Options, Preferred Stock and Warrants

6 Months Ended

Jun. 30, 2017

Preferred Stock, Number of Shares, Par Value and Other Disclosures [Abstract]

Options, Preferred Stock and Warrants

A summary of the Company’s preferred stock as of June 30, 2017 and December 31, 2016 is as follows.

	June 30, 2017 (unaudited)		December 31, 2016
	Shares Issued &		Shares Issued &
Offering	Outstanding		Outstanding
Series A convertible		47,250		47,250
Series B convertible, 10% cumulative dividend		93,750		93,750
Series C convertible, 10% cumulative dividend		38,333		38,333
Series E convertible, 10% cumulative dividend		19,022		19,022
Total Preferred Stock		198,355		198,355

As of June 30, 2017 and December 31, 2016, the Company had cumulative preferred undeclared and unpaid dividends of $1,457,370 and $1,411,946, respectively. In accordance with the relevant accounting guidance, these dividends were added to the net loss in the net loss per share calculation.

Options

The Company’s 2017 Employee/Consultant Common Stock Compensation Plan for the issuance of up to 3,000,000 options to grant common stock to the Company’s employees, directors and consultants was adopted pursuant to the written consent of holders of a majority of The Company’s common stock obtained as on March 7, 2017 and was considered approved on April 21, 2017. At June 30, 2017, no options have been issued from the plan.

Warrants outstanding

	Warrants		Weighted Average Exercise Price		Aggregate Intrinsic Value		Weighted Average Remaining Contractual Life (Years)
Outstanding at December 31, 2016		1,396,161	$	1.08		—		4.11
Granted		4,256,150		0.50		—		5.00
Exercised		—		—		—		—
Expired		—		—		—		—
Outstanding at June 30, 2017		5,652,311	$	0.62		—		4.54

During the three and six month period ended June 30, 2017, the Company issued 130,000 and 325,000 warrants in connection with the default provisions of the Notes and the May Notes, which were valued at $40,980 and $97,700.  The value of the warrants were determined using the Black-Scholes model, at an interest free rate of 1.33%, volatility of 50% and a remaining term of 5 years and a market price of between $0.50 to $0.80 during the three and six months ended June 30, 2017.

In January 2017, the Company reached an agreement with all secured promissory noteholders, to extend the maturity of the secured promissory notes to June 30, 2017, whereby the warrants were repriced from $0.80 a share to $0.50 a share. The notes continue to bear interest at 15% and the secured promissory noteholders continue to receive warrants amounting to 10% of the principal balance, as long as the notes remain outstanding. The Company repriced all warrants issued totaling 1.2 million warrants amounting to a $64,405 incremental value using the Black-Scholes model on January 16, 2017, the date of the amendments at a current market price of $0.36 a share, at an interest free rate of 1.33% and a remaining terms ranging from 4 years to 4 years and 11.5 months.

During the six months ended June 30, 2017, the Company issued 4,310,000 shares of common stock for $2,155,000, less $153,000 of issuance costs. In connection with the issuance of common stock, the Company issued 2,155,000 warrants to purchase shares of common stock at $0.50, for a term of 5 years. We also issued 50,000 shares from stock subscriptions of $25,000 at December 31, 2016 and issued 25,000 warrants on the same terms and conditions. On January 16, 2017 the Company also amended the original equity raise closed on December 7, 2016 and issued an additional 411,915 warrants to purchase shares of common stock at an exercise price of $0.50, for a term of 5 years. The Company issued 263,250 warrants to purchase common stock to brokers related to the above transaction for 2017.