Stockholders' Equity

6 Months Ended

Jun. 30, 2015

Equity [Abstract]

Stockholders' Equity

NOTE 11 – STOCKHOLDERS’ EQUITY

PREFERRED STOCK

As of June 30, 2015, there were 25,000,000 preferred shares authorized and 500,000 preferred shares outstanding. The board of directors had previously set the voting rights for the preferred stock at 1 share of preferred to 250 common shares.

COMMON STOCK

During the six months ended June 30, 2015, the Company issued the following shares.

On May 19, 2015, Quest entered into a Security Purchase Agreement (the “SPA”) with an accredited investor, who is also a subordinated debt holder and an employee of Quest, pursuant to which Quest issued 667,000 shares of Common Stock in exchange for $200,000.

Related Party

As discussed in Note 9, on June 24, 2015, Quest issued subordinated promissory notes (the “Promissory Notes”) to three investors (who are also Quest employees) in the aggregate principal amount of $400,000 in exchange for an aggregate 170,000 shares of Quest’s restricted common stock, par value $0.001 per share. The company recorded an interest expense of $62,731 relative to this issuance.

During the quarter ended June 30, 2015, the company issued 650,000 shares of restricted common stock to consultants of the Company relative to a 12 month contract. The Company has the option to repurchase 550,000 of the shares issued with the 12 month period. The Company recorded a $288,880 expense related to all of the consulting contracts. The Company also issued 100,000 shares to the Chief Executive Officer in connection with his employment contract on May 1, 2015.

Warrants and Options

On May 1, 2015, the Company issued one member of its board of directors a total of 36,000 warrants valued at $10,320 for their service. The value of these warrants was estimated by using the Black-Scholes option pricing model with the following assumptions: exercise price of $0.43, term of 3 years; risk free interest rate of 1.04%; dividend yield of 0% and expected volatility of 104%.

During the quarter ended June 30, 2015, the Company recognized approximately $38,624 related to the employee stock options which vested during the quarter.