per annum, were due on August 29, 2010. The convertible debentures are convertible at any time at the option of the holder into shares of our common stock based upon a conversion rate of $0.50 per share.

On September 30, 2009, two Affiliates of the Company extended $1,920,000 of the convertible debentures until August 29, 2013 in accordance with the terms of a Secured Convertible Debenture issued on that date.

21

OMNICOMM SYSTEMS, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2016 AND JUNE 30, 2015

(unaudited)

On February 22, 2013 the Company and Mr. Wit extended the maturity date of $1,770,000 of the convertible debentures to January 1, 2016. The expiration date of the warrants associated with the debentures was also extended to January 1, 2016.

On February 22, 2013 the Company and Mr. van Kesteren extended the maturity date of $150,000 of the convertible debentures due to our former Director, Guus van Kesteren (“Mr. van Kesteren”) to January 1, 2015. The expiration date of the warrants associated with the debentures was also extended to January 1, 2015.

On April 21, 2014 the Company and Mr. van Kesteren, extended the maturity date of his $150,000 of convertible debentures to April 1, 2016. The expiration date of the warrants associated with the debentures was also extended to April 1, 2016. On July 31, 2014 Mr. van Kesteren’s term on the Board of Directors ended. Effective on the same date, his convertible note in the amount of $150,000 was reclassified from Related Party to Non-Related Party.

On January 31, 2015 the Company and Mr. Wit extended the maturity date of the $1,770,000 of convertible debentures to April 1, 2017. The expiration date of the warrants associated with the debentures was also extended to April 1, 2017.

On June 30, 2015 the Company and Mr. van Kesteren extended the maturity date of $150,000 of convertible debentures to April 1, 2017. The expiration date of the warrants associated with the debentures was also extended to April 1, 2017.

On June 30, 2016 the Company and Mr. Wit extended the maturity date of the $1,770,000 of convertible debentures to April 1, 2020. The expiration date of the warrants associated with the debentures was also extended to April 1, 2020.

On June 30, 2016 the Company and Mr. van Kesteren extended the maturity date of $150,000 of convertible debentures to April 1, 2018. The expiration date of the warrants associated with the debentures was also extended to April 1, 2018.

December 2008

On December 16, 2008, the Company sold $5,075,000 of convertible debentures and warrants to purchase an aggregate of 10,150,000 shares of common stock to eleven accredited investors including our Chief Executive Officer and Director, Cornelis F. Wit (“Mr. Wit”), our Chief Operating Officer and President, Stephen E. Johnson (“Mr. Johnson”), our Chairman and Chief Technology Officer, Randall G. Smith (“Mr. Smith”), our Chief Financial Officer, Ronald T. Linares, and four of our Directors. The convertible debentures, which bear interest at 12% per annum, were due on December 16, 2010. The convertible debentures are convertible at any time at the option of the holder into shares of our common stock based upon a conversion rate of $0.50 per share.

On September 30, 2009 Affiliates of the Company extended $4,980,000 of Convertible Notes until December 16, 2013 in accordance with the terms of a Secured Convertible Debenture issued on that date.

On February 22, 2013 the Company and the holders agreed to extend the maturity date of $4,505,000 of the convertible debentures including $4,475,000 due to Mr. Wit, $25,000 due to Mr. Johnson, and $5,000 due to Mr. Smith, to January 1, 2016. The expiration date of the warrants associated with the debentures was also extended to January 1, 2016.

On February 27, 2013 the Company and Mr. Veatch extended the maturity date of $15,000 of convertible debentures issued to our former Director, Matthew Veatch, to January 1, 2016. The expiration date of the warrants associated with the debentures was also extended to January 1, 2016.

On March 6, 2013, the Company and one of the holders agreed to extend the maturity date of $200,000 of convertible debentures to January 1, 2014. The expiration date of the warrants associated with the debentures was also extended to January 1, 2014.

On March 12, 2013, the Company and one of the holders agreed to extend the maturity date of $100,000 of convertible debentures to January 1, 2015. The expiration date of the warrants associated with the debentures was also extended to January 1, 2015.

22

OMNICOMM SYSTEMS, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2016 AND JUNE 30, 2015

(unaudited)

In December 2013, the Company and two holders agreed to extend the maturity date of $360,000, including $160,000 due to our former Director, Guus van Kesteren (“Mr. van Kesteren”), of convertible debentures to January 1, 2016. The expiration date of the warrants associated with the debentures was also extended to January 1, 2016. On July 31, 2014 Mr. van Kesteren’s term on the Board of Directors ended. Effective on the same date, his convertible note in the amount of $160,000 was reclassified from Related Party to Non-Related Party.

On April 28, 2014 the Company and the holder extended the maturity date of $100,000 of convertible debentures to April 1, 2016. The expiration date of the warrants associated with the debentures was also extended to April 1, 2016.

On January 31, 2015 the Company and Mr. Wit extended the maturity date of $4,475,000 of convertible debentures to Mr. Wit to April 1, 2017. The expiration date of the warrants associated with the debentures was also extended to April 1, 2017. On November 19, 2015 the Company and Mr. Wit agreed to cancel $420,000 of the debentures and 1,680,000 of unrelated warrants in exchange for 1,680,000 shares of our common stock.

On April 27, 2015, the Company and the holder extended the maturity date of $200,000 of convertible debentures to April 1, 2018. The expiration date of the warrants associated with the debentures was also extended to April 1, 2018.

On April 30, 2015, the Company and Mr. Johnson extended the maturity date of $25,000 of convertible debentures to April 1, 2018. The expiration date of the warrants associated with the debentures was also extended to April 1, 2018.

On May 1, 2015 we paid $5,000 to Mr. Smith in exchange for $5,000 of convertible debentures originally issued in December 2008.

On May 1, 2015 the Company and Mr. van Kesteren extended the maturity date of $160,000 of convertible debentures to April 1, 2017. The expiration date of the warrants associated with the debentures was also extended to April 1, 2017.

On May 7, 2015 the Company and our former Director, Matthew Veatch, extended the maturity date of $15,000 of convertible debentures to April 1, 2018. The expiration date of the warrants associated with the debentures was also extended to April 1, 2018.

On June 30, 2015 the Company and the holder extended the maturity date of $100,000 of convertible debentures to April 1, 2017. The expiration date of the warrants associated with the debentures was also extended to April 1, 2017.

On June 30, 2016 the Company and Mr. Wit extended the maturity date of $4,055,000 of convertible debentures to Mr. Wit to April 1, 2020. The expiration date of the warrants associated with the debentures was also extended to April 1, 2020.

On June 30, 2016 the Company and Mr. van Kesteren extended the maturity date of $160,000 of convertible debentures to April 1, 2018. The expiration date of the warrants associated with the debentures was also extended to April 1, 2018.

On June 30, 2016 the Company and the holder extended the maturity date of $100,000 of convertible debentures to April 1, 2020. The expiration date of the warrants associated with the debentures was also extended to April 1, 2020.

December 2009

On December 31, 2009, the Company sold an aggregate of $1,490,000 principal amount 12% Convertible Debentures (the “Debentures”) and common stock purchase warrants (the “Warrants”) to purchase an aggregate of 5,960,000 shares of our common stock exercisable at a price of $0.25 per share for four years subsequent to the closing of the transaction to three accredited investors including our Chief Executive Officer and Director, Cornelis F. Wit (“Mr. Wit”). The Company received net proceeds of $1,490,000. The Debentures, which bear interest at 12% per annum, matured on June 30, 2011. The Debentures are convertible at any time at the option of the holder into shares of our common stock based upon a conversion rate of $0.25 per share.

23

OMNICOMM SYSTEMS, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2016 AND JUNE 30, 2015

(unaudited)

On September 30, 2011, the Company extended all $1,490,000 of the convertible notes until October 1, 2013, including $1,440,000 in convertible notes held by Mr. Wit. The Company also extended the expiration date of the warrants associated with the December 2009 offering until December 31, 2015.

On February 22, 2013, the Company extended all $1,490,000 of the convertible notes until January 1, 2016, including $1,440,000 in convertible notes held by Mr. Wit. The Company also extended the expiration date of the warrants associated with the December 2009 offering until January 1, 2016.

On January 31, 2015 the Company and Mr. Wit extended the maturity date of $1,440,000 of convertible debentures to Mr. Wit, originally issued in December 2009. The debentures carry an interest rate of 12% and have a maturity date of April 1, 2017. The expiration date of the warrants associated with the debentures was also extended to April 1, 2017. On November 19, 2015 Mr. Wit converted $1,440,000 of the convertible debentures into 5,760,000 shares of our common stock. On November 19, 2015 the Company and Mr. Wit agreed to cancel the 5,760,000 warrants related to the convertible debentures and $1,440,000 of unrelated promissory notes in exchange for 5,760,000 shares of our common stock.

On April 1, 2015 the Company and the holders extended the maturity date of $50,000 of convertible debentures originally issued in December 2009. The debentures carry an interest rate of 12% and have a maturity date of April 1, 2018. On December 7, 2015 the convertible debentures were paid off.

The principal payments required at maturity under the Company’s outstanding convertible debt at June 30, 2016 are as follows:

2016	$	75,000
2017		-0-
2018		650,000
2019		-0-
2020		6,550,000
Total	$	7,275,000

NOTE 9: FAIR VALUE MEASUREMENT

The Company measures the fair value of its assets and liabilities under the guidance of ASC 820, Fair Value Measurements and Disclosures, which defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles and expands disclosures about fair value measurements. ASC 820 does not require any new fair value measurements, but its provisions apply to all other accounting pronouncements that require or permit fair value measurement.

ASC 820 clarifies that fair value is an exit price, representing the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants based on the highest and best use of the asset or liability. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. ASC 820 requires the Company to use valuation techniques to measure fair value that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized as follows:

· Level 1: Observable inputs such as quoted prices for identical assets or liabilities in active markets;

· Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly such as quoted prices for similar assets or liabilities or market-corroborated inputs; and

· Level 3: Unobservable inputs for which there is little or no market data, which require the reporting entity to develop its own assumptions about how market participants would price the assets or liabilities.

 The valuation techniques that may be used to measure fair value are as follows:

A. Market approach - Uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities

24

OMNICOMM SYSTEMS, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2016 AND JUNE 30, 2015

(unaudited)

B. Income approach - Uses valuation techniques to convert future amounts to a single present amount based on current market expectations about those future amounts, including present value techniques, option-pricing models and excess earnings methods

C. Cost approach - Based on the amount that currently would be required to replace the service capacity of an asset (replacement cost)

The Company also adopted the provisions of ASC 825, Financial Instruments (“ASC 825”). ASC 825 allows companies to choose to measure eligible assets and liabilities at fair value with changes in value recognized in earnings. Fair value treatment may be elected either upon initial recognition of an eligible asset or liability or, for an existing asset or liability, if an event triggers a new basis of accounting. The Company did not elect to re-measure any of its existing financial assets or liabilities under the provisions of this Statement. The Company elected the fair value option for the issuance of warrants associated with the promissory notes issued in the six month periods ended June 30, 2016 and June 30, 2015.

The Company’s financial assets or liabilities subject to ASC 820 as of June 30, 2016 include the conversion feature and warrant liability associated with convertible debentures issued during 2008 and 2009 and the warrants issued during 2011 and 2016 that are associated with notes payable. The conversion feature and warrants were deemed to be derivatives (the “Derivative Instruments”) since a fixed conversion price cannot be determined for either of the Derivative Instruments due to anti-dilution provisions embedded in the offering documents for the convertible debentures. The derivative instruments were not issued for risk management purposes and as such are not designated as hedging instruments under the provisions of ASC 815, Disclosures about Derivative Instruments and Hedging Activities. See Note 8 – Convertible Notes Payable.

Following is a description of the valuation methodologies used to determine the fair value of the Company’s financial liabilities including the general classification of such instruments pursuant to the valuation hierarchy.

A summary as of June 30, 2016 of the fair value of liabilities measured at fair value on a recurring basis follows:

	Fair value at June 30, 2016		Quoted prices in active markets for identical assets/ liabilities (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Derivatives: (1) (2)
Conversion feature liability	$	2,313,328	$	-0-	$	-0-	$	2,313,328
Warrant liability		3,812,690		-0-		-0-		3,812,690
Total of derivative liabilities	$	6,126,018	$	-0-	$	-0-	$	6,126,018

(1) The fair value of the derivative instruments was estimated using the Income Approach and the Black Scholes option pricing model with the following assumptions for the period ended June 30, 2016

(2) The fair value at the measurement date is equal to the carrying value on the balance sheet

	Significant valuation assumptions for derivative instruments at June 30, 2016
Risk free interest rate	0.56%	to	0.92%
Dividend yield		0.00%
Expected volatility	106.3%	to	139.4%
Expected life (range in years)
Conversion feature liability	1.75	to	3.76
Warrant liability	0.75	to	3.76

25

OMNICOMM SYSTEMS, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2016 AND JUNE 30, 2015

(unaudited)

A summary as of December 31, 2015 of the fair value of liabilities measured at fair value on a recurring basis follows:

	Fair value at		Quoted prices in active markets for identical assets/ liabilities		Significant other observable inputs		Significant unobservable inputs
	December 31, 2015		(Level 1)		(Level 2)		(Level 3)
Derivatives: (1) (2)
Conversion feature liability	$	901,243	$	-0-	$	-0-	$	901,243
Warrant liability		1,914,923		-0-		-0-		1,914,923
Total of derivative liabilities	$	2,816,166	$	-0-	$	-0-	$	2,816,166

(1) The fair value of the derivative instruments was estimated using the Income Approach and the Black Scholes option pricing model with the following assumptions for the year ended December 31, 2015

(2) The fair value at the measurement date is equal to the carrying value on the balance sheet

	Significant valuation assumptions for derivative instruments at December 31, 2015
Risk free interest rate	0.48%	to	1.2%
Dividend yield		0.00%
Expected volatility	91.0%	to	132.2%
Expected life (range in years)
Conversion feature liability	1.25	to	2.25
Warrant liability	0.00	to	3.01

A summary as of June 30, 2016 of the fair value of assets measured at fair value on a non-recurring basis follows:

	Carrying amount		Carrying amount		Quoted prices in active markets for identical assets/ liabilities		Significant other observable inputs		Significant unobservable inputs
	December 31, 2015		June 30, 2016		(Level 1)		(Level 2)		(Level 3)
Acquired assets (3)
Promasys B.V. customer list (4)	$	92,444	$	90,703	$	-0-	$	-0-	$	136,253
Promasys B.V. software code (4)		41,274		33,991		-0-		-0-		72,943
Promasys B.V. URLs/website (4)		15,159		6,190		-0-		-0-		68,814
Total	$	148,877	$	130,884	$	-0-	$	-0-	$	278,010

(3) The fair value of the acquired assets was estimated using the Income Approach with a discounted cash flow valuation methodology applied.

(4) The acquired Promasys B.V. software code, customer list and URLs/website are not measured on a recurring basis since their initial fair value has been deemed to have a finite life and is being amortized periodically. Instead the Company performs an impairment analysis on a quarterly basis in order to determine whether the carrying value of the assets reflects the fair value of the assets in a market based transaction.

Other identifiable intangible assets, which are subject to amortization, are being amortized using the straight-line method over their estimated useful lives ranging from 3 to 15 years. The Impairment or Disposal of Long-Lived Asset subsection of ASC 360, Property, Plant and Equipment requires us to test the recoverability of long-lived assets, including identifiable intangible assets with definite lives, whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. In testing for potential impairment, if the carrying value of the asset group exceeds the expected undiscounted cash flows, we must then determine the amount by which the fair value of those assets exceeds the carrying value and determine the amount of impairment, if any.

26

OMNICOMM SYSTEMS, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2016 AND JUNE 30, 2015

(unaudited)

The table below presents the unrealized gains/(losses) for the six month periods ended June 30, 2016 and June 30, 2015.

	Other income/(expense)
	For the six months ended
	June 30, 2016			June 30, 2015
The net amount of gains/(losses) for the period included in earnings attributable to the unrealized gain/(losses) from changes in derivative liabilities at the reporting date	$	(2,458,836	)	$	4,072,798
Total unrealized gains/(losses) included in earnings	$	(2,458,836	)	$	4,072,798

The tables below set forth a summary of changes in fair value of the Company’s Level 3 financial liabilities at fair value for the periods ended June 30, 2016 and December 31, 2015. The tables reflect changes for all financial liabilities at fair value categorized as Level 3 as of June 30, 2016 and December 31, 2015.

	Level 3 financial liabilities at fair value
For the six months ended	Balance, beginning			Net realized		Net unrealized gains/(losses) relating to instruments held at the			Net purchases, issuances and			Net transfers		Balance, end of
June 30, 2016	of year			gains/(losses)		reporting date			settlements			in and/or out		period
Derivatives:
Conversion feature liability	$	(901,243	)	$	-0-	$	(1,412,085	)	$	-0-		$	-0-	$	(2,313,328	)
Warrant liability		(1,914,923	)		-0-		(1,046,751	)		(851,016	)		-0-		(3,812,690	)
Total of derivative liabilities	$	(2,816,166	)	$	-0-	$	(2,458,836	)	$	(851,016	)	$	-0-	$	(6,126,018	)

	Level 3 financial liabilities at fair value
For the year ended	Balance, beginning			Net realized		Net unrealized gains/(losses) relating to instruments held at the		Net purchases, issuances and			Net transfers		Balance, end of
December 31, 2015	of year			gains/(losses)		reporting date		settlements			in and/or out		year
Derivatives:
Conversion feature liability	$	(2,944,402	)	$	29,875	$	2,013,284	$	-0-		$	-0-	$	(901,243	)
Warrant liability		(6,695,060	)		-0-		2,482,639		(868,128	)		3,165,626		(1,914,923	)
Total of derivative liabilities	$	(9,639,462	)	$	29,875	$	4,495,923	$	(868,128	)	$	3,165,626	$	(2,816,166	)

NOTE 10: COMMITMENTS AND CONTINGENCIES

The Company currently leases office space under operating leases for its office locations and has operating leases related to server and network co-location and disaster recovery for its operations. The minimum future lease payments required under the Company’s operating leases at June 30, 2016 are as follows:

2016	$	396,069
2017		662,992
2018		512,421
2019		421,230
2020		297,570
Thereafter		580,512
Total	$	2,870,794

In addition to annual base rental payments, the Company pays for the operating expenses associated with its leased office space and is responsible for any escalation in operating expenses as determined in the leases. Rent expense was $501,058 and $482,711 for the six month periods ended June 30, 2016 and June 30, 2015, respectively.

27

OMNICOMM SYSTEMS, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2016 AND JUNE 30, 2015

(unaudited)

The Company’s Fort Lauderdale, Florida corporate office lease expires in February 2023. The Company’s lease on its New Jersey field office expires in March 2021. The Company currently operates its wholly-owned subsidiary, OmniComm Ltd., in the United Kingdom under the terms of a lease that expires in September 2017. The Company currently operates its wholly-owned subsidiary, OmniComm Europe, GmbH, in Germany under the terms of a lease that expires in July 2017. The Company currently operates its wholly-owned subsidiary, OmniComm Promasys B.V, in the Netherlands under the terms of a lease that expires in October 2018.

LEGAL PROCEEDINGS

From time to time the Company may be involved in litigation relating to claims arising out of our operations in the normal course of business. As of June 30, 2016, there were no pending or threatened lawsuits that could reasonably be expected to have a material effect on the results of our operations.

PATENT LITIGATION SETTLEMENT

Effective April 9, 2009, we entered into a Settlement and License Agreement with DataSci, LLC (“DataSci”). DataSci granted us a worldwide, non-exclusive non-transferable right and license under the Licensed Patent and the right to sublicense TrialMaster on a Technology Transfer and Technology Transition basis. Under the terms of the license, we are obligated to pay royalties quarterly for sales of Licensed Products, as defined therein, from January 1, 2009 until the expiration of the Licensed Patent equal to two percent (2%) of OmniComm’s annual Gross Revenues or, alternatively, the annual minimum royalty payment(s), whichever is greater.  In addition to the payment of royalties, the Settlement and Licensing Agreement imposes certain obligations on us including commercialization, certain sublicensing, other payments, insurance, and confidentiality. In addition and as a license fee for past use of the Licensed Patent which may have occurred prior to the effective date of the Settlement and Licensing Agreement, we issued a warrant to DataSci to purchase 1,000,000 shares of our common stock at an exercise price of $.01 per share. The Settlement and Licensing Agreement provides that upon the expiration date of the warrant, at DataSci’s sole discretion, DataSci shall exercise its option under the warrant or licensee shall pay DataSci $300,000. The warrant is exercisable commencing on the second anniversary of the Settlement and Licensing Agreement, April 2, 2011, through the expiration date of the warrant, deemed to be on the termination date of the Settlement and Licensing Agreement on May 12, 2018. 

On June 23, 2009, we entered into an agreement to acquire the EDC assets of eResearch Technology. Concurrent with the consummation of that transaction we entered into the First Amendment to Settlement and Licensing Agreement with DataSci, (i) to include the eResearch Technology EDC assets acquired within the definition of Licensed Products, and as such subject to the royalty payment(s), under and in accordance with the Settlement and Licensing Agreement, and (ii) provide a release by DataSci of any and all claims of infringement of the Licensed Patent in connection with the eResearch Technology EDC assets acquired which may have occurred prior to the effective date of the First Amendment to Settlement and Licensing Agreement for an aggregate amount of $300,000.

The remaining minimum royalty payments per year are as follows:

2016	$	225,000
2017		450,000
2018		164,500
Total	$	839,500

During the six month periods ended June 30, 2016 and June 30, 2015 the Company recorded a charge to earnings of $52,322 and $64,822 respectively, which amounts represent (i) the amount of additional license expense incurred above the stipulated minimum in the DataSci License Agreement during the six month periods ended June 30, 2016 and June 30, 2015 and (ii) the accretion of the difference between the total stipulated annual minimum royalty payments and the recorded present value accrual of the annual minimum royalty payments.

28

OMNICOMM SYSTEMS, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2016 AND JUNE 30, 2015

(unaudited)

EMPLOYMENT AGREEMENTS

We have employment agreements in place with the following members of our executive management team:

Cornelis F. Wit, Chief Executive Officer

Randall G. Smith, Chief Technology Officer

Stephen E. Johnson, President and Chief Operating Officer

The employment agreements provide, among other things, for participation in employee benefits available to employees and executives. Each of the agreements will renew for successive one-year terms unless the agreement is expressly cancelled by either the employee or the Company ninety days prior to the end of the term. Under the terms of the agreement, we may terminate the employee’s employment upon 30 days notice of a material breach and the employee may terminate the agreement under the same terms and conditions. The employment agreements contain non-disclosure provisions, as well as non-compete clauses. The agreements for Mr. Smith and Mr. Johnson contain severance provisions.

NOTE 11: RELATED PARTY TRANSACTIONS

On April 1, 2015 the Company issued a promissory note in the amount of $20,000 to our Chairman and Chief Technology Officer, Randall G. Smith (“Mr. Smith”), in exchange for an existing promissory note in the same amount.  The promissory note carries an interest rate of 12% and has a maturity date of April 1, 2018.

On April 30, 2015, the Company and Stephen E. Johnson, our Chief Operating Officer and President (“Mr. Johnson”) extended the maturity date of $25,000 of convertible debentures to Mr.  Johnson, originally issued in December 2008. The debentures carry an interest rate of 12% and have a maturity date of April 1, 2018. The expiration date of the warrants associated with the debentures was also extended to April 1, 2018.

On May 1, 2015 the Company paid $5,000 to Mr. Smith in exchange for an outstanding convertible note in the same amount. The note carried an interest rate of 12% and had a maturity date of January 1, 2016.

As of June 30, 2016, we have an aggregate of $5,825,000 of convertible debentures and $450,000 of promissory notes outstanding to our Chief Executive Officer and Director, Cornelis F. With (“Mr. Wit”), and have issued certain warrants to Mr. Wit, as follows:

● In June 2008, Mr. Wit invested $510,000 in convertible notes. On August 29, 2008, Mr. Wit converted the $510,000 and invested an additional $1,260,000 in a private placement of convertible debentures and warrants to purchase 3,540,000 shares of our common stock. The convertible debentures, which bear interest at 10% per annum, were due on August 29, 2010. The convertible debentures are convertible at any time at the option of the holder into shares of our common stock based upon a conversion rate of $0.50 per share. On September 30, 2009, the Company and Mr. Wit extended the $1,770,000 of convertible debentures until August 29, 2013 in accordance with the terms of a Secured Convertible Debenture issued on that date. On February 22, 2013, the Company and Mr. Wit extended the maturity date of the $1,770,000 of convertible debentures to January 1, 2016. The expiration date of the warrants associated with the debentures was also extended to January 1, 2016. On January 31, 2015 the Company and Mr. Wit extended the maturity date of the $1,770,000 of convertible debentures to April 1, 2017. The expiration date of the warrants associated with the debentures was also extended to April 1, 2017. On June 30, 2016 the Company and Mr. Wit extended the maturity date of the $1,770,000 of convertible debentures to April 1, 2020. The expiration date of the warrants associated with the debentures was also extended to April 1, 2020.

● In February 2008, Mr. Wit invested $150,000 in promissory notes and from September 2008 to December 2008, Mr. Wit invested $4,200,000 in convertible notes. On December 16, 2008, Mr. Wit converted the $4,350,000 into a private placement of convertible debentures and warrants to purchase 8,700,000 shares of our common stock. The convertible debentures, which bear interest at 12% per annum, were due on December 16, 2010. The convertible debentures are convertible at any time at the option of the holder into shares of our common stock based upon a conversion rate of $0.50 per share. On September 30, 2009, the Company and Mr. Wit extended the $4,350,000 of convertible debentures until December 16, 2013 in accordance with the terms of a Secured Convertible Debenture issued on that date. In a private transaction on October 16, 2012, Mr. Wit purchased $125,000 of the December 2008 convertible debentures and the related 250,000 warrants from Mr. Ronald Linares, the Company’s former Chief Financial Officer. On February 22, 2013, the Company and Mr. Wit extended the maturity date of the $4,475,000 of convertible debentures to January 1, 2016. The expiration date of the warrants associated with the debentures was also extended to January 1, 2016. On January 31, 2015 the Company and Mr. Wit extended the maturity date of the $4,475,000 of convertible debentures to April 1, 2017. The expiration date of the warrants associated with the debentures was also extended to April 1, 2017. On November 19, 2015 the Company and Mr. Wit agreed to cancel $420,000 of the debentures and 1,680,000 of unrelated warrants in exchange for 1,680,000 shares of our common stock. On June 30, 2016 the Company and Mr. Wit extended the maturity date of the $4,055,000 of convertible debentures to April 1, 2020. The expiration date of the warrants associated with the debentures was also extended to April 1, 2020.

29

OMNICOMM SYSTEMS, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2016 AND JUNE 30, 2015

(unaudited)

● From July 2009 to September 2009, Mr. Wit invested $1,100,000 which amount was aggregated under the terms of one convertible note dated September 30, 2009.  On September 30, 2009, Mr. Wit agreed to convert this convertible note into a private placement of secured convertible debentures bearing interest at a rate of 12% per annum with a maturity date of March 30, 2011. The convertible debentures were convertible into 4,400,000 shares of common stock and Mr. Wit received 4,400,000 warrants to purchase common stock of the Company at a price of $0.25. On March 30, 2011, the Company and Mr. Wit extended the maturity date of his convertible note until April 1, 2013 in accordance with the terms of Amendment Number One To Securities Purchase Agreement. The Company also extended the expiration date of the 4,400,000 warrants issued with convertible note by two years to September 30, 2015. On February 22, 2013, the Company and Mr. Wit extended the maturity date of his convertible debentures to January 1, 2016 and waived all his rights to the granted security interest in accordance with the terms of Amendment Number Two To Securities Purchase Agreement. The expiration date of the warrants associated with the debentures was also extended to January 1, 2016. On January 31, 2015 the Company and Mr. Wit extended the maturity date of the $1,100,000 of convertible debentures to April 1, 2017. The expiration date of the warrants associated with the debentures was also extended to April 1, 2017. On November 19, 2015 Mr. Wit converted $475,000 of the convertible debentures into 1,900,000 shares of our common stock. On November 19, 2015 the Company and Mr. Wit agreed to cancel the 1,900,000 warrants related to the $475,000 in convertible debentures and $475,000 of unrelated promissory notes in exchange for 1,900,000 shares of our common stock. On November 23, 2015 Mr. Wit sold the remaining $625,000 of convertible debentures and the related warrants to two unrelated non-affiliate shareholders.

● From October 2009 to December 2009, Mr. Wit invested $1,440,000, which amount was aggregated under the terms of one convertible note dated December 31, 2009. On December 31, 2009, Mr. Wit agreed to convert this Convertible Note into a private placement of unsecured convertible debentures bearing interest at a rate of 12% per annum, which Convertible Debentures were due on June 30, 2011. The Company and Mr. Wit extended the maturity date of his convertible note until October 1, 2013 in accordance with the terms of Amendment Number One To Securities Purchase Agreement. The Company also extended the expiration date of the 5,760,000 warrants issued with convertible note by two years to December 31, 2015. On February 22, 2013, the Company and Mr. Wit extended the maturity date of his convertible debentures to January 1, 2016 in accordance with the terms of Amendment Number Two To Securities Purchase Agreement. The expiration date of the warrants associated with the debentures was also extended to January 1, 2016. On January 31, 2015 the Company and Mr. Wit extended the maturity date of the $1,440,000 of convertible debentures to April 1, 2017. The expiration date of the warrants associated with the debentures was also extended to April 1, 2017. On November 19, 2015 Mr. Wit converted $1,440,000 of the convertible debentures into 5,760,000 shares of our common stock. On November 19, 2015 the Company and Mr. Wit agreed to cancel the 5,760,000 warrants related to the convertible debentures and $1,440,000 of unrelated promissory notes in exchange for 5,760,000 shares of our common stock.

● On January 1, 2014, the Company issued a promissory note in the principal amount of $980,000 and warrants to purchase 3,920,000 shares of common stock of the Company at an exercise price of $0.25 with an expiration date of April 1, 2017 to Mr. Wit in exchange for accrued interest in the amount of $980,000. The note carries an interest rate of 12% per annum and is due on April 1, 2017. On October 15, 2015 the Company issued a promissory note in the amount of $980,000 to Mr. Wit in exchange for the existing promissory note in the same amount. The promissory note carries an interest rate of 12% and has a maturity date of January 1, 2019. The expiration date of the warrants associated with the promissory note was also extended to January 1, 2019. On November 19, 2015 the promissory note and the related warrants were cancelled in exchange for 3,920,000 shares of our common stock.

30

OMNICOMM SYSTEMS, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2016 AND JUNE 30, 2015

(unaudited)

● On January 31, 2015 the Company issued a promissory note in the amount of $2,860,000 and paid $6,879 in principal to Mr. Wit in exchange for an existing promissory note in the same amount. The promissory note carries an interest rate of 12% and has a maturity date of April 1, 2017. The expiration date of the warrants associated with the promissory note was also extended to April 1, 2017. On October 15, 2015 the Company issued a promissory note in the amount of $2,860,000 to Mr. Wit in exchange for the existing promissory note in the same amount. The promissory note carries an interest rate of 12% and has a maturity date of January 1, 2019. The expiration date of the warrants associated with the promissory note was also extended to January 1, 2019. On November 19, 2015 the Company and Mr. Wit agreed to cancel the promissory note and 11,440,000 warrants related to the promissory note in exchange for 11,440,000 shares of our common stock.

● On January 31, 2015 the Company issued a promissory note in the amount of $529,000 to Mr. Wit in exchange for an existing promissory note in the same amount. The promissory note carries an interest rate of 12% and has a maturity date of April 1, 2017. The expiration date of the warrants associated with the promissory note was also extended to April 1, 2017. On October 15, 2015 the Company issued a promissory note in the amount of $529,000 to Mr. Wit in exchange for the existing promissory note in the same amount. The promissory note carries an interest rate of 12% and has a maturity date of January 1, 2019. The expiration date of the warrants associated with the promissory note was also extended to January 1, 2019. On November 19, 2015 the promissory note and the related warrants were cancelled in exchange for 2,116,000 shares of our common stock.

● On January 31, 2015, the Company issued a promissory note in the principal amount of $950,000 and warrants to purchase 3,800,000 shares of common stock of the Company at an exercise price of $0.25 per share with an expiration date of April 1, 2017 to Mr. Wit in exchange for an existing promissory note in the amount of $280,000 and accrued interest in the amount of $670,000. The note carries an interest rate of 12% per annum and is due on April 1, 2017. On October 15, 2015 the Company issued a promissory note in the amount of $950,000 to Mr. Wit in exchange for the existing promissory note in the same amount. The promissory note carries an interest rate of 12% and has a maturity date of January 1, 2019. The expiration date of the warrants associated with the promissory note was also extended to January 1, 2019. On November 19, 2015 the Company and Mr. Wit agreed to cancel the promissory note and the warrants related to the promissory note in exchange for 3,800,000 shares of our common stock.

● On November 19, 2015 we issued 37,023,517 restricted shares of our common stock to Mr. Wit. The shares were issued in exchange (i) for the cancellation of $6,919,000 of outstanding 12% promissory notes, $420,000 of outstanding 12% convertible notes payable and 29,363,517 outstanding warrants to purchase shares of our common stock at $0.25 per share and (ii) the conversion of $1,915,000 of convertible notes payable with a conversion price of $0.25 per share.

● On February 29, 2016, the Company issued a promissory note in the principal amount of $450,000 and warrants to purchase 1,800,000 shares of common stock of the Company at an exercise price of $0.25 per share with an expiration date of April 1, 2019 to Mr. Wit in exchange for accrued interest in the amount of $450,000. The note carries an interest rate of 12% per annum and has a maturity date of April 1, 2019.

On March 18, 2013, the Company entered into a $2,000,000 revolving Line of Credit (“Line of Credit”) with The Northern Trust Company guaranteed by our Chief Executive Officer and Director, Cornelis F. Wit. Mr. Wit receives 2.0% interest (approximately $9,500 per month) from the Company on the assets pledged for the Line of Credit. On December 18, 2013 the Company renewed the Line of Credit and increased the available balance to $4,000,000. On February 3, 2015 the Company renewed the Line of Credit and increased the available balance to $5,000,000. The Line of Credit matures on February 2, 2018 and carries a variable interest rate based on the prime rate. At June 30, 2016, $5,000,000 was outstanding on the Line of Credit at an interest rate of 2.5%.

For the six month periods ended June 30, 2016 and June 30, 2015 we incurred $443,686 and $1,299,785, respectively, in interest expense payable to related parties.

31

OMNICOMM SYSTEMS, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2016 AND JUNE 30, 2015

(unaudited)

NOTE 12: STOCKHOLDERS’ (DEFICIT)

Our authorized capital stock consists of 500,000,000 shares of common stock, $.001 par value per share, and 10,000,000 shares of preferred stock, par value $.001 per share, of which 5,000,000 shares have been designated as 5% Series A Preferred Stock, 230,000 shares have been designated as Series B Preferred Stock, 747,500 shares have been designated as Series C Preferred Stock and 250,000 shares have been designated as Series D Preferred Stock.

At the 2016 Annual Meeting of Stockholders the proposed amendment to the Company’s Certificate of Incorporation to increase the authorized number of shares of common stock by 250,000,000 shares to an aggregate of 500,000,000 shares received an affirmative vote from the holders of a majority of the outstanding shares of Voting Securities and an affirmative vote from the holders of a majority of the outstanding shares of common stock. Based on the votes received, the proposed amendment was approved and the number of authorized shares of common stock of the Company was increased from 250,000,000 shares to 500,000,000 shares.

As of June 30, 2016 we had the following outstanding securities:

o 147,683,879 shares of common stock issued and outstanding;

o 27,860,000 warrants issued and outstanding to purchase shares of our common stock;

o -0- shares of our Series A Preferred Stock issued and outstanding;

o -0- shares of our Series B Preferred Stock issued and outstanding;

o -0- shares of our Series C Preferred Stock issued and outstanding;

o 250,000 share of our Series D Preferred Stock issued and outstanding; and

o $7,275,000 principal amount Convertible Debentures convertible into 15,910,000 shares of common stock.

Common Stock

Holders of common stock are entitled to one vote for each share on all matters submitted to a stockholder vote. Holders of our voting securities do not have cumulative voting rights. Holders of common stock are entitled to share in all dividends that the Board of Directors, in its discretion, declares from legally available funds. In the event of our liquidation, dissolution or winding up each outstanding share of common stock entitles its holder to participate in all assets that remain after payment of liabilities and after providing for each class of stock, if any, having preference over the common stock.

Holders of common stock have no conversion, preemptive or other subscription rights, and there are no redemption provisions for the common stock. The rights of the holders of common stock are subject to any rights that may be fixed for holders of preferred stock, when and if any preferred stock is outstanding. All outstanding shares of common stock are duly authorized, validly issued, fully paid and non-assessable.

Preferred Stock

Our Board of Directors, without further stockholder approval, may issue preferred stock in one or more series from time to time and fix or alter the designations, relative rights, priorities, preferences, qualifications, limitations and restrictions of the shares of each series. In addition, the Board of Directors may fix and determine all privileges and rights of the authorized preferred stock series including:

o dividend and liquidation preferences;

o voting rights;

o conversion privileges; and

o redemption terms.

Our Board of Directors may authorize the issuance of preferred stock which ranks senior to our common stock for the payment of dividends and the distribution of assets on liquidation. In addition, our Board of Directors can fix limitations and restrictions, if any, upon the payment of dividends on our common stock to be effective while any shares of preferred stock are outstanding.

During the period from December 2015 through April 2016 all 5% Series A Preferred Stock Shareholders accepted the Exchange Offer and converted a total of 4,125,224 Series A preferred shares into 16,500,896 common shares.

32

OMNICOMM SYSTEMS, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2016 AND JUNE 30, 2015

(unaudited)

The following table presents the cumulative arrearage of undeclared dividends by class of preferred stock as of June 30, 2016 and June 30, 2015, respectively, and the per share amount by class of preferred stock.

	Cumulative arrearage as of				Cumulative arrearage per share as of
	June 30,				June 30,
Series of preferred stock	2016		2015		2016		2015
Series A	$	-0-	$	2,688,984	$	-0-	$	0.65
Series B		609,887		609,887	$	3.05	$	3.05
Series C		1,472,093		1,472,093	$	4.37	$	4.37
Total preferred stock arrearage	$	2,081,980	$	4,770,964

The following table presents preferred dividends accreted for the six month periods ended June 30, 2016 and June 30, 2015, respectively, and the per share effect of the preferred dividends if their effect was not anti-dilutive.

	Dividends accreted				Dividends per share
	For the six months ended				For the six months ended
	June 30,				June 30,
	2016		2015		2016		2015
Preferred stock dividends in arrears Series A	$	1,870	$	102,283	$	0.012	$	0.025
Preferred stock dividends in arrears Series B	$	-0-	$	-0-	$	-0-	$	-0-
Preferred stock dividends in arrears Series C	$	-0-	$	-0-	$	-0-	$	-0-

Warrants Issued for Services and in Capital Transactions

The following tables summarize all outstanding warrants for the periods ended June 30, 2016 and December 31, 2015, and the related changes during these periods.

June 30, 2016									June 30, 2016
Warrants outstanding									Warrants exercisable
Range of exercise price			Number outstanding		Weighted average remaining contractual life		Weighted average exercise price		Number exercisable		Weighted average exercise price
$0.25	–	$0.60		27,860,000		3.21	$	0.42		27,860,000	$	0.42

December 31, 2015									December 31, 2015
Warrants outstanding									Warrants exercisable
Range of exercise price			Number outstanding		Weighted average remaining contractual life		Weighted average exercise price		Number exercisable		Weighted average exercise price
$0.25	–	$0.60		22,900,000		1.76	$	0.46		22,900,000	$	0.46

Warrants
Balance at December 31, 2014		48,463,517
Issued		3,800,000
Exercised		-0-
Cancelled		(29,363,517	)
Expired/forfeited		-0-
Balance at December 31, 2015		22,900,000
Issued		4,970,000
Exercised		-0-
Expired/forfeited		(10,000	)
Balance at June 30, 2016		27,860,000
Warrants exercisable at June 30, 2016		27,860,000
Weighted average fair value of warrants granted during 2016	$	0.15

33

OMNICOMM SYSTEMS, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2016 AND JUNE 30, 2015

(unaudited)

Other Comprehensive (Loss)

Due to the availability of net operating losses and related deferred tax valuations, there is no tax effect associated with any component of other comprehensive (loss). The following table lists the beginning balance, activity and ending balance of the components of accumulated other comprehensive (loss).

	Foreign currency translation			Accumulated other comprehensive (loss)
Balance at December 31, 2014	$	(243,827	)	$	(243,827	)
2015 Activity		(122,528	)		(122,528	)
Balance at December 31, 2015		(366,355	)		(366,355	)
2016 Activity		(17,787	)		(17,787	)
Balance at June 30, 2016	$	(384,142	)	$	(384,142	)

NOTE 13: EMPLOYEE EQUITY INCENTIVE PLANS

Stock Option Plans

Description of 2016 Equity Incentive Plan

In 2016, the Company’s Board of Directors and shareholders approved the OmniComm Systems, Inc. 2016 Equity Incentive Plan (the “2016 Plan”). The 2016 Plan provides for granting Incentive Stock Options, Nonqualified Stock Options, Stock Appreciation Rights, Restricted Stock Awards, Phantom Stock Unit Awards and Performance Share Units. The 2016 Plan provides for the issuance of up to 10,000,000 shares of our common stock for issuance upon awards granted under the 2016 Plan. In addition, the number of shares of common stock available for issuance under the 2016 Plan shall automatically increase on January 1st of each year for a period of nine (9) years commencing on January 1, 2017 and ending on (and including) January 1, 2025, in an amount equal to five percent (5%) of the total number of shares authorized under the 2016 Plan. Unless earlier terminated by the Board, the 2016 Plan shall terminate on June 29, 2026.

The maximum term for any option grant under the 2016 Plan is ten years from the date of the grant; however, options granted under the 2016 Plan will generally expire five years from the date of grant. Options granted to employees generally vest either upon grant or in two installments. The first vesting, which is equal to 50% of the granted stock options, usually occurs upon completion of one full year of employment from the date of grant and the second vesting usually occurs on the second anniversary of the date of grant. The vesting period typically begins on the date of hire for new employees and on the date of grant for existing employees. The restrictions on restricted shares granted to employees generally lapse in three equal annual installments on the anniversary of the date of grant.  Any unvested stock options or restricted shares with restrictions that have not lapsed that are granted under the 2016 Plan are forfeited and expire upon termination of employment.

34

OMNICOMM SYSTEMS, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2016 AND JUNE 30, 2015

(unaudited)

As of June 30, 2016, there were -0- outstanding options and -0- restricted stock shares that have been granted under the 2016 Plan. At June 30, 2016, there were 10,000,000 shares available for grant as options or other forms of share-based compensation under the 2016 Plan.

Description of 2009 Equity Incentive Plan

In 2009, the Company’s Board of Directors and shareholders approved the OmniComm Systems, Inc. 2009 Equity Incentive Plan (the “2009 Plan”). On June 16, 2016 the 2009 Plan terminated upon the approval of the 2016 Plan. The 2009 Plan provided for granting Incentive Stock Options, Nonqualified Stock Options, Stock Appreciation Rights, Restricted Stock Awards, Phantom Stock Unit Awards and Performance Share Units. Pursuant to the 2009 Plan, 7,500,000 shares of the Company’s common stock were authorized for issuance.

The maximum term for any option grant under the 2009 Plan was ten years from the date of the grant; however, options granted under the 2009 Plan generally expired five years from the date of grant. Options granted to employees generally vested either upon grant or in two installments. The first vesting, which was equal to 50% of the granted stock options, usually occurred upon completion of one full year of employment from the date of grant and the second vesting usually occurred on the second anniversary of the date of grant. The vesting period typically began on the date of hire for new employees and on the date of grant for existing employees. The restrictions on restricted shares granted to employees generally lapsed in three equal annual installments on the anniversary of the date of grant.  Any unvested stock options or restricted shares with restrictions that had not lapsed that were granted under the 2009 Plan were forfeited and expired upon termination of employment.

As of June 30, 2016, there were 982,500 outstanding options and 3,893,330 restricted stock shares that have been granted under the 2009 Plan. At June 30, 2016, there were -0- shares available for grant as options or other forms of share-based compensation under the 2009 Plan.

The following table summarizes the stock option activity for the Company’s equity incentive plans:

	Number of options			Weighted average exercise price (per share)		Weighted average remaining contractual term (in years)		Aggregate intrinsic value
Outstanding at December 31, 2014		3,130,000		$	0.20		1.59	$	364,900
Granted		225,000			0.25
Exercised		(292,500	)		0.12
Forfeited/cancelled/expired		(1,060,000	)		0.35
Outstanding at December 31, 2015		2,002,500			0.14		1.40	$	198,990
Granted		-0-			-0-
Exercised		(1,012,500	)		0.13
Forfeited/cancelled/expired		(7,500	)		0.13
Outstanding at June 30, 2016		982,500		$	0.16		1.99	$	57,088
Vested and exercisable at June 30, 2016		845,000		$	0.15		1.70	$	54,938

The aggregate intrinsic value in the table above represents the total intrinsic value (the difference between the Company’s closing stock price at quarter-end and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on June 30, 2016.

The total number of shares vesting and the fair value of shares vesting for the six month periods ended June 30, 2016 and June 30, 2015, respectively, was:

Fair value of options vesting for the six months ended	Number of options vested		Fair value of options vested
June 30, 2016		112,500	$	25,153
June 30, 2015		125,000	$	22,235

Cash received for stock option exercises for the six month periods ended June 30, 2016 and June 30, 2015 was $125,000 and $27,250, respectively. Due to the Company’s net loss position, no income tax benefit has been realized during the six month periods ended June 30, 2016 and June 30, 2015.

35

OMNICOMM SYSTEMS, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2016 AND JUNE 30, 2015

(unaudited)

The following table summarizes information concerning options outstanding at June 30, 2016:

Awards breakdown by price range at June 30, 2016
			Outstanding						Vested
Strike price range ($)			Outstanding stock options		Weighted average remaining contractual life		Weighted average outstanding strike price		Vested stock options		Weighted average remaining vested contractual life		Weighted average vested strike price
0.00	to	0.20		757,500		1.72	$	0.13		682,500		1.48	$	0.13
0.21	to	0.29		125,000		2.33		0.22		112,500		2.17		0.21
0.30	to	0.49		100,000		3.67		0.30		50,000		3.67		0.30
0.50	to	0.70		-0-		0.00		0.00		-0-		0.00		0.00
0.00	to	0.70		982,500		1.99	$	0.16		845,000		1.70	$	0.15

The following table summarizes information concerning options outstanding at December 31, 2015:

Awards breakdown by price range at December 31, 2015
			Outstanding						Vested
Strike price range ($)			Outstanding stock options		Weighted average remaining contractual life		Weighted average outstanding strike price		Vested stock options		Weighted average remaining vested contractual life		Weighted average vested strike price
0.00	to	0.20		1,777,500		1.14	$	0.13		1,652,500		0.93	$	0.13
0.21	to	0.29		125,000		2.83		0.22		100,000		2.46		0.21
0.30	to	0.49		100,000		4.17		0.30		-0-		0.00		0.00
0.50	to	0.70		-0-		0.00		0.00		-0-		0.00		0.00
0.00	to	0.70		2,002,500		1.40	$	0.14		1,752,500		1.02	$	0.13

The weighted average fair value (per share) of options granted during the six month period ended June 30, 2016 was $0.0 as no options were granted during the period and $0.26 during the six month period ended June 30, 2015. The Black Scholes option-pricing model was utilized to calculate these values.

Basis for Fair Value Estimate of Share-Based Payments

Based on analysis of its historical volatility, the Company expects that the future volatility of its share price is likely to be similar to the historical volatility the Company experienced since the Company’s commercialization activities were initiated during the second half of 2000. The Company used a volatility calculation utilizing the Company’s own historical volatility to estimate its future volatility for purposes of valuing the share-based payments that have been granted. Actual volatility, and future changes in estimated volatility, may differ substantially from the Company’s current estimates.

The Company utilizes the historical data available regarding employee and director exercise activity to calculate an expected life of the options. The table below presents the weighted average expected life in years of options granted under the Plan as described above. The risk-free rate of the stock options is based on the U.S. Treasury yield curve in effect at the time of grant, which corresponds with the expected term of the option granted.

36

OMNICOMM SYSTEMS, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2016 AND JUNE 30, 2015

(unaudited)

Below are the assumptions for the fair value of share-based payments for the periods ended June 30, 2016 and December 31, 2015.

	Stock option assumptions for the period ended
Stock option assumptions	June 30, 2016		December 31, 2015
Risk-free interest rate		1.30%		1.20%
Expected dividend yield		0.0%		0.0%
Expected volatility		157.6%		183.8%
Expected life of options (in years)		5		5

The following table summarizes weighted average grant date fair value activity for the Company’s incentive stock plans:

	Weighted average grant date fair value
	for the six months ended June 30,
	2016		2015
Stock options granted during the period	$	-0-	$	0.26
Stock options vested during the period	$	0.22	$	0.18
Stock options forfeited during the period	$	0.11	$	0.25

A summary of the status of the Company’s non-vested shares underlying stock options as of June 30, 2016, and changes during the six month period ended June 30, 2016 is as follows:

	Shares underlying stock options		Weighted average grant date fair value
Nonvested shares at January 1, 2016		250,000	$	0.22
Nonvested shares at June 30, 2016		137,500	$	0.22

As of June 30, 2016, approximately $17,927 of total unrecognized compensation cost related to unvested stock options is expected to be recognized over a weighted-average period of 0.9 years.

NOTE 14: SUBSEQUENT EVENTS

Subsequent to June 30, 2016 the Company repaid $200,000 on its revolving Line of Credit.

Subsequent to June 30, 2016, one employee exercised options that had been granted to the employee. As a result 3,038 common shares were issued to the employee.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

General 

The following information should be read in conjunction with the information contained in our unaudited condensed consolidated financial statements and notes thereto appearing elsewhere herein and other information set forth in this report.

Forward-Looking Statements

Statements contained in this Form 10-Q that are not historical fact are "forward-looking statements". These statements can often be identified by the use of forward-looking terminology such as "estimate", "project", "believe", "expect", "may", "will", "should", "intends", or "anticipates" or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy that involve risks and uncertainties. We wish to caution the reader that these forward-looking statements, contained in this Form 10-Q regarding matters that are not historical facts, are only predictions and are based on information available at the time and/or management’s good faith belief with respect to future events. No assurance can be given that plans for the future will be consummated or that the future results indicated, whether expressed or implied, will be achieved. While sometimes presented with numerical specificity, these plans and projections and other forward-looking statements are based upon a variety of assumptions, which we consider reasonable, but which nevertheless may not be realized. Because of the number and range of the assumptions underlying our projections and forward-looking statements, many of which are subject to significant uncertainties and contingencies that are beyond our reasonable control, some of the assumptions inevitably will not materialize, and unanticipated events and circumstances may occur subsequent to the date of this Form 10-Q. Therefore, our actual experience and results achieved during the period covered by any particular projections or forward-looking statements may differ substantially from those projected. Consequently, the inclusion of projections and other forward-looking statements should not be regarded as a representation by us or any other person that these plans will be consummated or that estimates and projections will be realized, and actual results may vary materially. There can be no assurance that any of these expectations will be realized or that any of the forward-looking statements contained herein will prove to be accurate. Forward-looking statements speak only as of the date the statement was made. The Company does not undertake any obligation to update or revise any forward-looking statement made by it or on its behalf, whether as a result of new information, future events or otherwise.

Overview

We are a healthcare technology company that provides web-based electronic data capture (“EDC”) solutions and related value-added services to pharmaceutical and biotech companies, clinical research organizations (“CROs”), and other clinical trial sponsors worldwide. Our proprietary EDC software applications: TrialMaster^®; TrialOne^®; eClinical Suite and Promasys^® (the “EDC Software”), allow clinical trial sponsors and investigative sites to securely collect, validate, transmit and analyze clinical trial data electronically (“eClinical”).

In 2016, the primary focus of our strategy includes:

● Increasing our penetration of the Phase I trial market with our dedicated Phase I solution, TrialOne

● Stimulating demand by providing clinical trial sponsors with high value eClinical applications and services

● Expanding our penetration of the large pharmaceutical sponsor market

● Broadening our suite of services and software applications on an organic research and product development basis and on a selective basis via the acquisition or licensing of complementary solutions

● Expanding our business development efforts in Europe and East Asia to capitalize on our operational and clinical capabilities vis-à-vis our competition in that geographic market

Our operating focus is first, to increase our sales and marketing capabilities and penetration rate and secondly, to continue developing and improving our software solutions and services to ensure our services and products remain an attractive, high-value EDC choice.  Our ability to compete within the EDC and eClinical industries is predicated on our ability to continue enhancing and broadening the scope of solutions we offer. Our research and product development efforts are focused on developing new, complementary software solutions, as well as enhancing our existing software solutions through the addition of increased functionality. We spent approximately $1,315,525 and $1,355,783 on research and product development activities during the six months ended June 30, 2016 and June 30, 2015, respectively.  The majority of these expenses represent salaries and related benefits to our developers which include the costs associated with the continued development of our EDC Software applications to meet current customer requirements and with our efforts at enhancing our suite of products by incorporating new features and services we believe will improve the products and consequently improve our market position. Our research and product development team is comprised of software programmers, engineers and related support personnel. 

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Our clients are able to partially or completely license our EDC solutions. The licensing business model provides our clients with a more cost effective means of deploying our EDC solutions on a large-scale basis. Our licensed products, falling under the auspices of either a Tech Transition (partial transfer with some services performed by OmniComm) or Tech Transfer, allows us to broaden our potential client base, provides us with a high-margin revenue source and affords us the ability to improve our competitive position within the EDC industry.  

We feel that the momentum established from new client acquisitions in 2015 and year to date 2016 and our ability to retain clients for repeat engagements provide a good operating base from which to build during the remainder of 2016.  We increased the marketing and business development budget for our TrialOne product during 2015 and the first six months of 2016 as we place increased emphasis on increasing our penetration of the Phase I market in the U.S. and Europe as well as in East Asia. We believe that segment of the EDC market is the least penetrated and allows for the greatest potential increases in market share and in sales volumes.  We expect to continue increasing the level of resources deployed in our sales and marketing efforts through the addition of sales personnel and by increasing the number of industry tradeshows and conferences that we attend. We feel that a combination of our existing infrastructure, broadened array of eClinical products and services and increased success in new client acquisition, coupled with our ability to retain our existing clients will allow us to compete effectively within the EDC market. 

The six months ended June 30, 2016 compared to the six months ended June 30, 2015

Results of Operations

A summarized version of our results of operations for the six months ended June 30, 2016 and June 30, 2015 is included in the table below.

Summarized Statement of Operations  For the six months ended June 30,
	2016			% of Revenues			2015			% of Revenues			$ Change			% Change
Total revenues	$	10,460,999					$	9,673,026					$	787,973			8.1	%
Cost of sales		2,550,323			24.4	%		2,401,545			24.8	%		148,778			6.2	%
Gross margin		7,910,676			75.6	%		7,271,481			75.2	%		639,195			8.8	%
Salaries, benefits and related taxes		5,443,425			52.0	%		5,542,217			57.3	%		(98,792	)		-1.8	%
Rent		501,058			4.8	%		482,711			5.0	%		18,347			3.8	%
Consulting		48,000			0.5	%		176,740			1.8	%		(128,740	)		-72.8	%
Legal and professional fees		203,296			1.9	%		218,128			2.3	%		(14,832	)		-6.8	%
Other expenses		683,866			6.5	%		678,965			7.0	%		4,901			0.7	%
Selling, general and administrative		824,775			7.9	%		827,607			8.6	%		(2,832	)		-0.3	%
Total operating expenses		7,704,420			73.6	%		7,926,368			82.0	%		(221,948	)		-2.8	%
Operating income/(loss)		206,256			2.0	%		(654,887	)		-6.8	%		861,143			131.5	%
Interest expense		(619,059	)		-5.9	%		(1,445,682	)		-14.9	%		826,623			57.2	%
Interest income		2			0.0	%		-0-			0.0	%		2			n/a
Change in derivatives		(2,458,836	)		-23.5	%		4,072,798			42.1	%		(6,531,634	)		-160.4	%
Transaction gain/(loss)		(510	)		0.0	%		(48,076	)		-0.5	%		47,566			98.9	%
Income/(loss) before income taxes and dividends		(2,872,147	)		-27.5	%		1,924,153			19.9	%		(4,796,300	)		-249.3	%
Income tax (expense)		(59	)		0.0	%		(385	)		0.0	%		326			84.7	%
Net income/(loss)		(2,872,206	)		-27.5	%		1,923,768			19.9	%		(4,795,974	)		-249.3	%
Total preferred stock dividends		(1,870	)		0.0	%		(102,283	)		-1.1	%		100,413			98.2	%
Net income/(loss) attributable to common stockholders	$	(2,874,076	)		-27.5	%	$	1,821,485			18.8	%	$	(4,695,561	)		-257.8	%

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The table below provides a comparison of our recognized revenues for the six months ended June 30, 2016 and June 30, 2015.

	For the six months ended
Revenue activity	June 30, 2016				June 30, 2015				$ Change			% Change
Set-up fees	$	3,312,733	31.7	%	$	2,882,153	29.7	%	$	430,580			14.9	%
Change orders		669,899	6.4	%		354,808	3.7	%		315,091			88.8	%
Maintenance		2,337,965	22.3	%		2,501,407	25.9	%		(163,442	)		-6.5	%
Software licenses		2,202,288	21.0	%		1,527,374	15.8	%		674,914			44.2	%
Professional services		1,398,136	13.4	%		1,924,967	19.9	%		(526,831	)		-27.4	%
Hosting		539,978	5.2	%		482,317	5.0	%		57,661			12.0	%
Total	$	10,460,999	100.0	%	$	9,673,026	100.0	%	$	787,973			8.1	%

Overall revenue increased by $787,973 or 8.1% for the six months ended June 30, 2016 compared with revenue for the six months ended June 30, 2015. This increase is primarily the result of increases in software licenses, set-up fees, and change orders.

We recorded revenue of $8,149,218 including $3,312,733 from set-up fees and $1,520,278 from maintenance revenues associated with our TrialMaster suite during the six months ended June 30, 2016 compared with revenue of $6,560,021 that included $2,882,153 in set-up fees and $1,569,012 in maintenance revenues during the six months ended June 30, 2015.

We recorded $773,626 in revenues associated with clients using the eClinical Suite during the six months ended June 30, 2016 compared with revenue of $936,943 for the six months ended June 30, 2015.  eClinical Suite revenues are primarily comprised of license subscriptions and revenues associated with our hosting and maintenance services.

We recorded $534,986 in revenues in maintenance and $115,717 from hosting activities associated with the eClinical Suite during the six months ended June 30, 2016 compared with revenue of $637,765 from maintenance and $130,217 from hosting activities for the six months ended June 30, 2015.  Generally, these revenues are paid quarterly and are connected to hosting and client support for clients licensing the eClinical Suite.

We recorded revenue of $1,030,734 including $582,073 from software licensing and $264,356 from professional services associated with clients utilizing our TrialOne EDC software for the six months ended June 30, 2016 compared with revenue of $1,832,597 including $698,729 from software licensing and $908,870 from professional services for the six months ended June 30, 2015.   We are continuing to enhance our efforts at developing our sales and marketing campaign for the TrialOne application.  TrialOne revenues are primarily comprised of license subscriptions and maintenance services since the software is currently only sold on a technology transfer basis.

We recorded revenue of $341,315 for the six months ended June 30, 2016 including $99,641 from software licensing and $168,396 from maintenance associated with clients utilizing the Promasys EDC solution as compared to revenue of $343,465 for the six months ended June 30, 2015 including $94,923 from software licensing and $179,832 from maintenance.

Our TrialMaster EDC application has historically been sold on an application service provider (“ASP”) basis that provides EDC and other services such as an enterprise management suite which assists our clients in the pharmaceutical, biotechnology and medical device industries in accelerating the completion of clinical trials. During 2009 we completed the acquisition of the eResearch EDC Assets and TrialOne and in 2013 we acquired Promasys (collectively the “Acquired Software”).  These software applications have historically been sold on a licensed or technology transfer basis.  As we continue developing our software applications and our client relationships mature, we expect some of our clients to deploy TrialMaster on a licensed, rather than ASP hosted basis. We expect the Acquired Software applications to continue to be sold primarily on a licensed basis.

TrialMaster contracts for ASP services provide for pricing that is based on both the size and duration of the clinical trial. Size parameters include the number of case report forms used to collect data and the number of sites utilizing TrialMaster. The client will pay a trial setup fee at the beginning of a project based on the previously mentioned factors and then pay an on-going maintenance fee for the duration of the clinical trial that provides software, network and site support during the trial.

Generally, ASP contracts will range in duration from one month to several years. ASP setup fees are generally recognized in accordance with ASC 605, “Revenue Recognition”, which requires that the revenues be recognized ratably over the life of the contract. ASP maintenance fee revenues are earned and recognized monthly. Costs associated with contract revenues are recognized as incurred.

License contracts are typically sold on a subscription basis that takes into account system usage both on a data volume and system user basis.  Pricing includes additional charges for consulting services associated with the installation, validation, training and deployment of our eClinical software and solutions.  Licensed contracts of the eClinical Suite have historically been sold both on a term and on a perpetual license basis with hosting and maintenance charges being paid quarterly.  The Company expects any licenses it sells of its software products to be sold under three to five year term licenses.

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Our top five customers accounted for approximately 40% of our revenues during the six months ended June 30, 2016 and approximately 37% of our revenues during the six months ended June 30, 2015.  One customer accounted for approximately 20% of our revenues during the six months ended June 30, 2016.   One customer accounted for approximately 13% of our revenues the six months ended June 30, 2015. The loss of any of these contracts or these customers in the future could adversely affect our results of operations. 

Cost of goods sold increased approximately 6% or $149,000 for the six months ended June 30, 2016 as compared to the six months ended June 30, 2015.  Cost of goods sold were approximately 24% of revenues for the six months ended June 30, 2016 compared to approximately 25% for the six months ended June 30, 2015. Cost of goods sold relates primarily to (i) salaries and related benefits associated with the programmers, developers and systems analysts producing clinical trials on behalf of our clients and (ii) the costs associated with pass-through revenues. Cost of goods sold increased during the six months ended June 30, 2016 primarily due to an increase in pass-through expenses. The pass-through revenue and expense primarily relate to specific work being performed for a few clients. At this time we do not expect the volume of the pass-through revenue and expense to grow significantly and therefore we do not expect any significant degradation of our gross margin.

Overall, total operating expenses decreased approximately 3% for the six months ended June 30, 2016 compared to the six months ended June 30, 2015.  The decrease in operating expenses is primarily the result of a decrease in consulting; salaries, benefits and related taxes; and travel related expenses.

Salaries and related expenses were our biggest operating expense at 71% of total operating expenses for the six months ended June 30, 2016 compared to 70% of total operating expenses for the six months ended June 30, 2015.  Salaries and related expenses decreased by 2% for the six months ended June 30, 2016 compared to the same period ended June 30, 2015.  The table below provides a summary of the significant components of salary and related expenses by primary cost category.

For the six months ended
	June 30, 2016		June 30, 2015		$ Change			% Change
OmniComm corporate operations	$	3,725,538	$	3,757,997	$	(32,459	)		-0.9	%
New Jersey operations office		523,556		502,225		21,331			4.2	%
OmniComm Europe, GmbH		305,637		350,828		(45,191	)		-12.9	%
OmniComm Ltd.		367,784		463,711		(95,927	)		-20.7	%
OmniComm Spain		134,254		73,008		61,246			83.9	%
OmniComm Promasys B.V.		275,997		277,528		(1,531	)		-0.6	%
Employee stock compensation		110,659		116,920		(6,261	)		-5.4	%
Total salaries and related expenses	$	5,443,425	$	5,542,217	$	(98,792	)		-1.8	%

As of June 30, 2016, we employed approximately 119 employees world-wide as follows: 55 employees out of our headquarters in Fort Lauderdale, Florida, 8 employees out of a regional operating office in Somerset, New Jersey, 21 field employees located throughout the United States, Our wholly-owned subsidiary, OmniComm Europe, GmbH, employs 18 employees in Bonn, Germany.  Our wholly-owned subsidiary, OmniComm Ltd., employs 10 employees in Southampton, England.  Our wholly-owned subsidiary, OmniComm Spain, S. L. employs 2 employees in Barcelona, Spain.  Our wholly-owned subsidiary, OmniComm Promasys B.V. employs 4 employees in the Netherlands and 1 employee in Japan. We believe that relations with our employees are good.  None of our employees are represented by a collective bargaining agreement.

During the six months ended June 30, 2016 and the six months ended June 30, 2015 we incurred $110,659 and $116,920, respectively, in salary expense in connection with ASC 718, Compensation – Stock Compensation, which establishes standards for transactions in which an entity exchanges its equity instruments services from employees. This standard requires companies to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award.

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Rent and related expenses increased by approximately 4% during the six months ended June 30, 2016 compared to the six months ended June 30, 2015.  The table below details the significant portions of our rent expense.  Our primary data site is located at a co-location facility in Cincinnati, Ohio and we will continue utilizing this facility for the foreseeable future since it is designed to ensure 100% production system up-time and to provide system redundancy. We also utilize co-location and disaster recovery space in the Fort Lauderdale, Florida area. This facility provides us with disaster recovery and business continuity services for our operations. In 2015 we added a co-location facility in Frankfurt Germany. We currently lease office space in Bonn, Germany for our European subsidiary, OmniComm Europe, GmbH under a lease that expires in July 2017. We currently lease office space for a regional operating office in New Jersey under a lease that expires in March 2021. Our OmniComm Ltd. subsidiary leases office space in Southampton, UK under a lease that expires in September 2017. Our OmniComm Promasys B.V. subsidiary leases office space in Leiden, the Netherlands under a lease that expires in October 2018. Our Fort Lauderdale corporate office lease expires in February 2023. The table below provides the significant components of our rent related expenses by location or subsidiary. Included in rent during the six months ended June 30, 2016 was an increase in expense of $74,264 in non-cash, straight line rent recorded to give effect to contractual, inflation-based rent increases in our leases compared to a decrease in expense of $12,087 for the six months ended June 30, 2015.

For the six months ended
	June 30, 2016		June 30, 2015			$ Change			% Change
Corporate office	$	109,133	$	176,672		$	(67,539	)		-38.2	%
Co-location and disaster recovery facilities		212,768		212,188			580			0.3	%
New Jersey operations office		27,117		27,730			(613	)		-2.2	%
OmniComm Europe, GmbH		39,251		38,828			423			1.1	%
OmniComm Ltd.		31,604		32,534			(930	)		-2.9	%
OmniComm Spain		3,335		3,322			13			0.4	%
OmniComm Promasys B.V.		3,586		3,524			62			1.8	%
Straight-line rent expense		74,264		(12,087	)		86,351			714.4	%
Total	$	501,058	$	482,711		$	18,347			3.8	%

Consulting services expense decreased to $48,000 for the six months ended June 30, 2016 compared with $176,740 for the six months ended June 30, 2015. Consulting services are comprised of fees paid to consultants for help with product development and for services related to our sales and marketing efforts. Sales and marketing related consulting expenses increased year over year due to the utilization of a new consultant in 2016. Product development consulting expenses decreased year over year as the work being performed by the consultant was completed in 2015. The table provided below provides the significant components of the expenses incurred related to consulting services.

For the six months ended
Expense Category	June 30, 2016		June 30, 2015		$ Change			% Change
Sales and marketing	$	48,000	$	-0-	$	48,000			n/a
Product development		-0-		176,740		(176,740	)		-100.0	%
Total	$	48,000	$	176,740	$	(128,740	)		-72.8	%

Legal and professional fees decreased approximately 7% for the six months ended June 30, 2016 compared with the six months ended June 30, 2015. Professional fees include fees paid to our auditors for services rendered on a quarterly and annual basis in connection with our filings with the Securities and Exchange Commission (“SEC”) and fees paid to our attorneys in connection with representation in matters involving litigation and acquisitions or for services rendered to us related to securities and SEC related matters. The table below compares the significant components of our legal and professional fees for the six months ended June 30, 2016 and June 30, 2015, respectively.

For the six months ended
Expense Category	June 30, 2016		June 30, 2015		$ Change			% Change
Financial advisory	$	-0-	$	37,500	$	(37,500	)		-100.0	%
Audit and related		38,155		47,169		(9,014	)		-19.1	%
Accounting services		94,390		78,099		16,291			20.9	%
Legal-employment related		5,444		34,766		(29,322	)		-84.3	%
Legal-financial related		50,300		11,950		38,350			320.9	%
General legal		15,007		8,644		6,363			73.6	%
Total	$	203,296	$	218,128	$	(14,832	)		-6.8	%

Selling, general and administrative expenses (“SG&A”) decreased by $2,832 or approximately 0.3% for the six months ended June 30, 2016 compared to the six months ended June 30, 2015. SG&A expenses relate primarily to costs incurred in running our offices in Fort Lauderdale, Florida, Monmouth Junction, New Jersey, Southampton, England, Barcelona, Spain, Bonn, Germany and Leiden, the Netherlands on a day-to-day basis and other costs not directly related to other captioned items in our income statement. SG&A includes the cost of office equipment and supplies, the costs of attending conferences and seminars and other expenses incurred in the normal course of business. In 2015 we spent approximately $635,000 on marketing, sales and advertising. We expect that the 2016 marketing, sales and advertising expenses will be approximately $900,000 as we increase our attendance at tradeshows and our marketing efforts worldwide.

42

During the six months ended June 30, 2016 we recognized bad debt expense of $33,307 compared to a credit of $5,402 for bad debt for the six months ended June 30, 2015.  This change was primarily the result of an increase in aged receivable balances that caused us to increase our reserve. During the remainder of 2016 we will continue to carefully and actively manage our potential exposure to bad debt by closely monitoring our accounts receivable and proactively taking the action necessary to limit our exposure.  We have been very successful in managing and collecting our outstanding accounts receivable.  We believe that our current allowance for uncollectible accounts accurately reflects any accounts which may prove uncollectible during the remainder of 2016.

Interest expense was $619,059 for the six months ended June 30, 2016 compared to $1,445,682 for the six months ended June 30, 2015, a decrease of $826,623.  Interest incurred to related parties was $443,686 during the six months ended June 30, 2016 and $1,229,785 for the six months ended June 30, 2015.  Included in interest expense is the accretion of discounts recorded related to financial instrument derivatives that were deemed a part of the financings we undertook in 2008 and 2009 and relating to warrants issued during 2011 and 2016. Interest expense decreased year over year primarily due to the November 2015 transactions in which our Chief Executive Officer and Director, Cornelis F. Wit, cancelled $7.3M of outstanding debt due to him and 29,363,517 warrants to purchase the Company’s stock at $0.25 in exchange for 29,363,517 common shares and converted $1.9M of convertible notes into 7,660,000 common shares. The table below provides detail on the significant components of interest expense for the six months ended June 30, 2016 and June 30, 2015

Interest Expense
	For the six months ended
Debt Description	June 30, 2016		June 30, 2015		$ Change
Accretion of discount from derivatives	$	35,209	$	330,266	$	(295,057	)
August 2008 convertible notes		95,737		95,211		526
December 2008 convertible notes		272,551		296,244		(23,693	)
September 2009 secured convertible debentures		43,381		71,408		(28,027	)
December 2009 convertible debentures		-0-		88,665		(88,665	)
General interest		96,091		104,330		(8,239	)
Related party notes payable		76,090		459,558		(383,468	)
Total	$	619,059	$	1,445,682	$	(826,623	)

We evaluate the cost of capital available to us in combination with our overall capital structure and the prevailing market conditions in deciding what financing best fulfills our short and long-term capital needs. Given the overall economic climate and in particular the difficulties nano-cap companies have experienced in obtaining financing, we believe the structure and terms of the transactions we entered into during 2015 and 2016 were obtained at the best terms available to the Company.

We record unrealized gains/losses related to changes in our derivative liabilities associated with the issuance of convertible debt that occurred during 2008 and 2009 and warrants associated with promissory notes issued in 2011 and 2016.  We recorded a net unrealized loss of $2,458,836 during the six months ended June 30, 2016 compared with a net unrealized gain of $4,072,798 during the six months ended June 30, 2015.  The unrealized gains/losses can be attributed to fair value calculations undertaken periodically on the warrant and conversion feature liabilities recorded by us at the time the convertible debt and promissory notes were issued.  Accordingly the warrant and conversion feature liabilities are increased or decreased based on the fair value calculations made at each quarterly balance sheet date.  These non-cash gains and losses have materially impacted our results of operations during the six months ended June 30, 2016 and June 30, 2015 and can be reasonably anticipated to materially affect our net loss or net income in future periods. The fair value calculations are heavily reliant on the value of our common stock and on the calculated volatility of the price of our common stock on the OTCQX Marketplace. Accordingly, significant changes in our stock price will create large unrealized gains and losses on our financial statements. We are, however, unable to estimate the amount of such income/expense in future periods as the income/expense is partly based on the market price of our common stock at the end of a future measurement date. In addition, if we issue securities in the future which are classified as derivatives we will incur expense and income items in future periods. Investors are cautioned to consider the impact of this non-cash accounting treatment on our financial statements.

The Company recorded arrearages of $-0- and $102,283 in its 5% Series A Preferred Stock dividends for the six month periods ended June 30, 2016, and June 30, 2015, respectively. The below table contains the cumulative arrearage for each series of preferred stock.

Series of Preferred Stock	Cumulative Arrearage
Series A	$	-0-
Series B		609,887
Series C		1,472,093
Total preferred stock arrearages	$	2,081,980

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The three months ended June 30, 2016 compared to the three months ended June 30, 2015

Results of Operations

A summarized version of our results of operations for the three months ended June 30, 2016 and June 30, 2015 is included in the table below.

Summarized Statement of Operations For the three months ended June 30,
				% of						% of			$			%
	2016			Revenues			2015			Revenues			Change			Change
Total revenues	$	5,303,488					$	4,834,899					$	468,589			9.7	%
Cost of sales		1,376,296			26.0	%		1,049,948			21.7	%		326,348			31.1	%
Gross margin		3,927,192			74.0	%		3,784,951			78.3	%		142,241			3.8	%
Salaries, benefits and related taxes		2,710,513			51.1	%		2,764,113			57.2	%		(53,600	)		-1.9	%
Rent		244,458			4.6	%		227,480			4.7	%		16,978			7.5	%
Consulting		24,000			0.5	%		81,311			1.7	%		(57,311	)		-70.5	%
Legal and professional fees		80,459			1.5	%		98,592			2.0	%		(18,133	)		-18.4	%
Other expenses		394,177			7.4	%		318,671			6.6	%		75,506			23.7	%
Selling, general and administrative		441,721			8.3	%		467,786			9.7	%		(26,065	)		-5.6	%
Total operating expenses		3,895,328			73.4	%		3,957,953			81.9	%		(62,625	)		-1.6	%
Operating income/(loss)		31,864			0.6	%		(173,002	)		-3.6	%		204,866			118.4	%
Interest expense		(322,554	)		-6.1	%		(745,810	)		-15.4	%		423,256			56.8	%
Interest income		1			0.0	%		-0-			0.0	%		1			n/a
Change in derivatives		(1,696,825	)		-32.0	%		5,590,517			115.6	%		(7,287,342	)		-130.4	%
Transaction gain/(loss)		(7,732	)		-0.1	%		7,248			0.1	%		(14,980	)		-206.7	%
Income/(loss) before income taxes and dividends		(1,995,246	)		-37.6	%		4,678,953			96.8	%		(6,674,199	)		-142.6	%
Income tax (expense)		-0-			0.0	%		-0-			0.0	%		-0-			n/a
Net income/(loss)		(1,995,246	)		-37.6	%		4,678,953			96.8	%		(6,674,199	)		-142.6	%
Total preferred stock dividends		-0-			0.0	%		(51,424	)		-1.1	%		51,424			100.0	%
Net income/(loss) attributable to common stockholders	$	(1,995,246	)		-37.6	%	$	4,627,529			95.7	%	$	(6,622,775	)		-143.1	%

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The table below provides a comparison of our recognized revenues for the three months ended June 30, 2016 and June 30, 2015.

	For the three months ended
Revenue Activity	June 30, 2016				June 30, 2015				$ Change			% Change
Set-up fees	$	1,793,399	33.8	%	$	1,617,609	33.5	%	$	175,790			10.9	%
Change orders		392,146	7.4	%		212,767	4.4	%		179,379			84.3	%
Maintenance		1,136,745	21.4	%		1,269,530	26.3	%		(132,785	)		-10.5	%
Software licenses		1,001,374	18.9	%		786,437	16.3	%		214,937			27.3	%
Professional services		745,816	14.1	%		707,970	14.5	%		37,846			5.3	%
Hosting		234,008	4.4	%		240,586	5.0	%		(6,578	)		-2.7	%
Total	$	5,303,488	100.0	%	$	4,834,899	100.0	%	$	468,589			9.7	%

Overall revenue increased by $468,589 or 9.7% for the three months ended June 30, 2016 compared with revenue for the three months ended June 30, 2015. This increase is primarily the result of increases in software licenses, change orders and set-up fees.

We recorded revenue of $4,311,780 including $1,793,399 from set-up fees and $755,910 from maintenance revenues associated with our TrialMaster suite during the three months ended June 30, 2016 compared with revenue of $3,426,650 that included $1,617,610 in set-up fees and $791,564 in maintenance revenues during the three months ended June 30, 2015.

We recorded $365,181 in revenues associated with clients using the eClinical Suite during the three months ended June 30, 2016 compared with revenue of $471,774 for the three months ended June 30, 2015.  eClinical Suite revenues are primarily comprised of license subscriptions and revenues associated with our hosting and maintenance services.

We recorded $244,964 in revenues from maintenance and $59,442 from hosting activities associated with the eClinical Suite during the three months ended June 30, 2016 compared with revenue of $334,161 from maintenance and $60,567 from hosting activities for the three months ended June 30, 2015.  Generally, these revenues are paid quarterly and are connected to hosting and client support for clients licensing the eClinical Suite.

We recorded revenue of $417,736 including $273,845 from software licensing and $54,800 from professional services associated with clients utilizing our TrialOne EDC software for the three months ended June 30, 2016 compared with revenue of $802,124 including $396,175 from software licensing and $293,205 from professional services for the three months ended June 30, 2015.   We are enhancing our efforts at developing our sales and marketing campaign for the TrialOne application.  TrialOne revenues are primarily comprised of license subscriptions and maintenance services since the software is currently only sold on a technology transfer basis.

We recorded revenue of $139,166 for the three months ended June 30, 2016 including $27,029 from software licensing and $80,780 from maintenance associated with clients utilizing the Promasys EDC solution as compared to revenue of $134,351 for the three months ended June 30, 2015 including $41,648 from software licensing and $86,286 from maintenance.

Our TrialMaster EDC application has historically been sold on an application service provider (“ASP”) basis that provides EDC and other services such as an enterprise management suite which assists our clients in the pharmaceutical, biotechnology and medical device industries in accelerating the completion of clinical trials. During 2009 we completed the acquisition of the eResearch EDC Assets and TrialOne and in 2013 we acquired Promasys (collectively the “Acquired Software”).  These software applications have historically been sold on a licensed or technology transfer basis.  As we continue developing our software applications and our client relationships mature, we expect some of our clients to deploy TrialMaster on a licensed, rather than ASP hosted basis. We expect the Acquired Software applications to continue to be sold primarily on a licensed basis.

TrialMaster contracts for ASP services provide for pricing that is based on both the size and duration of the clinical trial. Size parameters include the number of case report forms used to collect data and the number of sites utilizing TrialMaster. The client will pay a trial setup fee at the beginning of a project based on the previously mentioned factors and then pay an on-going maintenance fee for the duration of the clinical trial that provides software, network and site support during the trial.

Generally, ASP contracts will range in duration from one month to several years. ASP setup fees are generally recognized in accordance with ASC 605, “Revenue Recognition”, which requires that the revenues be recognized ratably over the life of the contract. ASP maintenance fee revenues are earned and recognized monthly. Costs associated with contract revenues are recognized as incurred.

License contracts are typically sold on a subscription basis that takes into account system usage both on a data volume and system user basis.  Pricing includes additional charges for consulting services associated with the installation, validation, training and deployment of our eClinical software and solutions.  Licensed contracts of the eClinical Suite have historically been sold both on a term and on a perpetual license basis with hosting and maintenance charges being paid quarterly.  The Company expects any licenses it sells of its software products to be sold under three to five year term licenses.

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Our top five customers accounted for approximately 40% of our revenues during the three months ended June 30, 2016 and approximately 36% of our revenues during the three months ended June 30, 2015.  One customer accounted for approximately 20% of our revenues during the three months ended June 30, 2016.   One customer accounted for approximately 15% of our revenues the three months ended June 30, 2015. The loss of any of these contracts or these customers in the future could adversely affect our results of operations. 

Cost of goods sold increased approximately 31% or $326,348 for the three months ended June 30, 2016 as compared to the three months ended June 30, 2015.  Cost of goods sold were approximately 26% of revenues for the three months ended June 30, 2016 compared to approximately 22% for the three months ended June 30, 2015. Cost of goods sold relates primarily to (i) salaries and related benefits associated with the programmers, developers and systems analysts producing clinical trials on behalf of our clients and (ii) the costs associated with pass-through revenues. Cost of goods sold increased during the three months ended June 30, 2016 primarily due to an increase in pass-through expenses. The pass-through revenue and expense primarily relate to specific work being performed for a few clients. At this time we do not expect the volume of the pass-through revenue and expense to grow significantly and therefore we do not expect any significant degradation of our gross margin.

Overall, total operating expenses decreased approximately 2% for the three months ended June 30, 2016 compared to the three months ended June 30, 2015.  The decrease in operating expenses is primarily the result of decreases in consulting; and salaries, benefits & related taxes expenses partially offset by an increase in travel related expenses.

Salaries and related expenses were our biggest operating expense at 70% of total operating expenses for the three months ended June 30, 2016 compared to 70% of total operating expenses for the three months ended June 30, 2015.  Salaries and related expenses decreased by 2% for the three months ended June 30, 2016 compared to the same period ended June 30, 2015.  The table below provides a summary of the significant components of salary and related expenses by primary cost category.

For the three months ended
	June 30, 2016		June 30, 2015		$ Change			% Change
OmniComm corporate operations	$	1,849,517	$	1,867,019	$	(17,502	)		-0.9	%
New Jersey operations office		271,849		249,983		21,866			8.7	%
OmniComm Europe, GmbH		146,251		173,892		(27,641	)		-15.9	%
OmniComm Ltd.		187,614		232,035		(44,421	)		-19.1	%
OmniComm Spain		64,191		29,542		34,649			117.3	%
OmniComm Promasys B.V.		144,024		144,770		(746	)		-0.5	%
Employee stock compensation		47,067		66,872		(19,805	)		-29.6	%
Total salaries and related expenses	$	2,710,513	$	2,764,113	$	(53,600	)		-1.9	%

As of June 30, 2016, we employed approximately 119 employees world-wide as follows: 55 employees out of our headquarters in Fort Lauderdale, Florida, 8 employees out of a regional operating office in Somerset, New Jersey, 21 field employees located throughout the United States, Our wholly-owned subsidiary, OmniComm Europe, GmbH, employs 18 employees in Bonn, Germany.  Our wholly-owned subsidiary, OmniComm Ltd., employs 10 employees in Southampton, England.  Our wholly-owned subsidiary, OmniComm Spain, S. L. employs 2 employees in Barcelona, Spain.  Our wholly-owned subsidiary, OmniComm Promasys B.V. employs 4 employees in the Netherlands and 1 employee in Japan. We believe that relations with our employees are good.  None of our employees are represented by a collective bargaining agreement.

During the three months ended June 30, 2016 and the three months ended June 30, 2015 we incurred $47,067 and $66,872, respectively, in salary expense in connection with ASC 718, Compensation – Stock Compensation, which establishes standards for transactions in which an entity exchanges its equity instruments services from employees. This standard requires companies to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award.

Rent and related expenses increased by approximately 8% during the three months ended June 30, 2016 compared to the three months ended June 30, 2015.  The table below details the significant portions of our rent expense.  Our primary data site is located at a co-location facility in Cincinnati, Ohio and we will continue utilizing this facility for the foreseeable future since it is designed to ensure 100% production system up-time and to provide system redundancy. We also utilize co-location and disaster recovery space in the Fort Lauderdale, Florida area. This facility provides us with disaster recovery and business continuity services for our operations. In 2015 we added a co-location facility in Frankfurt Germany. We currently lease office space in Bonn, Germany for our European subsidiary, OmniComm Europe, GmbH under a lease that expires in July 2017. We currently lease office space for a regional operating office in New Jersey under a lease that expires in March 2021. Our OmniComm Ltd. subsidiary leases office space in Southampton, UK under a lease that expires in September 2017. Our OmniComm Promasys B.V. subsidiary leases office space in Leiden, the Netherlands under a lease that expires in October 2018. Our Fort Lauderdale corporate office lease expires in February 2023. The table below provides the significant components of our rent related expenses by location or subsidiary. Included in rent during the three months ended June 30, 2016 was an increase in expense of $61,934 in non-cash, straight line rent recorded to give effect to contractual, inflation-based rent increases in our leases compared to a decrease in expense of $5,902 for the three months ended June 30, 2015.

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For the three months ended
	June 30, 2016		June 30, 2015			$ Change			% Change
Corporate office	$	35,950	$	90,562		$	(54,612	)		-60.3	%
Co-location and disaster recovery facilities		98,826		89,077			9,749			10.9	%
New Jersey operations office		8,765		13,969			(5,204	)		-37.3	%
OmniComm Europe, GmbH		19,442		19,388			54			0.3	%
OmniComm Ltd.		16,087		16,411			(324	)		-2.0	%
OmniComm Spain		1,677		2,197			(520	)		-23.7	%
OmniComm Promasys B.V.		1,777		1,778			(1	)		-0.1	%
Straight-line rent expense		61,934		(5,902	)		67,836			1149.4	%
Total	$	244,458	$	227,480		$	16,978			7.5	%

Consulting services expense decreased to $24,000 for the three months ended June 30, 2016 compared with $81,311 for the three months ended June 30, 2015. Consulting services are comprised of fees paid to consultants for help with product development and for services related to our sales and marketing efforts. The table provided below provides the significant components of the expenses incurred related to consulting services. Consulting fees for product development were higher during the three months ended June 30, 2015 as we utilized the services of additional third-party sources for portions of our product development work.

	For the three months ended
Expense Category	June 30, 2016		June 30, 2015		$ Change			% Change
Sales and marketing	$	24,000	$	-0-	$	24,000			n/a
Product development		-0-		81,311		(81,311	)		-100.0	%
Total	$	24,000	$	81,311	$	(57,311	)		-70.5	%

Legal and professional fees decreased approximately 18% for the three months ended June 30, 2016 compared with the three months ended June 30, 2015. Professional fees include fees paid to our auditors for services rendered on a quarterly and annual basis in connection with our filings with the Securities and Exchange Commission (“SEC”) and fees paid to our attorneys in connection with representation in matters involving litigation and acquisitions or for services rendered to us related to securities and SEC related matters. The table below compares the significant components of our legal and professional fees for the three months ended June 30, 2016 and June 30, 2015, respectively.

	For the three months ended
Expense Category	June 30, 2016		June 30, 2015		$ Change			% Change
Financial advisory	$	-0-	$	18,750	$	(18,750	)		-100.0	%
Audit and related		5,865		7,000		(1,135	)		-16.2	%
Accounting services		41,337		46,654		(5,317	)		-11.4	%
Legal-employment related		830		10,959		(10,129	)		-92.4	%
Legal-financial related		24,765		9,220		15,545			168.6	%
General legal		7,662		6,009		1,653			27.5	%
Total	$	80,459	$	98,592	$	(18,133	)		-18.4	%

Selling, general and administrative expenses (“SG&A”) decreased by $26,065 or approximately 6% for the three months ended June 30, 2016 compared to the three months ended June 30, 2015. The decrease is primarily due to decreases in office and software expenses. SG&A expenses relate primarily to costs incurred in running our offices in Fort Lauderdale, Florida, Monmouth Junction, New Jersey, Southampton, England, Barcelona, Spain, Bonn, Germany and Leiden, the Netherlands on a day-to-day basis and other costs not directly related to other captioned items in our income statement. SG&A includes the cost of office equipment and supplies, the costs of attending conferences and seminars and other expenses incurred in the normal course of business. In 2015 we spent approximately $635,000 on marketing, sales and advertising. We expect that the 2016 marketing, sales and advertising expenses will be approximately $900,000 as we increase our attendance at tradeshows and our marketing efforts worldwide.

47

During the three months ended June 30, 2016 we recognized a bad debt expense of $33,455 compared to $14,972 for bad debt for the three months ended June 30, 2015.  This change was primarily the result of an increase in aged receivable balances that caused us to increase our reserve. During the remainder of 2016 we will continue to carefully and actively manage our potential exposure to bad debt by closely monitoring our accounts receivable and proactively taking the action necessary to limit our exposure.  We have been very successful in managing and collecting our outstanding accounts receivable.  We believe that our current allowance for uncollectible accounts accurately reflects any accounts which may prove uncollectible during the remainder of 2016.

Interest expense was $322,554 for the three months ended June 30, 2016 compared to $745,810 for the three months ended June 30, 2015, a decrease of $423,256.  Interest incurred to related parties was $235,084 during the three months ended June 30, 2016 and $672,649 for the three months ended June 30, 2015.  Included in interest expense is the accretion of discounts recorded related to financial instrument derivatives that were deemed a part of the financings we undertook in 2008 and 2009 and relating to warrants issued during 2011 and 2016. Interest expense decreased year over year primarily due to the November 2015 transactions in which our Chief Executive Officer and Director, Cornelis F. Wit, cancelled $7.3M of outstanding debt due to him and 29,363,517 warrants to purchase the Company’s stock at $0.25 in exchange for 29,363,517 common shares and converted $1.9M of convertible notes into 7,660,000 common shares. The table below provides detail on the significant components of interest expense for the three months ended June 30, 2016 and June 30, 2015

Interest Expense
	For the three months ended
Debt Description	June 30, 2016		June 30, 2015		$ Change
Accretion of discount from derivatives	$	26,407	$	181,828	$	(155,421	)
August 2008 convertible notes		47,869		47,869		-0-
December 2008 convertible notes		136,275		148,891		(12,616	)
September 2009 secured convertible debentures		21,691		35,901		(14,210	)
December 2009 convertible debentures		-0-		44,577		(44,577	)
General interest		47,829		53,785		(5,956	)
Related party notes payable		42,483		232,959		(190,476	)
Total	$	322,554	$	745,810	$	(423,256	)

We evaluate the cost of capital available to us in combination with our overall capital structure and the prevailing market conditions in deciding what financing best fulfills our short and long-term capital needs. Given the overall economic climate and in particular the difficulties nano-cap companies have experienced in obtaining financing, we believe the structure and terms of the transactions we entered into during 2015 and 2016 were obtained at the best terms available to the Company.

We record unrealized gains/losses related to changes in our derivative liabilities associated with the issuance of convertible debt that occurred during 2008 and 2009 and warrants associated with promissory notes issued in 2011 and 2016.  We recorded a net unrealized loss of $1,696,825 during the three months ended June 30, 2016 compared with a net unrealized gain of $5,590,517 during the three months ended June 30, 2015.  The unrealized gains/losses can be attributed to fair value calculations undertaken periodically on the warrant and conversion feature liabilities recorded by us at the time the convertible debt and promissory notes were issued.  Accordingly the warrant and conversion feature liabilities are increased or decreased based on the fair value calculations made at each quarterly balance sheet date.  These non-cash gains and losses have materially impacted our results of operations during the three months ended June 30, 2016 and June 30, 2015 and can be reasonably anticipated to materially affect our net loss or net income in future periods. The fair value calculations are heavily reliant on the value of our common stock and on the calculated volatility of the price of our common stock on the OTCQX Marketplace. Accordingly, significant changes in our stock price will create large unrealized gains and losses on our financial statements. We are, however, unable to estimate the amount of such income/expense in future periods as the income/expense is partly based on the market price of our common stock at the end of a future measurement date. In addition, in the future if we issue securities which are classified as derivatives we will incur expense and income items in future periods. Investors are cautioned to consider the impact of this non-cash accounting treatment on our financial statements.

The Company recorded arrearages of $-0- and $51,424 in its 5% Series A Preferred Stock dividends for the three month periods ended June 30, 2016, and June 30, 2015, respectively.

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Liquidity and Capital Resources

Liquidity is the ability of a company to generate adequate amounts of cash to meet its operating, investing and financing needs for cash.   We have historically experienced negative cash flows and have relied on the proceeds from the sale of debt and equity securities to fund our operations. In addition, we have utilized stock-based compensation as a means of paying for consulting and salary related expenses. At June 30, 2016, we had working capital deficit of approximately $9,663,510.

The table provided below summarizes key measures of our liquidity and capital resources:

Liquidity and Capital Resources
Summarized Balance Sheet Disclosure
	June 30, 2016			December 31, 2015			$ Change
Cash	$	857,101		$	835,219		$	21,882
Accounts receivable, net of allowance for doubtful accounts		4,327,935			4,092,472			235,463
Prepaid expenses		181,687			170,173			11,514
Prepaid stock compensation, current portion		179,950			175,858			4,092
Other current assets		9,648			14,351			(4,703	)
Current assets		5,556,321			5,288,073			268,248
Accounts payable and accrued expenses		1,657,931			1,957,270			(299,339	)
Patent litigation settlement liability, current portion		862,500			962,500			(100,000	)
Deferred revenue, current portion		6,498,382			7,054,614			(556,232	)
Convertible notes payable, current portion, net of discount		75,000			75,000			-0-
Conversion feature liability, related parties		1,763,485			535,835			1,227,650
Conversion feature liability		549,843			365,408			184,435
Warrant liability, related parties		2,601,315			1,353,786			1,247,529
Warrant liability		1,211,375			561,137			650,238
Current liabilities		15,219,831			12,865,550			2,354,281
Working capital (deficit)	$	(9,663,510	)	$	(7,577,477	)	$	(2,086,033	)

Statement of Cash Flows Disclosure
	For the six months ended
	June 30, 2016			June 30, 2015
Net cash provided by/(used in) operating activities	$	(716,407	)	$	(20,098	)
Net cash (used in) investing activities		(164,449	)		(298,489	)
Net cash provided by/(used in) financing activities		925,000			1,002,250
Net increase/(decrease) in cash and cash equivalents		21,882			663,174
Changes in operating accounts		(649,042	)		1,558,406
Effect of non-cash transactions on cash and cash equivalents	$	2,804,841		$	(3,502,272	)

Cash and Cash Equivalents

Cash and cash equivalents increased by $21,882 to $857,101 at June 30, 2016. The increase is primarily comprised of a net loss of $2,872,206, changes in working capital accounts of $649,042 and an increase from non-cash transactions of $2,804,841. During the six months ended June 30, 2016 we had investing activities comprised of net purchases of property and equipment of $164,449. For financing activities, we had proceeds of $925,000.

Capital Expenditures

We are not currently bound by any long or short-term agreements for the purchase or lease of capital expenditures. Any amounts expended for capital expenditures would be the result of an increase in the capacity needed to adequately service any increase in our business. To date we have paid for any needed additions to our capital equipment infrastructure from working capital funds and anticipate this being the case in the future.

Presently, we have approximately $150,000 planned for capital expenditures to further develop our infrastructure to allow for growth in our operations during the remainder of 2016.  We expect to fund these capital expenditure needs through a combination of vendor-provided financing, the use of operating or capital equipment leases and cash provided from operations.

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Contractual Obligations

The following table sets forth our contractual obligations as of June 30, 2016:

Contractual obligation			Payments due by period
	Total		Less than 1 year			1-2 Years			2-3 Years			3+ Years
Promissory notes (1)	$	1,262,500	$	-0-		$	20,000	(2)	$	450,000	(3)	$	792,500	(4)
Convertible notes (1)		7,275,000		75,000	(5)		650,000	(6)		-0-			6,550,000	(7)
Lines of credit (8)		5,000,000		-0-			5,000,000			-0-			-0-
Operating lease obligations (9)		2,870,794		770,877			544,291			513,107			1,042,519	(10)
Patent licensing fees (11)		1,251,923		862,500			389,423			-0-			-0-
Total	$	17,660,217	$	1,708,377		$	6,603,714		$	963,107		$	8,385,019

1. Amounts do not include interest to be paid.

2. Includes $20,000 of 12% notes payable that mature in April 2018.

3. Includes $450,000 of 12% notes payable that mature in April 2019.

4. Includes $420,000 of 10% notes payable that mature in April 2020 and $372,500 of 12% notes payable that mature in April 2020.

5. Includes $75,000 of 10% convertible notes currently in default and due that are convertible into shares of common stock at the option of of the holder at a conversion rate of $1.25 per share.

6. Includes $150,000 in 10% convertible notes that mature in April 2018 and $500,000 in 12% convertible notes that mature in April 2018.

7. Includes $1,770,000 in 10% convertible notes that mature in April 2020 and $4,780,000 in 12% convertible notes that mature in April 2020.

8. Includes $5,000,000 due on the revolving Line of Credit with The Northern Trust Company.

9. Includes office lease obligations for our Corporate Office in Florida, our regional operating office in New Jersey, our co-location and disaster recovery locations in Ohio, Florida and Frankfurt, Germany, our office in England, our office in Leiden, the Netherlands and our European headquarters in Bonn, Germany.

10. Includes office lease obligations through 2023

11. Relates to guaranteed minimum payments owed in connection with our settlement of a patent infringement lawsuit brought against the Company by DataSci, LLC.

Off Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

Debt Obligations

We are currently in arrears on principal and interest payments owed totaling $203,488 on our 10% Convertible Notes that were issued in 1999. We were in default effective January 30, 2002.

On January 1, 2014, the Company issued a promissory note in the principal amount of $980,000 and warrants to purchase 3,920,000 shares of common stock of the Company at an exercise price of $0.25 with an expiration date of April 1, 2017 to our Chief Executive Officer and Director, Cornelis F. Wit (“Mr. Wit”), in exchange for accrued interest in the amount of $980,000. The note carries an interest rate of 12% per annum and is due on April 1, 2017. On October 15, 2015 the Company issued a promissory note in the amount of $980,000 to Mr. Wit in exchange for the existing promissory note in the same amount. The promissory note carries an interest rate of 12% and has a maturity date of January 1, 2019. The expiration date of the warrants associated with the promissory note was also extended to January 1, 2019. On November 19, 2015 the promissory note and the related warrants were cancelled in exchange for 3,920,000 shares of our common stock.

On April 4, 2014 the Company issued a promissory note payable to Mr. Wit in the amount of $1,600,000 in exchange for an existing promissory note in the same amount. The promissory note carries an interest rate of 12% and has a maturity date of April 1, 2017. On October 15, 2015 the Company issued a promissory note in the amount of $1,600,000 to Mr. Wit in exchange for the existing promissory note in the same amount. The promissory note carries an interest rate of 12% and has a maturity date of January 1, 2019. The expiration date of the warrants associated with the promissory note was also extended to January 1, 2019. On November 19, 2015 the promissory note, 400,000 related warrants and 6,000,000 unrelated warrants were cancelled in exchange for 6,400,000 shares of our common stock. On November 23, 2015 Mr. Wit sold 4,000,000 of the related warrants to three employees of the Company. On December 17, 2015 Mr. Wit sold 2,000,000 of the related warrants to a fourth employee of the Company.

On April 21, 2014, the Company and our former director, Mr. van Kesteren (“Mr. van Kesteren) extended the maturity date of his $150,000 of convertible debentures to April 1, 2016. The expiration date of the warrants associated with the debentures was also extended to April 1, 2016. On July 31, 2014 Mr. van Kesteren’s term on the Board of Directors ended. Effective on the same date, his convertible note in the amount of $150,000 was reclassified from Related Party to Non-Related Party. On June 30, 2015 the Company and Mr. van Kesteren extended the maturity date of his $150,000 of convertible debentures to April 1, 2017. The expiration date of the warrants associated with the debentures was also extended to April 1, 2017. On June 30, 2016 the Company and Mr. van Kesteren extended the maturity date of his $150,000 of convertible debentures to April 1, 2018. The expiration date of the warrants associated with the debentures was also extended to April 1, 2018.

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On December 23, 2014, the Company issued a promissory note in the amount of $280,000 to Mr. Wit. The note carries an interest rate of 12% per annum and is due on April 1, 2017. On January 31, 2015 the promissory note was exchanged for a new promissory note.

On January 31, 2015 the Company and Mr. Wit extended the maturity date of $1,770,000 of convertible debentures to Mr. Wit originally issued in August 2008. The debentures carry an interest rate of 10% and have a maturity date of April 1, 2017. The expiration date of the warrants associated with the debentures was also extended to April 1, 2017. On June 30, 2016 the Company and Mr. Wit extended the maturity date of the $1,770,000 of convertible debentures to April 1, 2020. The expiration date of the warrants associated with the debentures was also extended to April 1, 2020.

On January 31, 2015 the Company and Mr. Wit extended the maturity date of $4,475,000 of convertible debentures to Mr. Wit originally issued in December 2008. The debentures carry an interest rate of 12% and have a maturity date of April 1, 2017. The expiration date of the warrants associated with the debentures was also extended to April 1, 2017. On November 19, 2015 the Company and Mr. Wit agreed to cancel $420,000 of the debentures and 1,680,000 of unrelated warrants in exchange for 1,680,000 shares of our common stock. On June 30, 2016 the Company and Mr. Wit extended the maturity date of the $4,055,000 of convertible debentures to April 1, 2020. The expiration date of the warrants associated with the debentures was also extended to April 1, 2020.

On January 31, 2015 the Company and Mr. Wit extended the maturity date of $1,100,000 of convertible debentures to Mr. Wit originally issued in September 2009. The debentures carry an interest rate of 12% and have a maturity date of April 1, 2017. The expiration date of the warrants associated with the debentures was also extended to April 1, 2017. On November 19, 2015 Mr. Wit converted $475,000 of the convertible debentures into 1,900,000 shares of our common stock. On November 19, 2015 the Company and Mr. Wit agreed to cancel the 1,900,000 warrants related to the $475,000 in convertible debentures and $475,000 of unrelated promissory notes in exchange for 1,900,000 shares of our common stock. On November 23, 2015 Mr. Wit sold the remaining $625,000 of convertible debentures and the related warrants to two unrelated non-affiliate shareholders.

On January 31, 2015 the Company and Mr. Wit extended the maturity date of $1,440,000 of convertible debentures to Mr. Wit originally issued in December 2009. The debentures carry an interest rate of 12% and have a maturity date of April 1, 2017. The expiration date of the warrants associated with the debentures was also extended to April 1, 2017. On November 19, 2015 Mr. Wit converted $1,440,000 of the convertible debentures into 5,760,000 shares of our common stock. On November 19, 2015 the Company and Mr. Wit agreed to cancel the 5,760,000 warrants related to the convertible debentures and $1,440,000 of unrelated promissory notes in exchange for 5,760,000 shares of our common stock.

On January 31, 2015 the Company issued a promissory note in the amount of $529,000 to Mr. Wit in exchange for an existing promissory note in the same amount. The promissory note carries an interest rate of 12% and has a maturity date of April 1, 2017. The expiration date of the warrants associated with the promissory note was also extended to April 1, 2017. On October 15, 2015 the Company issued a promissory note in the amount of $529,000 to Mr. Wit in exchange for the existing promissory note in the same amount. The promissory note carries an interest rate of 12% and has a maturity date of January 1, 2019. The expiration date of the warrants associated with the promissory note was also extended to January 1, 2019. On November 19, 2015 the promissory note and the related warrants were cancelled in exchange for 2,116,000 shares of our common stock.

On January 31, 2015 the Company issued a promissory note in the amount of $2,860,000 and paid $6,879 in principal to Mr. Wit in exchange for an existing promissory note in the same amount. The promissory note carries an interest rate of 12% and has a maturity date of April 1, 2017. The expiration date of the warrants associated with the promissory note was also extended to April 1, 2017. On October 15, 2015 the Company issued a promissory note in the amount of $2,860,000 to Mr. Wit in exchange for the existing promissory note in the same amount. The promissory note carries an interest rate of 12% and has a maturity date of January 1, 2019. The expiration date of the warrants associated with the promissory note was also extended to January 1, 2019. On November 19, 2015 the Company and Mr. Wit agreed to cancel the promissory note and 11,440,000 warrants related to the promissory note in exchange for 11,440,000 shares of our common stock.

On January 31, 2015, the Company issued a promissory note in the principal amount of $950,000 and warrants to purchase 3,800,000 shares of common stock of the Company at an exercise price of $0.25 per share with an expiration date of April 1, 2017 to Mr. Wit in exchange for an existing promissory note in the amount of $280,000 and accrued interest in the amount of $670,000. The note carries an interest rate of 12% per annum and is due on April 1, 2017. On October 15, 2015 the Company issued a promissory note in the amount of $950,000 to Mr. Wit in exchange for the existing promissory note in the same amount. The promissory note carries an interest rate of 12% and has a maturity date of January 1, 2019. The expiration date of the warrants associated with the promissory note was also extended to January 1, 2019. On November 19, 2015 the Company and Mr. Wit agreed to cancel the promissory note and the warrants related to the promissory note in exchange for 3,800,000 shares of our common stock.

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On February 3, 2015 the Company renewed the Line of Credit and increased the available balance to $5,000,000. The Line of Credit matures on February 2, 2018 and carries a variable interest rate based on the prime rate. At June 30, 2016, $5,000,000 was outstanding on the Line of Credit at an interest rate of 2.5%.

On April 1, 2015 the Company and the holder extended the maturity date of $100,000 of convertible debentures originally issued in September 2009. The debentures carry an interest rate of 12% and have a maturity date of April 1, 2018. The expiration date of the warrants associated with the debentures was also extended to April 1, 2018.

On April 1, 2015 the Company and the holders extended the maturity date of $50,000 of convertible debentures originally issued in December 2009. The debentures carry an interest rate of 12% and have a maturity date of April 1, 2018. The expiration date of the warrants associated with the debentures was also extended to April 1, 2018. On December 7, 2015 the convertible debentures were paid off.

On April 1, 2015 the Company issued a promissory note in the amount of $20,000 to our Chairman and Chief Technology Officer, Randall G. Smith (“Mr. Smith”), in exchange for an existing promissory note in the same amount. The promissory note carries an interest rate of 12% and has a maturity date of April 1, 2018.

On April 27, 2015, the Company and the holder extended the maturity date of $200,000 of convertible debentures originally issued in December 2008. The debentures carry an interest rate of 12% and have a maturity date of April 1, 2018. The expiration date of the warrants associated with the debentures was also extended to April 1, 2018.

On April 30, 2015, the Company and our Chief Operating Officer and President, Stephen E. Johnson extended the maturity date of $25,000 of convertible debentures originally issued in December 2008. The debentures carry an interest rate of 12% and have a maturity date of April 1, 2018. The expiration date of the warrants associated with the debentures was also extended to April 1, 2018.

On May 1, 2015 we paid $5,000 to Mr. Smith in exchange for $5,000 of convertible debentures originally issued in December 2008.

On May 1, 2015 the Company and Mr. van Kesteren extended the maturity date of $160,000 of convertible debentures originally issued in December 2008. The debentures carry an interest rate of 12% and have a maturity date of April 1, 2017. The expiration date of the warrants associated with the debentures was also extended to April 1, 2017. On June 30, 2016 the Company and Mr. van Kesteren extended the maturity date of $160,000 of convertible debentures to April 1, 2018. The expiration date of the warrants associated with the debentures was also extended to April 1, 2018.

On May 7, 2015 the Company and our former Director, Matthew Veatch, extended the maturity date of $15,000 of convertible debentures originally issued in December 2008. The debentures carry an interest rate of 12% and have a maturity date of April 1, 2018. The expiration date of the warrants associated with the debentures was also extended to April 1, 2018.

On June 30, 2015 the Company and the holder extended the maturity date of $100,000 of convertible debentures originally issued in December 2008. The debentures carry an interest rate of 12% and have a maturity date of April 1, 2017. The expiration date of the warrants associated with the debentures was also extended to April 1, 2017. On June 30, 2016 the Company and the holder extended the maturity date of the $100,000 of convertible debentures. The debentures carry an interest rate of 12% and have a maturity date of April 1, 2020. The expiration date of the warrants associated with the debentures was also extended to April 1, 2020.

On February 29, 2016, the Company issued a promissory note in the principal amount of $450,000 and warrants to purchase 1,800,000 shares of common stock of the Company at an exercise price of $0.25 per share with an expiration date of April 1, 2019 to Mr. Wit in exchange for accrued interest in the amount of $450,000. The note carries an interest rate of 12% per annum and has a maturity date of April 1, 2019.

On June 30, 2016, the Company issued promissory notes in the principal amount of $420,000 and warrants to purchase 1,680,000 shares of common stock of the Company at an exercise price of $0.25 per share with an expiration date of April 1, 2020 to two investors, in exchange for existing promissory notes in the same amount. The notes carry an interest rate of 10% per annum and have a maturity date of April 1, 2020.

On June 30, 2016, the Company issued promissory notes in the principal amount of $372,500 and warrants to purchase 1,490,000 shares of common stock of the Company at an exercise price of $0.25 per share with an expiration date of April 1, 2020 to two investors, in exchange for existing promissory notes in the same amount. The notes carry an interest rate of 12% per annum and have a maturity date of April 1, 2020.

On June 30, 2016 the Company and two holders extended the maturity date of $625,000 of convertible debentures to April 1, 2020. The expiration date of the warrants associated with the debentures was also extended to April 1, 2020.

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During the next twelve months we expect debt in the aggregate amount of $75,000 to mature as follows:  

● $75,000 of 10% convertible notes currently in default and due that are convertible into shares of common stock at the option of the debenture holder at a conversion rate of $1.25 per share;

Sources of Liquidity and Capital Resources

Because of the losses we have experienced from operations we have needed to continue utilizing the proceeds from the issuance of debt and the sale of equity securities to fund our working capital needs. We have used a combination of equity financing, short-term bridge loans and long-term loans to fund our working capital needs. Other than our revenues, current capital and capital we may raise from future debt or equity offerings, the $5,000,000 revolving line of credit with The Northern Trust Company ($5,000,000 of which is outstanding as of June 30, 2016) or short-term bridge loans, we do not have any additional sources of working capital.

We may continue to require substantial funds to continue our research and product development activities and to market, sell and commercialize our technology. We may need to raise substantial additional capital to fund our future operations. Our capital requirements will depend on many factors, including the problems, delays, expenses and complications frequently encountered by companies developing and commercializing new technologies; the progress of our research and product development activities; the rate of technological advances; determinations as to the commercial potential of our technology under development; the status of competitive technology; the establishment of collaborative relationships; the success of our sales and marketing programs; the cost of filing, prosecuting, defending and enforcing intellectual property rights; and other changes in economic, regulatory or competitive conditions in our planned business.  Estimates about the adequacy of funding for our activities are based upon certain assumptions, including assumptions that our research and product development programs relating to our technology can be conducted at projected costs and that progress towards broader commercialization of our technology will be timely and successful. There can be no assurance that changes in our research and product development plans or other events will not result in accelerated or unexpected expenditures.

While we have not sought capital from venture capital or private equity sources we believe that those sources of capital remain available although possibly under terms and conditions that might be disadvantageous to existing investors.

To satisfy our capital requirements, including ongoing future operations, we may seek to raise additional financing through debt and equity financings. There can be no assurance that any such funding will be available to us on favorable terms or at all. If adequate funds are not available when needed, we may be required to delay, scale back or eliminate some or all of our research and product development programs, and our business operations. If we are successful in obtaining additional financings, the terms of such financings may have the effect of diluting or adversely affecting the holdings or the rights of our stockholders or impose restrictive covenants that may adversely impact our business. Further, there can be no assurance that even if such additional capital is obtained or planned cost reductions are implemented, that we will achieve positive cash flow or profitability or be able to continue as a business.

While several of our officers and directors have historically, either personally or through funds with which they are affiliated, provided substantial capital either in the form of debt or equity financing there can be no assurance that they will continue to provide any such funding to us on favorable terms or at all.

CRITICAL ACCOUNTING POLICIES

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States requires management to make judgments, assumptions and estimates that affect the amounts reported. Note 2 of Notes to the Condensed Consolidated Financial Statements describes the significant accounting policies used in the preparation of the condensed consolidated financial statements. Certain of these significant accounting policies are considered to be critical accounting policies, as defined below.

A critical accounting policy is defined as one that is both material to the presentation of our financial statements and requires management to make difficult, subjective or complex judgments that could have a material effect on our financial condition and results of operations. Specifically, critical accounting estimates have the following attributes: 1) we are required to make assumptions about matters that are highly uncertain at the time of the estimate; and 2) different estimates we could reasonably have used, or changes in the estimate that are reasonably likely to occur, would have a material effect on our financial condition or results of operations.

Estimates and assumptions about future events and their effects cannot be determined with certainty. We base our estimates on historical experience and on various other assumptions believed to be applicable and reasonable under the circumstances. These estimates may change as new events occur, as additional information is obtained and as our operating environment changes. These changes have historically been minor and have been included in the consolidated financial statements as soon as they became known. In addition, our Management is periodically faced with uncertainties, the outcomes of which are not within our control and will not be known for prolonged periods of time.  Based on a critical assessment of its accounting policies and the underlying judgments and uncertainties affecting the application of those policies, our Management believes that our condensed consolidated financial statements are fairly stated in accordance with accounting principles generally accepted in the United States (GAAP), and present a meaningful presentation of our financial condition and results of operations.

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Our Management believes that the following are our critical accounting policies:

ASSET IMPAIRMENT

Asset Acquisitions and Intangible Assets

We account for asset acquisitions in accordance with ASC 350, Intangibles-Goodwill and Other. The acquisition method of accounting requires that assets acquired and liabilities assumed be recorded at their fair values on the date of an asset acquisition.

The judgments that we make in determining the estimated fair value assigned to each class of assets acquired and liabilities assumed, as well as asset lives, can materially impact net income in periods following an asset acquisition. We generally use either the income, cost or market approach to aid in our conclusions of such fair values and asset lives. The income approach presumes that the value of an asset can be estimated by the net economic benefit to be received over the life of the asset, discounted to present value. The cost approach presumes that an investor would pay no more for an asset than its replacement or reproduction cost. The market approach estimates value based on what other participants in the market have paid for reasonably similar assets. Although each valuation approach is considered in valuing the assets acquired, the approach ultimately selected is based on the characteristics of the asset and the availability of information.

Long Lived Assets

We review long-lived assets for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable. Determining whether an impairment has occurred typically requires various estimates and assumptions, including determining which cash flows are directly related to the potentially impaired asset, the useful life over which cash flows will occur, their amount and the asset’s residual value, if any. In turn, measurement of an impairment loss requires a determination of fair value, which is based on the best information available. We use quoted market prices when available and independent appraisals, as appropriate, to determine fair value.

FAIR VALUE MEASUREMENT

OmniComm’s capital structure includes the use of warrants and convertible debt features that are classified as derivative financial instruments. Derivative financial instruments are recognized as either assets or liabilities and are measured at fair value under ASC 815, Derivatives and Hedging. ASC 815 requires that changes in the fair value of derivative financial instruments with no hedging designation be recognized as gains/(losses) in the earnings statement. The fair value measurement is determined in accordance with ASC 820, Fair Value Measurements and Disclosures.

DEFERRED REVENUE

Deferred revenue represents cash advances and accounts receivable in excess of revenue earned on on-going contracts.  Payment terms vary with each contract but may include an initial payment at the time the contract is executed, with future payments dependent upon the completion of certain contract phases or targeted milestones.  In the event of contract cancellation, the Company is generally entitled to payment for all work performed through the point of cancellation.

REVENUE RECOGNITION POLICY

OmniComm’s revenue model is transaction-based and can be implemented either as an ASP (application service provider) or licensed for implementation by a customer such as a pharmaceutical company.  Revenues are derived from the set-up of clinical trial engagements; licensing arrangements, fees earned for hosting our clients’ data and projects, on-going maintenance fees incurred throughout the duration of an engagement; and fees for report writing and project change orders.  The clinical trials that are conducted using our EDC applications can last from a few months to several years.  Most of the fees associated with our product including post-setup customer support in the form of maintenance charges are recognized ratably over the term of clinical trial projects.  Cost of sales is primarily comprised of programmer salaries and taxes and is expensed as incurred.

The Company recognizes revenues, for both financial statement and tax purposes in accordance with SEC Staff Accounting Bulletin No. 104 “Revenue Recognition in Financial Statements (SAB 104)” (Codified within Accounting Standards Codification (ASC) Revenue Recognition ASC 605) and AICPA Statement of Position 97-2 (SOP 97-2) “Software Revenue Recognition” as amended by SOP 98-9 (Codified within ASC 605.985, Software Industry Revenue Recognition). SAB 104 requires that revenues be recognized ratably over the life of a contract.  The Company will periodically record deferred revenues relating to advance payments in contracts.  Under its licensing arrangements, the Company recognizes revenue pursuant to SOP 97-2.  Under these arrangements, the Company recognizes revenue when all of the following conditions are satisfied: (1) there is persuasive evidence of an arrangement; (2) the service has been provided to the customer and/or delivery has occurred; (3) the collection of fees is probable; and (4) the fee is fixed or determinable.  SOP 97-2, as amended, requires revenue earned on software arrangements involving multiple elements to be allocated to each element based on the relative fair values of the elements.  We have analyzed each element in our multiple element arrangements and determined that we have sufficient vendor-specific objective evidence (“VSOE”) to allocate revenues to license updates and product support.  License revenues are recognized on delivery if the other conditions of SOP 97-2 are satisfied.  License updates and product support revenue is recognized ratably over the term of the arrangement. In arrangements where term licenses are bundled with license updates and product support and such revenue is recognized ratably over the term of the arrangement, we allocate the revenue to license revenue and to license updates and product support revenue based on the VSOE of fair value for license updates and product support revenue on perpetual licenses of similar products.

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STOCK BASED COMPENSATION.

The Company accounts for its employee equity incentive plans under ASC 718, Compensation–Stock Compensation (“ASC 718”) which addresses the accounting for transactions in which an entity exchanges its equity instruments for goods or services, with a primary focus on transactions in which an entity obtains employee services in share-based payment transactions.

ASC 718 requires companies to estimate the fair value of share-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods in the Company’s Consolidated Statements of Income. The Company currently uses the Black-Scholes option pricing model to determine grant date fair value.

EFFECT OF RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

During the first six months of 2016, we adopted the following new accounting pronouncements:

In February 2016, the FASB issued accounting standard update (“ASU”) No. 2016-02, “Leases (Topic 842)”, (“ASU 2016-02”). This ASU requires that an entity should recognize assets and liabilities for leases with a maximum possible term of more than 12 months. A lessee would recognize a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the leased asset (the underlying asset) for the lease term. This guidance also provides accounting updates with respect to lessor accounting under a lease arrangement. This new lease guidance is effective for fiscal years beginning after December 15, 2019. Entities have the option of using either a full retrospective or a modified approach (cumulative effect adjustment in period of adoption) to adopt the new guidance. Early adoption is permitted for all entities. We are currently evaluating the impact of the adoption of this guidance in our consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-09, “Compensation – Stock Compensation (Topic 718)”, (“ASU 2016-09”). This guidance which simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. This guidance is effective for annual periods beginning after December 15, 2016, including interim periods within those annual reporting periods. Early adoption is permitted. We are currently evaluating the full impact of the new standard.

Accounting standards-setting organizations frequently issue new or revised accounting rules. We regularly review all new pronouncements that have been issued since the filing of our Form 10-K for the year ended December 31, 2015 to determine their impact, if any, on our financial statements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable to smaller reporting companies.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Based on their evaluation as of the end of the period covered by this Quarterly Report on Form 10-Q, being June 30, 2016, the Company’s principal executive officer and principal financial officer have concluded that the Company’s disclosure controls and procedures, as such term is defined in  Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”) are effective such that the information relating to OmniComm, including our consolidating subsidiaries, required to be disclosed by the Company in reports that it files or submits under the Exchange Act (1) is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, and (2) is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

55

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act, during the second quarter ended June 30, 2016 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

It should be noted that any system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system are met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events. Because of these and other inherent limitations of control systems, there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time the Company may be involved in litigation relating to claims arising out of our operations in the normal course of business. As of June 30, 2016, there were no pending or threatened lawsuits that could reasonably be expected to have a material effect on the results of our operations.

ITEM 1A. RISK FACTORS

In addition to the information set forth in this Form 10-Q, you should carefully consider the risk factors discussed in Part I, Item 1A of our most recent Annual Report on Form 10-K, which could materially affect our business, financial condition, or future results.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On February 29, 2016, the Company issued a promissory note in the principal amount of $450,000 and warrants to purchase 1,800,000 shares of common stock of the Company at an exercise price of $0.25 per share with an expiration date of April 1, 2019 to our Chief Executive Officer and Director, Mr. Wit, in exchange for accrued interest in the amount of $450,000. The notes carry an interest rate of 12% per annum and have a maturity date of April 1, 2019. The securities were issued in reliance on an exemption from registration under Section 4(a)(2) under the Securities Act of 1933, as amended, and the rules and regulations thereunder, including Regulation D, as a transaction by an issuer not involving a public offering.

On June 30, 2016, the Company issued promissory notes in the principal amount of $372,500 and warrants to purchase 1,490,000 shares of common stock of the Company at an exercise price of $0.25 per share with an expiration date of April 1, 2020 to two investors, in exchange for existing promissory notes in the same amount. The notes carry an interest rate of 12% per annum and have a maturity date of April 1, 2020. The securities were issued in reliance on an exemption from registration under Section 4(a)(2) under the Securities Act of 1933, as amended, and the rules and regulations thereunder, including Regulation D, as transactions by an issuer not involving a public offering.

On June 30, 2016, the Company issued promissory notes in the principal amount of $420,000 and warrants to purchase 1,680,000 shares of common stock of the Company at an exercise price of $0.25 per share with an expiration date of April 1, 2020 to two investors, in exchange for existing promissory notes in the same amount. The notes carry an interest rate of 10% per annum and have a maturity date of April 1, 2020. The securities were issued in reliance on an exemption from registration under Section 4(a)(2) under the Securities Act of 1933, as amended, and the rules and regulations thereunder, including Regulation D, as transactions by an issuer not involving a public offering.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not Applicable.

ITEM 5. OTHER INFORMATION

None.

56

ITEM 6. EXHIBITS 

The following documents are filed as a part of this report or are incorporated by reference to previous filings, if so indicated:

EXHIBIT NO.	DESCRIPTION
3.17*	Certificate of Amendment – Certificate of Incorporation
10.48* †	Form of Promissory Note and Schedule of Substantially Identical Promissory Notes
10.49* †	Form of Extension of Maturity Date of Convertible Debenture [and related warrants] and Schedule of Substantially Identical Extensions of Maturity Date of Convertible Debenture [and related warrants]
10.54* †	Form of Common Stock Purchase Warrant and Schedule of Substantially Identical Common Stock Purchase Warrants
10.56 ø	2016 Equity Incentive Plan, and form of stock option agreement and form of restricted stock award agreement relating thereto (1)
31.1*	Certification of Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema Document
101.CAL*	XBRL Taxonomy Extension Calculation Document
101.DEF*	XBRL Taxonomy Extension Definition Document
101.LAB*	XBRL Taxonomy Extension Label Document
101.PRE*	XBRL Taxonomy Extension Presentation Document

1. Incorporated by reference to Exhibit A filed with our 2016 Proxy Statement on Schedule 14A filed on April 29, 2016.

* Filed herewith

** Furnished herewith

ø Indicates a management contract or compensatory plan or arrangement.

† Pursuant to Instruction 2 of Item 601(a) of Regulation S-K, the Company has filed only the form of the contract, and other contracts substantially identical in all material respects, except as to the parties thereto and certain other details, are described in a Schedule to the exhibit.

57

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated: August 12, 2016

OMNICOMM SYSTEMS, INC.
By:	/s/ Cornelis F. Wit
	Cornelis F. Wit, Chief Executive Officer
	(Principal Executive Officer)

By:	/s/ Thomas E. Vickers
	Thomas E. Vickers, Chief Financial Officer
	(Principal Financial Officer)

58

EX-3.17

Exhibit 3.17

CERTIFICATE OF AMENDMENT

TO THE

CERTIFICATE OF INCORPORATION

OF

OMNICOMM SYSTEMS, INC.

a Delaware corporation

_________

Pursuant to and in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware, the undersigned, being the Chief Financial Officer of OmniComm Systems, Inc., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the "Corporation"), does hereby certify that the following resolutions were duly adopted by the Corporation’s Board of Directors and its stockholders as hereinafter described:

RESOLVED, that the Certificate of Incorporation of this Corporation be amended by deleting the first sentence of the FOURTH article of the Certificate of Incorporation of the Corporation and replacing said sentence with the following:

“FOURTH: The total number of common shares of stock which the corporation shall have the authority to issue is five hundred million (500,000,000).”

The effective date of this amendment shall be the date of filing this Certificate of Amendment with the Secretary of State of the State of Delaware.

The foregoing resolution and this Certificate of Amendment to the Certificate of Incorporation were approved and duly adopted by the Board of Directors of the Corporation pursuant to a meeting on April 8, 2016, and thereafter approved and duly adopted by the holders of shares of the Corporation’s voting stock and common stock at a meeting of the stockholders of the Corporation on June 16, 2016 held upon notice in accordance with Section 222 of the General Corporation Law of the State of Delaware at which meeting the necessary number of shares as required by statute were voted in favor of the amendment in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware.

IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to the Certificate of Incorporation to be signed by its Chief Financial Officer, on this 16th day of June 2016, and such person hereby affirms under penalty of perjury that this Certificate of Amendment to the Certificate of Incorporation is the act and deed of the Corporation and that the facts stated herein are true and correct.

OMNICOMM SYSTEMS, INC.
By:	/s/ Thomas E. Vickers
	Thomas E. Vickers, Chief Financial Officer

EX-10.48

Exhibit 10.48

Pursuant to Instruction 2 of Item 601(a) of Regulation S-K, the Company has filed only the form of this Promissory Note although the Company has entered into various such Promissory Notes that are substantially identical in all material respects except as to the parties thereto and certain other details. The Schedule that follows the form of Promissory Note identifies Promissory Notes that have not been filed (or incorporated by reference) because they are substantially identical in all material respects to the form of Promissory Note that is being filed, and sets forth the material details in which the omitted Promissory Notes differ from the form of Promissory Note that is being filed.

PROMISSORY NOTE

$______________[Amount]

Broward County, Florida

______________ [Date]

FOR VALUE RECEIVED, the undersigned, (hereinafter referred to as the ("Maker") promises to pay to the order of____________, his successors or assigns, (hereinafter referred to as "Payee"), the principal sum of ________________________________ ($______________), together with interest on the principal balance from time to time outstanding, at the rate of _______ percent (__.00%) per annum; principal and interest shall be payable as follows: interest shall be payable monthly and the balance of the principal sum, together with any accrued and unpaid accrued interest, shall be paid no later than ________, 20__.

[This Promissory Note is intended to replace and substitute in its entirety the Notes issued to the Payee in the following amounts received on the following dates:_______________]

In the event that the Maker defaults in the payment of any payment of the principal sum or interest owing hereunder when and as the same shall become due and payable and such default shall continue for a period of 15 days, then the Payee may declare this Promissory Note to be in default. The Payee must provide written notice to the Maker that the Payee is declaring the Note to be in default. The Maker shall have a cure period of 15 days to resolve the default. If at the end of the cure period the default has not been resolved, then the entire principal sum and all accrued interest shall become due and payable at once without any additional notice and demand at the option of the Payee. While in default, amounts outstanding under this Promissory Note shall bear interest at the rate of _____ percent (___%) per annum.

This Promissory Note may be prepaid in whole or in part at any time without penalty or premium. All payments made shall first be applied to accrued and unpaid interest and then to principal. Any prepayment shall require payment of all accrued interest thereon.

In the event of an action to enforce this Promissory Note is commenced in a court of competent jurisdiction or in the event recourse to any court shall be deemed necessary by Payee or Payee deems it necessary to employ legal counsel in order to collect or enforce the terms and provisions hereof for any reason, including but not limited to the filing of a proof(s) of claim or any other proceedings under the Acts of Congress relating to Bankruptcy Proceedings or in any other type of receivership or insolvency proceedings, Payee shall be entitled to reasonable attorney’s fees (through and including any appellate proceedings) and all costs and expenses incurred by Payee in collecting or enforcing payment hereof.

The Maker and any endorsers, sureties, guarantors, and all others who are, or may become liable for the payment hereof, (a) severally waive presentment for payment, demand, notice of protest of this Promissory Note, and all other notices in connection with the delivery, acceptance, performance, default, or enforcement of the payment of this Promissory Note, (b) expressly consent to all extensions of time, renewals, postponements of time of payment of this Promissory Note or other modifications hereof from time to time prior to or after the day they became due without notice, consent or consideration to any of the foregoing, (c) expressly agree to the addition or release of any party or person primarily or secondarily liable hereon, (d) expressly agree that the Payee shall not be required first to institute any suit, or to exhaust its remedies against the undersigned or any other person or party to become liable hereunder in order to enforce the payment of this Promissory Note, and (e) expressly agree that, notwithstanding the occurrence of any of the foregoing (except the express written release by the Payee of any such person), the Maker shall be and remain, directly and primarily liable for all sums due under this Promissory Note.

Notwithstanding any other provisions of this Promissory Note or any other instrument executed in connection with the loan evidenced here by, it is expressly agreed that the amounts payable under this Promissory Note or under the other aforesaid instruments for the payment of interest or any other payment in the nature of or which would be considered as interest or other charge for the use or loan of money shall not exceed the highest rate allowed by the laws of the State of Florida, from time to time, and in the event the provisions of this Promissory Note or of such other instrument referred to above in this paragraph with respect to the payment of interest or other payments in the nature of or which would be considered as interest or other charge for the use or loan of money shall result in exceeding such limitation, then the excess over such limitation shall not be payable and the amount otherwise agreed to have been paid shall be reduced by the excess so that such limitation will not be exceeded. If any payment is actually made which shall result in such limitation being exceeded, the amount of the excess shall constitute and be treated as a payment on the principal hereof and shall operate to reduce such principal by the amount of such excess, or if in excess of the principal indebtedness, such excess shall be refunded.

This Promissory Note shall be construed in accordance with the laws of the State of Florida.

MAKER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES THE RIGHT EITHER MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY LITIGATION BASED HEREUNDER, OR ARISING OUT OF, OR IN CONNECTION WITH THIS PROMISSORY NOTE OR ANY DOCUMENT EXECUTED IN CONNECTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN), OR ACTIONS OF EITHER THE MAKER OR LENDER. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PAYEE TO EXTEND THE CREDIT EVIDENCED BY THIS NOTE.

MAKER:

OMNICOMM SYSTEMS, INC.

_________________________

[Name]

[Title]

ACCEPTED BY:

_________________________

[Name]

SCHEDULE OF SUBSTANTIAL IDENTICAL PROMISSORY NOTES

Pursuant to Instruction 2 of Item 601(a) of Regulation S-K, the Company has filed only the form of this Promissory Note although the Company has entered into various such Promissory Notes that are substantially identical in all material respects except as to the parties thereto and certain other details. The following schedule identifies Promissory Notes that have not been filed (or incorporated by reference) because they are substantially identical in all material respects to the form of Promissory Note that is being filed, and sets forth the material details in which the omitted Promissory Notes differ from the form of Promissory Note that is being filed.

Promissory Note Date	Name of Payee	Amount	Interest	Balance due	Amount Outstanding at June 30, 2016
April 1, 2015(1)	Randall G. Smith	$20,000	12%	April 1, 2018	$20,000
October 15, 2015(1)	Cornelis F. Wit	$2,860,000	12%	January 1, 2019	Paid November 19, 2015
October 15, 2015(1)	Cornelis F. Wit	$1,600,000	12%	January 1, 2019	Paid November 19, 2015
October 15, 2015(1)	Cornelis F. Wit	$529,000	12%	January 1, 2019	Paid November 19, 2015
October 15, 2015(1)	Cornelis F. Wit	$980,000	12%	January 1, 2019	Paid November 19, 2015
October 15, 2015(1)	Cornelis F. Wit	$950,000	12%	January 1, 2019	Paid November 19, 2015
February 29, 2016	Cornelis F. Wit	$450,000	12%	April 1, 2019	$450,000
June 30,2016 (1)	Noesis International Holdings	$137,500	12%	April 1, 2020	$137,500
June 30,2016 (1)	Noesis International Holdings	$45,000	12%	April 1, 2020	$45,000
June 30,2016 (1)	Ad Klinkenberg	$120,000	10%	April 1, 2020	$120,000
June 30,2016 (1)	Noesis International Holdings	$100,000	12%	April 1, 2020	$100,000
June 30,2016 (1)	Wim Boegem	$300,000	10%	April 1, 2020	$300,000
June 30,2016 (1)	Guus van Kesteren	$90,000	12%	April 1, 2020	$90,000

(1) This Promissory Note supersedes and replaces a prior Promissory Note to the payee, extends the maturity date of the prior Promissory Note, and may have reduced or increased the amount of the prior Promissory Note.

EX-10.49

Exhibit 10.49

Pursuant to Instruction 2 of Item 601(a) of Regulation S-K, the Company has filed only the form of this Extension of Maturity Date of Convertible Debenture [and related Warrants] although the Company has entered into various suchExtension of Maturity Date of Convertible Debenture [and related Warrants] that are substantially identical in all material respects except as to the parties thereto and certain other details. The Schedule that follows the form of Extension of Maturity Date of Convertible Debenture [and related Warrants] identifies each Extension of Maturity Date of Convertible Debenture [and related Warrants] that have not been filed (or incorporated by reference) because they are substantially identical in all material respects to the form of Extension of Maturity Date of Convertible Debenture [and related Warrants] that is being filed, and sets forth the material details in which the each omitted Extension of Maturity Date of Convertible Debenture [and related Warrants] differ from the form of Extension of Maturity Date of Convertible Debenture [and related Warrants] that is being filed.

EXTENSION OF MATURITY DATE OF CONVERTIBLE DEBENTURE

This Extension of Maturity Date of Convertible Debenture (“Extension”) is by and between the individual or entity named on an executed counterpart of the signature page hereto (each such signatory is referred to as “Holder”) and OmniComm Systems, Inc., a Delaware corporation (“Maker”) and is entered into as of the day the last Holder executes a copy of this Extension.

WHEREAS, Maker has delivered to each Holder that certain     % Convertible Debenture Series ( ) of the Maker (“Convertible Debenture”) dated            in the aggregate to Holder in the principal of $               .

WHEREAS, the Maturity Date of the Convertible Debentures, as that term is defined in the Convertible Debenture, is                , and all principal and interest due thereunder remain unpaid as of the date hereof.

WHEREAS, the parties have agreed to extend the Maturity Date.

WHEREAS, each holder has all requisite power, authority, and capacity to enter into this Extension and to extend the Maturity Date of the Convertible Debenture.

NOW, THEREFORE, in consideration of the mutual promises and covenants herein contained, and other good and valuable consideration, the receipt of which is hereby acknowledged, each Holder and the Maker hereby agree as follows:

1. Recitals. The foregoing recitals are true and correct.

2. Extension of Maturity Date. The Maturity Date is hereby extended to                .

3. No Other Changes. Except as specifically set forth herein, all other terms and conditions of the Convertible Debenture remain in full force and effect.

4. Warrants Extension. Maker hereby agrees to extend the expiration date on the Warrants issued in connection with the Convertible Debenture on ______________, which were originally expected to expire on                . The new expiration date is                .

IN WITNESS WHEREOF, this Extension of Maturity Date of Convertible Debenture is executed as of the day and date the last Holder executes a copy of this Extension.

OmniComm Systems, Inc.
By:
	(name)
	(title)

[HOLDERS SIGNATURE PAGE FOLLOWS]

[EXTENSION OF MATURITY DATE OF CONVERTIBLE DEBENTURE SIGNATURE PAGE]

IN WITNESS WHEREOF, the undersigned represents that it has caused this extension of Maturity Date of Convertible Debenture and Warrants to be duly executed on its behalf (if an entity, by one of its officers thereunto duly authorized) as of the date written below.

HOLDER:

Printed Name of Holder

By: _________________________________

(Signature of Holder or Authorized Person)

_____________________________________

Printed Name and Title if Authorized Person

_____________________________________

Date

SCHEDULE OF SUBSTANTIALLY IDENTICAL

EXTENSION OF MATURITY DATE OF CONVERTIBLE DEBENTURE [AND RELATED WARRANTS]

Pursuant to Instruction 2 of Item 601(a) of Regulation S-K, the Company has filed only the form of this Extension of Maturity Date of Convertible Debenture [and related Warrants] although the Company has entered into various such Extension of Maturity Date of Convertible Debenture [and related Warrants] that are substantially identical in all material respects except as to the parties thereto and certain other details. The following schedule identifies each Extension of Maturity Date of Convertible Debenture [and related Warrants] that have not been filed (or incorporated by reference) because they are substantially identical in all material respects to the form of Extension of Maturity Date of Convertible Debenture [and related Warrants] that is being filed, and sets forth the material details in which each omitted Extension of Maturity Date of Convertible Debenture [and related Warrants] differ from the form of Extension of Maturity Date of Convertible Debenture [and related Warrants] that is being filed.

Date of Agreement	Name of Holder	Amount	Series of Convertible Debentures and Warrants(2)	Maturity Date and Expiration of Warrants	Amount Outstanding at June 30, 2016
April 27, 2015 (1)	Fernando MonteroIncentive Savings Trust	$200,000 and 400,000 warrants	December 2008	Changed from January 1, 2016 to April 1, 20018	$200,000 and 400,000 warrants
April 30, 2015 (1)	Stephen Johnson	$25,000 and 50,000 warrants	December 2008	Changed from January 1, 2016 to April 1, 2018	$25,000 and 50,000 warrants
May 7, 2015 (1)	Matthew D. Veatch	$15,000 and 30,000 warrants	December 2008	Changed from January 1, 2016 to April 1, 2018	$15,000  and 30,000 warrants
June 30, 2016 (1)	Cornelis F. Wit	$4,055,000  and 8,110,000warrants	December 2008	Changed from April 1, 2017 to April 1, 2020	$4,055,000  and 8,110,000warrants
June 30, 2016 (1)	Cornelis F. Wit	$1,770,000  and 3,540,000 warrants	August 2008	Changed from April 1, 2017 to April 1, 2020	$1,770,000  and 3,540,000 warrants
June 30, 2016 (1)	Guus van Kesteren	$160,000 and 320,000 warrants	December 2008	Changed from April 1, 2017 to April 1, 2018	$160,000  and 320,000 warrants
June 30, 2016 (1)	Guus van Kesteren	$150,000 and 300,000 warrants	August 2008	Changed from April 1, 2017 to April 1, 2018	$150,000 and 300,000 warrants
June 30, 2016 (1)	Noesis International Holdings	$100,000 and 200,000 warrants	December 2008	Changed from April 1, 2017 to April 1, 2020	$100,000 and 200,000 warrants
June 30, 2016 (1)	Ad Klinkenberg	$400,000 and 1,600,000 warrants	September 2009	Changed from April 1, 2017 to April 1, 2020	$400,000 and 1,600,000 warrants
June 30, 2016 (1)	Yolanda Dekker	$225,000 and 900,000 warrants	September 2009	Changed from April 1, 2017 to April 1, 2020	$225,000 and 900,000 warrants

(1) This Extension of Maturity Date of Convertible Debenture [and related Warrants] supersedes and replaces a prior Extension of Maturity Date of Convertible Debenture [and related Warrants] to the holder, extends the maturity date of the Convertible Debenture and the expiration date of the Warrants of the priorExtension of Maturity Date of Convertible Debenture [and related Warrants].

(2) The form of Debenture and form of Warrant for each series is filed as an exhibit with the Company’s most recent Annual Report on Form 10-K.

EX-10.54

Exhibit 10.54

Pursuant to Instruction 2 of Item 601(a) of Regulation S-K, the Company has filed only the form of the Common Stock Purchase Warrant although the Company has issued various such Common Stock Purchase Warrants that are substantially identical in all material respects except as to the parties thereto and certain other details. The Schedule that follows the form of Common Stock Purchase Warrant identifies each Common Stock Purchase Warrant that have not been filed (or incorporated by reference) because they are substantially identical in all material respects to the form of Common Stock Purchase Warrant that is being filed, and sets forth the material details in which each omitted Common Stock Purchase Warrant differ from the form of Common Stock Purchase Warrant that is being filed.

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES OR AN OPINION OF COUNSEL OR OTHER EVIDENCE ACCEPTABLE TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

No. X-X-X

OmniComm Systems, Inc.

COMMON STOCK PURCHASE WARRANT

CLASS 20XX

          1.     Issuance. In consideration of good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by OmniComm Systems, Inc., a Delaware corporation (the “Company”),                 or registered assigns (the “Holder”) is hereby granted the right to purchase at any time, on or after the Issue Date (as defined below) until 5:00 P.M., New York City time, on the Expiration Date (as defined below),                 (XXX,XXX,) fully paid and non-assessable shares of the Company’s Common Stock, $0.001 par value per share (the “Common Stock”), at an initial exercise price per share (the “Exercise Price”) of $_____ per share, subject to further adjustment as set forth herein. This Warrant was originally issued to the Holder or the Holder’s predecessor in interest on                 (the “Issue Date”).

2.     Exercise of Warrants.

2.1     General.

(a) This Warrant is exercisable in whole or in part at any time and from time to time commencing on the Issue Date. Such exercise shall be effectuated by submitting to the Company (either by delivery to the Company or by facsimile transmission) a completed and duly executed Notice of Exercise included herein. The date such Notice of Exercise is faxed to the Company shall be the “Exercise Date,” provided that, if such exercise represents the full exercise of the outstanding balance of the Warrant, the Holder of this Warrant tenders this Warrant Certificate to the Company within five (5) Trading Days thereafter. The Notice of Exercise shall be executed by the Holder of this Warrant and shall indicate (i) the number of shares then being purchased pursuant to such exercise and (ii) whether the exercise is a cashless exercise.

(b) If the Notice of Exercise form elects a “cashless” exercise, the Holder shall thereby be entitled to receive a number of shares of Common Stock equal to (w) the excess of the Current Market Value (as defined below) over the total cash exercise price of the portion of the Warrant then being exercised, divided by (x) the Market Price of the Common Stock. For the purposes of this Warrant, the terms (y) “Current Market Value” shall mean an amount equal to the Market Price of the Common Stock, multiplied by the number of shares of Common Stock specified in the applicable Notice of Exercise, and (z) “Market Price of the Common Stock” shall mean the average Closing Price of the Common Stock for the three (3) Trading Days ending on the Trading Day immediately prior to the Exercise Date.

(c) If the Holder provides on the Notice of Exercise form that the Holder has elected a “cash” exercise (or if the cashless exercise referred to in the immediately preceding paragraph (b) is not available in accordance with its terms), the Exercise Price per share of Common Stock for the shares then being exercised shall be payable, at the election of the Holder, in cash or by certified or official bank check or by wire transfer in accordance with instructions provided by the Company at the request of the Holder.

(d) Upon the appropriate payment, if any, of the Exercise Price for the shares of Common Stock purchased, together with the surrender of this Warrant Certificate (if required), the Holder shall be entitled to receive a certificate or certificates for the shares of Common Stock so purchased. The Company shall deliver such certificates representing the Warrant Shares in accordance with the instructions of the Holder as provided in the Notice of Exercise (the certificates delivered in such manner, the “Warrant Share Certificates”) within three (3) Trading Days (such third Trading Day, a “Delivery Date”) of (i) with respect to a “cashless exercise,” the Exercise Date or the Automatic Exercise Date, as the case may be, or, (ii) with respect to a “cash” exercise, the later of the Exercise Date or the date the payment of the Exercise Price for the relevant Warrant Shares is received by the Company.

(e) The Holder shall be deemed to be the holder of the shares issuable to it in accordance with the provisions of this Section 2.1 on the Exercise Date.

2.2     Automatic Exercise. If any portion of this Warrant remains unexercised as of the Expiration Date and the Market Price of the Common Stock as of the Expiration Date is greater than the applicable Exercise Price as of the Expiration Date, then, without further action by the Holder, this Warrant shall be deemed to have been exercised automatically on the date (the “Automatic Exercise Date”) which is the day immediately prior to the close of business on the Expiration Date (or, in the event that the Expiration Date is not a Business Day, the immediately preceding Business Day) as if the Holder had duly given a Notice of Exercise for a “cashless” exercise as contemplated by Section 2.1(b) hereof, and the Holder (or such other person or persons as directed by the Holder) shall be treated for all purposes as the holder of record of such Warrant Shares as of the close of business on such Automatic Exercise Date. This Warrant shall be deemed to be surrendered to the Company on the Automatic Exercise Date by virtue of this Section 2.2 without any action by the Holder.

2.3     Certain Definitions. As used herein, the term “Expiration Date” means                     .

3.     Reservation of Shares. The Company hereby agrees that, at all times during the term of this Warrant, there shall be reserved for issuance upon exercise of this Warrant, one hundred percent (100%) of the number of shares of its Common Stock as shall be required for issuance of the Warrant Shares for the then unexercised portion of this Warrant. For the purposes of such calculations, the Company should assume that the outstanding portion of these Warrants was exercisable in full at any time, without regard to any restrictions which might limit the Holder’s right to exercise all or any portion of this Warrant held by the Holder.

4.     Mutilation or Loss of Warrant. Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction or mutilation of this Warrant, and (in the case of loss, theft or destruction) receipt of reasonably satisfactory indemnification, and (in the case of mutilation) upon surrender and cancellation of this Warrant, the Company will execute and deliver a new Warrant of like tenor and date and any such lost, stolen, destroyed or mutilated Warrant shall thereupon become void.

5.     Rights of the Holder. The Holder shall not, by virtue hereof, be entitled to any rights of a stockholder in the Company, either at law or equity, and the rights of the Holder are limited to those expressed in this Warrant and are not enforceable against the Company except to the extent set forth herein.

6.     Protection Against Dilution and Other Adjustments.

6.1     Adjustment Mechanism. If an adjustment of the Exercise Price is required pursuant to this Section 6 (other than pursuant to Section 6.4), the Holder shall be entitled to purchase such number of shares of Common Stock as will cause (i) (v) the total number of shares of Common Stock Holder is entitled to purchase pursuant to this Warrant following such adjustment, multiplied by (w) the adjusted Exercise Price per share, to equal the result of (ii) (x) the total number of shares of Common Stock Holder is entitled to purchase before adjustment, multiplied by (y) the total Exercise Price before adjustment.

6.2     Capital Adjustments. In case of any stock split or reverse stock split, stock dividend, reclassification of the Common Stock, recapitalization, merger or consolidation (where the Company is not the surviving entity), the provisions of this Section 6 shall be applied as if such capital adjustment event had occurred immediately prior to the date of this Warrant and the original Exercise Price had been fairly allocated to the stock resulting from such capital adjustment; and in other respects the provisions of this Section shall be applied in a fair, equitable and reasonable manner so as to give effect, as nearly as may be, to the purposes hereof. A rights offering to stockholders shall be deemed a stock dividend to the extent of the bargain purchase element of the rights. The Company will not effect any consolidation or merger, unless prior to the consummation thereof, the successor or acquiring entity (if other than the Company) and, if an entity different from the successor or acquiring entity, the entity whose capital stock or assets the holders of the Common Stock of the Company are entitled to receive as a result of such consolidation or merger assumes by written instrument the obligations under this Warrant (including under this Section 6) and the obligations to deliver to the holder of this Warrant such shares of stock, securities or assets as, in accordance with the foregoing provisions, the holder may be entitled to acquire.

6.3     Adjustment for Spin Off. If, for any reason, prior to the exercise of this Warrant in full, the Company spins off or otherwise divests itself of a part of its business or operations or disposes all or of a part of its assets in a transaction (the “Spin Off”) in which the Company does not receive compensation for such business, operations or assets, but causes securities of another entity (the “Spin Off Securities”) to be issued to security holders of the Company, then the Company shall cause (i) to be reserved Spin Off Securities equal to the number thereof which would have been issued to the Holder had all of the Holder’s unexercised Warrants outstanding on the record date (the “Record Date”) for determining the amount and number of Spin Off Securities to be issued to security holders of the Company (the “Outstanding Warrants”) been exercised as of the close of business on the Trading Day immediately before the Record Date (the “Reserved Spin Off Shares”), and (ii) to be issued to the Holder on the exercise of all or any of the Outstanding Warrants, such amount of the Reserved Spin Off Shares equal to (x) the Reserved Spin Off Shares, multiplied by (y) a fraction, of which (I) the numerator is the amount of the Outstanding Warrants then being exercised, and (II) the denominator is the amount of the Outstanding Warrants.

7.     Transfer to Comply with the Securities Act. This Warrant has not been registered under the Securities Act of 1933, as amended, (the “1933 Act”) and has been issued to the Holder for investment and not with a view to the distribution of either the Warrant or the Warrant Shares. Neither this Warrant nor any of the Warrant Shares or any other security issued or issuable upon exercise of this Warrant may be sold, transferred, pledged or hypothecated in the absence of an effective registration statement under the 1933 Act relating to such security or an opinion of counsel satisfactory to the Company that registration is not required under the 1933 Act. Each certificate for the Warrant, the Warrant Shares and any other security issued or issuable upon exercise of this Warrant shall contain a legend on the face thereof, in form and substance satisfactory to counsel for the Company, setting forth the restrictions on transfer contained in this Section.

8.     Supplements and Amendments; Whole Agreement. This Warrant may be amended or supplemented only by an instrument in writing signed by the parties hereto. This Warrant contains the full understanding of the parties hereto with respect to the subject matter hereof and thereof and there are no representations, warranties, agreements or understandings other than expressly contained herein and therein.

9.     Governing Law. This Warrant shall be deemed to be a contract made under the laws of the State of Florida for contracts to be wholly performed in such state and without giving effect to the principles thereof regarding the conflict of laws. Each of the parties consents to the jurisdiction of the federal courts whose districts encompass any part of the County of Broward or the state courts of the State of Florida sitting in the County of Broward in connection with any dispute arising under this Warrant and hereby waives, to the maximum extent permitted by law, any objection, including any objection based on forum non conveniens, to the bringing of any such proceeding in such jurisdictions. To the extent determined by such court, the Company shall reimburse the Holder for any reasonable legal fees and disbursements incurred by the Holder in enforcement of or protection of any of its rights under any of the Transaction Agreements.

10.     JURY TRIAL WAIVER. The Company and the Holder hereby waive a trial by jury in any action, proceeding or counterclaim brought by either of the Parties hereto against the other in respect of any matter arising out or in connection with this Warrant.

11.     Remedies. The Company stipulates that the remedies at law of the Holder of this Warrant in the event of any default or threatened default by the Company in the performance of or compliance with any of the terms of this Warrant are not and will not be adequate and that, to the fullest extent permitted by law, such terms may be specifically enforced by a decree for the specific performance of any agreement contained herein or by an injunction against a violation of any of the terms hereof or otherwise.

12.     Counterparts. This Warrant may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.

13.     Severability. If any one of the provisions contained in this Agreement, for any reason, shall be held invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement, and this Agreement shall remain in full force and effect and be construed as if the invalid, illegal or unenforceable provision had never been contained herein.

14.     Waiver. No waiver of any provision of this Agreement shall be effective unless it is in writing, signed by the party against whom it is asserted and any such written waiver shall only be applicable to the specific instance to which it relates and shall not be deemed to be a continuing or future waiver.

15.     Descriptive Headings. Descriptive headings of the several Sections of this Warrant are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof.

IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed by an officer thereunto duly authorized.

Dated:
	OmniComm Systems, Inc.
	By:
	Thomas E. Vickers
	(Name)
	Chief Financial Officer
	(Title)

NOTICE OF EXERCISE OF WARRANT

TO:	OmniComm Systems, Inc	VIA FAX: (954) 473-1256
	2101 W. Commercial Blvd., Suite 3500
	Ft. Lauderdale, FL 33309
	Attn: CFO

The undersigned hereby irrevocably elects to exercise the right, represented by the Common Stock Purchase Warrant Class 20XX, No. X-X-X dated as of           , to purchase ___________ shares of the Common Stock, $0.001 par value (“Common Stock”), of OmniComm Systems, Inc. and tenders herewith payment in accordance with Section 2 of said Common Stock Purchase Warrant, as follows:

● CASH:     $                                                    =   (Exercise Price x Exercise Shares)

Payment is being made by:

☐      enclosed check

☐wire transfer

☐other                                        

● CASHLESS EXERCISE:

Net number of Warrant Shares to be issued to Holder :     _________*

* based on:      Current Market Value - (Exercise Price x Exercise Shares)     

Market Price of Common Stock

where:

Market Price of Common Stock [“MP”]                                       =     $_______________

Current Market Value [MP x Exercise Shares]                             =     $_______________

As contemplated by the Warrant, this Notice of Exercise is being sent by facsimile to the telecopier number and officer indicated above.

If this Notice of Exercise represents the full exercise of the outstanding balance of the Warrant, the Holder either (1) has previously surrendered the Warrant to the Company or (2) will surrender (or cause to be surrendered) the Warrant to the Company at the address indicated above by express courier within five (5) Trading Days after delivery or facsimile transmission of this Notice of Exercise.

The certificates representing the Warrant Shares should be transmitted by the Company to the Holder

☐     via express courier, or

☐     by electronic transfer

after receipt of this Notice of Exercise (by facsimile transmission or otherwise) to:

_____________________________________

_____________________________________

_____________________________________

Dated: ______________________

________________________________

Holder’s Name

SCHEDULE OF SUBSTANTIALLY IDENTICAL

COMMON STOCK PURCHASE WARRANTS

Pursuant to Instruction 2 of Item 601(a) of Regulation S-K, the Company has filed only the form of this Common Stock Purchase Warrant although the Company has issued various such Common Stock Purchase Warrants that are substantially identical in all material respects except as to the parties thereto and certain other details. The following Schedule identifies each Common Stock Purchase Warrant that have not been filed (or incorporated by reference) because they are substantially identical in all material respects to the form of Common Stock Purchase Warrant that is being filed, and sets forth the material details in which each omitted Common Stock Purchase Warrant differ from the form of Common Stock Purchase Warrant that is being filed.

Original Date of Issuance	Name of Holder	Amount of Warrants	Exercise Price	Expiration of Warrants
December 31, 2011(1)	Randell G. Smith	2,000,000	$.25 per share	January 1, 2019
December 31, 2011(2)	Stephan E. Johnson	2,000,000	$.25 per share	January 1, 2019
December 31, 2011(3)	Thomas E. Vickers	1,000,000	$.25 per share	January 1, 2019
February 29, 2016	Cornelis F. Wit	1,800,000	$.25 per share	April 1, 2019
June 30, 2016	Noesis International	550,000	$.25 per share	April 1, 2020
June 30, 2016	Noesis International	400,000	$.25 per share	April 1, 2020
June 30, 2016	Noesis International	180,000	$.25 per share	April 1, 2020
June 30, 2016	Guus van Kesteren	360,000	$.25 per share	April 1, 2020
June 30, 2016	Ad Klinkenberg	480,000	$.25 per share	April 1, 2020
June 30, 2016	Wim Boegem	1,200,000	$.25 per share	April 1, 2020

(1) The Common Stock Purchase Warrants were issued to Cornelis F. Wit on December 31, 2011 and on December 17, 2015 Mr. Wit sold the Common Stock Purchase Warrants to Mr. Smith.

(2) The Common Stock Purchase Warrants were issued to Cornelis F. Wit on December 31, 2011 and on November 23, 2015 Mr. Wit sold the Common Stock Purchase Warrants to Mr. Johnson.

(3) The Common Stock Purchase Warrants were issued to Cornelis F. Wit on December 31, 2011 and on November 23, 2015 Mr. Wit sold the Common Stock Purchase Warrants to Mr. Vickers.

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO SECURITIES EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a)

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, CORNELIS F. WIT, certify that:

1. I have reviewed this quarterly report on Form 10-Q for the period ended June 30, 2016 of OmniComm Systems, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)     Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)     Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)     Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)     Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)     All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)     Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

August 12, 2016

By: /s/ Cornelis F. Wit

Cornelis F. Wit

Chief Executive Officer

[A signed original of this written statement required by Section 906 has been provided to OmniComm Systems, Inc. and will be retained by OmniComm Systems, Inc. and furnished to the United States Securities and Exchange Commission or its staff upon request.]

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO SECURITIES EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a)

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, THOMAS E. VICKERS, certify that:

1. I have reviewed this quarterly report on Form 10-Q for the period ended June 30, 2016 of OmniComm Systems, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)     Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)     Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)     Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)     Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)     All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)     Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

August 12, 2016

By: /s/ Thomas E. Vickers

Thomas E. Vickers

Chief Financial Officer

[A signed original of this written statement required by Section 906 has been provided to OmniComm Systems, Inc. and will be retained by OmniComm Systems, Inc. and furnished to the United States Securities and Exchange Commission or its staff upon request.] 

EX-32.1

EXHIBIT 32.1

CERTIFICATIONS OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of OmniComm Systems, Inc. (the “Company”) for the period ended June 30, 2016, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, being, Cornelis F. Wit, Chief Executive Officer of the Company, and Thomas E. Vickers, Chief Financial Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

August 12, 2016

/s/ Cornelis F. Wit

Cornelis F. Wit

Chief Executive Officer

August 12, 2016

/s/ Thomas E. Vickers

Thomas E. Vickers

Chief Financial Officer

The foregoing certification is being furnished pursuant to 18 U.S.C. Section 1350. It is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and it is not to be incorporated by reference into any filing of the Company, regardless of any general incorporation language in such filing.

XML

Document And Entity Information - shares	6 Months Ended
	Jun. 30, 2016	Aug. 11, 2016
Document Information [Line Items]
Entity Registrant Name	OMNICOMM SYSTEMS INC
Entity Central Index Key	0001034592
Trading Symbol	omcm
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Common Stock, Shares Outstanding (in shares)		147,686,917
Document Type	10-Q
Document Period End Date	Jun. 30, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q2
Amendment Flag	false

XML

Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($)	Jun. 30, 2016	Dec. 31, 2015
Conversion Feature Liability Related Parties [Member]
CURRENT LIABILITIES
Derivative liabilities, current	$ 1,763,485	$ 535,835
Conversion Feature Liability [Member]
CURRENT LIABILITIES
Derivative liabilities, current	549,843	365,408
Warrant Liability Related Parties [Member]
CURRENT LIABILITIES
Derivative liabilities, current	2,601,315	1,353,786
Warrant Liability [Member]
CURRENT LIABILITIES
Derivative liabilities, current	1,211,375	561,137
Series B Preferred Stock [Member]
SHAREHOLDERS' (DEFICIT)
Preferred stock	0	0
Series C Preferred Stock [Member]
SHAREHOLDERS' (DEFICIT)
Preferred stock	0	0
Series A Preferred Stock [Member]
SHAREHOLDERS' (DEFICIT)
Preferred stock	0	3,637
TOTAL SHAREHOLDERS' (DEFICIT)	0	3,637
Series D Preferred Stock [Member]
SHAREHOLDERS' (DEFICIT)
Preferred stock	250	250
TOTAL SHAREHOLDERS' (DEFICIT)	250	250
Cash	857,101	835,219
Accounts receivable, net of allowance for doubtful accounts of $125,593 and $116,834, respectively	4,327,935	4,092,472
Prepaid expenses	181,687	170,173
Prepaid stock compensation, current portion	179,950	175,858
Other current assets	9,648	14,351
Total current assets	5,556,321	5,288,073
Property and equipment, net	703,799	683,712
Net Book Value	130,884	148,877
Prepaid stock compensation	117,526	150,085
Other assets	53,354	46,565
TOTAL ASSETS	6,561,884	6,317,312
Accounts payable and accrued expenses	1,657,931	1,957,270
Deferred revenue, current portion	6,498,382	7,054,614
Convertible notes payable, current portion, net of discount of $-0- and $-0-, respectively	75,000	75,000
Patent settlement liability, current portion	862,500	962,500
Total current liabilities	15,219,831	12,865,550
Line of credit, long term	5,000,000	4,200,000
Notes payable, related parties, long term, net of current portion, net of discount of $290,478 and $-0-, respectively	179,522	20,000
Notes payable, long term, net of current portion, net of discount of $525,329 and $-0-, respectively	267,171	792,500
Deferred revenue, long term, net of current portion	2,504,740	2,193,163
Convertible notes payable, related parties, long term, net of current portion	5,850,000	5,850,000
Convertible notes payable, long term, net of current portion	1,350,000	1,350,000
Patent settlement liability, long term, net of current portion	291,895	464,573
TOTAL LIABILITIES	30,663,159	27,735,786
COMMITMENTS AND CONTINGENCIES (See Note 10)
Preferred stock	0	0
Common stock, 500,000,000 shares authorized, 147,683,879 and 131,703,577 issued and outstanding, respectively, at $0.001 par value	147,685	131,704
Additional paid in capital - preferred	131,703,577	131,703,577
Additional paid in capital - common	53,400,305	49,974,415
Accumulated other comprehensive (loss)	(384,142)	(366,355)
Accumulated (deficit)	(78,265,123)	(75,392,917)
TOTAL SHAREHOLDERS' (DEFICIT)	(24,101,275)	(21,418,474)
TOTAL LIABILITIES AND SHAREHOLDERS' (DEFICIT)	$ 6,561,884	$ 6,317,312

XML

Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($)	Jun. 30, 2016	Dec. 31, 2015
Convertible Notes Payable [Member]
Notes payable discount	$ 0	$ 0
Related Party Long Term [Member]
Notes payable discount	290,478	0
Notes Payable, Other Payables [Member]
Notes payable discount	$ 525,329	$ 0
Series B Preferred Stock [Member]
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	230,000	230,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Preferred stock, liquidation preference	$ 0	$ 0
Series C Preferred Stock [Member]
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	747,500	747,500
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Preferred stock, liquidation preference	$ 0	$ 0
Series A Preferred Stock [Member]
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred stock, shares issued (in shares)	0	3,637,724
Preferred stock, shares outstanding (in shares)	0	3,637,724
Preferred stock, liquidation preference	$ 0	$ 3,637,724
Series D Preferred Stock [Member]
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	250,000	250,000
Preferred stock, shares issued (in shares)	250,000	250,000
Preferred stock, shares outstanding (in shares)	250,000	250,000
Allowance for doubtful accounts	$ 125,593	$ 116,834
Notes payable discount
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	10,000,000	10,000,000
Preferred stock, shares undesignated	$ 3,772,500	$ 3,772,500
Common stock, shares authorized (in shares)	500,000,000	500,000,000
Common stock, shares issued (in shares)	147,683,879	131,703,577
Common stock, shares outstanding (in shares)	147,683,879	131,703,577
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001

XML

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Revenues	$ 4,930,261	$ 4,788,160	$ 9,822,270	$ 9,175,614
Reimbursable revenues	373,227	46,739	638,729	497,412
Total revenues	5,303,488	4,834,899	10,460,999	9,673,026
Cost of goods sold	940,859	1,009,580	1,911,030	1,969,075
Reimbursable expenses-cost of goods sold	435,437	40,368	639,293	432,470
Total cost of sales	1,376,296	1,049,948	2,550,323	2,401,545
Gross margin	3,927,192	3,784,951	7,910,676	7,271,481
Operating expenses
Salaries, benefits and related taxes	2,710,513	2,764,113	5,443,425	5,542,217
Rent and occupancy expenses	244,458	227,480	501,058	482,711
Consulting services	24,000	81,311	48,000	176,740
Legal and professional fees	80,459	98,592	203,296	218,128
Travel	231,264	184,723	400,062	471,670
Telephone and internet	43,183	52,576	83,667	83,955
Selling, general and administrative	441,721	467,786	824,775	827,607
Bad debt expense	33,455	14,972	33,307	(5,402)
Depreciation expense	76,111	56,343	146,577	108,505
Amortization expense	10,164	10,057	20,253	20,237
Total operating expenses	3,895,328	3,957,953	7,704,420	7,926,368
Operating income/(loss)	31,864	(173,002)	206,256	(654,887)
Other income/(expense)
Interest expense, related parties	(235,084)	(672,649)	(443,686)	(1,299,785)
Interest expense	(87,470)	(73,161)	(175,373)	(145,897)
Interest income	1	0	2	0
Change in derivative liabilities	(1,696,825)	5,590,517	(2,458,836)	4,072,798
Transaction gain/(loss)	(7,732)	7,248	(510)	(48,076)
Income/(loss) before income taxes	(1,995,246)	4,678,953	(2,872,147)	1,924,153
Income tax (expense)	0	0	(59)	(385)
Net income/(loss)	(1,995,246)	4,678,953	(2,872,206)	1,923,768
Preferred stock dividends
Total preferred stock dividends	0	(51,424)	(1,870)	(102,283)
Net income/(loss) attributable to common stockholders	$ (1,995,246)	$ 4,627,529	$ (2,874,076)	$ 1,821,485
Net income/(loss) per share
Basic (in dollars per share)	$ (0.01)	$ 0.05	$ (0.02)	$ 0.02
Diluted (in dollars per share)	$ (0.01)	$ 0.03	$ (0.02)	$ 0.01
Weighted average number of shares outstanding
Basic (in shares)	146,978,378	92,350,506	144,029,335	91,999,079
Diluted (in shares)	146,978,378	120,664,362	144,029,335	103,712,786

XML

Condensed Consolidated Statements of Comprehensive Income/(Loss) (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Net income/(loss) attributable to common stockholders	$ (1,995,246)	$ 4,627,529	$ (2,874,076)	$ 1,821,485
Other comprehensive income/(loss)
Foreign currency translation adjustment	(14,631)	21,926	(17,787)	(83,531)
Other comprehensive income/(loss)	(14,631)	21,926	(17,787)	(83,531)
Comprehensive income/(loss)	$ (2,009,877)	$ 4,649,455	$ (2,891,863)	$ 1,737,954

XML

Condensed Consolidated Statement of Shareholders' (Deficit) (Unaudited) - USD ($)	Series A Preferred Stock [Member]	Series D Preferred Stock [Member]	Additional Paid In Capital Preferred [Member]	Common Stock [Member]	Additional Paid In Capital Common [Member]	Retained Earnings [Member]	AOCI Attributable to Parent [Member]	Total
Balance (in shares) at Dec. 31, 2014	4,125,224	250,000		91,561,802
Balance at Dec. 31, 2014	$ 4,125	$ 250	$ 4,717,804	$ 91,562	$ 37,634,555	$ (77,979,301)	$ (243,827)	$ (35,774,832)
Employee stock option expense					43,090			43,090
Foreign currency translation adjustment							(122,528)	(122,528)
Restricted stock issuance/forfeiture (in shares)				908,330
Restricted stock issuance/forfeiture				$ 908	226,875			$ 227,783
Issuance of common stock, stock option exercise (in shares)				252,500				292,500
Issuance of common stock, stock option exercise				$ 253	26,997			$ 27,250
Cashless issuance of common stock, stock option exercise (in shares)				7,428
Cashless issuance of common stock, stock option exercise				$ 7	(7)			0
Issuance of common stock, in exchange for Series A Preferred Stock (in shares)	(487,500)			1,950,000
Issuance of common stock, in exchange for Series A Preferred Stock	$ (488)		(487,012)	$ 1,950	485,550			0
Issuance of common stock in exchange for converted and cancelled debt and cancelled warrants (in shares)				37,023,517
Issuance of common stock in exchange for converted and cancelled debt and cancelled warrants				$ 37,024	11,557,355			11,594,379
Net income/(loss) for the year ended December 31, 2015	$ 0	$ 0	0	$ 0	0	2,586,384	0	2,586,384
Balance (in shares) at Dec. 31, 2015	3,637,724	250,000		131,703,577
Balance at Dec. 31, 2015	$ 3,637	$ 250	4,230,792	$ 131,704	49,974,415	(75,392,917)	(366,355)	(21,418,474)
Employee stock option expense					13,792			13,792
Foreign currency translation adjustment							(17,787)	(17,787)
Restricted stock issuance/forfeiture (in shares)				360,000
Restricted stock issuance/forfeiture				$ 360	68,040			$ 68,400
Issuance of common stock, stock option exercise (in shares)				1,000,000				1,012,500
Issuance of common stock, stock option exercise				$ 1,000	124,000			$ 125,000
Cashless issuance of common stock, stock option exercise (in shares)				4,606
Cashless issuance of common stock, stock option exercise				$ 5	(5)			$ 0
Issuance of common stock, in exchange for Series A Preferred Stock (in shares)	(3,637,724)			14,615,696				16,500,896
Issuance of common stock, in exchange for Series A Preferred Stock	$ (3,637)		(3,231,042)	$ 14,616	3,220,063			$ 0
Net income/(loss) for the year ended December 31, 2015	$ 0	$ 0	0	$ 0	0	(2,872,206)	0	(2,872,206)
Balance (in shares) at Jun. 30, 2016	0	250,000		147,683,879
Balance at Jun. 30, 2016	$ 0	$ 250	$ 999,750	$ 147,685	$ 53,400,305	$ (78,265,123)	$ (384,142)	$ (24,101,275)

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended	18 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015	Jun. 30, 2016
Notes Payable Issued For Existing Notes Payable [Member]
Non-cash transactions:
Notes payable issued in exchange for existing notes payable			$ 7,652,500	$ 14,874,000
Promasys B.V. [Member]
Non-cash transactions:
Promissory notes issued for accrued interest			450,000	670,000
Restricted Stock [Member]
Non-cash transactions:
Restricted stock issuance/forfeiture			68,400	247,950
Net income/(loss)	$ (1,995,246)	$ 4,678,953	(2,872,206)	1,923,768	$ 2,586,384
Change in derivative liabilities	1,696,825	(5,590,517)	2,458,836	(4,072,798)
Interest expense from derivative instruments			35,209	330,266
Employee stock compensation			110,659	116,920
Provision for doubtful accounts	33,455	14,972	33,307	(5,402)	14,939
Depreciation and amortization			166,830	128,742
Accounts receivable			(268,770)	418,215
Prepaid expenses			(11,514)	63,497
Other current assets			4,703	5,658
Other assets			(6,789)	1,222
Accounts payable and accrued expenses			150,661	900,005
Patent settlement liability			(272,678)	(160,177)
Deferred revenue			(244,655)	329,986
Net cash provided by/(used in) operating activities			(716,407)	(20,098)
Purchase of property and equipment			(164,449)	(298,489)
Net cash (used in) investing activities			(164,449)	(298,489)
Repayments of notes payable			0	(25,000)
Proceeds from revolving line of credit			800,000	1,000,000
Proceeds from Stock Options Exercised			125,000	27,250		$ 27,250
Net cash provided by/(used in) financing activities			925,000	1,002,250
Effect of exchange rate changes on fixed and intangible assets			(4,475)	63,042
Effect of exchange rate changes on cash and cash equivalents			(17,787)	(83,531)
Net increase/(decrease) in cash and cash equivalents			21,882	663,174
Cash and cash equivalents at beginning of period			835,219	522,914	522,914	522,914
Cash and cash equivalents at end of period	$ 857,101	$ 1,186,088	857,101	1,186,088	$ 835,219	$ 857,101
Income taxes			59	385
Interest			774,746	528,823
Common stock issued in exchange for 5% Series A Preferred Stock			$ 3,637,724	$ 0

XML

Note 1 - Organization and Nature of Operations

6 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Nature of Operations [Text Block]

NOTE 1: ORGANIZATION AND NATURE OF OPERATIONS

OmniComm Systems, Inc. (“OmniComm” or the “Company”) is a healthcare technology company that provides web-based electronic data capture (“EDC”) solutions and related value-added services to pharmaceutical and biotech companies, contract research organizations (“CROs”), and other clinical trial sponsors principally located in the United States and Europe as well as in East Asia. Our proprietary EDC software applications; TrialMaster

®

, TrialOne

®

, eClinical Suite, and Promasys

®

(the “EDC Software”) allow clinical trial sponsors and investigative sites to securely collect, validate, transmit and analyze clinical trial data.

Our ability to compete within the EDC industry is predicated on our ability to continue enhancing and broadening the scope of solutions offered through our EDC Software and services. Our research and product development efforts are focused on developing new and complementary software solutions, as well as enhancing our existing software solutions through the addition of increased functionality. During the six month periods ended June 30, 2016 and June 30, 2015 we spent approximately $1,315,525 and $1,355,783, respectively, on research and product development activities, which are primarily comprised of salaries to our developers and other research and product development personnel and related costs associated with the development of our software products.

XML

Note 2 - Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Significant Accounting Policies [Text Block]

NOTE 2:  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION

The Company’s accounts include those of all its wholly-owned subsidiaries, which are more fully described in the Company’s 2015 Annual Report filed on Form 10-K with the Securities and Exchange Commission, and have been prepared in conformity with (i) accounting principles generally accepted in the United States of America; and (ii) the rules and regulations of the United States Securities and Exchange Commission. All significant intercompany accounts and transactions between the Company and its subsidiaries have been eliminated in consolidation.

UNAUDITED FINANCIAL STATEMENTS

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information, pursuant to the rules and regulations of the Securities and Exchange Commission. Pursuant to such rules and regulations, certain financial information and footnote disclosures normally included in the consolidated financial statements have been condensed or omitted. The results for the periods indicated are unaudited, but reflect all adjustments (consisting only of normally recurring adjustments) which management considers necessary for a fair presentation of operating results.

The operating results for the six month period ended June 30, 2016 are not necessarily indicative of the results that may be expected for the year-ended December 31, 2016. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year-ended December 31, 2015.

ESTIMATES IN FINANCIAL STATEMENTS

The preparation of the unaudited condensed consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and footnotes thereto. Significant estimates incorporated in our financial statements include the recorded allowance for doubtful accounts, the estimate of the appropriate amortization period of our intangible assets, the evaluation of whether our intangible assets have suffered any impairment, the allocation of revenues under multiple-element customer contracts, royalty-based patent liabilities, the value of derivatives associated with debt issued by the Company and the valuation of any corresponding discount to the issuance of our debt. Actual results may differ from those estimates.

Reclassifications

Certain reclassifications have been made in the 2015 financial statements to conform to the 2016 presentation. These reclassifications did not have any effect on our net income/(loss) or shareholders’ deficit.

foreign currency translation

The financial statements of the Company’s foreign subsidiaries are translated in accordance with Accounting Standards Codification (“ASC”) 830-30,

Foreign Currency Matters—Translation of Financial Statements

. The reporting currency for the Company is the U.S. dollar. The functional currency of the Company’s subsidiaries, OmniComm Europe GmbH in Germany, OmniComm Spain S.L. in Spain and OmniComm Promasys B.V. in the Netherlands is the Euro. The functional currency of the Company’s subsidiary, OmniComm Ltd. in the United Kingdom, is the British Pound Sterling. Accordingly, the assets and liabilities of the Company’s foreign subsidiaries are translated into U.S. dollars using the exchange rate in effect at each balance sheet date. Revenue and expense accounts of the Company’s foreign subsidiaries are translated using an average rate of exchange during the period. Foreign currency translation adjustments are accumulated as a component of other comprehensive income/(loss) as a separate component of stockholders’ equity. Gains and losses arising from transactions denominated in foreign currencies are primarily related to intercompany accounts that have been determined to be temporary in nature and accordingly, are recorded directly to the statement of operations. We record translation gains and losses in accumulated other comprehensive income as a component of stockholders’ equity. We recorded translation losses of $17,787 and $83,531 for the six month periods ended June 30, 2016 and June 30, 2015 respectively.

REVENUE RECOGNITION POLICY

The Company derives revenues from software licenses and services of its EDC products and services which can be purchased on a stand-alone basis. License revenues are derived principally from the sale of term licenses for the following software products offered by the Company:

TrialMaster, TrialOne

,

eClinical Suite

and

Promasys.

Service revenues are derived principally from the Company's delivery of the hosted solutions of its

TrialMaster

and

eClinical Suite

software products, and consulting services and customer support, including training, for all of the Company's products.

The Company recognizes revenues when all of the following conditions are satisfied: (1) there is persuasive evidence of an arrangement; (2) the product or service has been provided to the customer; (3) the collection of fees is probable; and (4) the amount of fees to be paid by the customer is fixed or determinable.

The Company operates in one reportable segment which is the delivery of EDC Software and services to clinical trial sponsors. The Company segregates its revenues based on the activity cycle used to generate its revenues. Accordingly, revenues are currently generated through four main activities

, including hosted applications, licensing, professional services and maintenance-related services.

Hosted Application Revenues

The Company offers its

TrialMaster

and

eClinical Suite

software products as hosted application solutions delivered through a standard web-browser, with customer support and training services. The Company's

TrialOne

and

Promasys

solutions are presently available on a licensed basis. To date, hosted applications revenues have been primarily related to

TrialMaster

and

eClinical Suite

.

Revenues resulting from

TrialMaster

and

eClinical Suite

application hosting services consist of three components of services for each clinical trial. The first component is comprised of application set up, including design of electronic case report forms and edit checks, installation and server configuration of the system. The second component involves application hosting and related support services as well as billable change orders which consist of amounts billed to customers for functionality changes made. The third component involves services required to close out, or lock, the database for the clinical trial.

Fees charged for the trial system design, set up and implementation are amortized and recognized ratably over the estimated hosting period. Work performed outside the original scope of work is contracted for separately as an additional fee and is generally recognized ratably over the remaining term of the hosting period. Fees for the first and third stages of the service are typically billed based upon milestones. Revenues earned upon completion of a contractual milestone are deferred and recognized over the estimated remaining hosting period. Fees for application hosting and related services in the second stage are generally billed monthly or quarterly in advance. Revenues resulting from hosting services for the

eClinical Suite

products consist of installation and server configuration, application hosting and related support services. Revenues are recognized ratably over the period of the service.

Licensing Revenues

The Company's software license revenues are earned from the sale of off-the-shelf software. From time-to-time a client might require significant modification or customization subsequent to delivery to the customer. The Company generally enters into software term licenses for its EDC Software products with its customers for three to five year periods, although customers have entered into both longer and shorter term license agreements. These arrangements typically include multiple elements: software license, consulting services and customer support. The Company bills its customers in accordance with the terms of the underlying contract. Generally, the Company bills license fees in advance for each billing cycle of the license term, which typically is either on a quarterly or annual basis. Payment terms are generally net 30 days.

The Company has sold perpetual licenses for EDC Software products in certain situations to existing customers with the option to purchase customer support, and may, in the future, do so for new customers based on customer requirements or market conditions. The Company has established vendor specific objective evidence of fair value for the customer support. Accordingly, license revenues are recognized upon delivery of the software and when all other revenue recognition criteria are met. Customer support revenues are recognized ratably over the term of the underlying support arrangement. The Company generates customer support and maintenance revenues from its perpetual license customer base.

Professional Services

The Company may also enter into arrangements to provide consulting services separate from a license arrangement. In these situations, revenue is recognized on a time-and-materials basis. Professional services can be deemed to be as essential to the functionality of the software at inception and typically are for initial trial configuration, implementation planning, loading of software, building simple interfaces, running test data and documentation of procedures. Subsequent additions or extensions to license terms do not generally include additional professional services.

Pass-through Revenue and Expense

The Company accounts for pass-through revenue and expense in accordance with ASC 605-45,

Principal Agent Considerations

(“ASC 605-45”). In accordance with ASC 605-45 these amounts are recorded as revenue in the statement of operations with a corresponding expense recorded in cost of goods sold. Pass-through revenues and expenses include amounts associated with third-party services provided to our customers by our service and product partners. These third-party services are primarily comprised of Interactive Voice and Web Response software services (IVR and IWR), travel and shipping that are incurred on our clients’ behalf.

Maintenance Revenues

Maintenance includes telephone-based help desk support and software maintenance. The Company generally bundles customer support with the software license for the entire term of the arrangement. As a result, the Company generally recognizes revenues for both maintenance and software licenses ratably over the term of the software license and support arrangement. The Company allocates the revenues recognized for these arrangements to the different elements based on management's estimate of the relative fair value of each element. The Company generally invoices each of the elements based on separately quoted amounts and thus has a fairly accurate estimate of the relative fair values of each of the invoiced revenue elements.

The fees associated with each business activity for the periods ended June 30, 2016 and June 30, 2015, respectively are:

	For the six months ended
Revenue activity	June 30, 2016		June 30, 2015
Set-up fees	$	3,312,733	$	2,882,153
Change orders		669,899		354,808
Maintenance		2,337,965		2,501,407
Software licenses		2,202,288		1,527,374
Professional services		1,398,136		1,924,967
Hosting		539,978		482,317
Total	$	10,460,999	$	9,673,026

	For the three months ended
Revenue activity	June 30, 2016		June 30, 2015
Set-up fees	$	1,793,399	$	1,617,609
Change orders		392,146		212,767
Maintenance		1,136,745		1,269,530
Software licenses		1,001,374		786,437
Professional services		745,816		707,970
Hosting		234,008		240,586
Total	$	5,303,488	$	4,834,899

COST OF REVENUES

Cost of revenues primarily consists of costs related to hosting, maintaining and supporting the Company’s application suite and delivering professional services and support. These costs include salaries, benefits, and bonuses for the Company’s professional services staff. Cost of revenues also includes outside service provider costs

.

Cost of revenues is expensed as incurred.

CASH AND CASH EQUIVALENTS

Cash equivalents consist of highly liquid, short-term investments with maturities of 90 days or less. The carrying amount reported in the accompanying consolidated balance sheets approximates fair value.

ACCOUNTS RECEIVABLE

Accounts receivable are judged as to collectability by management and an allowance for bad debts is established as necessary. The allowance is based on an evaluation of the collectability of accounts receivable and prior bad debt experience. The Company had recorded an allowance for uncollectible accounts receivable of $125,593 as of June 30, 2016 and $116,834 as of December 31, 2015, respectively.

The following table summarizes activity in the Company's allowance for doubtful accounts for the periods presented.

	June 30, 2016			December 31, 2015
Beginning of period	$	116,834		$	186,085
Bad debt expense		33,307			14,939
Write-offs		(24,548	)		(84,190	)
End of period	$	125,593		$	116,834

Concentration of Credit Risk

Cash and cash equivalents and restricted cash are deposited with major financial institutions and, at times, such balances with any one financial institution may be in excess of FDIC-insured limits. As of June 30, 2016, $560,865 was deposited in excess of FDIC-insured limits. Management believes the risk in these situations to be minimal.

Except as follows, the Company has no significant off-balance-sheet risk or credit risk concentrations. Financial instruments that subject the Company to potential credit risks are principally cash equivalents and accounts receivable. Concentrated credit risk with respect to accounts receivable is limited to creditworthy customers. The Company's customers are principally located in the United States and Europe as well as in East Asia. The Company is directly affected by the overall financial condition of the pharmaceutical, biotechnology and medical device industries and management believes that credit risk exists and that any credit risk the Company faces has been adequately reserved for as of June 30, 2016. The Company maintains an allowance for doubtful accounts based on accounts past due according to contractual terms and historical collection experience. Actual losses

, when incurred

, are charged to the allowance. The Company's losses related to collection of accounts receivable have consistently been within management's expectations. As of June 30, 2016, the Company believes no additional credit risk exists beyond the amounts provided for in our allowance for uncollectible accounts. The Company evaluates its allowance for uncollectable accounts on a quarterly basis based on a specific review of receivable aging and the period that any receivables are beyond the standard payment terms. The Company does not require collateral from its customers in order to mitigate credit risk.

One customer accounted for 20% of our revenues during the six month period ended June 30, 2016 or approximately $2,102,000. One customer accounted for 13% of our revenues during the six month period ended June 30, 2015 or approximately $1,249,000. The following table summarizes the number of customers who individually comprise greater than 10% of total revenue and/or total accounts receivable and their aggregate percentage of the Company's total revenue and gross accounts receivable for the periods presented.

	Revenues				Accounts receivable
For the period ended	Number of customers		Percentage of total revenues		Number of customers		Percentage of a ccounts receivable
June 30, 2016		1		20%		1		13%
December 31, 2015		1		16%		3		42%
June 30, 2015		1		13%		2		31%

The table below provides revenues from European customers for the six month periods ended June 30, 2016 and June 30, 2015, respectively.

European revenues For the six months ended
June 30, 2016				June 30, 2015
European revenues		% of Total revenues		European revenues		% of Total revenues
$	899,293		9%	$	1,084,178		11%

The Company serves all of its hosting customers from third-party web hosting facilities located in the United States. The Company does not control the operation of these facilities, and they are vulnerable to damage or interruption. The Company maintains redundant systems that can be used to provide service in the event the third-party web hosting facilities become unavailable, although in such circumstances, the Company's service may be interrupted during the transition.

PROPERTY AND EQUIPMENT

Property and equipment are recorded at cost. Additions and betterments are capitalized; maintenance and repairs are expensed as incurred. Depreciation is calculated using the straight-line method over the asset’s estimated useful life, which is 5 years for leasehold improvements, computers, equipment and furniture and 3 years for software. Gains or losses on disposal are charged to operations.

ASSET IMPAIRMENT

Acquisitions and Intangible Assets

We account for acquisitions in accordance with ASC 805,

Business Combinations

(“ASC 805”) and

ASC 350,

Intangibles- Goodwill and Other

(“ASC 350”). The acquisition method of accounting requires that assets acquired and liabilities assumed be recorded at their fair values on the date of a business acquisition. Our consolidated financial statements and results of operations reflect an acquired business from the completion date of an acquisition.

The judgments that we make in determining the estimated fair value assigned to each class of assets acquired and liabilities assumed, as well as asset lives, can materially impact net income in periods following an asset acquisition. We generally use either the income, cost or market approach to aid in our conclusions of such fair values and asset lives. The income approach presumes that the value of an asset can be estimated by the net economic benefit to be received over the life of the asset, discounted to present value. The cost approach presumes that an investor would pay no more for an asset than its replacement or reproduction cost. The market approach estimates value based on what other participants in the market have paid for reasonably similar assets. Although each valuation approach is considered in valuing the assets acquired, the approach ultimately selected is based on the characteristics of the asset and the availability of information.

Long-lived Assets

We review long-lived assets for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable. Determining whether an impairment has occurred typically requires various estimates and assumptions, including determining which cash flows are directly related to the potentially impaired asset, the useful life over which cash flows will occur, their amount and the asset’s residual value, if any. In turn, measurement of an impairment loss requires a determination of fair value, which is based on the best information available. We use quoted market prices when available and independent appraisals and management estimates of future operating cash flows, as appropriate, to determine fair value.

FAIR VALUE MEASUREMENT

OmniComm’s capital structure includes the use of warrants and convertible debt features that are classified as derivative financial instruments. Derivative financial instruments are recognized as either assets or liabilities and are measured at fair value under ASC 815

,

Derivatives and Hedging

(“ASC 815”)

.

ASC 815 requires that changes in the fair value of derivative financial instruments with no hedging designation be recognized as gains/(losses) in the earnings statement. The fair value measurement is determined in accordance with ASC 820

,

Fair Value Measurements and Disclosures

(“ASC 820”).

DEFERRED REVENUE

Deferred revenue represents cash advances and amounts in accounts receivable as of the balance sheet date received in excess of revenue earned on on-going contracts. Payment terms vary with each contract but may include an initial payment at the time the contract is executed, with future payments dependent upon the completion of certain contract phases or targeted milestones. In the event of contract cancellation, the Company is generally entitled to payment for all work performed through the point of cancellation. As of June 30, 2016, the Company had $9,003,122 in deferred revenues relating to contracts for services to be performed over periods ranging from one month to 5 years. The Company had $6,498,382 in deferred revenues that are expected to be recognized in the next twelve fiscal months.

ADVERTISING

Advertising costs are expensed as incurred. Advertising costs were approximately $432,837 and $406,502 for the six month periods ended June 30, 2016 and June 30, 2015, respectively and are included under selling, general and administrative expenses in our unaudited condensed consolidated financial statements.

RESEARCH AND DEVELOPMENT EXPENSES

Software development costs are expensed as incurred. ASC 985-20,

Software Industry Costs of Software to Be Sold, Leased or Marketed

(“ASC 985-20”), requires the capitalization of certain development costs of software to be sold once technological feasibility is established, which the Company defines as completion to the point of marketability. The capitalized cost is then amortized on a straight-line basis over the estimated product life. To date, the period between achieving technological feasibility and the general availability of such software has been short and software development costs qualifying for capitalization have been immaterial. Accordingly, the Company has not capitalized any software development costs under ASC 985-20. During the six month periods ended June 30, 2016 and June 30, 2015 we spent approximately $1,315,525 and $1,355,783 respectively, on research and product development activities, which include costs associated with the development of our software products and services for our clients’ projects and which are primarily comprised of salaries and related expenses for our software developers and consulting fees paid to third-party consultants. Research and product development costs are primarily included under Salaries, benefits and related taxes in our Statement of Operations.

EMPLOYEE EQUITY INCENTIVE PLANS

The OmniComm Systems, Inc. 2016 Equity Incentive Plan (the “2016 Plan”) was approved at our Annual Meeting of Shareholders on June 16, 2016. The 2016 Plan provides for the issuance of up to

10,000,000 shares of our common stock. In addition, the number of shares of common stock available for issuance under the 2016 Plan shall automatically increase on January 1st of each year for a period of nine (9) years commencing on January 1, 2017 and ending on (and including) January 1, 2025, in an amount equal to five percent (5%) of the total number of shares authorized under the 2016 Plan

.

The predecessor plan, the OmniComm Systems, Inc. 2009 Equity Incentive Plan (the “2009 Plan”) was approved at our Annual Meeting of Shareholders on July 10, 2009 and terminated on June 16, 2016 upon the approval of the 2016 Plan. The 2009 Plan provided for the issuance of up to 7,500,000 shares to employees, directors and key consultants. The 2016 and 2009 Plans are more fully described in “Note 13, Employee Equity Incentive Plans”.

The Company accounts for its employee equity incentive plans underASC 718,

Compensation – Stock Compensation

, (“ASC 718”) which addresses the accounting for transactions in which an entity exchanges its equity instruments for goods or services, with a primary focus on transactions in which an entity obtains employee services in share-based payment transactions. ASC 718 requires companies to estimate the fair value of share-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods in the Company’s consolidated statements of operations. The Company currently uses the Black Scholes option pricing model to determine grant date fair value.

EARNINGS PER SHARE

The Company accounts for Earnings per Share using ASC 260,

Earnings per Share,

(“ASC 260”)

. Unlike diluted earnings per share basic earnings per share excludes any dilutive effects of options, warrants, and convertible securities.

INCOME TAXES

The Company accounts for income taxes in accordance with ASC 740,

Income Taxes

(“ASC 740”)

.

ASC 740 has as its basic objective the recognition of current and deferred income tax assets and liabilities based upon all events that have been recognized in the financial statements as measured by the provisions of the enacted tax laws.

Valuation allowances are established

, when necessary

, to reduce deferred tax assets to the estimated amount to be realized. Income tax expense represents the tax payable for the current period and the change during the period in the deferred tax assets and liabilities.

IMPACT OF NEW ACCOUNTING STANDARDS

During the first six months of 2016, we adopted the following new accounting pronouncements:

In February 2016, the FASB issued accounting standard update (“ASU”) No. 2016-02,

“Leases (Topic 842)”

, (“ASU 2016-02”). This ASU requires that an entity should recognize assets and liabilities for leases with a maximum possible term of more than 12 months. A lessee would recognize a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the leased asset (the underlying asset) for the lease term. This guidance also provides accounting updates with respect to lessor accounting under a lease arrangement. This new lease guidance is effective for fiscal years beginning after December 15, 2019. Entities have the option of using either a full retrospective or a modified approach (cumulative effect adjustment in period of adoption) to adopt the new guidance. Early adoption is permitted for all entities. We are currently evaluating the impact of the adoption of this guidance in our consolidated financial statements.

In March 2016, the FASB issued

ASU No. 2016-09

,

“Compensation – Stock Compensation (Topic 718)”,

(“ASU 2016-09”). This

guidance which simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. This guidance is effective for annual periods beginning after December 15, 2016, including interim periods within those annual reporting periods. Early adoption is permitted. We are currently evaluating the full impact of the new standard.

Accounting standards-setting organizations frequently issue new or revised accounting rules. We regularly review all new pronouncements to determine their impact, if any, on our financial statements.

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Note 3 - Earnings (Loss) Per Share

6 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Earnings Per Share [Text Block]

NOTE 3:  EARNINGS/ (LOSS) PER SHARE

Basic earnings/(loss) per share were calculated using the weighted average number of shares outstanding of 144,029,335 and 91,999,079 for the six month periods ended June 30, 2016 and June 30, 2015, respectively.

The outstanding share balance as of June 30, 2016 and June 30, 2015, respectively, includes 1,943,343 and 2,866,681 restricted shares that have been issued but are still at risk of forfeiture as the restrictions have not lapsed.

Antidilutive shares of 44,902,516 and 71,302,468 have been omitted from the calculation of dilutive earnings/(loss) per share for the six month periods ended June 30, 2016 and June 30, 2015, respectively, as the shares were antidilutive. Provided below is the reconciliation between numerators and denominators of the basic and diluted earnings per shares. The table below provides a reconciliation of anti-dilutive securities outstanding as of June 30, 2016 and June 30, 2015, respectively.

Anti-dilutive security	June 30, 2016		June 30, 2015
Preferred stock		-0-		2,750,149
Employee stock options		982,500		1,563,793
Warrants		27,860,000		52,263,517
Convertible notes		15,910,000		13,850,000
Shares issuable for accrued interest		150,016		875,009
Total		44,902,516		71,302,468

The employee stock options are exercisable at prices ranging from $0.045 to $0.30 per share. The exercise prices on the warrants range from $0.25 to $0.60 per share. Shares issuable upon conversion of Convertible Debentures or accrued interest have conversion prices ranging from $0.25 to $1.25 per share.

Some of the Company’s convertible debt and convertible preferred stock have an anti-dilutive effect on net income/(loss) per share and were not included in the computation of diluted earnings per share.

	For the six months ended
	June 30, 2016								June 30, 2015
	Income/(loss) numerator			Shares denominator		Per-share amount			Income/(loss) numerator			Shares denominator		Per-share amount
Basic EPS	$	(2,874,076	)		144,029,335	$	(0.02	)	$	1,821,485			91,999,079	$	0.02
Effect of dilutive securities		-0-			-0-		-0-			(387,828	)		11,713,707		(0.03	)
Diluted EPS	$	(2,874,076	)		144,029,335	$	(0.02	)	$	1,433,657			103,712,786	$	0.01

	For the three months ended
	June 30, 2016								June 30, 2015
	Income/(loss) numerator			Shares denominator		Per-share amount			Income/(loss) numerator			Shares denominator		Per-share amount
Basic EPS	$	(1,995,246	)		146,978,378	$	(0.01	)	$	4,627,529			92,350,506	$	0.05
Effect of dilutive securities		-0-			-0-		-0-			(1,460,161	)		28,313,856		(0.05	)
Diluted EPS	$	(1,995,246	)		146,978,378	$	(0.01	)	$	3,167,368			120,664,362	$	0.03

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Note 4 - Property and Equipment, Net

6 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Property, Plant and Equipment Disclosure [Text Block]

NOTE 4 : PROPERTY AND EQUIPMENT, NET

Property and equipment consists of the following:

	June 30, 2016						December 31, 2015
	Cost		Accumulated depreciation		Net book value		Cost		Accumulated depreciation		Net book value		Estimated useful life (years)
Computer & office equipment	$	2,105,691	$	1,683,685	$	422,006	$	2,055,956	$	1,605,473	$	450,483		5
Leasehold improvements		105,929		87,105		18,824		91,452		85,895		5,557		5
Computer software		1,884,873		1,671,897		212,976		1,843,483		1,621,492		221,991		3
Office furniture		159,292		109,299		49,993		111,660		105,979		5,681		5
Total	$	4,255,785	$	3,551,986	$	703,799	$	4,102,551	$	3,418,839	$	683,712

Depreciation expense for the six month periods ended June 30, 2016 and June 30, 2015 was $146,577 and $108,505, respectively.

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Note 5 - Intangible Assets, Net

6 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Intangible Assets Disclosure [Text Block]

NOTE 5 : INTANGIBLE ASSETS, NET

Intangible assets consist of the following:

	June 30, 2016						December 31, 2015
Asset	Cost		Accumulated amortization		Net book value		Cost		Accumulated amortization		Net book value		Estimated useful life (years)
eClinical Suite customer lists	$	1,392,701	$	1,392,701	$	-0-	$	1,392,701	$	1,392,701	$	-0-		3
Promasys B.V. customer lists		110,314		19,611		90,703		108,051		15,607		92,444		15
Promasys B.V. software code		72,837		38,846		33,991		72,837		31,563		41,274		5
Promasys B.V. URLs/Website		55,714		49,524		6,190		54,572		39,413		15,159		3
Total	$	1,631,566	$	1,500,682	$	130,884	$	1,628,161	$	1,479,284	$	148,877

Amortization expense was $20,253 and $20,237 for the six month periods ended June 30, 2016 and June 30, 2015, respectively.

Remaining amortization expense for the Company’s intangible assets is as follows:

2016	$	17,151
2017		21,922
2018		19,494
2019		7,354
2020		7,354
Thereafter		57,609
Total	$	130,884

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Note 6 - Accounts Payable and Accrued Expenses

6 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Accounts Payable and Accrued Liabilities Disclosure [Text Block]

NOTE 6 : ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consist of the following:

Account	June 30, 2016		December 31, 2015
Accounts payable	$	712,580	$	515,764
Accrued payroll and related costs		583,534		473,108
Other accrued expenses		141,306		105,562
Accrued interest		220,511		862,836
Total accounts payable and accrued expenses	$	1,657,931	$	1,957,270

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Note 7 - Line of Credit, Notes Payable and Liquidity

6 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Debt Disclosure [Text Block]

NOTE 7 : LINE OF CREDIT , NOTES PAYABLE AND LIQUIDITY

On March 18, 2013, the Company entered into a $2,000,000 revolving Line of Credit (“Line of Credit”) with The Northern Trust Company guaranteed by our Chief Executive Officer and Director

, Cornelis F. Wit. Mr. Wit receives 2.0% interest (approximately $9,500 per month) from the Company on the assets pledged for the Line of Credit. On December 18, 2013 the Company renewed the Line of Credit and increased the available balance to $4,000,000. On February 3, 2015 the Company renewed the Line of Credit and increased the available balance to $5,000,000. The Line of Credit matures on February 2, 2018 and carries a variable interest rate based on the prime rate. At June 30, 2016, $5,000,000 was outstanding on the Line of Credit at an interest rate of 2.5%.

Our primary sources of working capital are funds from operations and borrowings under our revolving Line of Credit. In the event that the Line of Credit is called for any reason, Mr. Wit has pledged to replace the borrowing capacity under the Line of Credit with a promissory note that utilizes the same maturity date and interest rate as the Line of Credit.  

To satisfy our capital requirements, we may seek additional financing. There can be no assurance that any such funding will be available to us on favorable terms or at all. If adequate funds are not available when needed, we may be required to delay, scale back or eliminate some or all of our research and product development and marketing programs. If we are successful in obtaining additional financings, the terms of such financings may have the effect of diluting or adversely affecting the holdings or the rights of the holders of our securities or result in increased interest expense in future periods.

At June 30, 2016, the Company owed $1,262,500 in notes payable all of which are unsecured. The table below provides details as to the terms and conditions of the notes payable.

				Ending		Non related party					Related party
Origination date	Maturity date	Interest rate		principal June 30, 2016		Current		Long term			Current		Long term
4/1/2015	4/1/2018		12%	$	20,000	$	-0-	$	-0-		$	-0-	$	20,000
2/29/2016	4/1/2019		12%		450,000		-0-		-0-			-0-		450,000
6/30/2016	4/1/2020		10%		420,000		-0-		420,000			-0-		-0-
6/30/2016	4/1/2020		12%		372,500		-0-		372,500			-0-		-0-
Discount on notes payable							-0-		(525,329	)		-0-		(290,478	)
Total				$	1,262,500	$	-0-	$	267,171		$	-0-	$	179,522

At December 31, 2015, the Company owed $812,500 in notes payable all of which were unsecured. The table below provides details as to the terms and conditions of the notes payable.

				Ending		Non related party				Related party
Origination date	Maturity date	Interest rate		principal December 31, 2015		Current		Long term		Current		Long term
4/4/2014	4/1/2017		12%	$	45,000	$	-0-	$	45,000	$	-0-	$	-0-
4/4/2014	4/1/2017		12%		137,500		-0-		137,500		-0-		-0-
4/4/2014	4/1/2017		10%		120,000		-0-		120,000		-0-		-0-
12/1/2014	4/1/2017		10%		300,000		-0-		300,000		-0-		-0-
12/1/2014	4/1/2017		12%		90,000		-0-		90,000		-0-		-0-
12/1/2014	4/1/2017		12%		100,000		-0-		100,000		-0-		-0-
4/1/2015	4/1/2018		12%		20,000		-0-		-0-		-0-		20,000
Discount on notes payable							-0-		-0-		-0-		-0-
Total				$	812,500	$	-0-	$	792,500	$	-0-	$	20,000

On June 30, 2016, the Company issued promissory notes in the principal amount of $372

,500 and warrants to purchase 1,490,000 shares of common stock of the Company at an exercise price of $0.25 per share with an expiration date of April 1, 2020 to two investors, in exchange for existing promissory notes in the same amount. The notes carry an interest rate of 12% per annum and have a maturity date of April 1, 2020.

This issuance caused us to calculate and record a derivative liability for the warrant liability. The warrants were valued using the Black Scholes option pricing model. A value of $246,921 was calculated and allocated to the warrants and recorded as a liability to the issuance of the note payable. As a result of the liability we recorded a discount to the note payable. The carrying amount of the note at the time of issuance was therefore $125,579. The warrant liability (discount) will be amortized over the 45 month duration of the note payables. The Company will continue to perform a fair value calculation quarterly on the warrant liability and accordingly the warrant liability is increased or decreased based on the fair value calculation. The resulting increase or decrease is reflected in operations as an unrealized gain or loss on changes in derivative liabilities.

On June 30, 2016, the Company issued promissory notes in the principal amount of $420

,000 and warrants to purchase 1,680,000 shares of common stock of the Company at an exercise price of $0.25 per share with an expiration date of April 1, 2020 to two investors, in exchange for existing promissory notes in the same amount. The notes carry an interest rate of 1

0% per annum and have a maturity date of April 1, 2020.

This issuance caused us to calculate and record a derivative liability for the warrant liability. The warrants were valued using the Black Scholes option pricing model. A value of $278,408 was calculated and allocated to the warrants and recorded as a liability to the issuance of the note payable. As a result of the liability we recorded a discount to the note payable. The carrying amount of the note at the time of issuance was therefore $141,592. The warrant liability (discount) will be amortized over the 45 month duration of the note payables. The Company will continue to perform a fair value calculation quarterly on the warrant liability and accordingly the warrant liability is increased or decreased based on the fair value calculation. The resulting increase or decrease is reflected in operations as an unrealized gain or loss on changes in derivative liabilities.

On February 29, 2016, the Company issued a promissory note in the principal amount of $450,000 and warrants to purchase 1,800,000 shares of common stock of the Company at an exercise price of $0.25 per share with an expiration date of April 1, 2019 to our Chief Executive Officer and Director, Cornelis F. Wit (“Mr. Wit”), in exchange for accrued interest in the amount of $450,000. The note carries an interest rate of 12% per annum and has a maturity date of April 1, 2019.

This issuance caused us to calculate and record a derivative liability for the warrant liability. The warrants were valued using the Black Scholes option pricing model. A value of $325,689 was calculated and allocated to the warrants and recorded as a liability to the issuance of the note payable. As a result of the liability we recorded a discount to the note payable. The carrying amount of the note at the time of issuance was therefore $124,311. The warrant liability (discount) will be amortized over the 37 month duration of the note payable. The Company will continue to perform a fair value calculation quarterly on the warrant liability and accordingly the warrant liability is increased or decreased based on the fair value calculation. The resulting increase or decrease is reflected in operations as an unrealized gain or loss on changes in derivative liabilities.

On October 15, 2015 the Company issued a promissory note in the amount of $980,000 to Mr. Wit in exchange for an existing promissory note in the same amount. The promissory note carries an interest rate of 12% and has a maturity date of January 1, 2019. The expiration date of the warrants associated with the promissory note was also extended to January 1, 2019. On November 19, 2015 the promissory note and the related warrants were cancelled in exchange for 3,920,000 shares of our common stock.

On October 15, 2015 the Company issued a promissory note in the amount of $1,600,000 to Mr. Wit in exchange for an existing promissory note in the same amount. The promissory note carries an interest rate of 12% and has a maturity date of January 1, 2019. The expiration date of the warrants associated with the promissory note was also extended to January 1, 2019. On November 19, 2015 the promissory note, 400,000 related warrants and 6,000,000 unrelated warrants were cancelled in exchange for 6,400,000 shares of our common stock. On November 23, 2015 Mr. Wit sold 4,000,000 of the related warrants to three employees of the Company. On December 17, 2015 Mr. Wit sold 2,000,000 of the related warrants to a fourth employee of the Company.

On April 1, 2015 the Company issued a promissory note in the amount of $20,000 to our Chairman and Chief Technology Officer, Randall G. Smith (“Mr. Smith”) in exchange for an existing promissory note in the same amount. The promissory note carries an interest rate of 12% and has a maturity date of April 1, 2018.

On January 31, 2015 the Company issued a promissory note in the amount of $529,000 to Mr. Wit in exchange for an existing promissory note in the same amount. The promissory note carries an interest rate of 12% and has a maturity date of April 1, 2017. The expiration date of the warrants associated with the promissory note was also extended to April 1, 2017. On October 15, 2015 the Company issued a promissory note in the amount of $529,000 to Mr. Wit in exchange for the existing promissory note in the same amount. The promissory note carries an interest rate of 12% and has a maturity date of January 1, 2019. The expiration date of the warrants associated with the promissory note was also extended to January 1, 2019. On November 19, 2015 the promissory note and the related warrants were cancelled in exchange for 2,116,000 shares of our common stock.

On January 31, 2015 the Company issued a promissory note in the amount of $2,860,000 and paid $6,879 in principal to Mr. Wit in exchange for an existing promissory note in the same amount. The promissory note carries an interest rate of 12% and has a maturity date of April 1, 2017. The expiration date of the warrants associated with the promissory note was also extended to April 1, 2017. On October 15, 2015 the Company issued a promissory note in the amount of $2,860,000 to Mr. Wit in exchange for the existing promissory note in the same amount. The promissory note carries an interest rate of 12% and has a maturity date of January 1, 2019. The expiration date of the warrants associated with the promissory note was also extended to January 1, 2019. On November 19, 2015 the Company and Mr. Wit agreed to cancel the promissory note and 11,440,000 warrants related to the promissory note in exchange for 11,440,000 shares of our common stock.

On January 31, 2015, the Company issued a promissory note in the principal amount of $950,000 and warrants to purchase 3,800,000 shares of common stock of the Company at an exercise price of $0.25 per share with an expiration date of April 1, 2017 to Mr. Wit in exchange for an existing promissory note in the amount of $280,000 and accrued interest in the amount of $670,000. The note carries an interest rate of 12% per annum and is due on April 1, 2017. On October 15, 2015 the Company issued a promissory note in the amount of $950,000 to Mr. Wit in exchange for the existing promissory note in the same amount. The promissory note carries an interest rate of 12% and has a maturity date of January 1, 2019. The expiration date of the warrants associated with the promissory note was also extended to January 1, 2019. On November 19, 2015 the Company and Mr. Wit agreed to cancel the promissory note and the warrants related to the promissory note in exchange for 3,800,000 shares of our common stock.

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Note 8 - Convertible Notes Payable

6 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Convertible Debt Disclosure [Text Block]

NOTE 8 : CONVERTIBLE NOTES PAYABLE

The following table summarizes the convertible debt outstanding as of June 30, 2016

.

								Carrying amount
Date of	Maturity	Interest		Original		Principal at		Short term				Long term
issuance	date	rate		principal		June 30, 2016		Related		Non related		Related		Non related
8/1/1999	6/30/2004		10%	$	862,500	$	75,000	$	-0-	$	75,000	$	-0-	$	-0-
8/29/2008	4/1/2018		10%		150,000		150,000		-0-		-0-		-0-		150,000
8/29/2008	4/1/2020		10%		2,120,000		1,770,000		-0-		-0-		1,770,000		-0-
12/16/2008	4/1/2018		12%		375,000		375,000		-0-		-0-		-0-		375,000
12/16/2008	4/1/2018		12%		25,000		25,000		-0-		-0-		25,000		-0-
12/16/2008	4/1/2020		12%		100,000		100,000		-0-		-0-		-0-		100,000
12/16/2008	4/1/2020		12%		4,570,000		4,055,000		-0-		-0-		4,055,000		-0-
9/30/2009	4/1/2018		12%		100,000		100,000		-0-		-0-		-0-		100,000
9/30/2009	4/1/2020		12%		1,300,000		625,000		-0-		-0-		-0-		625,000
Total				$	9,602,500	$	7,275,000	$	-0-	$	75,000	$	5,850,000	$	1,350,000

The following table summarizes the convertible debt outstanding as of December 31, 2015

.

								Carrying amount
Date of	Maturity	Interest		Original		Principal at		Short term				Long term
issuance	date	rate		principal		December 31, 2015		Related		Non related		Related		Non related
8/1/1999	6/30/2004		10%	$	862,500	$	75,000	$	-0-	$	75,000	$	-0-	$	-0-
8/29/2008	4/1/2017		10%		150,000		150,000		-0-		-0-		-0-		150,000
8/29/2008	4/1/2017		10%		2,120,000		1,770,000		-0-		-0-		1,770,000		-0-
12/16/2008	4/1/2017		12%		260,000		260,000		-0-		-0-		-0-		260,000
12/16/2008	4/1/2017		12%		4,570,000		4,055,000		-0-		-0-		4,055,000		-0-
12/16/2008	4/1/2018		12%		215,000		215,000		-0-		-0-		-0-		215,000
12/16/2008	4/1/2018		12%		25,000		25,000		-0-		-0-		25,000		-0-
9/30/2009	4/1/2017		12%		1,300,000		625,000		-0-		-0-		-0-		625,000
9/30/2009	4/1/2018		12%		100,000		100,000		-0-		-0-		-0-		100,000
Total				$	9,602,500	$	7,275,000	$	-0-	$	75,000	$	5,850,000	$	1,350,000

10% Convertible Notes

During 1999, the Company issued 10% Convertible Notes payable in the amount of $862,500 pursuant to a Confidential Private Placement Memorandum. There were costs of $119,625 associated with this offering. The net proceeds to the Company were $742,875. The notes bear interest at 10% annually, payable semi-annually. The notes were convertible after maturity, which was June 30, 2004, into shares of common stock of the Company at $1.25 per share. We are in default in the payment of principal and interest. As of June 30, 2016, approximately $787,500 of the Convertible Notes had been repaid in cash or converted into 1,495,179 shares of common stock of the Company leaving an outstanding principal balance of $75,000. There was $128,488 of accrued interest at June 30, 2016.

Secured Convertible Debentures

On September 30, 2009, the Company sold an aggregate of $1,400,000 principal amount 12% Secured Convertible Debentures (the “Debentures”) and common stock purchase warrants (the “Warrants”) to purchase an aggregate of 5,600,000 shares of our common stock exercisable at a price of $0.25 per share for four years subsequent to the closing of the transaction to four accredited investors including our Chief Executive Officer and Director, Cornelis F. Wit (“Mr. Wit”). The Company received net proceeds of $1,400,000. The Debentures, which bear interest at 12% per annum, matured on March 30, 2011. The Debentures are convertible at any time at the option of the holder into shares of our common stock based upon a conversion rate of $0.25 per share.

On March 30, 2011, the Company repaid $200,000 of the outstanding principal amounts owed and extended $1,200,000 of the convertible notes until April 1, 2013, including $1,100,000 in convertible notes held by Mr. Wit. The Company also extended the expiration date of the warrants associated with the September 2009 offering.

On February 22, 2013, the Company and two holders extended $1,200,000 of the convertible notes until January 1, 2016, including $1,100,000 in convertible notes held by Mr. Wit.

Mr. Wit also waived all his rights to the security interest under his $1,100,000 convertible notes.

The expiration date of the warrants associated with the September 2009 offering was also extended to January 1, 2016.

On January 31, 2015 the Company and Mr. Wit extended the maturity date of $1,100,000 of convertible debentures to Mr. Wit. The debentures carry an interest rate of 12% and have a maturity date of April 1, 2017. The expiration date of the warrants associated with the debentures was also extended to April 1, 2017. On November 19, 2015 Mr. Wit converted $475,000 of the convertible debentures into 1,900,000 shares of our common stock. On November 19, 2015 the Company and Mr. Wit agreed to cancel the 1,900,000 warrants related to the $475,000 in convertible debentures and $475,000 of unrelated promissory notes in exchange for 1,900,000 shares of our common stock. On November 23, 2015 Mr. Wit sold the remaining $625,000 of convertible debentures and the related warrants to two unrelated non-affiliate shareholders.

On April 1, 2015 the Company and the holder extended the maturity date of $100,000 of convertible debentures to April 1, 2018. The expiration date of the warrants associated with the debentures was also extended to April 1, 2018.

On June 30, 2016 the Company and two holders extended the maturity date of $625,000 of convertible debentures to April 1, 2020. The expiration date of the warrants associated with the debentures was also extended to April 1, 2020.

Convertible Debentures

August 2008

On August 29, 2008, the Company sold $2,270,000 of convertible debentures and warrants to purchase an aggregate of 4,540,000 shares of our common stock to four accredited investors including our Chief Executive Officer and Director, Cornelis F. Wit (“Mr. Wit”), and one of our Directors. The convertible debentures, which bear interest at 10% per annum, were due on August 29, 2010. The convertible debentures are convertible at any time at the option of the holder into shares of our common stock based upon a conversion rate of $0.50 per share.

On September 30, 2009, two Affiliates of the Company extended $1,920,000 of the convertible debentures until August 29, 2013 in accordance with the terms of a Secured Convertible Debenture issued on that date.

On February 22, 2013 the Company and Mr. Wit extended the maturity date of $1,770,000 of the convertible debentures to January 1, 2016.

The expiration date of the warrants associated with the debentures was also extended to January 1, 2016.

On February 22, 2013 the Company and Mr. van Kesteren extended the maturity date of $150,000 of the convertible debentures due to our former Director, Guus van Kesteren (“Mr. van Kesteren”) to January 1, 2015. The expiration date of the warrants associated with the debentures was also extended to January 1, 2015.

On April 21, 2014 the Company and Mr. van Kesteren, extended the maturity date of his $150,000 of convertible debentures to April 1, 2016. The expiration date of the warrants associated with the debentures was also extended to April 1, 2016. On July 31, 2014 Mr. van Kesteren’s term on the Board of Directors ended. Effective on the same date, his convertible note in the amount of $150,000 was reclassified from Related Party to Non-Related Party.

On January 31, 2015 the Company and Mr. Wit extended the maturity date of the $1,770,000 of convertible debentures to April 1, 2017. The expiration date of the warrants associated with the debentures was also extended to April 1, 2017.

On June 30, 2015 the Company and Mr. van Kesteren extended the maturity date of $150,000 of convertible debentures to April 1, 2017. The expiration date of the warrants associated with the debentures was also extended to April 1, 2017.

On June 30, 2016 the Company and Mr. Wit extended the maturity date of the $1,770,000 of convertible debentures to April 1, 2020. The expiration date of the warrants associated with the debentures was also extended to April 1, 2020.

On June 30, 2016 the Company and Mr. van Kesteren extended the maturity date of $150,000 of convertible debentures to April 1, 2018. The expiration date of the warrants associated with the debentures was also extended to April 1, 2018.

December 2008

On December 16, 2008, the Company sold $5,075,000 of convertible debentures and warrants to purchase an aggregate of 10,150,000 shares of common stock to eleven accredited investors including our Chief Executive Officer and Director, Cornelis F. Wit (“Mr. Wit”), our Chief Operating Officer and President, Stephen E. Johnson (“Mr. Johnson”), our Chairman and Chief Technology Officer, Randall G. Smith (“Mr. Smith”), our Chief Financial Officer, Ronald T. Linares, and four of our Directors. The convertible debentures, which bear interest at 12% per annum, were due on December 16, 2010. The convertible debentures are convertible at any time at the option of the holder into shares of our common stock based upon a conversion rate of $0.50 per share.

On September 30, 2009 Affiliates of the Company extended $4,980,000 of Convertible Notes until December 16, 2013 in accordance with the terms of a Secured Convertible Debenture issued on that date.

On February 22, 2013 the Company and the holders agreed to extend the maturity date of $4,505,000 of the convertible debentures including $4,475,000 due to Mr. Wit, $25,000 due to Mr. Johnson, and $5,000 due to Mr. Smith, to January 1, 2016. The expiration date of the warrants associated with the debentures was also extended to January 1, 2016.

On February 27, 2013 the Company and Mr. Veatch extended the maturity date of $15,000 of convertible debentures issued to our former Director, Matthew Veatch, to January 1, 2016. The expiration date of the warrants associated with the debentures was also extended to January 1, 2016.

On March 6, 2013, the Company and one of the holders agreed to extend the maturity date of $200,000 of convertible debentures to January 1, 2014. The expiration date of the warrants associated with the debentures was also extended to January 1, 2014.

On March 12, 2013, the Company and one of the holders agreed to extend the maturity date of $100,000 of convertible debentures to January 1, 2015. The expiration date of the warrants associated with the debentures was also extended to January 1, 2015.

In December 2013, the Company and two holders agreed to extend the maturity date of $360,000, including $160,000 due to our former Director, Guus van Kesteren (“Mr. van Kesteren”), of convertible debentures to January 1, 2016. The expiration date of the warrants associated with the debentures was also extended to January 1, 2016. On July 31, 2014 Mr. van Kesteren’s term on the Board of Directors ended. Effective on the same date, his convertible note in the amount of $160,000 was reclassified from Related Party to Non-Related Party.

On April 28, 2014 the Company and the holder extended the maturity date of $100,000 of convertible debentures to April 1, 2016. The expiration date of the warrants associated with the debentures was also extended to April 1, 2016.

On January 31, 2015 the Company and Mr. Wit extended the maturity date of $4,475,000 of convertible debentures to Mr. Wit to April 1, 2017. The expiration date of the warrants associated with the debentures was also extended to April 1, 2017. On November 19, 2015 the Company and Mr. Wit agreed to cancel $420,000 of the debentures and 1,680,000 of unrelated warrants in exchange for 1,680,000 shares of our common stock.

On April 27, 2015, the Company and the holder extended the maturity date of $200,000 of convertible debentures to April 1, 2018. The expiration date of the warrants associated with the debentures was also extended to April 1, 2018.

On April 30, 2015, the Company and Mr. Johnson extended the maturity date of $25,000 of convertible debentures to April 1, 2018. The expiration date of the warrants associated with the debentures was also extended to April 1, 2018.

On May 1, 2015 we paid $5,000 to Mr. Smith in exchange for $5,000 of convertible debentures originally issued in December 2008.

On May 1, 2015 the Company and Mr. van Kesteren extended the maturity date of $160,000 of convertible debentures to April 1, 2017. The expiration date of the warrants associated with the debentures was also extended to April 1, 2017.

On May 7, 2015 the Company and our former Director, Matthew Veatch, extended the maturity date of $15,000 of convertible debentures to April 1, 2018. The expiration date of the warrants associated with the debentures was also extended to April 1, 2018.

On June 30, 2015 the Company and the holder extended the maturity date of $100,000 of convertible debentures to April 1, 2017. The expiration date of the warrants associated with the debentures was also extended to April 1, 2017.

On June 30, 2016 the Company and Mr. Wit extended the maturity date of $4,055,000 of convertible debentures to Mr. Wit to April 1, 2020. The expiration date of the warrants associated with the debentures was also extended to April 1, 2020.

On June 30, 2016 the Company and Mr. van Kesteren extended the maturity date of $160,000 of convertible debentures to April 1, 2018. The expiration date of the warrants associated with the debentures was also extended to April 1, 2018.

On June 30, 2016 the Company and the holder extended the maturity date of $100,000 of convertible debentures to April 1, 2020. The expiration date of the warrants associated with the debentures was also extended to April 1, 2020.

December 2009

On December 31, 2009, the Company sold an aggregate of $1,490,000 principal amount 12% Convertible Debentures (the “Debentures”) and common stock purchase warrants (the “Warrants”) to purchase an aggregate of 5,960,000 shares of our common stock exercisable at a price of $0.25 per share for four years subsequent to the closing of the transaction to three accredited investors including our Chief Executive Officer and Director, Cornelis F. Wit (“Mr. Wit”). The Company received net proceeds of $1,490,000. The Debentures, which bear interest at 12% per annum, matured on June 30, 2011. The Debentures are convertible at any time at the option of the holder into shares of our common stock based upon a conversion rate of $0.25 per share.

On September 30, 2011, the Company extended all $1,490,000 of the convertible notes until October 1, 2013, including $1,440,000 in convertible notes held by Mr. Wit. The Company also extended the expiration date of the warrants associated with the December 2009 offering until December 31, 2015.

On February 22, 2013, the Company extended all $1,490,000 of the convertible notes until January 1, 2016, including $1,440,000 in convertible notes held by Mr. Wit. The Company also extended the expiration date of the warrants associated with the December 2009 offering until January 1, 2016.

On January 31, 2015 the Company and Mr. Wit extended the maturity date of $1,440,000 of convertible debentures to Mr. Wit, originally issued in December 2009. The debentures carry an interest rate of 12% and have a maturity date of April 1, 2017. The expiration date of the warrants associated with the debentures was also extended to April 1, 2017. On November 19, 2015 Mr. Wit converted $1,440,000 of the convertible debentures into 5,760,000 shares of our common stock. On November 19, 2015 the Company and Mr. Wit agreed to cancel the 5,760,000 warrants related to the convertible debentures and $1,440,000 of unrelated promissory notes in exchange for 5,760,000 shares of our common stock.

On April 1, 2015 the Company and the holders extended the maturity date of $50,000 of convertible debentures originally issued in December 2009. The debentures carry an interest rate of 12% and have a maturity date of April 1, 2018. On December 7, 2015 the convertible debentures were paid off.

The principal payments required at maturity under the Company’s outstanding convertible debt at June 30, 2016 are as follows:

2016	$	75,000
2017		-0-
2018		650,000
2019		-0-
2020		6,550,000
Total	$	7,275,000

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Note 9 - Fair Value Measurement

6 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Fair Value Disclosures [Text Block]

NOTE 9 : FAIR VALUE MEASUREMENT

The Company measures the fair value of its assets and liabilities under the guidance of ASC 820,

Fair Value Measurements and Disclosures

, which defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles and expands disclosures about fair value measurements. ASC 820 does not require any new fair value measurements, but its provisions apply to all other accounting pronouncements that require or permit fair value measurement.

ASC 820 clarifies that fair value is an exit price, representing the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants based on the highest and best use of the asset or liability. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. ASC 820 requires the Company to use valuation techniques to measure fair value that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized as follows:

· Level 1 : Observable inputs such as quoted prices for identical assets or liabilities in active markets;

· Level 2 : Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly such as quoted prices for similar assets or liabilities or market-corroborated inputs; and

· Level 3 : Unobservable inputs for which there is little or no market data, which require the reporting entity to develop its own assumptions about how market participants would price the assets or liabilities.

 The valuation techniques that may be used to measure fair value are as follows:

A. Market approach - Uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities

B. Income approach - Uses valuation techniques to convert future amounts to a single present amount based on current market expectations about those future amounts, including present value techniques, option-pricing models and excess earnings methods

C. Cost approach - Based on the amount that currently would be required to replace the service capacity of an asset (replacement cost)

The Company also adopted the provisions of ASC 825,

Financial Instruments

(“ASC 825”). ASC 825allows companies to choose to measure eligible assets and liabilities at fair value with changes in value recognized in earnings. Fair value treatment may be elected either upon initial recognition of an eligible asset or liability or, for an existing asset or liability, if an event triggers a new basis of accounting. The Company did not elect to re-measure any of its existing financial assets or liabilities under the provisions of this Statement. The Company elected the fair value option for the issuance of warrants associated with the promissory notes issued in the six month periods ended June 30, 2016 and June 30, 2015.

The Company’s financial assets or liabilities subject to ASC 820 as of June 30, 2016 include the conversion feature and warrant liability associated with convertible debentures issued during 2008 and 2009 and the warrants issued during 2011 and 2016 that are associated with notes payable. The conversion feature and warrants were deemed to be derivatives (the “Derivative Instruments”) since a fixed conversion price cannot be determined for either of the Derivative Instruments due to anti-dilution provisions embedded in the offering documents for the convertible debentures. The derivative instruments were not issued for risk management purposes and as such are not designated as hedging instruments under the provisions of ASC 815

,

Disclosures about Derivative Instruments and Hedging Activities

. See Note 8 – Convertible Notes Payable.

Following is a description of the valuation methodologies used to determine the fair value of the Company’s financial liabilities including the general classification of such instruments pursuant to the valuation hierarchy.

A summary as of June 30, 2016 of the fair value of liabilities measured at fair value on a recurring basis follows:

	Fair value at June 30, 2016		Quoted prices in active markets for identical assets/ liabilities (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Derivatives: (1) (2)
Conversion feature liability	$	2,313,328	$	-0-	$	-0-	$	2,313,328
Warrant liability		3,812,690		-0-		-0-		3,812,690
Total of derivative liabilities	$	6,126,018	$	-0-	$	-0-	$	6,126,018

(1) The fair value of the derivative instruments was estimated using the Income Approach and the Black Scholes option pricing model with the following assumptions for the period ended June 30, 2016

(2) The fair value at the measurement date is equal to the carrying value on the balance sheet

	Significant valuation assumptions for derivative instruments at June 30, 2016
Risk free interest rate	0.56%	to	0.92%
Dividend yield		0.00%
Expected volatility	106.3%	to	139.4%
Expected life (range in years)
Conversion feature liability	1.75	to	3.76
Warrant liability	0.75	to	3.76

A summary as of December 31, 2015 of the fair value of liabilities measured at fair value on a recurring ba

s

is follows:

	Fair value at		Quoted prices in active markets for identical assets/ liabilities		Significant other observable inputs		Significant unobservable inputs
	December 31, 2015		(Level 1)		(Level 2)		(Level 3)
Derivatives: (1) (2)
Conversion feature liability	$	901,243	$	-0-	$	-0-	$	901,243
Warrant liability		1,914,923		-0-		-0-		1,914,923
Total of derivative liabilities	$	2,816,166	$	-0-	$	-0-	$	2,816,166

(1) The fair value of the derivative instruments was estimated using the Income Approach and the Black Scholes option pricing model with the following assumptions for the year ended December 31, 2015

(2) The fair value at the measurement date is equal to the carrying value on the balance sheet

	Significant valuation assumptions for derivative instruments at December 31, 2015
Risk free interest rate	0.48%	to	1.2%
Dividend yield		0.00%
Expected volatility	91.0%	to	132.2%
Expected life (range in years)
Conversion feature liability	1.25	to	2.25
Warrant liability	0.00	to	3.01

A summary as of June 30, 2016 of the fair value of assets measured at fair value on a non-recurring basis follows:

	Carrying amount		Carrying amount		Quoted prices in active markets for identical assets/ liabilities		Significant other observable inputs		Significant unobservable inputs
	December 31, 2015		June 30, 2016		(Level 1)		(Level 2)		(Level 3)
Acquired assets (3)
Promasys B.V. customer list (4)	$	92,444	$	90,703	$	-0-	$	-0-	$	136,253
Promasys B.V. software code (4)		41,274		33,991		-0-		-0-		72,943
Promasys B.V. URLs/website (4)		15,159		6,190		-0-		-0-		68,814
Total	$	148,877	$	130,884	$	-0-	$	-0-	$	278,010

(3) The fair value of the acquired assets was estimated using the Income Approach with a discounted cash flow valuation methodology applied.

(4) The acquired Promasys B.V. software code, customer list and URLs/website are not measured on a recurring basis since their initial fair value has been deemed to have a finite life and is being amortized periodically. Instead the Company performs an impairment analysis on a quarterly basis in order to determine whether the carrying value of the assets reflects the fair value of the assets in a market based transaction.

Other identifiable intangible assets, which are subject to amortization, are being amortized using the straight-line method over their estimated useful lives ranging from 3 to 15 years. The Impairment or Disposal of Long-Lived Asset subsection of ASC 360,

Property, Plant and Equipment

requires us to test the recoverability of long-lived assets, including identifiable intangible assets with definite lives, whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. In testing for potential impairment, if the carrying value of the asset group exceeds the expected undiscounted cash flows, we must then determine the amount by which the fair value of those assets exceeds the carrying value and determine the amount of impairment, if any.

The table below presents the unrealized gains/(losses) for the six month periods ended June 30, 2016 and June 30, 2015

.

	Other income/(expense)
	For the six months ended
	June 30, 2016			June 30, 2015
The net amount of gains/(losses) for the period included in earnings attributable to the unrealized gain/(losses) from changes in derivative liabilities at the reporting date	$	(2,458,836	)	$	4,072,798
Total unrealized gains/(losses) included in earnings	$	(2,458,836	)	$	4,072,798

The tables below set forth a summary of changes in fair value of the Company’s Level 3 financial liabilities at fair value for the periods ended June 30, 2016 and December 31, 2015. The tables reflect changes for all financial liabilities at fair value categorized as Level 3 as of June 30, 2016 and December 31, 2015.

	Level 3 financial liabilities at fair value
For the six months ended	Balance, beginning			Net realized		Net unrealized gains/(losses) relating to instruments held at the			Net purchases, issuances and			Net transfers		Balance, end of
June 30, 2016	of year			gains/(losses)		reporting date			settlements			in and/or out		period
Derivatives:
Conversion feature liability	$	(901,243	)	$	-0-	$	(1,412,085	)	$	-0-		$	-0-	$	(2,313,328	)
Warrant liability		(1,914,923	)		-0-		(1,046,751	)		(851,016	)		-0-		(3,812,690	)
Total of derivative liabilities	$	(2,816,166	)	$	-0-	$	(2,458,836	)	$	(851,016	)	$	-0-	$	(6,126,018	)

	Level 3 financial liabilities at fair value
For the year ended	Balance, beginning			Net realized		Net unrealized gains/(losses) relating to instruments held at the		Net purchases, issuances and			Net transfers		Balance, end of
December 31, 2015	of year			gains/(losses)		reporting date		settlements			in and/or out		year
Derivatives:
Conversion feature liability	$	(2,944,402	)	$	29,875	$	2,013,284	$	-0-		$	-0-	$	(901,243	)
Warrant liability		(6,695,060	)		-0-		2,482,639		(868,128	)		3,165,626		(1,914,923	)
Total of derivative liabilities	$	(9,639,462	)	$	29,875	$	4,495,923	$	(868,128	)	$	3,165,626	$	(2,816,166	)

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Note 10 - Commitments and Contingencies

6 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

NOTE 1 0 : COMMITMENTS AND CONTINGENCIES

The Company currently leases office space under operating leases for its office locations and has operating leases related to server and network co-location and disaster recovery for its operations. The minimum future lease payments required under the Company’s operating leases at June 30, 2016 are as follows:

2016	$	396,069
2017		662,992
2018		512,421
2019		421,230
2020		297,570
Thereafter		580,512
Total	$	2,870,794

In addition to annual base rental payments, the Company pays for the operating expenses associated with its leased office space and is responsible for any escalation in operating expenses as determined in the leases. Rent expense was $501,058 and $482,711 for the six month periods ended June 30, 2016 and June 30, 2015, respectively.

The Company’s Fort Lauderdale, Florida corporate office lease expires in February 2023

. The Company’s lease on its New Jersey field office expires in March 2021. The Company currently operates its wholly-owned subsidiary, OmniComm Ltd., in the United Kingdom under the terms of a lease that expires in September 2017. The Company currently operates its wholly-owned subsidiary, OmniComm Europe, GmbH, in Germany under the terms of a lease that expires in July 2017

. The Company currently operates its wholly-owned subsidiary, OmniComm Promasys B.V, in the Netherlands under the terms of a lease that expires in October 2018.

LEGAL PROCEEDINGS

From time to time the Company may be involved in litigation relating to claims arising out of our operations in the normal course of business. As of June 30, 2016, there were no pending or threatened lawsuits that could reasonably be expected to have a material effect on the results of our operations.

PATENT LITIGATION SETTLEMENT

Effective April 9, 2009, we entered into a Settlement and License Agreement with DataSci, LLC (“DataSci”). DataSci granted us a worldwide, non-exclusive non-transferable right and license under the Licensed Patent and the right to sublicense TrialMaster on a Technology Transfer and Technology Transition basis. Under the terms of the license, we are obligated to pay royalties quarterly for sales of Licensed Products, as defined therein, from January 1, 2009 until the expiration of the Licensed Patent equal to two percent (2%) of OmniComm’s annual Gross Revenues or, alternatively, the annual minimum royalty payment(s), whichever is greater.  In addition to the payment of royalties, the Settlement and Licensing Agreement imposes certain obligations on us including commercialization, certain sublicensing, other payments, insurance, and confidentiality. In addition and as a license fee for past use of the Licensed Patent which may have occurred prior to the effective date of the Settlement and Licensing Agreement, we issued a warrant to DataSci to purchase 1,000,000 shares of our common stock at an exercise price of $.01 per share. The Settlement and Licensing Agreement provides that upon the expiration date of the warrant, at DataSci’s sole discretion, DataSci shall exercise its option under the warrant or licensee shall pay DataSci $300,000. The warrant is exercisable commencing on the second anniversary of the Settlement and Licensing Agreement, April 2, 2011, through the expiration date of the warrant, deemed to be on the termination date of the Settlement and Licensing Agreement on May 12, 2018. 

On June 23, 2009, we entered into an agreement to acquire the EDC assets of eResearch Technology. Concurrent with the consummation of that transaction we entered into the First Amendment to Settlement and Licensing Agreement with DataSci, (i) to include the eResearch Technology EDC assets acquired within the definition of Licensed Products, and as such subject to the royalty payment(s), under and in accordance with the Settlement and Licensing Agreement, and (ii) provide a release by DataSci of any and all claims of infringement of the Licensed Patent in connection with the eResearch Technology EDC assets acquired which may have occurred prior to the effective date of the First Amendment to Settlement and Licensing Agreement for an aggregate amount of $300,000.

The remaining minimum royalty payments per year are as follows:

2016	$	225,000
2017		450,000
2018		164,500
Total	$	839,500

During the six month periods ended June 30, 2016 and June 30, 2015 the Company recorded a charge to earnings of $52,322 and $64,822 respectively, which amounts represent (i) the amount of additional license expense incurred above the stipulated minimum in the DataSci License Agreement during the six month periods ended June 30, 2016 and June 30, 2015 and (ii) the accretion of the difference between the total stipulated annual minimum royalty payments and the recorded present value accrual of the annual minimum royalty payments.

EMPLOYMENT AGREEMENTS

We have employment agreements in place with the following members of our executive management team:

Cornelis F. Wit, Chief Executive Officer

Randall G. Smith, Chief Technology Officer

Stephen E. Johnson, President and Chief Operating Officer

The employment agreements provide, among other things, for participation in employee benefits available to employees and executives. Each of the agreements will renew for successive one-year terms unless the agreement is expressly cancelled by either the employee or the Company ninety days prior to the end of the term. Under the terms of the agreement, we may terminate the employee’s employment upon 30 days notice of a material breach and the employee may terminate the agreement under the same terms and conditions. The employment agreements contain non-disclosure provisions, as well as non-compete clauses. The agreements for Mr. Smith and Mr. Johnson contain severance provisions.

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Note 11 - Related Party Transactions

6 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Related Party Transactions Disclosure [Text Block]

NOTE 1 1 : RELATED P ARTY TRANSACTIONS

On April 1, 2015 the Company issued a promissory note in the amount of $20,000 to our Chairman and Chief Technology Officer, Randall G. Smith (“Mr. Smith”), in exchange for an existing promissory note in the same amount.  The promissory note carries an interest rate of 12% and has a maturity date of April 1, 2018.

On April 30, 2015, the Company and Stephen E. Johnson, our Chief Operating Officer and President (“Mr. Johnson”) extended the maturity date of $25,000 of convertible debentures to Mr.  Johnson, originally issued in December 2008. The debentures carry an interest rate of 12% and have a maturity date of April 1, 2018. The expiration date of the warrants associated with the debentures was also extended to April 1, 2018.

On May 1, 2015 the Company paid $5,000 to Mr. Smith in exchange for an outstanding convertible note in the same amount. The note carried an interest rate of 12% and had a maturity date of January 1, 2016.

As of June 30, 2016, we have an aggregate of $5,825,000 of convertible debentures and $450,000 of promissory notes outstanding to our Chief Executive Officer and Director, Cornelis F. With (“Mr. Wit”), and have issued certain warrants to Mr. Wit, as follows:

● In June 2008, Mr. Wit invested $510,000 in convertible notes. On August 29, 2008, Mr. Wit converted the $510,000 and invested an additional $1,260,000 in a private placement of convertible debentures and warrants to purchase 3,540,000 shares of our common stock. The convertible debentures, which bear interest at 10% per annum, were due on August 29, 2010. The convertible debentures are convertible at any time at the option of the holder into shares of our common stock based upon a conversion rate of $0.50 per share. On September 30, 2009, the Company and Mr. Wit extended the $1,770,000 of convertible debentures until August 29, 2013 in accordance with the terms of a Secured Convertible Debenture issued on that date. On February 22, 2013, the Company and Mr. Wit extended the maturity date of the $1,770,000 of convertible debentures to January 1, 2016. The expiration date of the warrants associated with the debentures was also extended to January 1, 2016. On January 31, 2015 the Company and Mr. Wit extended the maturity date of the $1,770,000 of convertible debentures to April 1, 2017. The expiration date of the warrants associated with the debentures was also extended to April 1, 2017. On June 3 0, 2016 the Company and Mr. Wit extended the maturity date of the $1,770,000 of convertible debentures to April 1, 2020. The expiration date of the warrants associated with the debentures was also extended to April 1, 2020 .

● In February 2008, Mr. Wit invested $150,000 in promissory notes and from September 2008 to December 2008, Mr. Wit invested $4,200,000 in convertible notes. On December 16, 2008, Mr. Wit converted the $4,350,000 into a private placement of convertible debentures and warrants to purchase 8,700,000 shares of our common stock. The convertible debentures, which bear interest at 12% per annum, were due on December 16, 2010. The convertible debentures are convertible at any time at the option of the holder into shares of our common stock based upon a conversion rate of $0.50 per share. On September 30, 2009, the Company and Mr. Wit extended the $4,350,000 of convertible debentures until December 16, 2013 in accordance with the terms of a Secured Convertible Debenture issued on that date. In a private transaction on October 16, 2012, Mr. Wit purchased $125,000 of the December 2008 convertible debentures and the related 250,000 warrants from Mr. Ronald Linares, the Company’s former Chief Financial Officer. On February 22, 2013, the Company and Mr. Wit extended the maturity date of the $4,475,000 of convertible debentures to January 1, 2016. The expiration date of the warrants associated with the debentures was also extended to January 1, 2016. On January 31, 2015 the Company and Mr. Wit extended the maturity date of the $4,475,000 of convertible debentures to April 1, 2017. The expiration date of the warrants associated with the debentures was also extended to April 1, 2017. On November 19, 2015 the Company and Mr. Wit agreed to cancel $420,000 of the debentures and 1,680,000 of unrelated warrants in exchange for 1,680,000 shares of our common stock. On June 3 0, 2016 the Company and Mr. Wit extended the maturity date of the $4,055,000 of convertible debentures to April 1, 2020. The expiration date of the warrants associated with the debentures was also extended to April 1, 2020 .

● From July 2009 to September 2009, Mr. Wit invested $1,100,000 which amount was aggregated under the terms of one convertible note dated September 30, 2009.  On September 30, 2009, Mr. Wit agreed to convert this convertible note into a private placement of secured convertible debentures bearing interest at a rate of 12% per annum with a maturity date of March 30, 2011. The convertible debentures were convertible into 4,400,000 shares of common stock and Mr. Wit received 4,400,000 warrants to purchase common stock of the Company at a price of $0.25. On March 30, 2011, the Company and Mr. Wit extended the maturity date of his convertible note until April 1, 2013 in accordance with the terms of Amendment Number One To Securities Purchase Agreement. The Company also extended the expiration date of the 4,400,000 warrants issued with convertible note by two years to September 30, 2015. On February 22, 2013, the Company and Mr. Wit extended the maturity date of his convertible debentures to January 1, 2016 and waived all his rights to the granted security interest in accordance with the terms of Amendment Number Two To Securities Purchase Agreement. The expiration date of the warrants associated with the debentures was also extended to January 1, 2016. On January 31, 2015 the Company and Mr. Wit extended the maturity date of the $1,100,000 of convertible debentures to April 1, 2017. The expiration date of the warrants associated with the debentures was also extended to April 1, 2017. On November 19, 2015 Mr. Wit converted $475,000 of the convertible debentures into 1,900,000 shares of our common stock. On November 19, 2015 the Company and Mr. Wit agreed to cancel the 1,900,000 warrants related to the $475,000 in convertible debentures and $475,000 of unrelated promissory notes in exchange for 1,900,000 shares of our common stock. On November 23, 2015 Mr. Wit sold the remaining $625,000 of convertible debentures and the related warrants to two unrelated non-affiliate shareholders.

● From October 2009 to December 2009, Mr. Wit invested $1,440,000, which amount was aggregated under the terms of one convertible note dated December 31, 2009. On December 31, 2009, Mr. Wit agreed to convert this Convertible Note into a private placement of unsecured convertible debentures bearing interest at a rate of 12% per annum, which Convertible Debentures were due on June 30, 2011. The Company and Mr. Wit extended the maturity date of his convertible note until October 1, 2013 in accordance with the terms of Amendment Number One To Securities Purchase Agreement. The Company also extended the expiration date of the 5,760,000 warrants issued with convertible note by two years to December 31, 2015. On February 22, 2013, the Company and Mr. Wit extended the maturity date of his convertible debentures to January 1, 2016 in accordance with the terms of Amendment Number Two To Securities Purchase Agreement. The expiration date of the warrants associated with the debentures was also extended to January 1, 2016. On January 31, 2015 the Company and Mr. Wit extended the maturity date of the $1,440,000 of convertible debentures to April 1, 2017. The expiration date of the warrants associated with the debentures was also extended to April 1, 2017. On November 19, 2015 Mr. Wit converted $1,440,000 of the convertible debentures into 5,760,000 shares of our common stock. On November 19, 2015 the Company and Mr. Wit agreed to cancel the 5,760,000 warrants related to the convertible debentures and $1,440,000 of unrelated promissory notes in exchange for 5,760,000 shares of our common stock.

● On January 1, 2014, the Company issued a promissory note in the principal amount of $980,000 and warrants to purchase 3,920,000 shares of common stock of the Company at an exercise price of $0.25 with an expiration date of April 1, 2017 to Mr. Wit in exchange for accrued interest in the amount of $980,000. The note carries an interest rate of 12% per annum and is due on April 1, 2017. On October 15, 2015 the Company issued a promissory note in the amount of $980,000 to Mr. Wit in exchange for the existing promissory note in the same amount. The promissory note carries an interest rate of 12% and has a maturity date of January 1, 2019. The expiration date of the warrants associated with the promissory note was also extended to January 1, 2019. On November 19, 2015 the promissory note and the related warrants were cancelled in exchange for 3,920,000 shares of our common stock .

● On January 31, 2015 the Company issued a promissory note in the amount of $2,860,000 and paid $6,879 in principal to Mr. Wit in exchange for an existing promissory note in the same amount. The promissory note carries an interest rate of 12% and has a maturity date of April 1, 2017. The expiration date of the warrants associated with the promissory note was also extended to April 1, 2017. On October 15, 2015 the Company issued a promissory note in the amount of $2,860,000 to Mr. Wit in exchange for the existing promissory note in the same amount. The promissory note carries an interest rate of 12% and has a maturity date of January 1, 2019. The expiration date of the warrants associated with the promissory note was also extended to January 1, 2019. On November 19, 2015 the Company and Mr. Wit agreed to cancel the promissory note and 11,440,000 warrants related to the promissory note in exchange for 11,440,000 shares of our common stock.

● On January 31, 2015 the Company issued a promissory note in the amount of $529,000 to Mr. Wit in exchange for an existing promissory note in the same amount. The promissory note carries an interest rate of 12% and has a maturity date of April 1, 2017. The expiration date of the warrants associated with the promissory note was also extended to April 1, 2017. On October 15, 2015 the Company issued a promissory note in the amount of $529,000 to Mr. Wit in exchange for the existing promissory note in the same amount. The promissory note carries an interest rate of 12% and has a maturity date of January 1, 2019. The expiration date of the warrants associated with the promissory note was also extended to January 1, 2019. On November 19, 2015 the promissory note and the related warrants were cancelled in exchange for 2,116,000 shares of our common stock.

● On January 31, 2015, the Company issued a promissory note in the principal amount of $950,000 and warrants to purchase 3,800,000 shares of common stock of the Company at an exercise price of $0.25 per share with an expiration date of April 1, 2017 to Mr. Wit in exchange for an existing promissory note in the amount of $280,000 and accrued interest in the amount of $670,000. The note carries an interest rate of 12% per annum and is due on April 1, 2017. On October 15, 2015 the Company issued a promissory note in the amount of $950,000 to Mr. Wit in exchange for the existing promissory note in the same amount. The promissory note carries an interest rate of 12% and has a maturity date of January 1, 2019. The expiration date of the warrants associated with the promissory note was also extended to January 1, 2019. On November 19, 2015 the Company and Mr. Wit agreed to cancel the promissory note and the warrants related to the promissory note in exchange for 3,800,000 shares of our common stock.

● On November 19, 2015 we issued 37,023,517 restricted shares of our common stock to Mr. Wit. The shares were issued in exchange (i) for the cancellation of $6,919,000 of outstanding 12% promissory notes, $420,000 of outstanding 12% convertible notes payable and 29,363,517 outstanding warrants to purchase shares of our common stock at $0.25 per share and (ii) the conversion of $1,915,000 of convertible notes payable with a conversion price of $0.25 per share.

● On February 29, 2016, the Company issued a promissory note in the principal amount of $450,000 and warrants to purchase 1,800,000 shares of common stock of the Company at an exercise price of $0.25 per share with an expiration date of April 1, 2019 to Mr. Wit in exchange for accrued interest in the amount of $450,000. The note carries an interest rate of 12% per annum and has a maturity date of April 1, 2019.

On March 18, 2013, the Company entered into a $2,000,000 revolving Line of Credit (“Line of Credit”) with The Northern Trust Company guaranteed by our Chief Executive Officer and Director

, Cornelis F. Wit. Mr. Wit receives 2.0% interest (approximately $9,500 per month) from the Company on the assets pledged for the Line of Credit. On December 18, 2013 the Company renewed the Line of Credit and increased the available balance to $4,000,000. On February 3, 2015 the Company renewed the Line of Credit and increased the available balance to $5,000,000. The Line of Credit matures on February 2, 2018 and carries a variable interest rate based on the prime rate. At June 30, 2016, $5,000,000 was outstanding on the Line of Credit at an interest rate of 2.5%.

For the six month periods ended June 30, 2016 and June 30, 2015 we incurred $443,686 and $1,299,785, respectively, in interest expense payable to related parties.

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Note 12 - Stockholders' (Deficit)

6 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

NOTE 1 2 : STOCKHOLDERS’ (DEFICIT)

Our authorized capital stock consists of 500,000,000 shares of common stock, $.001 par value per share, and 10,000,000 shares of preferred stock, par value $.001 per share, of which 5,000,000 shares have been designated as 5% Series A Preferred Stock, 230,000 shares have been designated as Series B Preferred Stock, 747,500 shares have been designated as Series C Preferred Stock and 250,000 shares have been designated as Series D Preferred Stock.

At the 2016 Annual Meeting of Stockholders the proposed amendment to the Company’s Certificate of Incorporation to increase the authorized number of shares of common stock by 250,000,000 shares to an aggregate of 500,000,000 shares received an affirmative vote from the holders of a majority of the outstanding shares of Voting Securities and an affirmative vote from the holders of a majority of the outstanding shares of common stock. Based on the votes received, the proposed amendment was approved and the number of authorized shares of common stock of the Company was increased from 250,000,000 shares to 500,000,000 shares.

As of June 30, 2016 we had the following outstanding securities:

o 147,683,879 shares of common stock issued and outstanding;

o 27,860,000 warrants issued and outstanding to purchase shares of our common stock;

o -0- shares of our Series A Preferred Stock issued and outstanding;

o -0- shares of our Series B Preferred Stock issued and outstanding;

o -0- shares of our Series C Preferred Stock issued and outstanding;

o 250,000 share of our Series D Preferred Stock issued and outstanding; and

o $7,275,000 principal amount Convertible Debentures convertible into 15,910 ,000 shares of common stock.

Common Stock

Holders of common stock are entitled to one vote for each share on all matters submitted to a stockholder vote. Holders of our voting securities do not have cumulative voting rights. Holders of common stock are entitled to share in all dividends that the Board of Directors, in its discretion, declares from legally available funds. In the event of our liquidation, dissolution or winding up each outstanding share of common stock entitles its holder to participate in all assets that remain after payment of liabilities and after providing for each class of stock, if any, having preference over the common stock.

Holders of common stock have no conversion, preemptive or other subscription rights, and there are no redemption provisions for the common stock. The rights of the holders of common stock are subject to any rights that may be fixed for holders of preferred stock, when and if any preferred stock is outstanding. All outstanding shares of common stock are duly authorized, validly issued, fully paid and non-assessable.

Preferred

S

tock

Our Board of Directors, without further stockholder approval, may issue preferred stock in one or more series from time to time and fix or alter the designations, relative rights, priorities, preferences, qualifications, limitations and restrictions of the shares of each series. In addition, the Board of Directors may fix and determine all privileges and rights of the authorized preferred stock series including:

o dividend and liquidation preferences;

o voting rights;

o conversion privileges; and

o redemption terms .

Our Board of Directors may authorize the issuance of preferred stock which ranks senior to our common stock for the payment of dividends and the distribution of assets on liquidation. In addition, our Board of Directors can fix limitations and restrictions, if any, upon the payment of dividends on our common stock to be effective while any shares of preferred stock are outstanding.

During the period from December 2015 through April 2016 all 5% Series A Preferred Stock Shareholders accepted the Exchange Offer and converted a total of 4,125,224 Series A preferred shares into 16,500,896 common shares.

The following table presents the cumulative arrearage of undeclared dividends by class of preferred stock as of June 30, 2016 and June 30, 2015, respectively, and the per share amount by class of preferred stock.

	Cumulative arrearage as of				Cumulative arrearage per share as of
	June 30,				June 30,
Series of preferred stock	2016		2015		2016		2015
Series A	$	-0-	$	2,688,984	$	-0-	$	0.65
Series B		609,887		609,887	$	3.05	$	3.05
Series C		1,472,093		1,472,093	$	4.37	$	4.37
Total preferred stock arrearage	$	2,081,980	$	4,770,964

The following table presents preferred dividends accreted for the six month periods ended June 30, 2016 and June 30, 2015, respectively, and the per share effect of the preferred dividends if their effect was not anti-dilutive.

	Dividends accreted				Dividends per share
	For the six months ended				For the six months ended
	June 30,				June 30,
	2016		2015		2016		2015
Preferred stock dividends in arrears Series A	$	1,870	$	102,283	$	0.012	$	0.025
Preferred stock dividends in arrears Series B	$	-0-	$	-0-	$	-0-	$	-0-
Preferred stock dividends in arrears Series C	$	-0-	$	-0-	$	-0-	$	-0-

Warrants Issued for Services and in Capital Transactions

The following tables summarize all outstanding warrants for the periods ended

June 30, 2016 and December 31, 2015, and the related changes during these periods.

June 30, 2016									June 30, 2016
Warrants outstanding									Warrants exercisable
Range of exercise price			Number outstanding		Weighted average remaining contractual life		Weighted average exercise price		Number exercisable		Weighted average exercise price
$0.25	–	$0.60		27,860,000		3.21	$	0.42		27,860,000	$	0.42

December 31, 2015									December 31, 2015
Warrants outstanding									Warrants exercisable
Range of exercise price			Number outstanding		Weighted average remaining contractual life		Weighted average exercise price		Number exercisable		Weighted average exercise price
$0.25	–	$0.60		22,900,000		1.76	$	0.46		22,900,000	$	0.46

Warrants
Balance at December 31, 2014		48,463,517
Issued		3,800,000
Exercised		-0-
Cancelled		(29,363,517	)
Expired/forfeited		-0-
Balance at December 31, 2015		22,900,000
Issued		4,970,000
Exercised		-0-
Expired/forfeited		(10,000	)
Balance at June 30, 2016		27,860,000
Warrants exercisable at June 30, 2016		27,860,000
Weighted average fair value of warrants granted during 2016	$	0.15

Other Comprehensive (Loss)

Due to the availability of net operating losses and related deferred tax valuations, there is no tax effect associated with any component of other comprehensive (loss). The following table lists the beginning balance, activity and ending balance of the components of accumulated other comprehensive (loss).

	Foreign currency translation			Accumulated other comprehensive (loss)
Balance at December 31, 2014	$	(243,827	)	$	(243,827	)
2015 Activity		(122,528	)		(122,528	)
Balance at December 31, 2015		(366,355	)		(366,355	)
2016 Activity		(17,787	)		(17,787	)
Balance at June 30, 2016	$	(384,142	)	$	(384,142	)

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Note 13 - Employee Equity Incentive Plans

6 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

NOTE 1 3 : EMPLOYEE EQUITY INCENTIVE PLANS

Stock Option Plan

s

Description of 20

16

Equity Incentive Plan

In 2016, the Company’s Board of Directors and shareholders approved the OmniComm Systems, Inc. 2016 Equity Incentive Plan (the “2016 Plan”). The 2016 Plan provides for granting Incentive Stock Options, Nonqualified Stock Options, Stock Appreciation Rights, Restricted Stock Awards, Phantom Stock Unit Awards and Performance Share Units. The 2016 Plan provides for the issuance of up to

10,000,000 shares of our common stock for issuance upon awards granted under the 2016 Plan. In addition, the number of shares of common stock available for issuance under the 2016 Plan shall automatically increase on January 1st of each year for a period of nine (9) years commencing on January 1, 2017 and ending on (and including) January 1, 2025, in an amount equal to five percent (5%) of the total number of shares authorized under the 2016 Plan

.

Unless earlier terminated by the Board, the 2016 Plan shall terminate on June 29, 2026.

The maximum term for any option grant under the 2016 Plan is ten years from the date of the grant; however, options granted under the 2016 Plan will generally expire five years from the date of grant. Options granted to employees generally vest either upon grant or in two installments. The first vesting, which is equal to 50% of the granted stock options, usually occurs upon completion of one full year of employment from the date of grant and the second vesting usually occurs on the second anniversary of the date of grant. The vesting period typically begins on the date of hire for new employees and on the date of grant for existing employees. The restrictions on restricted shares granted to employees generally lapse in three equal annual installments on the anniversary of the date of grant.  Any unvested stock options or restricted shares with restrictions that have not lapsed that are granted under the 2016 Plan are forfeited and expire upon termination of employment.

As of June 30, 2016, there were -0- outstanding options and -0- restricted stock shares that have been granted under the 2016 Plan. At June 30, 2016, there were 10,000,000 shares available for grant as options or other forms of share-based compensation under the 2016 Plan.

Description of 2009 Equity Incentive Plan

In 2009, the Company’s Board of Directors and shareholders approved the OmniComm Systems, Inc. 2009 Equity Incentive Plan (the “2009 Plan”). On June 16, 2016 the 2009 Plan terminated upon the approval of the 2016 Plan. The 2009 Plan provided for granting Incentive Stock Options, Nonqualified Stock Options, Stock Appreciation Rights, Restricted Stock Awards, Phantom Stock Unit Awards and Performance Share Units. Pursuant to the 2009 Plan, 7,500,000 shares of the Company’s common stock were authorized for issuance.

The maximum term for any option grant under the 2009 Plan was ten years from the date of the grant; however, options granted under the 2009 Plan generally expired five years from the date of grant. Options granted to employees generally vested either upon grant or in two installments. The first vesting, which was equal to 50% of the granted stock options, usually occurred upon completion of one full year of employment from the date of grant and the second vesting usually occurred on the second anniversary of the date of grant. The vesting period typically began on the date of hire for new employees and on the date of grant for existing employees. The restrictions on restricted shares granted to employees generally lapsed in three equal annual installments on the anniversary of the date of grant.  Any unvested stock options or restricted shares with restrictions that had not lapsed that were granted under the 2009 Plan were forfeited and expired upon termination of employment.

As of June 30, 2016, there were 982,500 outstanding options and 3

,893,330 restricted stock shares that have been granted under the 2009 Plan. At June 30, 2016, there were -0- shares available for grant as options or other forms of share-based compensation under the 2009 Plan.

The following table summarizes the stock option activity for the Company’s equity incentive plans:

	Number of options			Weighted average exercise price (per share)		Weighted average remaining contractual term (in years)		Aggregate intrinsic value
Outstanding at December 31, 2014		3,130,000		$	0.20		1.59	$	364,900
Granted		225,000			0.25
Exercised		(292,500	)		0.12
Forfeited/cancelled/expired		(1,060,000	)		0.35
Outstanding at December 31, 2015		2,002,500			0.14		1.40	$	198,990
Granted		-0-			-0-
Exercised		(1,012,500	)		0.13
Forfeited/cancelled/expired		(7,500	)		0.13
Outstanding at June 30, 2016		982,500		$	0.16		1.99	$	57,088
Vested and exercisable at June 30, 2016		845,000		$	0.15		1.70	$	54,938

The aggregate intrinsic value in the table above represents the total intrinsic value (the difference between the Company’s closing stock price at quarter-end and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on June 30, 2016.

The total number of shares vesting and the fair value of shares vesting for the six month periods ended June 30, 2016 and June 30, 2015, respectively, was:

Fair value of options vesting for the six months ended	Number of options vested		Fair value of options vested
June 30, 2016		112,500	$	25,153
June 30, 2015		125,000	$	22,235

Cash received for stock option exercises for the six month periods ended June 30, 2016 and June 30, 2015 was $125,000 and $27,250, respectively. Due to the Company’s net loss position, no income tax benefit has been realized during the six month periods ended June 30, 2016 and June 30, 2015.

The following table summarizes information concerning options outstanding at June 30, 2016:

Awards breakdown by price range at June 30, 2016
			Outstanding						Vested
Strike price range ($)			Outstanding stock options		Weighted average remaining contractual life		Weighted average outstanding strike price		Vested stock options		Weighted average remaining vested contractual life		Weighted average vested strike price
0.00	to	0.20		757,500		1.72	$	0.13		682,500		1.48	$	0.13
0.21	to	0.29		125,000		2.33		0.22		112,500		2.17		0.21
0.30	to	0.49		100,000		3.67		0.30		50,000		3.67		0.30
0.50	to	0.70		-0-		0.00		0.00		-0-		0.00		0.00
0.00	to	0.70		982,500		1.99	$	0.16		845,000		1.70	$	0.15

The following table summarizes information concerning options outstanding at December 31, 2015:

Awards breakdown by price range at December 31, 2015
			Outstanding						Vested
Strike price range ($)			Outstanding stock options		Weighted average remaining contractual life		Weighted average outstanding strike price		Vested stock options		Weighted average remaining vested contractual life		Weighted average vested strike price
0.00	to	0.20		1,777,500		1.14	$	0.13		1,652,500		0.93	$	0.13
0.21	to	0.29		125,000		2.83		0.22		100,000		2.46		0.21
0.30	to	0.49		100,000		4.17		0.30		-0-		0.00		0.00
0.50	to	0.70		-0-		0.00		0.00		-0-		0.00		0.00
0.00	to	0.70		2,002,500		1.40	$	0.14		1,752,500		1.02	$	0.13

The weighted average fair value (per share) of options granted during the six month period ended June 30, 2016 was $0.0 as no options were granted during the period and $0.26 during the six month period ended June 30, 2015. The Black Scholes option-pricing model was utilized to calculate these values.

Basis for Fair Value Estimate of Share-Based Payments

Based on analysis of its historical volatility, the Company expects that the future volatility of its share price is likely to be similar to the historical volatility the Company experienced since the Company’s commercialization activities were initiated during the second half of 2000. The Company used a volatility calculation utilizing the Company’s own historical volatility to estimate its future volatility for purposes of valuing the share-based payments that have been granted. Actual volatility, and future changes in estimated volatility, may differ substantially from the Company’s current estimates.

The Company utilizes the historical data available regarding employee and director exercise activity to calculate an expected life of the options. The table below presents the weighted average expected life in years of options granted under the Plan as described above. The risk-free rate of the stock options is based on the U.S. Treasury yield curve in effect at the time of grant, which corresponds with the expected term of the option granted.

Below are the assumptions for the fair value of share-based payments for the periods ended June 30, 2016 and December 31, 2015.

	Stock option assumptions for the period ended
Stock option assumptions	June 30, 2016		December 31, 2015
Risk-free interest rate		1.30%		1.20%
Expected dividend yield		0.0%		0.0%
Expected volatility		157.6%		183.8%
Expected life of options (in years)		5		5

The following table summarizes weighted average grant date fair value activity for the Company’s incentive stock plans:

	Weighted average grant date fair value
	for the six months ended June 30,
	2016		2015
Stock options granted during the period	$	-0-	$	0.26
Stock options vested during the period	$	0.22	$	0.18
Stock options forfeited during the period	$	0.11	$	0.25

A summary of the status of the Company’s non-vested shares underlying stock options as of June 30, 2016, and changes during the six month period ended June 30, 2016 is as follows:

	Shares underlying stock options		Weighted average grant date fair value
Nonvested shares at January 1, 2016		250,000	$	0.22
Nonvested shares at June 30, 2016		137,500	$	0.22

As of June 30, 2016, approximately $17,927 of total unrecognized compensation cost related to unvested stock options is expected to be recognized over a weighted-average period of 0.9 years.

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Note 14 - Subsequent Events

6 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Subsequent Events [Text Block]

NOTE 1 4 : SUBSEQUENT EVENTS

Subsequent to June 30, 2016 the Company repaid $200,000 on its revolving Line of Credit.

Subsequent to June 30, 2016, one employee exercised options that had been granted to the employee. As a result 3,038 common shares were issued to the employee.

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Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2016

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION

The Company’s accounts include those of all its wholly-owned subsidiaries, which are more fully described in the Company’s 2015 Annual Report filed on Form 10-K with the Securities and Exchange Commission, and have been prepared in conformity with (i) accounting principles generally accepted in the United States of America; and (ii) the rules and regulations of the United States Securities and Exchange Commission. All significant intercompany accounts and transactions between the Company and its subsidiaries have been eliminated in consolidation.

Consolidation, Policy [Policy Text Block]

UNAUDITED FINANCIAL STATEMENTS

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information, pursuant to the rules and regulations of the Securities and Exchange Commission. Pursuant to such rules and regulations, certain financial information and footnote disclosures normally included in the consolidated financial statements have been condensed or omitted. The results for the periods indicated are unaudited, but reflect all adjustments (consisting only of normally recurring adjustments) which management considers necessary for a fair presentation of operating results.

The operating results for the six month period ended June 30, 2016 are not necessarily indicative of the results that may be expected for the year-ended December 31, 2016. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year-ended December 31, 2015.

Use of Estimates, Policy [Policy Text Block]

ESTIMATES IN FINANCIAL STATEMENTS

The preparation of the unaudited condensed consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and footnotes thereto. Significant estimates incorporated in our financial statements include the recorded allowance for doubtful accounts, the estimate of the appropriate amortization period of our intangible assets, the evaluation of whether our intangible assets have suffered any impairment, the allocation of revenues under multiple-element customer contracts, royalty-based patent liabilities, the value of derivatives associated with debt issued by the Company and the valuation of any corresponding discount to the issuance of our debt. Actual results may differ from those estimates.

Reclassification, Policy [Policy Text Block]

Reclassifications

Certain reclassifications have been made in the 2015 financial statements to conform to the 2016 presentation. These reclassifications did not have any effect on our net income/(loss) or shareholders’ deficit.

Foreign Currency Transactions and Translations Policy [Policy Text Block]

foreign currency translation

The financial statements of the Company’s foreign subsidiaries are translated in accordance with Accounting Standards Codification (“ASC”) 830-30,

Foreign Currency Matters—Translation of Financial Statements

. The reporting currency for the Company is the U.S. dollar. The functional currency of the Company’s subsidiaries, OmniComm Europe GmbH in Germany, OmniComm Spain S.L. in Spain and OmniComm Promasys B.V. in the Netherlands is the Euro. The functional currency of the Company’s subsidiary, OmniComm Ltd. in the United Kingdom, is the British Pound Sterling. Accordingly, the assets and liabilities of the Company’s foreign subsidiaries are translated into U.S. dollars using the exchange rate in effect at each balance sheet date. Revenue and expense accounts of the Company’s foreign subsidiaries are translated using an average rate of exchange during the period. Foreign currency translation adjustments are accumulated as a component of other comprehensive income/(loss) as a separate component of stockholders’ equity. Gains and losses arising from transactions denominated in foreign currencies are primarily related to intercompany accounts that have been determined to be temporary in nature and accordingly, are recorded directly to the statement of operations. We record translation gains and losses in accumulated other comprehensive income as a component of stockholders’ equity. We recorded translation losses of $17,787 and $83,531 for the six month periods ended June 30, 2016 and June 30, 2015 respectively.

Revenue Recognition, Policy [Policy Text Block]

REVENUE RECOGNITION POLICY

The Company derives revenues from software licenses and services of its EDC products and services which can be purchased on a stand-alone basis. License revenues are derived principally from the sale of term licenses for the following software products offered by the Company:

TrialMaster, TrialOne

,

eClinical Suite

and

Promasys.

Service revenues are derived principally from the Company's delivery of the hosted solutions of its

TrialMaster

and

eClinical Suite

software products, and consulting services and customer support, including training, for all of the Company's products.

The Company recognizes revenues when all of the following conditions are satisfied: (1) there is persuasive evidence of an arrangement; (2) the product or service has been provided to the customer; (3) the collection of fees is probable; and (4) the amount of fees to be paid by the customer is fixed or determinable.

The Company operates in one reportable segment which is the delivery of EDC Software and services to clinical trial sponsors. The Company segregates its revenues based on the activity cycle used to generate its revenues. Accordingly, revenues are currently generated through four main activities

, including hosted applications, licensing, professional services and maintenance-related services.

Hosted Application Revenues

The Company offers its

TrialMaster

and

eClinical Suite

software products as hosted application solutions delivered through a standard web-browser, with customer support and training services. The Company's

TrialOne

and

Promasys

solutions are presently available on a licensed basis. To date, hosted applications revenues have been primarily related to

TrialMaster

and

eClinical Suite

.

Revenues resulting from

TrialMaster

and

eClinical Suite

application hosting services consist of three components of services for each clinical trial. The first component is comprised of application set up, including design of electronic case report forms and edit checks, installation and server configuration of the system. The second component involves application hosting and related support services as well as billable change orders which consist of amounts billed to customers for functionality changes made. The third component involves services required to close out, or lock, the database for the clinical trial.

Fees charged for the trial system design, set up and implementation are amortized and recognized ratably over the estimated hosting period. Work performed outside the original scope of work is contracted for separately as an additional fee and is generally recognized ratably over the remaining term of the hosting period. Fees for the first and third stages of the service are typically billed based upon milestones. Revenues earned upon completion of a contractual milestone are deferred and recognized over the estimated remaining hosting period. Fees for application hosting and related services in the second stage are generally billed monthly or quarterly in advance. Revenues resulting from hosting services for the

eClinical Suite

products consist of installation and server configuration, application hosting and related support services. Revenues are recognized ratably over the period of the service.

Licensing Revenues

The Company's software license revenues are earned from the sale of off-the-shelf software. From time-to-time a client might require significant modification or customization subsequent to delivery to the customer. The Company generally enters into software term licenses for its EDC Software products with its customers for three to five year periods, although customers have entered into both longer and shorter term license agreements. These arrangements typically include multiple elements: software license, consulting services and customer support. The Company bills its customers in accordance with the terms of the underlying contract. Generally, the Company bills license fees in advance for each billing cycle of the license term, which typically is either on a quarterly or annual basis. Payment terms are generally net 30 days.

The Company has sold perpetual licenses for EDC Software products in certain situations to existing customers with the option to purchase customer support, and may, in the future, do so for new customers based on customer requirements or market conditions. The Company has established vendor specific objective evidence of fair value for the customer support. Accordingly, license revenues are recognized upon delivery of the software and when all other revenue recognition criteria are met. Customer support revenues are recognized ratably over the term of the underlying support arrangement. The Company generates customer support and maintenance revenues from its perpetual license customer base.

Professional Services

The Company may also enter into arrangements to provide consulting services separate from a license arrangement. In these situations, revenue is recognized on a time-and-materials basis. Professional services can be deemed to be as essential to the functionality of the software at inception and typically are for initial trial configuration, implementation planning, loading of software, building simple interfaces, running test data and documentation of procedures. Subsequent additions or extensions to license terms do not generally include additional professional services.

Pass-through Revenue and Expense

The Company accounts for pass-through revenue and expense in accordance with ASC 605-45,

Principal Agent Considerations

(“ASC 605-45”). In accordance with ASC 605-45 these amounts are recorded as revenue in the statement of operations with a corresponding expense recorded in cost of goods sold. Pass-through revenues and expenses include amounts associated with third-party services provided to our customers by our service and product partners. These third-party services are primarily comprised of Interactive Voice and Web Response software services (IVR and IWR), travel and shipping that are incurred on our clients’ behalf.

Maintenance Revenues

Maintenance includes telephone-based help desk support and software maintenance. The Company generally bundles customer support with the software license for the entire term of the arrangement. As a result, the Company generally recognizes revenues for both maintenance and software licenses ratably over the term of the software license and support arrangement. The Company allocates the revenues recognized for these arrangements to the different elements based on management's estimate of the relative fair value of each element. The Company generally invoices each of the elements based on separately quoted amounts and thus has a fairly accurate estimate of the relative fair values of each of the invoiced revenue elements.

The fees associated with each business activity for the periods ended June 30, 2016 and June 30, 2015, respectively are:

	For the six months ended
Revenue activity	June 30, 2016		June 30, 2015
Set-up fees	$	3,312,733	$	2,882,153
Change orders		669,899		354,808
Maintenance		2,337,965		2,501,407
Software licenses		2,202,288		1,527,374
Professional services		1,398,136		1,924,967
Hosting		539,978		482,317
Total	$	10,460,999	$	9,673,026

	For the three months ended
Revenue activity	June 30, 2016		June 30, 2015
Set-up fees	$	1,793,399	$	1,617,609
Change orders		392,146		212,767
Maintenance		1,136,745		1,269,530
Software licenses		1,001,374		786,437
Professional services		745,816		707,970
Hosting		234,008		240,586
Total	$	5,303,488	$	4,834,899

Cost of Sales, Policy [Policy Text Block]

COST OF REVENUES

Cost of revenues primarily consists of costs related to hosting, maintaining and supporting the Company’s application suite and delivering professional services and support. These costs include salaries, benefits, and bonuses for the Company’s professional services staff. Cost of revenues also includes outside service provider costs

.

Cost of revenues is expensed as incurred.

Cash and Cash Equivalents, Policy [Policy Text Block]

CASH AND CASH EQUIVALENTS

Cash equivalents consist of highly liquid, short-term investments with maturities of 90 days or less. The carrying amount reported in the accompanying consolidated balance sheets approximates fair value.

Receivables, Policy [Policy Text Block]

ACCOUNTS RECEIVABLE

Accounts receivable are judged as to collectability by management and an allowance for bad debts is established as necessary. The allowance is based on an evaluation of the collectability of accounts receivable and prior bad debt experience. The Company had recorded an allowance for uncollectible accounts receivable of $125,593 as of June 30, 2016 and $116,834 as of December 31, 2015, respectively.

The following table summarizes activity in the Company's allowance for doubtful accounts for the periods presented.

	June 30, 2016			December 31, 2015
Beginning of period	$	116,834		$	186,085
Bad debt expense		33,307			14,939
Write-offs		(24,548	)		(84,190	)
End of period	$	125,593		$	116,834

Concentration Risk, Credit Risk, Policy [Policy Text Block]

Concentration of Credit Risk

Cash and cash equivalents and restricted cash are deposited with major financial institutions and, at times, such balances with any one financial institution may be in excess of FDIC-insured limits. As of June 30, 2016, $560,865 was deposited in excess of FDIC-insured limits. Management believes the risk in these situations to be minimal.

Except as follows, the Company has no significant off-balance-sheet risk or credit risk concentrations. Financial instruments that subject the Company to potential credit risks are principally cash equivalents and accounts receivable. Concentrated credit risk with respect to accounts receivable is limited to creditworthy customers. The Company's customers are principally located in the United States and Europe as well as in East Asia. The Company is directly affected by the overall financial condition of the pharmaceutical, biotechnology and medical device industries and management believes that credit risk exists and that any credit risk the Company faces has been adequately reserved for as of June 30, 2016. The Company maintains an allowance for doubtful accounts based on accounts past due according to contractual terms and historical collection experience. Actual losses

, when incurred

, are charged to the allowance. The Company's losses related to collection of accounts receivable have consistently been within management's expectations. As of June 30, 2016, the Company believes no additional credit risk exists beyond the amounts provided for in our allowance for uncollectible accounts. The Company evaluates its allowance for uncollectable accounts on a quarterly basis based on a specific review of receivable aging and the period that any receivables are beyond the standard payment terms. The Company does not require collateral from its customers in order to mitigate credit risk.

One customer accounted for 20% of our revenues during the six month period ended June 30, 2016 or approximately $2,102,000. One customer accounted for 13% of our revenues during the six month period ended June 30, 2015 or approximately $1,249,000. The following table summarizes the number of customers who individually comprise greater than 10% of total revenue and/or total accounts receivable and their aggregate percentage of the Company's total revenue and gross accounts receivable for the periods presented.

	Revenues				Accounts receivable
For the period ended	Number of customers		Percentage of total revenues		Number of customers		Percentage of a ccounts receivable
June 30, 2016		1		20%		1		13%
December 31, 2015		1		16%		3		42%
June 30, 2015		1		13%		2		31%

The table below provides revenues from European customers for the six month periods ended June 30, 2016 and June 30, 2015, respectively.

European revenues For the six months ended
June 30, 2016				June 30, 2015
European revenues		% of Total revenues		European revenues		% of Total revenues
$	899,293		9%	$	1,084,178		11%

The Company serves all of its hosting customers from third-party web hosting facilities located in the United States. The Company does not control the operation of these facilities, and they are vulnerable to damage or interruption. The Company maintains redundant systems that can be used to provide service in the event the third-party web hosting facilities become unavailable, although in such circumstances, the Company's service may be interrupted during the transition.

Property, Plant and Equipment, Policy [Policy Text Block]

PROPERTY AND EQUIPMENT

Property and equipment are recorded at cost. Additions and betterments are capitalized; maintenance and repairs are expensed as incurred. Depreciation is calculated using the straight-line method over the asset’s estimated useful life, which is 5 years for leasehold improvements, computers, equipment and furniture and 3 years for software. Gains or losses on disposal are charged to operations.

Impairment or Disposal of Long-Lived Assets, Including Intangible Assets, Policy [Policy Text Block]

ASSET IMPAIRMENT

Acquisitions and Intangible Assets

We account for acquisitions in accordance with ASC 805,

Business Combinations

(“ASC 805”) and

ASC 350,

Intangibles- Goodwill and Other

(“ASC 350”). The acquisition method of accounting requires that assets acquired and liabilities assumed be recorded at their fair values on the date of a business acquisition. Our consolidated financial statements and results of operations reflect an acquired business from the completion date of an acquisition.

The judgments that we make in determining the estimated fair value assigned to each class of assets acquired and liabilities assumed, as well as asset lives, can materially impact net income in periods following an asset acquisition. We generally use either the income, cost or market approach to aid in our conclusions of such fair values and asset lives. The income approach presumes that the value of an asset can be estimated by the net economic benefit to be received over the life of the asset, discounted to present value. The cost approach presumes that an investor would pay no more for an asset than its replacement or reproduction cost. The market approach estimates value based on what other participants in the market have paid for reasonably similar assets. Although each valuation approach is considered in valuing the assets acquired, the approach ultimately selected is based on the characteristics of the asset and the availability of information.

Long-lived Assets

We review long-lived assets for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable. Determining whether an impairment has occurred typically requires various estimates and assumptions, including determining which cash flows are directly related to the potentially impaired asset, the useful life over which cash flows will occur, their amount and the asset’s residual value, if any. In turn, measurement of an impairment loss requires a determination of fair value, which is based on the best information available. We use quoted market prices when available and independent appraisals and management estimates of future operating cash flows, as appropriate, to determine fair value.

Fair Value of Financial Instruments, Policy [Policy Text Block]

FAIR VALUE MEASUREMENT

OmniComm’s capital structure includes the use of warrants and convertible debt features that are classified as derivative financial instruments. Derivative financial instruments are recognized as either assets or liabilities and are measured at fair value under ASC 815

,

Derivatives and Hedging

(“ASC 815”)

.

ASC 815 requires that changes in the fair value of derivative financial instruments with no hedging designation be recognized as gains/(losses) in the earnings statement. The fair value measurement is determined in accordance with ASC 820

,

Fair Value Measurements and Disclosures

(“ASC 820”).

Revenue Recognition, Deferred Revenue [Policy Text Block]

DEFERRED REVENUE

Deferred revenue represents cash advances and amounts in accounts receivable as of the balance sheet date received in excess of revenue earned on on-going contracts. Payment terms vary with each contract but may include an initial payment at the time the contract is executed, with future payments dependent upon the completion of certain contract phases or targeted milestones. In the event of contract cancellation, the Company is generally entitled to payment for all work performed through the point of cancellation. As of June 30, 2016, the Company had $9,003,122 in deferred revenues relating to contracts for services to be performed over periods ranging from one month to 5 years. The Company had $6,498,382 in deferred revenues that are expected to be recognized in the next twelve fiscal months.

Advertising Costs, Policy [Policy Text Block]

ADVERTISING

Advertising costs are expensed as incurred. Advertising costs were approximately $432,837 and $406,502 for the six month periods ended June 30, 2016 and June 30, 2015, respectively and are included under selling, general and administrative expenses in our unaudited condensed consolidated financial statements.

Research, Development, and Computer Software, Policy [Policy Text Block]

RESEARCH AND DEVELOPMENT EXPENSES

Software development costs are expensed as incurred. ASC 985-20,

Software Industry Costs of Software to Be Sold, Leased or Marketed

(“ASC 985-20”), requires the capitalization of certain development costs of software to be sold once technological feasibility is established, which the Company defines as completion to the point of marketability. The capitalized cost is then amortized on a straight-line basis over the estimated product life. To date, the period between achieving technological feasibility and the general availability of such software has been short and software development costs qualifying for capitalization have been immaterial. Accordingly, the Company has not capitalized any software development costs under ASC 985-20. During the six month periods ended June 30, 2016 and June 30, 2015 we spent approximately $1,315,525 and $1,355,783 respectively, on research and product development activities, which include costs associated with the development of our software products and services for our clients’ projects and which are primarily comprised of salaries and related expenses for our software developers and consulting fees paid to third-party consultants. Research and product development costs are primarily included under Salaries, benefits and related taxes in our Statement of Operations.

Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]

EMPLOYEE EQUITY INCENTIVE PLANS

The OmniComm Systems, Inc. 2016 Equity Incentive Plan (the “2016 Plan”) was approved at our Annual Meeting of Shareholders on June 16, 2016. The 2016 Plan provides for the issuance of up to

10,000,000 shares of our common stock. In addition, the number of shares of common stock available for issuance under the 2016 Plan shall automatically increase on January 1st of each year for a period of nine (9) years commencing on January 1, 2017 and ending on (and including) January 1, 2025, in an amount equal to five percent (5%) of the total number of shares authorized under the 2016 Plan

.

The predecessor plan, the OmniComm Systems, Inc. 2009 Equity Incentive Plan (the “2009 Plan”) was approved at our Annual Meeting of Shareholders on July 10, 2009 and terminated on June 16, 2016 upon the approval of the 2016 Plan. The 2009 Plan provided for the issuance of up to 7,500,000 shares to employees, directors and key consultants. The 2016 and 2009 Plans are more fully described in “Note 13, Employee Equity Incentive Plans”.

The Company accounts for its employee equity incentive plans underASC 718,

Compensation – Stock Compensation

, (“ASC 718”) which addresses the accounting for transactions in which an entity exchanges its equity instruments for goods or services, with a primary focus on transactions in which an entity obtains employee services in share-based payment transactions. ASC 718 requires companies to estimate the fair value of share-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods in the Company’s consolidated statements of operations. The Company currently uses the Black Scholes option pricing model to determine grant date fair value.

Earnings Per Share, Policy [Policy Text Block]

EARNINGS PER SHARE

The Company accounts for Earnings per Share using ASC 260,

Earnings per Share,

(“ASC 260”)

. Unlike diluted earnings per share basic earnings per share excludes any dilutive effects of options, warrants, and convertible securities.

Income Tax, Policy [Policy Text Block]

INCOME TAXES

The Company accounts for income taxes in accordance with ASC 740,

Income Taxes

(“ASC 740”)

.

ASC 740 has as its basic objective the recognition of current and deferred income tax assets and liabilities based upon all events that have been recognized in the financial statements as measured by the provisions of the enacted tax laws.

Valuation allowances are established

, when necessary

, to reduce deferred tax assets to the estimated amount to be realized. Income tax expense represents the tax payable for the current period and the change during the period in the deferred tax assets and liabilities.

New Accounting Pronouncements, Policy [Policy Text Block]

IMPACT OF NEW ACCOUNTING STANDARDS

During the first six months of 2016, we adopted the following new accounting pronouncements:

In February 2016, the FASB issued accounting standard update (“ASU”) No. 2016-02,

“Leases (Topic 842)”

, (“ASU 2016-02”). This ASU requires that an entity should recognize assets and liabilities for leases with a maximum possible term of more than 12 months. A lessee would recognize a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the leased asset (the underlying asset) for the lease term. This guidance also provides accounting updates with respect to lessor accounting under a lease arrangement. This new lease guidance is effective for fiscal years beginning after December 15, 2019. Entities have the option of using either a full retrospective or a modified approach (cumulative effect adjustment in period of adoption) to adopt the new guidance. Early adoption is permitted for all entities. We are currently evaluating the impact of the adoption of this guidance in our consolidated financial statements.

In March 2016, the FASB issued

ASU No. 2016-09

,

“Compensation – Stock Compensation (Topic 718)”,

(“ASU 2016-09”). This

guidance which simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. This guidance is effective for annual periods beginning after December 15, 2016, including interim periods within those annual reporting periods. Early adoption is permitted. We are currently evaluating the full impact of the new standard.

Accounting standards-setting organizations frequently issue new or revised accounting rules. We regularly review all new pronouncements to determine their impact, if any, on our financial statements.

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Note 2 - Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2016

Notes Tables

Revenue Recognition, Multiple-deliverable Arrangements [Table Text Block]

	For the six months ended
Revenue activity	June 30, 2016		June 30, 2015
Set-up fees	$	3,312,733	$	2,882,153
Change orders		669,899		354,808
Maintenance		2,337,965		2,501,407
Software licenses		2,202,288		1,527,374
Professional services		1,398,136		1,924,967
Hosting		539,978		482,317
Total	$	10,460,999	$	9,673,026

	For the three months ended
Revenue activity	June 30, 2016		June 30, 2015
Set-up fees	$	1,793,399	$	1,617,609
Change orders		392,146		212,767
Maintenance		1,136,745		1,269,530
Software licenses		1,001,374		786,437
Professional services		745,816		707,970
Hosting		234,008		240,586
Total	$	5,303,488	$	4,834,899

Allowance for Credit Losses on Financing Receivables [Table Text Block]

	June 30, 2016			December 31, 2015
Beginning of period	$	116,834		$	186,085
Bad debt expense		33,307			14,939
Write-offs		(24,548	)		(84,190	)
End of period	$	125,593		$	116,834

Schedules of Concentration of Risk, by Risk Factor [Table Text Block]

	Revenues				Accounts receivable
For the period ended	Number of customers		Percentage of total revenues		Number of customers		Percentage of a ccounts receivable
June 30, 2016		1		20%		1		13%
December 31, 2015		1		16%		3		42%
June 30, 2015		1		13%		2		31%

Schedule of Revenue from External Customers Attributed to Foreign Countries by Geographic Area [Table Text Block]

European revenues For the six months ended
June 30, 2016				June 30, 2015
European revenues		% of Total revenues		European revenues		% of Total revenues
$	899,293		9%	$	1,084,178		11%

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Note 3 - Earnings (Loss) Per Share (Tables)

6 Months Ended

Jun. 30, 2016

Notes Tables

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block]

Anti-dilutive security	June 30, 2016		June 30, 2015
Preferred stock		-0-		2,750,149
Employee stock options		982,500		1,563,793
Warrants		27,860,000		52,263,517
Convertible notes		15,910,000		13,850,000
Shares issuable for accrued interest		150,016		875,009
Total		44,902,516		71,302,468

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	For the six months ended
	June 30, 2016								June 30, 2015
	Income/(loss) numerator			Shares denominator		Per-share amount			Income/(loss) numerator			Shares denominator		Per-share amount
Basic EPS	$	(2,874,076	)		144,029,335	$	(0.02	)	$	1,821,485			91,999,079	$	0.02
Effect of dilutive securities		-0-			-0-		-0-			(387,828	)		11,713,707		(0.03	)
Diluted EPS	$	(2,874,076	)		144,029,335	$	(0.02	)	$	1,433,657			103,712,786	$	0.01

	For the three months ended
	June 30, 2016								June 30, 2015
	Income/(loss) numerator			Shares denominator		Per-share amount			Income/(loss) numerator			Shares denominator		Per-share amount
Basic EPS	$	(1,995,246	)		146,978,378	$	(0.01	)	$	4,627,529			92,350,506	$	0.05
Effect of dilutive securities		-0-			-0-		-0-			(1,460,161	)		28,313,856		(0.05	)
Diluted EPS	$	(1,995,246	)		146,978,378	$	(0.01	)	$	3,167,368			120,664,362	$	0.03

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Note 4 - Property and Equipment, Net (Tables)

6 Months Ended

Jun. 30, 2016

Notes Tables

Property, Plant and Equipment [Table Text Block]

	June 30, 2016						December 31, 2015
	Cost		Accumulated depreciation		Net book value		Cost		Accumulated depreciation		Net book value		Estimated useful life (years)
Computer & office equipment	$	2,105,691	$	1,683,685	$	422,006	$	2,055,956	$	1,605,473	$	450,483		5
Leasehold improvements		105,929		87,105		18,824		91,452		85,895		5,557		5
Computer software		1,884,873		1,671,897		212,976		1,843,483		1,621,492		221,991		3
Office furniture		159,292		109,299		49,993		111,660		105,979		5,681		5
Total	$	4,255,785	$	3,551,986	$	703,799	$	4,102,551	$	3,418,839	$	683,712

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Note 5 - Intangible Assets, Net (Tables)

6 Months Ended

Jun. 30, 2016

Notes Tables

Schedule of Finite-Lived Intangible Assets [Table Text Block]

	June 30, 2016						December 31, 2015
Asset	Cost		Accumulated amortization		Net book value		Cost		Accumulated amortization		Net book value		Estimated useful life (years)
eClinical Suite customer lists	$	1,392,701	$	1,392,701	$	-0-	$	1,392,701	$	1,392,701	$	-0-		3
Promasys B.V. customer lists		110,314		19,611		90,703		108,051		15,607		92,444		15
Promasys B.V. software code		72,837		38,846		33,991		72,837		31,563		41,274		5
Promasys B.V. URLs/Website		55,714		49,524		6,190		54,572		39,413		15,159		3
Total	$	1,631,566	$	1,500,682	$	130,884	$	1,628,161	$	1,479,284	$	148,877

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block]

2016	$	17,151
2017		21,922
2018		19,494
2019		7,354
2020		7,354
Thereafter		57,609
Total	$	130,884

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Note 6 - Accounts Payable and Accrued Expenses (Tables)

6 Months Ended

Jun. 30, 2016

Notes Tables

Schedule of Accounts Payable and Accrued Liabilities [Table Text Block]

Account	June 30, 2016		December 31, 2015
Accounts payable	$	712,580	$	515,764
Accrued payroll and related costs		583,534		473,108
Other accrued expenses		141,306		105,562
Accrued interest		220,511		862,836
Total accounts payable and accrued expenses	$	1,657,931	$	1,957,270

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Note 7 - Line of Credit, Notes Payable and Liquidity (Tables)

6 Months Ended

Jun. 30, 2016

Notes Tables

Schedule of Debt [Table Text Block]

				Ending		Non related party					Related party
Origination date	Maturity date	Interest rate		principal June 30, 2016		Current		Long term			Current		Long term
4/1/2015	4/1/2018		12%	$	20,000	$	-0-	$	-0-		$	-0-	$	20,000
2/29/2016	4/1/2019		12%		450,000		-0-		-0-			-0-		450,000
6/30/2016	4/1/2020		10%		420,000		-0-		420,000			-0-		-0-
6/30/2016	4/1/2020		12%		372,500		-0-		372,500			-0-		-0-
Discount on notes payable							-0-		(525,329	)		-0-		(290,478	)
Total				$	1,262,500	$	-0-	$	267,171		$	-0-	$	179,522

				Ending		Non related party				Related party
Origination date	Maturity date	Interest rate		principal December 31, 2015		Current		Long term		Current		Long term
4/4/2014	4/1/2017		12%	$	45,000	$	-0-	$	45,000	$	-0-	$	-0-
4/4/2014	4/1/2017		12%		137,500		-0-		137,500		-0-		-0-
4/4/2014	4/1/2017		10%		120,000		-0-		120,000		-0-		-0-
12/1/2014	4/1/2017		10%		300,000		-0-		300,000		-0-		-0-
12/1/2014	4/1/2017		12%		90,000		-0-		90,000		-0-		-0-
12/1/2014	4/1/2017		12%		100,000		-0-		100,000		-0-		-0-
4/1/2015	4/1/2018		12%		20,000		-0-		-0-		-0-		20,000
Discount on notes payable							-0-		-0-		-0-		-0-
Total				$	812,500	$	-0-	$	792,500	$	-0-	$	20,000

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Note 8 - Convertible Notes Payable (Tables)

6 Months Ended

Jun. 30, 2016

Convertible Debt [Member]

Notes Tables

Schedule of Long-term Debt Instruments [Table Text Block]

								Carrying amount
Date of	Maturity	Interest		Original		Principal at		Short term				Long term
issuance	date	rate		principal		June 30, 2016		Related		Non related		Related		Non related
8/1/1999	6/30/2004		10%	$	862,500	$	75,000	$	-0-	$	75,000	$	-0-	$	-0-
8/29/2008	4/1/2018		10%		150,000		150,000		-0-		-0-		-0-		150,000
8/29/2008	4/1/2020		10%		2,120,000		1,770,000		-0-		-0-		1,770,000		-0-
12/16/2008	4/1/2018		12%		375,000		375,000		-0-		-0-		-0-		375,000
12/16/2008	4/1/2018		12%		25,000		25,000		-0-		-0-		25,000		-0-
12/16/2008	4/1/2020		12%		100,000		100,000		-0-		-0-		-0-		100,000
12/16/2008	4/1/2020		12%		4,570,000		4,055,000		-0-		-0-		4,055,000		-0-
9/30/2009	4/1/2018		12%		100,000		100,000		-0-		-0-		-0-		100,000
9/30/2009	4/1/2020		12%		1,300,000		625,000		-0-		-0-		-0-		625,000
Total				$	9,602,500	$	7,275,000	$	-0-	$	75,000	$	5,850,000	$	1,350,000

								Carrying amount
Date of	Maturity	Interest		Original		Principal at		Short term				Long term
issuance	date	rate		principal		December 31, 2015		Related		Non related		Related		Non related
8/1/1999	6/30/2004		10%	$	862,500	$	75,000	$	-0-	$	75,000	$	-0-	$	-0-
8/29/2008	4/1/2017		10%		150,000		150,000		-0-		-0-		-0-		150,000
8/29/2008	4/1/2017		10%		2,120,000		1,770,000		-0-		-0-		1,770,000		-0-
12/16/2008	4/1/2017		12%		260,000		260,000		-0-		-0-		-0-		260,000
12/16/2008	4/1/2017		12%		4,570,000		4,055,000		-0-		-0-		4,055,000		-0-
12/16/2008	4/1/2018		12%		215,000		215,000		-0-		-0-		-0-		215,000
12/16/2008	4/1/2018		12%		25,000		25,000		-0-		-0-		25,000		-0-
9/30/2009	4/1/2017		12%		1,300,000		625,000		-0-		-0-		-0-		625,000
9/30/2009	4/1/2018		12%		100,000		100,000		-0-		-0-		-0-		100,000
Total				$	9,602,500	$	7,275,000	$	-0-	$	75,000	$	5,850,000	$	1,350,000

Schedule of Maturities of Long-term Debt [Table Text Block]

2016	$	75,000
2017		-0-
2018		650,000
2019		-0-
2020		6,550,000
Total	$	7,275,000

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Note 9 - Fair Value Measurement (Tables)

6 Months Ended

Jun. 30, 2016

Notes Tables

Fair Value, Liabilities Measured on Recurring Basis [Table Text Block]

	Fair value at June 30, 2016		Quoted prices in active markets for identical assets/ liabilities (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Derivatives: (1) (2)
Conversion feature liability	$	2,313,328	$	-0-	$	-0-	$	2,313,328
Warrant liability		3,812,690		-0-		-0-		3,812,690
Total of derivative liabilities	$	6,126,018	$	-0-	$	-0-	$	6,126,018

	Fair value at		Quoted prices in active markets for identical assets/ liabilities		Significant other observable inputs		Significant unobservable inputs
	December 31, 2015		(Level 1)		(Level 2)		(Level 3)
Derivatives: (1) (2)
Conversion feature liability	$	901,243	$	-0-	$	-0-	$	901,243
Warrant liability		1,914,923		-0-		-0-		1,914,923
Total of derivative liabilities	$	2,816,166	$	-0-	$	-0-	$	2,816,166

Fair Value Measurements, Recurring and Nonrecurring [Table Text Block]

	Significant valuation assumptions for derivative instruments at June 30, 2016
Risk free interest rate	0.56%	to	0.92%
Dividend yield		0.00%
Expected volatility	106.3%	to	139.4%
Expected life (range in years)
Conversion feature liability	1.75	to	3.76
Warrant liability	0.75	to	3.76

	Significant valuation assumptions for derivative instruments at December 31, 2015
Risk free interest rate	0.48%	to	1.2%
Dividend yield		0.00%
Expected volatility	91.0%	to	132.2%
Expected life (range in years)
Conversion feature liability	1.25	to	2.25
Warrant liability	0.00	to	3.01

Fair Value Measurements, Nonrecurring [Table Text Block]

	Carrying amount		Carrying amount		Quoted prices in active markets for identical assets/ liabilities		Significant other observable inputs		Significant unobservable inputs
	December 31, 2015		June 30, 2016		(Level 1)		(Level 2)		(Level 3)
Acquired assets (3)
Promasys B.V. customer list (4)	$	92,444	$	90,703	$	-0-	$	-0-	$	136,253
Promasys B.V. software code (4)		41,274		33,991		-0-		-0-		72,943
Promasys B.V. URLs/website (4)		15,159		6,190		-0-		-0-		68,814
Total	$	148,877	$	130,884	$	-0-	$	-0-	$	278,010

Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings [Table Text Block]

	Other income/(expense)
	For the six months ended
	June 30, 2016			June 30, 2015
The net amount of gains/(losses) for the period included in earnings attributable to the unrealized gain/(losses) from changes in derivative liabilities at the reporting date	$	(2,458,836	)	$	4,072,798
Total unrealized gains/(losses) included in earnings	$	(2,458,836	)	$	4,072,798

Schedule of Derivative Liabilities at Fair Value [Table Text Block]

	Level 3 financial liabilities at fair value
For the six months ended	Balance, beginning			Net realized		Net unrealized gains/(losses) relating to instruments held at the			Net purchases, issuances and			Net transfers		Balance, end of
June 30, 2016	of year			gains/(losses)		reporting date			settlements			in and/or out		period
Derivatives:
Conversion feature liability	$	(901,243	)	$	-0-	$	(1,412,085	)	$	-0-		$	-0-	$	(2,313,328	)
Warrant liability		(1,914,923	)		-0-		(1,046,751	)		(851,016	)		-0-		(3,812,690	)
Total of derivative liabilities	$	(2,816,166	)	$	-0-	$	(2,458,836	)	$	(851,016	)	$	-0-	$	(6,126,018	)

	Level 3 financial liabilities at fair value
For the year ended	Balance, beginning			Net realized		Net unrealized gains/(losses) relating to instruments held at the		Net purchases, issuances and			Net transfers		Balance, end of
December 31, 2015	of year			gains/(losses)		reporting date		settlements			in and/or out		year
Derivatives:
Conversion feature liability	$	(2,944,402	)	$	29,875	$	2,013,284	$	-0-		$	-0-	$	(901,243	)
Warrant liability		(6,695,060	)		-0-		2,482,639		(868,128	)		3,165,626		(1,914,923	)
Total of derivative liabilities	$	(9,639,462	)	$	29,875	$	4,495,923	$	(868,128	)	$	3,165,626	$	(2,816,166	)

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Note 10 - Commitments and Contingencies (Tables)

6 Months Ended

Jun. 30, 2016

Notes Tables

Schedule Of Minimum Royalty Payments [Table Text Block]

2016	$	396,069
2017		662,992
2018		512,421
2019		421,230
2020		297,570
Thereafter		580,512
Total	$	2,870,794

Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block]

2016	$	225,000
2017		450,000
2018		164,500
Total	$	839,500

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Note 12 - Stockholders' (Deficit) (Tables)

6 Months Ended

Jun. 30, 2016

Warrant [Member]

Notes Tables

Schedule of Share-based Compensation, Activity [Table Text Block]

Warrants
Balance at December 31, 2014		48,463,517
Issued		3,800,000
Exercised		-0-
Cancelled		(29,363,517	)
Expired/forfeited		-0-
Balance at December 31, 2015		22,900,000
Issued		4,970,000
Exercised		-0-
Expired/forfeited		(10,000	)
Balance at June 30, 2016		27,860,000
Warrants exercisable at June 30, 2016		27,860,000
Weighted average fair value of warrants granted during 2016	$	0.15

Schedule Of Dividends In Arrears [Table Text Block]

	Cumulative arrearage as of				Cumulative arrearage per share as of
	June 30,				June 30,
Series of preferred stock	2016		2015		2016		2015
Series A	$	-0-	$	2,688,984	$	-0-	$	0.65
Series B		609,887		609,887	$	3.05	$	3.05
Series C		1,472,093		1,472,093	$	4.37	$	4.37
Total preferred stock arrearage	$	2,081,980	$	4,770,964

Schedule of Dividends Payable [Table Text Block]

	Dividends accreted				Dividends per share
	For the six months ended				For the six months ended
	June 30,				June 30,
	2016		2015		2016		2015
Preferred stock dividends in arrears Series A	$	1,870	$	102,283	$	0.012	$	0.025
Preferred stock dividends in arrears Series B	$	-0-	$	-0-	$	-0-	$	-0-
Preferred stock dividends in arrears Series C	$	-0-	$	-0-	$	-0-	$	-0-

Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block]

June 30, 2016									June 30, 2016
Warrants outstanding									Warrants exercisable
Range of exercise price			Number outstanding		Weighted average remaining contractual life		Weighted average exercise price		Number exercisable		Weighted average exercise price
$0.25	–	$0.60		27,860,000		3.21	$	0.42		27,860,000	$	0.42

December 31, 2015									December 31, 2015
Warrants outstanding									Warrants exercisable
Range of exercise price			Number outstanding		Weighted average remaining contractual life		Weighted average exercise price		Number exercisable		Weighted average exercise price
$0.25	–	$0.60		22,900,000		1.76	$	0.46		22,900,000	$	0.46

Schedule of Share-based Compensation, Activity [Table Text Block]

	Weighted average grant date fair value
	for the six months ended June 30,
	2016		2015
Stock options granted during the period	$	-0-	$	0.26
Stock options vested during the period	$	0.22	$	0.18
Stock options forfeited during the period	$	0.11	$	0.25

Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]

	Foreign currency translation			Accumulated other comprehensive (loss)
Balance at December 31, 2014	$	(243,827	)	$	(243,827	)
2015 Activity		(122,528	)		(122,528	)
Balance at December 31, 2015		(366,355	)		(366,355	)
2016 Activity		(17,787	)		(17,787	)
Balance at June 30, 2016	$	(384,142	)	$	(384,142	)

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Note 13 - Employee Equity Incentive Plans (Tables)

6 Months Ended

Jun. 30, 2016

Notes Tables

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

	Number of options			Weighted average exercise price (per share)		Weighted average remaining contractual term (in years)		Aggregate intrinsic value
Outstanding at December 31, 2014		3,130,000		$	0.20		1.59	$	364,900
Granted		225,000			0.25
Exercised		(292,500	)		0.12
Forfeited/cancelled/expired		(1,060,000	)		0.35
Outstanding at December 31, 2015		2,002,500			0.14		1.40	$	198,990
Granted		-0-			-0-
Exercised		(1,012,500	)		0.13
Forfeited/cancelled/expired		(7,500	)		0.13
Outstanding at June 30, 2016		982,500		$	0.16		1.99	$	57,088
Vested and exercisable at June 30, 2016		845,000		$	0.15		1.70	$	54,938

Schedule of Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding [Table Text Block]

Fair value of options vesting for the six months ended	Number of options vested		Fair value of options vested
June 30, 2016		112,500	$	25,153
June 30, 2015		125,000	$	22,235

Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range [Table Text Block]

Awards breakdown by price range at June 30, 2016
			Outstanding						Vested
Strike price range ($)			Outstanding stock options		Weighted average remaining contractual life		Weighted average outstanding strike price		Vested stock options		Weighted average remaining vested contractual life		Weighted average vested strike price
0.00	to	0.20		757,500		1.72	$	0.13		682,500		1.48	$	0.13
0.21	to	0.29		125,000		2.33		0.22		112,500		2.17		0.21
0.30	to	0.49		100,000		3.67		0.30		50,000		3.67		0.30
0.50	to	0.70		-0-		0.00		0.00		-0-		0.00		0.00
0.00	to	0.70		982,500		1.99	$	0.16		845,000		1.70	$	0.15

Awards breakdown by price range at December 31, 2015
			Outstanding						Vested
Strike price range ($)			Outstanding stock options		Weighted average remaining contractual life		Weighted average outstanding strike price		Vested stock options		Weighted average remaining vested contractual life		Weighted average vested strike price
0.00	to	0.20		1,777,500		1.14	$	0.13		1,652,500		0.93	$	0.13
0.21	to	0.29		125,000		2.83		0.22		100,000		2.46		0.21
0.30	to	0.49		100,000		4.17		0.30		-0-		0.00		0.00
0.50	to	0.70		-0-		0.00		0.00		-0-		0.00		0.00
0.00	to	0.70		2,002,500		1.40	$	0.14		1,752,500		1.02	$	0.13

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

	Stock option assumptions for the period ended
Stock option assumptions	June 30, 2016		December 31, 2015
Risk-free interest rate		1.30%		1.20%
Expected dividend yield		0.0%		0.0%
Expected volatility		157.6%		183.8%
Expected life of options (in years)		5		5

Schedule of Share-based Compensation, Activity [Table Text Block]

	Weighted average grant date fair value
	for the six months ended June 30,
	2016		2015
Stock options granted during the period	$	-0-	$	0.26
Stock options vested during the period	$	0.22	$	0.18
Stock options forfeited during the period	$	0.11	$	0.25

Schedule of Nonvested Share Activity [Table Text Block]

	Shares underlying stock options		Weighted average grant date fair value
Nonvested shares at January 1, 2016		250,000	$	0.22
Nonvested shares at June 30, 2016		137,500	$	0.22

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Note 1 - Organization and Nature of Operations (Details Textual) - USD ($)	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Research and Development Expense	$ 1,315,525	$ 1,355,783

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Note 2 - Summary of Significant Accounting Policies (Details Textual) - USD ($)		3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 16, 2016	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015	Jul. 10, 2009
Minimum [Member]
Term Of Software License				3 years
Derivative, Term of Contract				30 days
Maximum [Member]
Term Of Software License				5 years
Derivative, Term of Contract				5 years
Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | Customer 1 [Member]
Concentration Risk, Percentage				20.00%	13.00%
Revenues				$ 2,102,000	$ 1,249,000
Sales Revenue, Net [Member] | Customer Concentration Risk [Member]
Concentration Risk, Percentage				20.00%	13.00%	16.00%
Leasehold Improvements Computers Equipment And Furniture [Member]
Property, Plant and Equipment, Useful Life				5 years
Software Development [Member]
Property, Plant and Equipment, Useful Life				3 years
The 2016 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	10,000,000	10,000,000		10,000,000
Common Stock Available for Issuance Increasing Period	9 years
Common Stock Available for Issuance, Annual Increase Percent	5.00%
Plan 2009 [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized							7,500,000
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax		$ (14,631)	$ 21,926	$ (17,787)	$ (83,531)	$ (122,528)
Number of Reportable Segments				1
Allowance for Doubtful Accounts Receivable, Current		125,593		$ 125,593		116,834
Cash, Uninsured Amount		560,865		560,865
Revenues		5,303,488	$ 4,834,899	$ 10,460,999	9,673,026
Property, Plant and Equipment, Useful Life
Deferred Revenue		9,003,122		$ 9,003,122
Deferred Revenue, Current		$ 6,498,382		6,498,382		$ 7,054,614
Advertising Expense				432,837	406,502
Research and Development Expense				$ 1,315,525	$ 1,355,783

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Note 2 - Summary of Significant Accounting Policies - Revenue By Business Activity (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Set Up Fees [Member]
Revenue	$ 1,793,399	$ 1,617,609	$ 3,312,733	$ 2,882,153
Change Orders [Member]
Revenue	392,146	212,767	669,899	354,808
Maintenance [Member]
Revenue	1,136,745	1,269,530	2,337,965	2,501,407
Software Licenses [Member]
Revenue	1,001,374	786,437	2,202,288	1,527,374
Professional Services [Member]
Revenue	745,816	707,970	1,398,136	1,924,967
Hosting [Member]
Revenue	234,008	240,586	539,978	482,317
Revenue	$ 5,303,488	$ 4,834,899	$ 10,460,999	$ 9,673,026

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Note 2 - Summary of Significant Accounting Policies - Allowance for Doubtful Account Summary (Details) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Beginning of period			$ 116,834	$ 186,085	$ 186,085
Bad debt expense	$ 33,455	$ 14,972	33,307	$ (5,402)	14,939
Write-offs			(24,548)		(84,190)
End of period	$ 125,593		$ 125,593		$ 116,834

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Note 2 - Summary of Significant Accounting Policies - Customer Concentration (Details) - Customer Concentration Risk [Member]	6 Months Ended		12 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Sales Revenue, Net [Member]
Number of customers	1	1	1
Concentration risk, percentage	20.00%	13.00%	16.00%
Accounts Receivable [Member]
Number of customers	1	2	3
Concentration risk, percentage	13.00%	31.00%	42.00%

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Note 2 - Summary of Significant Accounting Policies - Revenue From European Operations (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Reportable Geographical Components [Member] | Europe [Member]
Revenue			$ 9	$ 11
Europe [Member] | Sales Revenue, Net [Member]
Concentration risk, percentage			1084178.00%
Revenue	$ 5,303,488	$ 4,834,899	$ 10,460,999	$ 9,673,026

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Note 3 - Earnings (Loss) Per Share (Details Textual) - $ / shares	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Restricted Stock [Member]
Common Stock, Shares, Outstanding	1,943,343	2,866,681	1,943,343	2,866,681
Lower Range Limit [Member]
Investment Warrants, Exercise Price			$ 0.25
Upper Range Limit [Member]
Investment Warrants, Exercise Price			0.60
Lower Range Limit [Member]
Debt Instrument, Convertible, Conversion Price	$ 0.25		0.25
Upper Range Limit [Member]
Debt Instrument, Convertible, Conversion Price	$ 1.25		$ 1.25
Weighted Average Number of Shares Outstanding, Basic	146,978,378	92,350,506	144,029,335	91,999,079
Common Stock, Shares, Outstanding	147,683,879		147,683,879		131,703,577
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount			44,902,516	71,302,468
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Lower Range Limit			$ 0.045
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Upper Range Limit			$ 0.30

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Note 3 - Earnings (Loss) Per Share - Reconciliation of Anti-dilutive Securities (Details) - shares	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Shares Of Preferred Stock [Member]
Anti-dilutive Security (in shares)	0	2,750,149
Employee Stock Option [Member]
Anti-dilutive Security (in shares)	982,500	1,563,793
Warrant [Member]
Anti-dilutive Security (in shares)	27,860,000	52,263,517
Convertible Debt Securities [Member]
Anti-dilutive Security (in shares)	15,910,000	13,850,000
Shares Issuable For Accrued Interest [Member]
Anti-dilutive Security (in shares)	150,016	875,009
Anti-dilutive Security (in shares)	44,902,516	71,302,468

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Note 3 - Earnings (Loss) Per Share - Computation of Diluted Earnings Per Share (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Basic EPS	$ (1,995,246)	$ 4,627,529	$ (2,874,076)	$ 1,821,485
Weighted Average Number of Shares Outstanding, Basic	146,978,378	92,350,506	144,029,335	91,999,079
Basic EPS (in dollars per share)	$ (0.01)	$ 0.05	$ (0.02)	$ 0.02
Effect of dilutive securities	$ 0	$ (1,460,161)	$ 0	$ (387,828)
Effect of dilutive securities (in shares)	0	28,313,856	0	11,713,707
Effect of dilutive securities (in dollars per share)	$ 0	$ (0.05)	$ 0	$ (0.03)
Diluted EPS	$ (1,995,246)	$ 3,167,368	$ (2,874,076)	$ 1,433,657
Diluted EPS (in shares)	146,978,378	120,664,362	144,029,335	103,712,786
Diluted EPS (in dollars per share)	$ (0.01)	$ 0.03	$ (0.02)	$ 0.01

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Note 4 - Property and Equipment, Net (Details Textual) - USD ($)	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Depreciation	$ 146,577	$ 108,505

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Note 4 - Property and Equipment, Net - Property and Equipment (Details) - USD ($)	6 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Computer And Office Equipment [Member]
Cost	$ 2,105,691	$ 2,055,956
Accumulated Depreciation	1,683,685	1,605,473
Net Book Value	$ 422,006	450,483
Estimated Useful Lives	5 years
Leasehold Improvements [Member]
Cost	$ 105,929	91,452
Accumulated Depreciation	87,105	85,895
Net Book Value	$ 18,824	5,557
Estimated Useful Lives	5 years
Computer Equipment [Member]
Cost	$ 1,884,873	1,843,483
Accumulated Depreciation	1,671,897	1,621,492
Net Book Value	$ 212,976	221,991
Estimated Useful Lives	3 years
Furniture and Fixtures [Member]
Cost	$ 159,292	111,660
Accumulated Depreciation	109,299	105,979
Net Book Value	$ 49,993	5,681
Estimated Useful Lives	5 years
Cost	$ 4,255,785	4,102,551
Accumulated Depreciation	3,551,986	3,418,839
Net Book Value	$ 703,799	$ 683,712
Estimated Useful Lives

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Note 5 - Intangible Assets, Net (Details Textual) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Amortization of Intangible Assets	$ 10,164	$ 10,057	$ 20,253	$ 20,237

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Note 5 - Intangible Assets, Net - Intangible Assets (Details) - USD ($)	6 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
eClinical Customer List [Member]
Cost	$ 1,392,701	$ 1,392,701
Accumulated Amortization	1,392,701	1,392,701
Net Book Value	$ 0	0
Finite-Lived Intangible Asset, Useful Life	3 years
Promasys B.V. Customer List [Member]
Cost	$ 110,314	108,051
Accumulated Amortization	19,611	15,607
Net Book Value	$ 90,703	92,444
Finite-Lived Intangible Asset, Useful Life	15 years
Promasys B.V. Software Code [Member]
Cost	$ 72,837	72,837
Accumulated Amortization	38,846	31,563
Net Book Value	$ 33,991	41,274
Finite-Lived Intangible Asset, Useful Life	5 years
Promasys B.V. URLs/Website [Member]
Cost	$ 55,714	54,572
Accumulated Amortization	49,524	39,413
Net Book Value	$ 6,190	15,159
Finite-Lived Intangible Asset, Useful Life	3 years
Cost	$ 1,631,566	1,628,161
Accumulated Amortization	1,500,682	1,479,284
Net Book Value	$ 130,884	$ 148,877
Finite-Lived Intangible Asset, Useful Life

XML

Note 5 - Intangible Assets, Net - Intangible Assets, Future Amortization Expense (Details)	Jun. 30, 2016 USD ($)
2016	$ 17,151
2017	21,922
2018	19,494
2019	7,354
2020	7,354
Thereafter	57,609
Total	$ 130,884

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Note 6 - Accounts Payable and Accrued Expenses - Accounts Payable and Accrued Expenses (Details) - USD ($)	Jun. 30, 2016	Dec. 31, 2015
Accounts payable	$ 712,580	$ 515,764
Accrued payroll and related costs	583,534	473,108
Other accrued expenses	141,306	105,562
Accrued interest	220,511	862,836
Total accounts payable and accrued expenses	$ 1,657,931	$ 1,957,270

XML

Note 7 - Line of Credit, Notes Payable and Liquidity (Details Textual) - USD ($)									12 Months Ended
	Jun. 30, 2016	Feb. 29, 2016	Dec. 17, 2015	Nov. 23, 2015	Nov. 19, 2015	Oct. 15, 2015	Jan. 31, 2015	Mar. 18, 2013	Dec. 31, 2015	Apr. 02, 2015	Feb. 03, 2015	Dec. 18, 2013
Matures April 1, 2020 I [Member] | Investor [Member]
Debt Instrument, Interest Rate, Stated Percentage	12.00%
Debt Instrument, Face Amount	$ 372,500
Class of Warrant or Right, Number of Securities Called by Warrants or Rights	1,490,000
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 0.25
Warrants and Rights Outstanding	$ 246,921
Debt Instrument, Fair Value Disclosure	$ 125,579
Amortization Period of Warrant Liabilities	3 years 270 days
Matures April 1, 2020 II [Member] | Investor [Member]
Debt Instrument, Interest Rate, Stated Percentage	10.00%
Debt Instrument, Face Amount	$ 420,000
Class of Warrant or Right, Number of Securities Called by Warrants or Rights	1,680,000
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 0.25
Warrants and Rights Outstanding	$ 278,408
Debt Instrument, Fair Value Disclosure	$ 141,592
Amortization Period of Warrant Liabilities	3 years 270 days
Matures on April 1, 2019 [Member] | Chief Executive Officer and Director Mr. Wit [Member] | Accrued Interest [Member]
Extinguishment of Debt, Amount		$ 450,000
Matures on April 1, 2019 [Member] | Chief Executive Officer and Director Mr. Wit [Member]
Debt Instrument, Interest Rate, Stated Percentage		12.00%
Debt Instrument, Face Amount		$ 450,000
Class of Warrant or Right, Number of Securities Called by Warrants or Rights	1,800,000
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 0.25
Warrants and Rights Outstanding	$ 325,689
Debt Instrument, Fair Value Disclosure		$ 124,311
Amortization Period of Warrant Liabilities		3 years 30 days
Note Payable 17 [Member] | Chief Executive Officer and Director Mr. Wit [Member]
Debt Instrument, Interest Rate, Stated Percentage										12.00%
Debt Instrument, Face Amount										$ 20,000
Note Payable 14 [Member] | Chief Executive Officer and Director Mr. Wit [Member]
Debt Instrument, Interest Rate, Stated Percentage							12.00%
Debt Instrument, Face Amount							$ 529,000
Debt Conversion, Converted Instrument, Rate							12.00%
Note Payable 15 [Member] | Chief Executive Officer and Director Mr. Wit [Member]
Debt Instrument, Face Amount							$ 2,860,000
Note Payable 16 [Member] | Chief Executive Officer and Director Mr. Wit [Member]
Debt Instrument, Interest Rate, Stated Percentage							12.00%
Debt Instrument, Face Amount							$ 950,000
Class of Warrant or Right, Number of Securities Called by Warrants or Rights							3,800,000
Class of Warrant or Right, Exercise Price of Warrants or Rights							$ 0.25
Debt Instrument, Repurchase Amount							$ 280,000
Interest Payable							670,000
Chief Executive Officer and Director Mr. Wit [Member] | Matures on January 1, 2019 [Member]
Debt Conversion, Converted Instrument, Amount						$ 980,000
Debt Conversion, Converted Instrument, Rate						12.00%
Stock Issued During Period Converted Cancelled Debt and Cancelled Warrants Shares					3,920,000
Chief Executive Officer and Director Mr. Wit [Member] | Matures On January 1, 2019 II [Member]
Debt Conversion, Converted Instrument, Amount						$ 1,600,000
Debt Conversion, Converted Instrument, Rate						12.00%
Stock Issued During Period Converted Cancelled Debt and Cancelled Warrants Shares					6,400,000
Chief Executive Officer and Director Mr. Wit [Member] | Matures On January 1, 2019 III [Member]
Debt Conversion, Converted Instrument, Amount						$ 529,000
Stock Issued During Period Converted Cancelled Debt and Cancelled Warrants Shares					2,116,000
Chief Executive Officer and Director Mr. Wit [Member] | Matures On January 1, 2019 IV [Member]
Debt Conversion, Converted Instrument, Amount						2,860,000
Stock Issued During Period Converted Cancelled Debt and Cancelled Warrants Shares					11,440,000
Chief Executive Officer and Director Mr. Wit [Member] | Matures On January 1, 2019 V [Member]
Debt Conversion, Converted Instrument, Amount						$ 950,000
Debt Conversion, Converted Instrument, Rate						12.00%
Stock Issued During Period Converted Cancelled Debt and Cancelled Warrants Shares					3,800,000
Chief Executive Officer and Director Mr. Wit [Member] | Related Warrants [Member]
Class of Warrant or Right Cancelled During the Period					400,000
Warrants Sold During the Period			2,000,000	4,000,000
Chief Executive Officer and Director Mr. Wit [Member] | Unrelated Warrants [Member]
Class of Warrant or Right Cancelled During the Period					6,000,000
Chief Executive Officer and Director Mr. Wit [Member]
Class of Warrant or Right Cancelled During the Period					11,440,000
Repayments of Long-term Debt							$ 6,879
Line of Credit Facility, Maximum Borrowing Capacity								$ 2,000,000			$ 5,000,000	$ 4,000,000
Debt Instrument, Interest Rate, Stated Percentage								2.00%
Debt Instrument, Periodic Payment, Interest								$ 9,500
Long-term Line of Credit	$ 5,000,000
Line of Credit Facility, Interest Rate at Period End	2.50%
Unsecured Debt	$ 1,262,500								$ 812,500
Debt Instrument, Face Amount	$ 9,602,500								$ 9,602,500
Class of Warrant or Right Cancelled During the Period									29,363,517

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Note 7 - Lines of Credit Notes Payable, and Liquidity - Notes Payable (Details) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015	Mar. 18, 2013
Notes Payable, Matures April 1, 2018 [Member] | Short-term Debt [Member] | Non-Related Party Current [Member]
Ending principal	$ 0
Notes Payable, Matures April 1, 2018 [Member] | Short-term Debt [Member] | Non-Related Party [Member]
Ending principal		$ 0
Notes Payable, Matures April 1, 2018 [Member] | Short-term Debt [Member] | Related Party [Member]
Ending principal	0	0
Notes Payable, Matures April 1, 2018 [Member] | Long-term Debt [Member] | Non-Related Party Current [Member]
Ending principal	0
Notes Payable, Matures April 1, 2018 [Member] | Long-term Debt [Member] | Non-Related Party [Member]
Ending principal		0
Notes Payable, Matures April 1, 2018 [Member] | Long-term Debt [Member] | Related Party [Member]
Ending principal	$ 20,000	$ 20,000
Notes Payable, Matures April 1, 2018 [Member]
Maturity date	Apr. 01, 2018	Apr. 01, 2018
Debt Instrument, Interest Rate, Stated Percentage	12.00%	12.00%
Ending principal	$ 20,000	$ 20,000
Notes Payable, Matures April 1, 2017 [Member] | Short-term Debt [Member] | Non-Related Party [Member]
Ending principal		0
Notes Payable, Matures April 1, 2017 [Member] | Short-term Debt [Member] | Related Party [Member]
Ending principal		0
Notes Payable, Matures April 1, 2017 [Member] | Long-term Debt [Member] | Non-Related Party [Member]
Ending principal		45,000
Notes Payable, Matures April 1, 2017 [Member] | Long-term Debt [Member] | Related Party [Member]
Ending principal		$ 0
Notes Payable, Matures April 1, 2017 [Member]
Maturity date		Apr. 01, 2017
Debt Instrument, Interest Rate, Stated Percentage		12.00%
Ending principal		$ 45,000
Notes Payable, Matures April 1, 2019 [Member] | Short-term Debt [Member] | Non-Related Party Current [Member]
Ending principal	0
Notes Payable, Matures April 1, 2019 [Member] | Short-term Debt [Member] | Related Party [Member]
Ending principal	0
Notes Payable, Matures April 1, 2019 [Member] | Long-term Debt [Member] | Non-Related Party Current [Member]
Ending principal	0
Notes Payable, Matures April 1, 2019 [Member] | Long-term Debt [Member] | Related Party [Member]
Ending principal	$ 450,000
Notes Payable, Matures April 1, 2019 [Member]
Maturity date	Apr. 01, 2019
Debt Instrument, Interest Rate, Stated Percentage	12.00%
Ending principal	$ 450,000
Notes Payable, Matures April 1, 2017 II [Member] | Short-term Debt [Member] | Non-Related Party [Member]
Ending principal		0
Notes Payable, Matures April 1, 2017 II [Member] | Short-term Debt [Member] | Related Party [Member]
Ending principal		0
Notes Payable, Matures April 1, 2017 II [Member] | Long-term Debt [Member] | Non-Related Party [Member]
Ending principal		137,500
Notes Payable, Matures April 1, 2017 II [Member] | Long-term Debt [Member] | Related Party [Member]
Ending principal		$ 0
Notes Payable, Matures April 1, 2017 II [Member]
Maturity date		Apr. 01, 2017
Debt Instrument, Interest Rate, Stated Percentage		12.00%
Ending principal		$ 137,500
Notes Payable, Matures April 1, 2020 I [Member] | Short-term Debt [Member] | Non-Related Party [Member]
Ending principal	0
Notes Payable, Matures April 1, 2020 I [Member] | Short-term Debt [Member] | Related Party [Member]
Ending principal	0
Notes Payable, Matures April 1, 2020 I [Member] | Long-term Debt [Member] | Non-Related Party [Member]
Ending principal	420,000
Notes Payable, Matures April 1, 2020 I [Member] | Long-term Debt [Member] | Related Party [Member]
Ending principal	$ 0
Notes Payable, Matures April 1, 2020 I [Member]
Maturity date	Apr. 01, 2020
Debt Instrument, Interest Rate, Stated Percentage	10.00%
Ending principal	$ 420,000
Notes Payable, Matures April 1, 2017 III [Member] | Short-term Debt [Member] | Non-Related Party [Member]
Ending principal		0
Notes Payable, Matures April 1, 2017 III [Member] | Short-term Debt [Member] | Related Party [Member]
Ending principal		0
Notes Payable, Matures April 1, 2017 III [Member] | Long-term Debt [Member] | Non-Related Party [Member]
Ending principal		120,000
Notes Payable, Matures April 1, 2017 III [Member] | Long-term Debt [Member] | Related Party [Member]
Ending principal		$ 0
Notes Payable, Matures April 1, 2017 III [Member]
Maturity date		Apr. 01, 2017
Debt Instrument, Interest Rate, Stated Percentage		10.00%
Ending principal		$ 120,000
Notes Payable, Matures April 1, 2020 II [Member] | Short-term Debt [Member] | Non-Related Party [Member]
Ending principal	0
Notes Payable, Matures April 1, 2020 II [Member] | Short-term Debt [Member] | Related Party [Member]
Ending principal	0
Notes Payable, Matures April 1, 2020 II [Member] | Long-term Debt [Member] | Non-Related Party [Member]
Ending principal	372,500
Notes Payable, Matures April 1, 2020 II [Member] | Long-term Debt [Member] | Related Party [Member]
Ending principal	$ 0
Notes Payable, Matures April 1, 2020 II [Member]
Maturity date	Apr. 01, 2020
Debt Instrument, Interest Rate, Stated Percentage	12.00%
Ending principal	$ 372,500
Notes Payable, Matures April 1, 2017 IV [Member] | Short-term Debt [Member] | Non-Related Party [Member]
Ending principal		0
Notes Payable, Matures April 1, 2017 IV [Member] | Short-term Debt [Member] | Related Party [Member]
Ending principal		0
Notes Payable, Matures April 1, 2017 IV [Member] | Long-term Debt [Member] | Non-Related Party [Member]
Ending principal		300,000
Notes Payable, Matures April 1, 2017 IV [Member] | Long-term Debt [Member] | Related Party [Member]
Ending principal		$ 0
Notes Payable, Matures April 1, 2017 IV [Member]
Maturity date		Apr. 01, 2017
Debt Instrument, Interest Rate, Stated Percentage		10.00%
Ending principal		$ 300,000
Notes Payable, Matures April 1, 2017 V [Member] | Short-term Debt [Member] | Non-Related Party [Member]
Ending principal		0
Notes Payable, Matures April 1, 2017 V [Member] | Short-term Debt [Member] | Related Party [Member]
Ending principal		0
Notes Payable, Matures April 1, 2017 V [Member] | Long-term Debt [Member] | Non-Related Party [Member]
Ending principal		90,000
Notes Payable, Matures April 1, 2017 V [Member] | Long-term Debt [Member] | Related Party [Member]
Ending principal		$ 0
Notes Payable, Matures April 1, 2017 V [Member]
Maturity date		Apr. 01, 2017
Debt Instrument, Interest Rate, Stated Percentage		12.00%
Ending principal		$ 90,000
Notes Payable, Matures April 1, 2017 VI [Member] | Short-term Debt [Member] | Non-Related Party [Member]
Ending principal		0
Notes Payable, Matures April 1, 2017 VI [Member] | Short-term Debt [Member] | Related Party [Member]
Ending principal		0
Notes Payable, Matures April 1, 2017 VI [Member] | Long-term Debt [Member] | Non-Related Party [Member]
Ending principal		100,000
Notes Payable, Matures April 1, 2017 VI [Member] | Long-term Debt [Member] | Related Party [Member]
Ending principal		$ 0
Notes Payable, Matures April 1, 2017 VI [Member]
Maturity date		Apr. 01, 2017
Debt Instrument, Interest Rate, Stated Percentage		12.00%
Ending principal		$ 100,000
Short-term Debt [Member] | Non-Related Party [Member]
Ending principal	0	0
Discount on notes payable	0	0
Short-term Debt [Member] | Related Party [Member]
Ending principal	0	0
Discount on notes payable	0	0
Long-term Debt [Member] | Non-Related Party [Member]
Ending principal	267,171	792,500
Discount on notes payable	(525,329)	0
Long-term Debt [Member] | Related Party [Member]
Ending principal	179,522	20,000
Discount on notes payable	(290,478)	0
Debt Instrument, Interest Rate, Stated Percentage			2.00%
Ending principal	1,262,500	812,500
Discount on notes payable

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Note 8 - Convertible Notes Payable (Details Textual) - USD ($)								1 Months Ended		6 Months Ended		12 Months Ended
	Nov. 23, 2015	Nov. 19, 2015	May 01, 2015	Mar. 30, 2011	Dec. 31, 2009	Sep. 30, 2009	Dec. 31, 1999	Dec. 31, 2009	Aug. 29, 2008	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015	Feb. 29, 2016	May 07, 2015	Apr. 30, 2015	Apr. 27, 2015	Apr. 02, 2015	Jan. 31, 2015	Jul. 31, 2014	Apr. 28, 2014	Apr. 21, 2014	Dec. 31, 2013	Mar. 18, 2013	Mar. 12, 2013	Mar. 06, 2013	Feb. 27, 2013	Feb. 22, 2013	Sep. 30, 2011	Dec. 16, 2008	Jun. 30, 2008	Jun. 30, 2004
Convertible Notes 10% [Member]
Convertible Notes Payable							$ 862,500
Payments of Debt Issuance Costs							119,625
Proceeds from Issuance of Debt							$ 742,875
Debt Instrument, Interest Rate, Stated Percentage							10.00%
Debt Instrument, Convertible, Conversion Price																															$ 1.25
Debt Conversion, Converted Instrument, Amount										$ 787,500
Debt Conversion, Converted Instrument, Shares Issued										1,495,179
Long-term Debt, Gross										$ 75,000
Interest Payable										128,488
Secured Convertible Debenture [Member] | Chief Executive Officer and Director Mr. Wit [Member] | Extended Maturity Debentures [Member]
Convertible Notes Payable																		$ 1,100,000
Secured Convertible Debenture [Member] | Chief Executive Officer and Director Mr. Wit [Member]
Convertible Notes Payable				$ 1,100,000																							$ 1,100,000
Debt Instrument, Convertible, Conversion Price						$ 0.25
Class of Warrant or Right, Number of Securities Called by Warrants or Rights						5,600,000
Class of Warrant or Right, Exercise Price of Warrants or Rights						$ 0.25
Secured Convertible Debenture [Member] | Lenders [Member] | Extended Maturity Debentures [Member]
Convertible Notes Payable										625,000							$ 100,000										1,200,000
Secured Convertible Debenture [Member] | Director Mr. Wit [Member]
Debt Conversion, Converted Instrument, Amount		$ 475,000
Class of Warrant or Right, Number of Securities Called by Warrants or Rights		1,900,000
Extinguishment of Debt, Amount		$ 475,000
Stock Issued During Period Converted Cancelled Debt and Cancelled Warrants Shares		1,900,000
Increase (Decrease) in Notes Payable, Related Parties	$ 625,000
Secured Convertible Debenture [Member] | Extended Maturity Debentures [Member]
Convertible Notes Payable				1,200,000
Secured Convertible Debenture [Member]
Convertible Notes Payable						$ 1,400,000
Debt Instrument, Interest Rate, Stated Percentage						12.00%
Proceeds from Issuance of Secured Debt						$ 1,400,000
Repayments of Notes Payable				$ 200,000
Convertible Debentures Issued August 2008 [Member] | Director Mr. Wit [Member] | Extended Maturity Debentures [Member]
Convertible Notes Payable																		1,770,000									1,770,000
Convertible Debentures Issued August 2008 [Member] | Chief Officer, Mr. Wit and Mr. Van Kesteren [Member]
Debt Instrument, Interest Rate, Stated Percentage									10.00%
Debt Instrument, Convertible, Conversion Price									$ 0.50
Class of Warrant or Right, Number of Securities Called by Warrants or Rights									4,540,000
Convertible Debentures Issued August 2008 [Member] | Mr. van Kesteren and Mr. Wit [Member] | Extended Maturity Debentures [Member]
Convertible Notes Payable						1,920,000																					150,000
Convertible Debentures Issued August 2008 [Member] | Director Mr. van Kesteren [Member] | Extended Maturity Debentures 2 [Member]
Convertible Notes Payable											$ 150,000
Convertible Debentures Issued August 2008 [Member] | Director Mr. van Kesteren [Member] | Non-Related Party [Member]
Convertible Notes Payable																			$ 150,000
Convertible Debentures Issued August 2008 [Member]
Convertible Notes Payable									$ 2,270,000
Convertible Debentures [Member] | Lenders [Member] | Extended Maturity Debentures [Member]
Convertible Notes Payable																												$ 1,440,000
Convertible Debentures [Member] | Director Mr. Wit [Member]
Convertible Notes Payable																														$ 510,000
Debt Conversion, Converted Instrument, Amount									$ 510,000
Class of Warrant or Right, Number of Securities Called by Warrants or Rights		5,760,000
Convertible Debentures [Member] | Chief Officer, Mr. Wit and Mr. Van Kesteren [Member]
Convertible Notes Payable																					$ 150,000
Convertible Debentures [Member] | Chief Operating Officer [Member]
Convertible Notes Payable															$ 25,000
Debt Instrument, Interest Rate, Stated Percentage															12.00%
Matures April 1, 2020 I [Member] | Director Mr. Wit [Member] | Extended Maturity Debentures 2 [Member]
Convertible Notes Payable										1,770,000
Matures April 1, 2020 I [Member] | Director Mr. Wit [Member]
Convertible Notes Payable										$ 4,055,000
Matures April 1, 2020 I [Member] | Investor [Member]
Debt Instrument, Interest Rate, Stated Percentage										12.00%
Class of Warrant or Right, Number of Securities Called by Warrants or Rights										1,490,000
Class of Warrant or Right, Exercise Price of Warrants or Rights										$ 0.25
Notes Payable, Matures April 1, 2018 [Member] | Chief Officer, Mr. Wit and Mr. Van Kesteren [Member] | Extended Maturity Debentures 2 [Member]
Convertible Notes Payable										$ 150,000
Notes Payable, Matures April 1, 2018 [Member] | Chief Officer, Mr. Wit and Mr. Van Kesteren [Member]
Convertible Notes Payable										$ 160,000
Notes Payable, Matures April 1, 2018 [Member]
Debt Instrument, Interest Rate, Stated Percentage										12.00%		12.00%
Convertible Debentures Issued December 2008 [Member] | Lenders [Member] | Extended Maturity Debentures [Member]
Convertible Notes Payable																				$ 100,000				$ 100,000	$ 200,000		4,505,000
Convertible Debentures Issued December 2008 [Member] | Lenders [Member]
Convertible Notes Payable											100,000					$ 200,000
Convertible Debentures Issued December 2008 [Member] | Director Mr. Wit [Member] | Extended Maturity Debentures [Member]
Convertible Notes Payable																		4,475,000
Convertible Debentures Issued December 2008 [Member] | Director Mr. Wit [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights		1,680,000
Class of Warrant or Right Cancelled During the Period		1,680,000
Extinguishment of Debt, Amount		$ 420,000
Convertible Debentures Issued December 2008 [Member] | Director Mr. van Kesteren [Member] | Extended Maturity Debentures [Member]
Convertible Notes Payable			$ 160,000																			$ 160,000
Convertible Debentures Issued December 2008 [Member] | Chief Executive Officer, Director, Chief Operating Officer, Chairman, Chief Technology Officer, Chief Financial Officer and Directors [Member]
Debt Instrument, Interest Rate, Stated Percentage																													12.00%
Debt Instrument, Convertible, Conversion Price																													$ 0.50
Class of Warrant or Right, Number of Securities Called by Warrants or Rights																													10,150,000
Convertible Debentures Issued December 2008 [Member] | Officers, Directors and Affiliate [Member] | Extended Maturity Debentures [Member]
Convertible Notes Payable						$ 4,980,000
Convertible Debentures Issued December 2008 [Member] | Chief Executive Officer [Member]
Convertible Notes Payable																											4,475,000
Convertible Debentures Issued December 2008 [Member] | Chief Operating Officer [Member]
Convertible Notes Payable																											25,000
Convertible Debentures Issued December 2008 [Member] | Chairman and Chief Technology Officer [Member]
Convertible Notes Payable			5,000																								5,000
Related Party Transaction, Amounts of Transaction			$ 5,000
Convertible Debentures Issued December 2008 [Member] | Former Director [Member] | Extended Maturity Debentures [Member]
Convertible Notes Payable																										$ 15,000
Convertible Debentures Issued December 2008 [Member] | Former Director [Member]
Convertible Notes Payable														$ 15,000
Convertible Debentures Issued December 2008 [Member] | President [Member]
Convertible Notes Payable															$ 25,000
Convertible Debentures Issued December 2008 [Member] | Extended Maturity Debentures [Member]
Convertible Notes Payable																						$ 360,000
Convertible Debentures Issued December 2008 [Member] | Non-Related Party [Member]
Convertible Notes Payable																			$ 160,000
Convertible Debentures Issued December 2008 [Member]
Convertible Notes Payable																													$ 5,075,000
Matures April 1, 2020 II [Member] | Lenders [Member]
Convertible Notes Payable										$ 100,000
Matures April 1, 2020 II [Member] | Investor [Member]
Debt Instrument, Interest Rate, Stated Percentage										10.00%
Class of Warrant or Right, Number of Securities Called by Warrants or Rights										1,680,000
Class of Warrant or Right, Exercise Price of Warrants or Rights										$ 0.25
Convertible Debentures Issued December 2009 [Member] | Chief Executive Officer and Director Mr. Wit [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights					5,960,000			5,960,000
Class of Warrant or Right, Exercise Price of Warrants or Rights					$ 0.25			$ 0.25
Convertible Debentures Issued December 2009 [Member] | Lenders [Member] | Extended Maturity Debentures [Member]
Convertible Notes Payable																	$ 50,000											$ 1,490,000
Debt Instrument, Interest Rate, Stated Percentage																	12.00%
Convertible Debentures Issued December 2009 [Member] | Lenders [Member] | Extended Maturity Debentures 2 [Member]
Convertible Notes Payable																											$ 1,490,000
Convertible Debentures Issued December 2009 [Member] | Director Mr. Wit [Member] | Extended Maturity Debentures 2 [Member]
Convertible Notes Payable																		$ 1,440,000
Debt Instrument, Interest Rate, Stated Percentage																		12.00%
Convertible Debentures Issued December 2009 [Member] | Director Mr. Wit [Member]
Debt Conversion, Converted Instrument, Amount		$ 1,440,000
Class of Warrant or Right, Number of Securities Called by Warrants or Rights		5,760,000
Class of Warrant or Right Cancelled During the Period		5,760,000
Stock Issued During Period Converted Cancelled Debt and Cancelled Warrants Shares		5,760,000
Convertible Debentures Issued December 2009 [Member]
Convertible Notes Payable					$ 1,490,000			$ 1,490,000
Debt Instrument, Interest Rate, Stated Percentage					12.00%			12.00%
Debt Instrument, Convertible, Conversion Price					$ 0.25			$ 0.25
Proceeds from Issuance of Secured Debt					$ 1,490,000
Extinguishment of Debt, Amount		$ 1,440,000
Chief Executive Officer and Director Mr. Wit [Member]
Class of Warrant or Right Cancelled During the Period		11,440,000
Director Mr. Wit [Member]
Class of Warrant or Right, Exercise Price of Warrants or Rights		$ 0.25
Class of Warrant or Right Cancelled During the Period		1,900,000
Stock Issued During Period Converted Cancelled Debt and Cancelled Warrants Shares		37,023,517
Chief Executive Officer [Member]
Debt Instrument, Interest Rate, Stated Percentage													12.00%
Interest Payable													$ 450,000
Class of Warrant or Right, Number of Securities Called by Warrants or Rights													1,800,000
Class of Warrant or Right, Exercise Price of Warrants or Rights													$ 0.25
Investor [Member]
Warrant Term								4 years
Convertible Notes Payable										$ 7,275,000		$ 7,275,000
Debt Instrument, Interest Rate, Stated Percentage																							2.00%
Repayments of Notes Payable										$ 0	$ 25,000
Class of Warrant or Right Cancelled During the Period												29,363,517

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Note 8 - Convertible Notes Payable - Convertible Debt (Details) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015	Mar. 18, 2013
Convertible Note Payable 10% $862,500 [Member] | Non-Related Party [Member]
Convertible notes payable, current portion	$ 0	$ 0
Convertible notes payable, related parties, long term, net of current portion	0	0
Convertible Note Payable 10% $862,500 [Member] | Related Party [Member]
Convertible notes payable, current portion	75,000	75,000
Convertible notes payable, long term, net of current portion	$ 0	$ 0
Convertible Note Payable 10% $862,500 [Member]
Maturity date	Jun. 30, 2004	Jun. 30, 2004
Debt Instrument, Interest Rate, Stated Percentage	10.00%	10.00%
Debt Instrument, Face Amount	$ 862,500	$ 862,500
Convertible Notes Payable	75,000	75,000
Convertible Notes Payable 10% $150,000 [Member] | Non-Related Party [Member]
Convertible notes payable, current portion	0	0
Convertible notes payable, related parties, long term, net of current portion	0	0
Convertible Notes Payable 10% $150,000 [Member] | Related Party [Member]
Convertible notes payable, current portion	0	0
Convertible notes payable, long term, net of current portion	$ 150,000	$ 150,000
Convertible Notes Payable 10% $150,000 [Member]
Maturity date	Apr. 01, 2018	Apr. 01, 2017
Debt Instrument, Interest Rate, Stated Percentage	10.00%	10.00%
Debt Instrument, Face Amount	$ 150,000	$ 150,000
Convertible Notes Payable	150,000	150,000
Convertible Notes Payable 10% $2,120,000 [Member] | Non-Related Party [Member]
Convertible notes payable, current portion	0	0
Convertible notes payable, related parties, long term, net of current portion	1,770,000	1,770,000
Convertible Notes Payable 10% $2,120,000 [Member] | Related Party [Member]
Convertible notes payable, current portion	0	0
Convertible notes payable, long term, net of current portion	$ 0	$ 0
Convertible Notes Payable 10% $2,120,000 [Member]
Maturity date	Apr. 01, 2020	Apr. 01, 2017
Debt Instrument, Interest Rate, Stated Percentage	10.00%	10.00%
Debt Instrument, Face Amount	$ 2,120,000	$ 2,120,000
Convertible Notes Payable	1,770,000	1,770,000
Convertible Notes Payable 12 Percent 375,000 [Member] | Non-Related Party [Member]
Convertible notes payable, current portion	0
Convertible notes payable, related parties, long term, net of current portion	0
Convertible Notes Payable 12 Percent 375,000 [Member] | Related Party [Member]
Convertible notes payable, current portion	0
Convertible notes payable, long term, net of current portion	$ 375,000
Convertible Notes Payable 12 Percent 375,000 [Member]
Maturity date	Apr. 01, 2018
Debt Instrument, Interest Rate, Stated Percentage	12.00%
Debt Instrument, Face Amount	$ 375,000
Convertible Notes Payable	375,000
Convertible Notes Payable 12 Percent 260,000 [Member] | Non-Related Party [Member]
Convertible notes payable, current portion		0
Convertible notes payable, related parties, long term, net of current portion		0
Convertible Notes Payable 12 Percent 260,000 [Member] | Related Party [Member]
Convertible notes payable, current portion		0
Convertible notes payable, long term, net of current portion		$ 260,000
Convertible Notes Payable 12 Percent 260,000 [Member]
Maturity date		Apr. 01, 2017
Debt Instrument, Interest Rate, Stated Percentage		12.00%
Debt Instrument, Face Amount		$ 260,000
Convertible Notes Payable		260,000
Convertible Notes Payable, 12%, $25,000 [Member] | Non-Related Party [Member]
Convertible notes payable, current portion	0	0
Convertible notes payable, related parties, long term, net of current portion	25,000	25,000
Convertible Notes Payable, 12%, $25,000 [Member] | Related Party [Member]
Convertible notes payable, current portion	0	0
Convertible notes payable, long term, net of current portion	$ 0	$ 0
Convertible Notes Payable, 12%, $25,000 [Member]
Maturity date	Apr. 01, 2018	Apr. 01, 2018
Debt Instrument, Interest Rate, Stated Percentage	12.00%	12.00%
Debt Instrument, Face Amount	$ 25,000	$ 25,000
Convertible Notes Payable	25,000	25,000
Convertible Notes Payable, 12%, $4,570,000 [Member] | Non-Related Party [Member]
Convertible notes payable, current portion	0	0
Convertible notes payable, related parties, long term, net of current portion	4,055,000	4,055,000
Convertible Notes Payable, 12%, $4,570,000 [Member] | Related Party [Member]
Convertible notes payable, current portion	0	0
Convertible notes payable, long term, net of current portion	$ 0	$ 0
Convertible Notes Payable, 12%, $4,570,000 [Member]
Maturity date	Apr. 01, 2020	Apr. 01, 2017
Debt Instrument, Interest Rate, Stated Percentage	12.00%	12.00%
Debt Instrument, Face Amount	$ 4,570,000	$ 4,570,000
Convertible Notes Payable	4,055,000	4,055,000
Convertible Notes Payable12 Percent,100,000 [Member] | Non-Related Party [Member]
Convertible notes payable, current portion	0
Convertible notes payable, related parties, long term, net of current portion	0
Convertible Notes Payable12 Percent,100,000 [Member] | Related Party [Member]
Convertible notes payable, current portion	0
Convertible notes payable, long term, net of current portion	$ 100,000
Convertible Notes Payable12 Percent,100,000 [Member]
Maturity date	Apr. 01, 2020
Debt Instrument, Interest Rate, Stated Percentage	12.00%
Debt Instrument, Face Amount	$ 100,000
Convertible Notes Payable	100,000
Convertible Notes Payable, 12%, $215,000 [Member] | Non-Related Party [Member]
Convertible notes payable, current portion		0
Convertible notes payable, related parties, long term, net of current portion		0
Convertible Notes Payable, 12%, $215,000 [Member] | Related Party [Member]
Convertible notes payable, current portion		0
Convertible notes payable, long term, net of current portion		$ 215,000
Convertible Notes Payable, 12%, $215,000 [Member]
Maturity date		Apr. 01, 2018
Debt Instrument, Interest Rate, Stated Percentage		12.00%
Debt Instrument, Face Amount		$ 215,000
Convertible Notes Payable		215,000
Convertible Notes Payable, 12%, $100,000 issued 9/30/2009, Second Issuance [Member] | Non-Related Party [Member]
Convertible notes payable, current portion	0	0
Convertible notes payable, related parties, long term, net of current portion	0	0
Convertible Notes Payable, 12%, $100,000 issued 9/30/2009, Second Issuance [Member] | Related Party [Member]
Convertible notes payable, current portion	0	0
Convertible notes payable, long term, net of current portion	$ 100,000	$ 100,000
Convertible Notes Payable, 12%, $100,000 issued 9/30/2009, Second Issuance [Member]
Maturity date	Apr. 01, 2018	Apr. 01, 2018
Debt Instrument, Interest Rate, Stated Percentage	12.00%	12.00%
Debt Instrument, Face Amount	$ 100,000	$ 100,000
Convertible Notes Payable	100,000	100,000
Convertible Notes Payable 12% 1,300,000 [Member] | Non-Related Party [Member]
Convertible notes payable, current portion	0	0
Convertible notes payable, related parties, long term, net of current portion	0	0
Convertible Notes Payable 12% 1,300,000 [Member] | Related Party [Member]
Convertible notes payable, current portion	0	0
Convertible notes payable, long term, net of current portion	$ 625,000	$ 625,000
Convertible Notes Payable 12% 1,300,000 [Member]
Maturity date	Apr. 01, 2020	Apr. 01, 2017
Debt Instrument, Interest Rate, Stated Percentage	12.00%	12.00%
Debt Instrument, Face Amount	$ 1,300,000	$ 1,300,000
Convertible Notes Payable	625,000	625,000
Non-Related Party [Member]
Convertible notes payable, current portion	0	0
Convertible notes payable, related parties, long term, net of current portion	5,850,000	5,850,000
Related Party [Member]
Convertible notes payable, current portion	75,000	75,000
Convertible notes payable, long term, net of current portion	1,350,000	1,350,000
Debt Instrument, Interest Rate, Stated Percentage			2.00%
Debt Instrument, Face Amount	9,602,500	9,602,500
Convertible Notes Payable	7,275,000	7,275,000
Convertible notes payable, current portion	75,000	75,000
Convertible notes payable, related parties, long term, net of current portion	5,850,000	5,850,000
Convertible notes payable, long term, net of current portion	$ 1,350,000	$ 1,350,000

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Note 8 - Convertible Notes Payable - Convertible Debt Maturity Payments (Details) - USD ($)	Jun. 30, 2016	Dec. 31, 2015
Convertible Debt [Member]
2016	$ 75,000
2017	0
2018	650,000
2019	0
2020	6,550,000
Total	7,275,000
Total	$ 7,275,000	$ 7,275,000

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Note 9 - Fair Value Measurement (Details Textual)	6 Months Ended
	Jun. 30, 2016
Minimum [Member]
Finite-Lived Intangible Asset, Useful Life	3 years
Maximum [Member]
Finite-Lived Intangible Asset, Useful Life	15 years
Finite-Lived Intangible Asset, Useful Life

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Note 9 - Fair Value Measurement - Fair Value of Liabilities Measured on a Recurring Basis (Details) - USD ($)		Jun. 30, 2016	[2]	Dec. 31, 2015	[3]
Conversion Feature Liability [Member] | Fair Value, Inputs, Level 1 [Member]
Derivative Liability fair value	[1]	$ 0		$ 0
Conversion Feature Liability [Member] | Fair Value, Inputs, Level 2 [Member]
Derivative Liability fair value	[1]	0		0
Conversion Feature Liability [Member] | Fair Value, Inputs, Level 3 [Member]
Derivative Liability fair value	[1]	2,313,328		901,243
Conversion Feature Liability [Member]
Derivative Liability fair value	[1]	2,313,328		901,243
Warrant Liability [Member] | Fair Value, Inputs, Level 1 [Member]
Derivative Liability fair value	[1]	0		0
Warrant Liability [Member] | Fair Value, Inputs, Level 2 [Member]
Derivative Liability fair value	[1]	0		0
Warrant Liability [Member] | Fair Value, Inputs, Level 3 [Member]
Derivative Liability fair value	[1]	3,812,690		1,914,923
Warrant Liability [Member]
Derivative Liability fair value	[1]	3,812,690		1,914,923
Fair Value, Inputs, Level 1 [Member]
Derivative Liability fair value	[1]	0		0
Fair Value, Inputs, Level 2 [Member]
Derivative Liability fair value	[1]	0		0
Fair Value, Inputs, Level 3 [Member]
Derivative Liability fair value	[1]	6,126,018		2,816,166
Derivative Liability fair value	[1]	$ 6,126,018		$ 2,816,166

[1] The fair value at the measurement date is equal to their carrying value on the balance sheet

[2] The fair value of the derivative instruments was estimated using the Income Approach and the Black Scholes option pricing model with the following assumptions for the period ended June 30, 2016

[3] The fair value of the derivative instruments was estimated using the Income Approach and the Black Scholes option pricing model with the following assumptions for the year ended December 31, 2015

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Note 9 - Fair Value Measurement - Fair Value Assumptions (Details)	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Minimum [Member] | Conversion Feature Liability [Member]
Conversion feature liability	1 year 273 days	1 year 91 days
Minimum [Member] | Warrant Liability [Member]
Conversion feature liability	273 days	0 years
Minimum [Member]
Risk free interest rate	0.56%	0.48%
Expected volatility	106.30%	91.00%
Maximum [Member] | Conversion Feature Liability [Member]
Conversion feature liability	3 years 277 days	2 years 91 days
Maximum [Member] | Warrant Liability [Member]
Conversion feature liability	3 years 277 days	3 years 3 days
Maximum [Member]
Risk free interest rate	0.92%	1.20%
Expected volatility	139.40%	132.20%
Dividend yield	0.00%	0.00%

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Note 9 - Fair Value Measurement - Fair Value of Assets Acquired on Non-recurring Basis (Details) - USD ($)		Jun. 30, 2016	Dec. 31, 2015
Fair Value, Inputs, Level 1 [Member]
Promasys B.V. customer list (4)	[1],[2]	$ 0
Promasys B.V. software code (4)	[1],[2]	0
Promasys B.V. URLs/website (4)	[1],[2]	0
Total	[2]	0
Fair Value, Inputs, Level 2 [Member]
Promasys B.V. customer list (4)	[1],[2]	0
Promasys B.V. software code (4)	[1],[2]	0
Promasys B.V. URLs/website (4)	[1],[2]	0
Total	[2]	0
Fair Value, Inputs, Level 3 [Member]
Promasys B.V. customer list (4)	[1],[2]	136,253
Promasys B.V. software code (4)	[1],[2]	72,943
Promasys B.V. URLs/website (4)	[1],[2]	68,814
Total	[2]	278,010
Promasys B.V. customer list (4)	[1],[2]	90,703	$ 92,444
Promasys B.V. software code (4)	[1],[2]	33,991	41,274
Promasys B.V. URLs/website (4)	[1],[2]	6,190	15,159
Total	[2]	$ 130,884	$ 148,877

[1] The acquired Promasys B.V. software code, customer list and URLs/website are not measured on a recurring basis since their initial fair value has been deemed to have a finite life and is being amortized periodically. Instead the Company performs an impairment analysis on a quarterly basis in order to determine whether the carrying value of the assets reflects the fair value of the assets in a market based transaction.

[2] The fair value of the acquired assets was estimated using the Income Approach with a discounted cash flow valuation methodology applied.

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Note 9 - Fair Value Measurement - Unrealized Gain or Loss Included in Earnings (Details) - USD ($)	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
The net amount of gains/(losses) for the period included in earnings attributable to the unrealized gain/(losses) from changes in derivative liabilities at the reporting date	$ (2,458,836)	$ 4,072,798
Total unrealized gains/(losses) included in earnings	$ (2,458,836)	$ 4,072,798

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Note 9 - Fair Value Measurement - Change in Level 3 Financial Liabilities Fair Value (Details) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Conversion Feature Liability [Member]
Derivatives:
Balance beginning of year	$ (901,243)	$ (2,944,402)
Net realized gains/(losses)	0	29,875
Net unrealized gains/(losses) relating to instruments still held at the reporting date	(1,412,085)	2,013,284
Net purchases, issuances and settlements	0	0
Net transfers in and/or out of Level 3	0	0
Balance, end of period	(2,313,328)	(901,243)
Net realized gains/(losses)	0	29,875
Net unrealized gains/(losses) relating to instruments still held at the reporting date	(1,412,085)	2,013,284
Net purchases, issuances and settlements	0	0
Net transfers in and/or out of Level 3	0	0
Warrant Liability [Member]
Derivatives:
Balance beginning of year	(1,914,923)	(6,695,060)
Net realized gains/(losses)	0	0
Net unrealized gains/(losses) relating to instruments still held at the reporting date	(1,046,751)	2,482,639
Net purchases, issuances and settlements	(851,016)	(868,128)
Net transfers in and/or out of Level 3	0	3,165,626
Balance, end of period	(3,812,690)	(1,914,923)
Net realized gains/(losses)	0	0
Net unrealized gains/(losses) relating to instruments still held at the reporting date	(1,046,751)	2,482,639
Net purchases, issuances and settlements	(851,016)	(868,128)
Net transfers in and/or out of Level 3	0	3,165,626
Balance beginning of year	(2,816,166)	(9,639,462)
Net realized gains/(losses)	0	29,875
Net unrealized gains/(losses) relating to instruments still held at the reporting date	(2,458,836)	4,495,923
Net purchases, issuances and settlements	(851,016)	(868,128)
Net transfers in and/or out of Level 3	0	3,165,626
Balance, end of period	(6,126,018)	(2,816,166)
Net realized gains/(losses)	0	29,875
Net unrealized gains/(losses) relating to instruments still held at the reporting date	(2,458,836)	4,495,923
Net purchases, issuances and settlements	(851,016)	(868,128)
Net transfers in and/or out of Level 3	$ 0	$ 3,165,626

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Note 10 - Commitments and Contingencies (Details Textual)	1 Months Ended	6 Months Ended
	Jun. 30, 2009 USD ($)	Jun. 30, 2016 USD ($) $ / shares shares	Jun. 30, 2015 USD ($)
Settlement and Licensing Agreement [Member]
Patent Royalty Percentage Obligation		2.00%
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | shares		1,000,000
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares		$ 0.01
Loss Contingency, Estimate of Possible Loss		$ 300,000
Loss Contingency, Pending Claims, Number		0
Operating Leases, Rent Expense		$ 501,058	$ 482,711
License Payments	$ 300,000
Other Expenses		$ 52,322	$ 64,822

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Note 10 - Commitments and Contingencies - Minimum Royalty Payments Per Year (Details)	Jun. 30, 2016 USD ($)
2016	$ 396,069
2017	662,992
2018	512,421
2019	421,230
2020	297,570
Thereafter	580,512
Total	$ 2,870,794

XML

Note 10 - Commitments and Contingencies - Future Minimum Lease Payments (Details)	Jun. 30, 2016 USD ($)
2016	$ 225,000
2017	450,000
2018	164,500
Total	$ 839,500

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Note 11 - Related Party Transactions (Details Textual)						1 Months Ended			3 Months Ended		6 Months Ended		12 Months Ended	15 Months Ended
	Nov. 19, 2015 USD ($) $ / shares shares	May 02, 2015 USD ($)	Jan. 31, 2015 USD ($) $ / shares shares	Mar. 18, 2013 USD ($)	Dec. 31, 2009 USD ($) shares	Sep. 30, 2009 USD ($) $ / shares shares	Dec. 16, 2008 USD ($) $ / shares shares	Aug. 29, 2008 USD ($) $ / shares shares	Jun. 30, 2016 USD ($)	Jun. 30, 2015 USD ($)	Jun. 30, 2016 USD ($)	Jun. 30, 2015 USD ($)	Dec. 31, 2015 USD ($) shares	Mar. 31, 2015 USD ($)	Mar. 31, 2016 USD ($)	Feb. 29, 2016 USD ($) $ / shares shares	Nov. 23, 2015 USD ($)	Oct. 15, 2015 USD ($)	Apr. 30, 2015 USD ($)	Apr. 02, 2015 USD ($) $ / shares shares	Feb. 03, 2015 USD ($)	Dec. 18, 2013 USD ($)	Feb. 22, 2013 USD ($)	Oct. 16, 2012 USD ($) shares	Jun. 30, 2008 USD ($)	Feb. 29, 2008 USD ($)
12% Promissory Notes [Member] | Chairman and Chief Technology Officer [Member]
Notes Payable, Related Parties																				$ 20,000
12% Promissory Notes [Member] | Director Mr. Wit [Member]
Debt Instrument, Interest Rate, Stated Percentage	12.00%
Extinguishment of Debt, Amount	$ 6,919,000
Convertible Debentures [Member] | Chairman and Chief Technology Officer [Member]
Debt Instrument, Interest Rate, Stated Percentage		12.00%
Related Party Transaction, Amounts of Transaction		$ 5,000
Convertible Debentures [Member] | Chief Operating Officer [Member]
Debt Instrument, Interest Rate, Stated Percentage																			12.00%
Convertible Notes Payable																			$ 25,000
Convertible Debentures [Member] | Director Mr. Wit [Member]
Convertible Notes Payable																									$ 510,000
Due to Related Parties															$ 5,825,000
Debt Conversion, Converted Instrument, Amount								$ 510,000
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | shares	5,760,000
Promissory Notes [Member] | CEO And Director [Member]
Notes Payable, Related Parties															450,000
Convertible Debenture Initiated In June 2008 [Member] | Director Mr. Wit [Member]
Debt Instrument, Interest Rate, Stated Percentage								10.00%
Convertible Notes Payable			$ 1,770,000			$ 1,770,000		$ 1,260,000															$ 1,770,000
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | shares								3,540,000
Debt Instrument, Convertible, Conversion Price | $ / shares								$ 0.50
Convertible Debenture Initiated In February 2008 [Member] | Director Mr. Wit [Member] | Extended Maturity Debentures [Member]
Convertible Notes Payable									$ 4,055,000		$ 4,055,000
Convertible Debenture Initiated In February 2008 [Member] | Director Mr. Wit [Member]
Notes Payable, Related Parties																										$ 150,000
Convertible Notes Payable			4,475,000			$ 4,350,000																	$ 4,475,000	$ 125,000		$ 4,200,000
Debt Conversion, Converted Instrument, Amount							$ 4,350,000
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | shares	1,680,000						8,700,000																	250,000
Debt Instrument, Convertible, Conversion Price | $ / shares							$ 0.50
Debt Conversion, Converted Instrument, Rate							12.00%
Extinguishment of Debt, Amount	$ 420,000
Class of Warrant or Right Cancelled During the Period | shares	1,680,000
Aggregated Convertible Debt July - September 30, 2009 [Member] | Director Mr. Wit [Member]
Debt Instrument, Interest Rate, Stated Percentage						12.00%
Convertible Notes Payable			1,100,000			$ 1,100,000
Debt Conversion, Converted Instrument, Amount	$ 475,000
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | shares	1,900,000					4,400,000
Extinguishment of Debt, Amount	$ 475,000
Class of Warrant or Right Cancelled During the Period | shares	1,900,000
Debt Instrument, Convertible, Number of Equity Instruments						4,400,000
Warrants and Rights Outstanding						$ 4,400,000
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares						$ 0.25
Warrants Extension of Maturity						2 years
Stock Issued During Period Converted Cancelled Debt and Cancelled Warrants Shares | shares	5,760,000
Notes Payable Related Parties Amount Transfered																	$ 625,000
Aggregated Convertible Debt July - September 30, 2009 [Member]
Stock Issued During Period Converted Cancelled Debt and Cancelled Warrants Shares | shares	1,900,000
Aggregated Convertible Debt October - December 31, 2009 [Member] | Director Mr. Wit [Member]
Debt Instrument, Interest Rate, Stated Percentage					12.00%
Convertible Notes Payable			1,440,000		$ 1,440,000
Debt Conversion, Converted Instrument, Amount	$ 1,440,000
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | shares					5,760,000
Extinguishment of Debt, Amount	$ 1,440,000
Class of Warrant or Right Cancelled During the Period | shares	5,760,000
Warrants Extension of Maturity					2 years
Matures On April 1, 2017 [Member] | Director Mr. Wit [Member]
Notes Payable, Related Parties			2,860,000															$ 980,000		$ 980,000
Debt Instrument, Interest Rate, Stated Percentage														12.00%				12.00%
Related Party Transaction, Amounts of Transaction			$ 6,879
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | shares																				3,920,000
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares																				$ 0.25
Stock Issued During Period Converted Cancelled Debt and Cancelled Warrants Shares | shares	11,440,000
Matures On April 1, 2017 [Member] | Accrued Interest [Member]
Extinguishment of Debt, Amount														$ 980,000
Matures on January 1, 2019 [Member] | Director Mr. Wit [Member]
Debt Instrument, Interest Rate, Stated Percentage																		12.00%
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | shares	3,920,000
Matures on April 1, 2019 [Member] | Director Mr. Wit [Member]
Notes Payable, Related Parties																		$ 2,860,000
Matures On April 1, 2017 II [Member] | Director Mr. Wit [Member] | Notes Payable, Other Payables [Member]
Debt Instrument, Interest Rate, Stated Percentage			12.00%
Matures On April 1, 2017 II [Member] | Director Mr. Wit [Member]
Notes Payable, Related Parties			$ 529,000
Matures On January 1, 2019 II [Member] | Director Mr. Wit [Member]
Notes Payable, Related Parties																		$ 529,000
Debt Instrument, Interest Rate, Stated Percentage																		12.00%
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | shares	2,116,000
Matures On April 1, 2017 III [Member] | Director Mr. Wit [Member] | Accrued Interest [Member]
Extinguishment of Debt, Amount			670,000
Matures On April 1, 2017 III [Member] | Director Mr. Wit [Member]
Notes Payable, Related Parties			$ 950,000
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | shares			3,800,000
Extinguishment of Debt, Amount			$ 280,000
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares			$ 0.25
Matures On January 1, 2019 IV [Member] | Director Mr. Wit [Member]
Notes Payable, Related Parties																		$ 950,000
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | shares	3,800,000
Matures On January 1, 2019 III [Member] | Director Mr. Wit [Member]
Debt Instrument, Interest Rate, Stated Percentage																		12.00%
12% Percent Convertible Notes Payable [Member] | Director Mr. Wit [Member]
Debt Instrument, Interest Rate, Stated Percentage	12.00%
Debt Conversion, Converted Instrument, Amount	$ 1,915,000
Debt Instrument, Convertible, Conversion Price | $ / shares	$ 0.25
Extinguishment of Debt, Amount	$ 420,000
12% Promissory Notes [Member] | Chairman and Chief Technology Officer [Member]
Debt Instrument, Interest Rate, Stated Percentage																				12.00%
Matures On April 1, 2017 [Member] | Director Mr. Wit [Member]
Class of Warrant or Right Cancelled During the Period | shares	11,440,000
Director Mr. Wit [Member]
Class of Warrant or Right Cancelled During the Period | shares	1,900,000
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares	$ 0.25
Stock Issued During Period Converted Cancelled Debt and Cancelled Warrants Shares | shares	37,023,517
Warrants Cancelled | shares	29,363,517
Interest Expense, Related Party Approximately Monthly Amount				$ 9,500
Chief Executive Officer [Member]
Notes Payable, Related Parties																$ 450,000
Debt Instrument, Interest Rate, Stated Percentage																12.00%
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | shares																1,800,000
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares																$ 0.25
Interest Payable																$ 450,000
The Northern Trust Company [Member]
Line of Credit Facility, Maximum Borrowing Capacity				$ 2,000,000																	$ 5,000,000	$ 4,000,000
Line of Credit Facility, Interest Rate During Period				2.00%
Long-term Line of Credit															$ 5,000,000
Line of Credit Facility, Interest Rate at Period End															2.50%
Debt Instrument, Interest Rate, Stated Percentage				2.00%
Convertible Notes Payable									7,275,000		$ 7,275,000		$ 7,275,000
Class of Warrant or Right Cancelled During the Period | shares													29,363,517
Debt Instrument, Convertible, Number of Equity Instruments											15,910,000
Line of Credit Facility, Maximum Borrowing Capacity				$ 2,000,000																	$ 5,000,000	$ 4,000,000
Long-term Line of Credit									$ 5,000,000		$ 5,000,000
Line of Credit Facility, Interest Rate at Period End									2.50%		2.50%
Interest Expense, Related Party									$ 235,084	$ 672,649	$ 443,686	$ 1,299,785

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Note 12 - Stockholders' (Deficit) (Details Textual)	6 Months Ended	12 Months Ended
	Jun. 30, 2016 USD ($) shares	Dec. 31, 2015 shares	Dec. 31, 2014 shares
Series A Preferred Stock [Member]
Preferred Stock, Shares Authorized	5,000,000	5,000,000
Preferred Stock, Dividend Rate, Percentage	5.00%
Preferred Stock, Shares Issued	0	3,637,724
Preferred Stock, Shares Outstanding	0	3,637,724
Conversion of Stock, Shares Converted	4,125,224
Stock Issued During Period, Shares, Conversion of Convertible Securities	(3,637,724)	(487,500)
Series B Preferred Stock [Member]
Preferred Stock, Shares Authorized	230,000	230,000
Preferred Stock, Shares Issued	0	0
Preferred Stock, Shares Outstanding	0	0
Series C Preferred Stock [Member]
Preferred Stock, Shares Authorized	747,500	747,500
Preferred Stock, Shares Issued	0	0
Preferred Stock, Shares Outstanding	0	0
Series D Preferred Stock [Member]
Preferred Stock, Shares Authorized	250,000	250,000
Preferred Stock, Shares Issued	250,000	250,000
Preferred Stock, Shares Outstanding	250,000	250,000
Stock Issued During Period, Shares, Conversion of Convertible Securities
Common Stock, Shares Authorized	500,000,000	500,000,000
Preferred Stock, Shares Authorized	10,000,000	10,000,000
Preferred Stock, Dividend Rate, Percentage	5.00%
Common Stock, Shares Authorized, Increase in Amount	250,000,000
Common Stock, Shares, Issued	147,683,879	131,703,577
Class of Warrant or Right, Outstanding	27,860,000	22,900,000	48,463,517
Convertible Debt | $	$ 7,275,000
Debt Instrument, Convertible, Number of Equity Instruments	15,910,000
Stock Issued During Period, Shares, Conversion of Convertible Securities	16,500,896

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Note 12 - Stockholders' (Deficit) - Cumulative Arrearage of Undeclared Dividends (Details) - USD ($)	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Series A Preferred Stock [Member]
Preferred Stock, Dividend, Cumulative Arrearage	$ 0	$ 2,688,984
Preferred Stock, Dividend, Cumulative Arrearage Per Share (in dollars per share)	$ 0	$ 0.65
Series B Preferred Stock [Member]
Preferred Stock, Dividend, Cumulative Arrearage	$ 609,887	$ 609,887
Preferred Stock, Dividend, Cumulative Arrearage Per Share (in dollars per share)	$ 3.05	$ 3.05
Series C Preferred Stock [Member]
Preferred Stock, Dividend, Cumulative Arrearage	$ 1,472,093	$ 1,472,093
Preferred Stock, Dividend, Cumulative Arrearage Per Share (in dollars per share)	$ 4.37	$ 4.37
Preferred Stock, Dividend, Cumulative Arrearage	$ 2,081,980	$ 4,770,964

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Note 12 - Stockholders' (Deficit) - Dividends Payable (Details) - USD ($)	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Series A Preferred Stock [Member]
Dividends accreted	$ 1,870	$ 102,283
Divideds accreted per share (in dollars per share)	$ 0.012	$ 0.025
Series B Preferred Stock [Member]
Dividends accreted	$ 0	$ 0
Divideds accreted per share (in dollars per share)	$ 0	$ 0
Series C Preferred Stock [Member]
Dividends accreted	$ 0	$ 0
Divideds accreted per share (in dollars per share)	$ 0	$ 0

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Note 12 - Stockholders' (Deficit) - Warrants (Details) - $ / shares	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015	Dec. 31, 2014
Maximum [Member]
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 0.60	$ 0.60
Class of Warrant or Right, Outstanding	27,860,000	22,900,000	48,463,517
Weighted average remaining contractual life	3 years 76 days	1 year 277 days
Weighted average exercise price (in dollars per share)	$ 0.42	$ 0.46
Warrants exercisable at June 30, 2016 (in shares)	27,860,000	22,900,000
Warrants exercisable Weighted average exercise price (in dollars per share)	$ 0.42	$ 0.46

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Note 12 - Stockholders' (Deficit) - Warrants Activity (Details) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Balance (in shares)	22,900,000	48,463,517
Issued (in shares)	4,970,000	3,800,000
Exercised (in shares)	0	0
Cancelled (in shares)		(29,363,517)
Expired/forfeited (in shares)	(10,000)	0
Balance (in shares)	27,860,000	22,900,000
Warrants exercisable at June 30, 2016 (in shares)	27,860,000	22,900,000
Weighted average fair value of warrants granted during 2016	$ 0.15

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Note 12 - Stockholders' (Deficit) - Accumulated Other Comprehensive Gain (Loss) (Details) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Foreign currency translation			$ (366,355)	$ (243,827)	$ (243,827)
Foreign currency translation adjustment			(366,355)	(243,827)	(243,827)
Foreign currency translation adjustment	$ (14,631)	$ 21,926	(17,787)	(83,531)	(122,528)
Accumulated other comprehensive income (loss)	(14,631)	$ 21,926	(17,787)	$ (83,531)	(122,528)
Foreign currency translation	(384,142)		(384,142)		(366,355)
Foreign currency translation adjustment	$ (384,142)		$ (384,142)		$ (366,355)

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Note 13 - Employee Equity Incentive Plans (Details Textual)		6 Months Ended		18 Months Ended
	Jun. 16, 2016 shares	Jun. 30, 2016 USD ($) $ / shares shares	Jun. 30, 2015 USD ($) $ / shares	Jun. 30, 2016 USD ($) shares	Dec. 31, 2015 shares	Dec. 31, 2014 shares
The 2016 Plan [Member] | Share-based Compensation Award, Tranche Two [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage		50.00%
Share-based Compensation Arrangement by Share-based Payment Award, Award Requisite Service Period		2 years
The 2016 Plan [Member] | Share-based Compensation Award, Tranche One [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage		50.00%
Share-based Compensation Arrangement by Share-based Payment Award, Award Requisite Service Period		1 year
The 2016 Plan [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period		10 years
The 2016 Plan [Member] | Employee Stock Option [Member]
Share-based Compensation Arrangement, Installments for Vesting		2
The 2016 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	10,000,000	10,000,000		10,000,000
Common Stock Available for Issuance Increasing Period	9 years
Common Stock Available for Issuance, Annual Increase Percent	5.00%
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period		5 years
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number		0		0
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding, Number		0		0
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant		10,000,000		10,000,000
Equity Incentive Plan 2009 [Member] | Share-based Compensation Award, Tranche Two [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage		50.00%
Share-based Compensation Arrangement by Share-based Payment Award, Award Requisite Service Period		2 years
Equity Incentive Plan 2009 [Member] | Share-based Compensation Award, Tranche One [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage		50.00%
Share-based Compensation Arrangement by Share-based Payment Award, Award Requisite Service Period		1 year
Equity Incentive Plan 2009 [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period		10 years
Equity Incentive Plan 2009 [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized		7,500,000		7,500,000
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period		5 years
Share-based Compensation Arrangement, Installments for Vesting		2
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant		0		0
Equity Incentive Plan 2009 [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number		982,500		982,500
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding, Number		3,893,330		3,893,330
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number		982,500		982,500	2,002,500	3,130,000
Proceeds from Stock Options Exercised | $		$ 125,000	$ 27,250	$ 27,250
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ / shares		$ 0	$ 0.26
Employee Service Share-based Compensation, Tax Benefit from Compensation Expense | $		$ 0	$ 0
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures		0
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options | $		$ 17,927		$ 17,927
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition		328 days

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Note 13 - Employee Equity Incentive Plans - Stock Option Activity (Details) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015	Dec. 31, 2014
Number of shares (in shares)	2,002,500	3,130,000
Weighted average exercise price (per share) (in dollars per share)	$ 0.14	$ 0.20
Weighted average remaining contractual term (in years)	1 year 361 days	1 year 146 days	1 year 215 days
Aggregate intrinsic value	$ 57,088	$ 198,990	$ 364,900
Number of shares, granted (in shares)	0	225,000
Weighted average exercise price (per share), granted (in dollars per share)	$ 0	$ 0.25
Number of shares, exercised (in shares)	(1,012,500)	(292,500)
Weighted average exercise price (per share), exercised (in dollars per share)	$ 0.13	$ 0.12
Number of shares, forfeited/cancelled/expired (in shares)	(7,500)	(1,060,000)
Weighted average exercise price (per share), forfeited/cancelled/expired (in dollars per share)	$ 0.13	$ 0.35
Number of shares (in shares)	982,500	2,002,500	3,130,000
Weighted average exercise price (per share) (in dollars per share)	$ 0.16	$ 0.14	$ 0.20
Vested and exercisable at June 30, 2016 (in shares)	845,000
Vested and exercisable at June 30, 2016 (in dollars per share)	$ 0.15
Vested and exercisable at June 30, 2016	1 year 255 days
Vested and exercisable at June 30, 2016	$ 54,938

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Note 13 - Employee Equity Incentive Plans - Vested Shares (Details) - USD ($)	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Number of options vested (in shares)	112,500	125,000
Fair value of options vested	$ 25,153	$ 22,235

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Note 13 - Employee Equity Incentive Plans - Stock Options Oustanding (Details) - $ / shares	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Range One [Member]
Low Price range (in dollars per share)	$ 0	$ 0
High Price range (in dollars per share)	$ 0.20	$ 0.20
Outstanding stock options (in shares)	757,500	1,777,500
Weighted average remaining contractual life-outstanding	1 year 262 days	1 year 51 days
Weighted average outstanding strike price-outstanding (in dollars per share)	$ 0.13	$ 0.13
Vested stock options (in shares)	682,500	1,652,500
Weighted average remaining contractual life-vested	1 year 175 days	339 days
Weighted average outstanding strike price-vested (in dollars per share)	$ 0.13	$ 0.13
Range Two [Member]
Low Price range (in dollars per share)	0.21	0.21
High Price range (in dollars per share)	$ 0.29	$ 0.29
Outstanding stock options (in shares)	125,000	125,000
Weighted average remaining contractual life-outstanding	2 years 120 days	2 years 302 days
Weighted average outstanding strike price-outstanding (in dollars per share)	$ 0.22	$ 0.22
Vested stock options (in shares)	112,500	100,000
Weighted average remaining contractual life-vested	2 years 62 days	2 years 167 days
Weighted average outstanding strike price-vested (in dollars per share)	$ 0.21	$ 0.21
Range Three [Member]
Low Price range (in dollars per share)	0.30	0.30
High Price range (in dollars per share)	$ 0.49	$ 0.49
Outstanding stock options (in shares)	100,000	100,000
Weighted average remaining contractual life-outstanding	3 years 244 days	4 years 62 days
Weighted average outstanding strike price-outstanding (in dollars per share)	$ 0.30	$ 0.30
Vested stock options (in shares)	50,000	0
Weighted average remaining contractual life-vested	3 years 244 days	0 years
Weighted average outstanding strike price-vested (in dollars per share)	$ 0.30	$ 0
Range Four [Member]
Low Price range (in dollars per share)	0.50	0.50
High Price range (in dollars per share)	$ 0.70	$ 0.70
Outstanding stock options (in shares)	0	0
Weighted average remaining contractual life-outstanding	0 years	0 years
Weighted average outstanding strike price-outstanding (in dollars per share)	$ 0	$ 0
Vested stock options (in shares)	0	0
Weighted average remaining contractual life-vested	0 years	0 years
Weighted average outstanding strike price-vested (in dollars per share)	$ 0	$ 0
Range Five [Member]
Low Price range (in dollars per share)	0	0
High Price range (in dollars per share)	$ 0.70	$ 0.70
Outstanding stock options (in shares)	982,500	2,002,500
Weighted average remaining contractual life-outstanding	1 year 361 days	1 year 146 days
Weighted average outstanding strike price-outstanding (in dollars per share)	$ 0.16	$ 0.14
Vested stock options (in shares)	845,000	1,752,500
Weighted average remaining contractual life-vested	1 year 255 days	1 year 7 days
Weighted average outstanding strike price-vested (in dollars per share)	$ 0.15	$ 0.13
Low Price range (in dollars per share)	0.045
High Price range (in dollars per share)	$ 0.30

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Note 13 - Employee Equity Incentive Plans - Fair Value Assumptions of Share-based Payments (Details)	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Risk-free interest rate	1.30%	1.20%
Expected dividend yield	0.00%	0.00%
Expected volatility	157.60%	183.80%
Expected life of options (in years)	5 years	5 years

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Note 13 - Employee Equity Incentive Plans - Weighted Average Grant Date Fair Value Activity (Details) - $ / shares	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Stock options granted during the period (in dollars per share)	$ 0	$ 0.26
Stock options vested during the period (in dollars per share)	0.22	0.18
Stock options forfeited during the period (in dollars per share)	$ 0.11	$ 0.25

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Note 13 - Employee Equity Incentive Plans - Status of Non-vested Shares (Details) - $ / shares	Jun. 30, 2016	Dec. 31, 2015
Shares underlying stock options (in shares)	137,500	250,000
Weighted average grant date fair value (in dollars per share)	$ 0.22	$ 0.22

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Note 14 - Subsequent Events (Details Textual) - USD ($)	1 Months Ended	6 Months Ended	12 Months Ended
	Aug. 04, 2016	Jun. 30, 2016	Dec. 31, 2015
Subsequent Event [Member]
Repayments of Lines of Credit	$ 200,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period	3,038
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period		1,012,500	292,500