Stockholders' Equity

12 Months Ended

Dec. 31, 2016

Stockholders' Equity [Abstract]

STOCKHOLDERS' EQUITY

NOTE 13 – STOCKHOLDERS’ EQUITY

Common stock issued for services

During 2015, the Company issued 21,000 shares of common stock pursuant to its amended 2010 long-term incentive plan, including 5,000 shares to the chief executive officer, 3,000 shares to the chief executive officer’s wife, who the Company employs in its sales department, 4,500 shares to the chief financial officer and 1,000 shares to a director. The shares were valued at fair market value using the reported closing share price on the dates of grant, and the Company recorded stock-based compensation of $285,560 in 2015.

On March 1, 2016, the Company issued 40,000 shares of common stock pursuant to its amended 2010 long-term incentive plan, including 18,750 shares to its former chief financial officer. The shares were valued at $209,600, the fair market value on the grant date using the reported closing share price on the date of grant, and the Company reduced accrued liabilities of $54,000 and recorded stock-based compensation and fees of $155,600 for the year ended December 31, 2016.

On March 1, 2016, Company issued a total of 75,000 shares of common stock to two companies which performed services relating to preparing and implementing a new business plan for the Company with the objective of improving the Company’s long-term growth. Of these shares, 25,000 shares were issued pursuant to an agreement with one consultant and 50,000 shares were issued pursuant to an agreement with a second consultant. The agreements provide for the issuance of an additional 25,000 shares to one consultant and 50,000 to the second consultant if the agreement is in effect in July 2016. On July 1, 2016, the Company issued an additional 25,000 shares of its common stock to the first consultant pursuant to the agreement. A consulting agreement with the second consultant was terminated, and no additional shares of common stock were issued or are issuable pursuant to the consulting agreement with the second consultant. The shares were valued at fair market value using the reported closing share price on the dates of grant, and the Company recorded stock-based compensation and fees of $490,980 for the year ended December 31, 2016.

On June 30, 2016, the Company issued 3,125 shares of common stock pursuant to its amended 2010 long-term incentive plan to a consultant. The shares were valued at $12,500, the fair market value on the grant date using the reported closing share price on the date of grant, and the Company recorded stock-based compensation and fees of $12,500 for the year ended December 31, 2016.

On December 28, 2016, the Company issued 105,000 shares of common stock pursuant to its 2016 long-term incentive plan, including 50,000 shares to its chief executive officer. The shares were valued at $277,200, the fair market value on the grant date using the reported closing share price on the date of grant, and the Company recorded stock-based compensation and fees of $268,126 for the year ended December 31, 2016 and recorded prepaid expenses of $9,074 which will be amortized over the rest of the corresponding service periods.

Common stock sold for cash

The Company sold a total of 180,000 shares of common stock to an investor during June and July 2016 pursuant to stock purchase agreements. On June 6, 2016, the Company sold 57,500 shares of common stock at a purchase price of $4.00 per share, from which the Company received net proceeds of $230,000. On June 24, 2016, the Company sold 57,500 shares of common stock at a purchase price of $4.40 per share, from which it received net proceeds of $253,000. On July 18, 2016, the Company sold 65,000 shares of common stock at a purchase price of $4.16 per share, from which it received gross proceeds of $270,400. The Company did not engage a placement agent with respect to these sales.

2010 long-term incentive plan

In January 2010, the Company’s board of directors adopted, and in March 2010, the stockholders approved the Company’s 2010 long-term incentive plan, which initially covered 50,000 shares of common stock.  In October 2013, the Company’s board of directors adopted, and in December 2013, the stockholders approved, an amendment to the 2010 long-term incentive plan to increase the number of shares of common stock subject to the plan, to 125,000 shares. The plan provides for the grant of incentive and non-qualified options and stock grants to employees, including officers, directors and consultants. The plan is to be administered by a committee of not less than three directors, each of whom is to be an independent director.  In the absence of a committee, the plan is administered by the board of directors.   Members of the committee are not eligible for stock options or stock grants pursuant to the plan unless such stock options or stock grant are granted by a majority of the Company’s independent directors other than the proposed grantee.  As of December 31, 2016, the Company had issued a total of 124,998 shares of common stock under the plan and the Company terminated this 2010 long-term incentive plan in year 2017.

2016 long-term incentive plan

In September 2016, the Company’s board of directors adopted, and in November 2016, the stockholders approved the Company’s 2016 long-term incentive plan, which covers 125,000 shares of common stock. The plan provides for the grant of incentive and non-qualified options and stock grants to employees, including officers, directors and consultants. The plan is to be administered by a committee of not less than three directors, each of whom is to be an independent director.  In the absence of a committee, the plan is administered by the board of directors.   Members of the committee are not eligible for stock options or stock grants pursuant to the plan unless such stock options or stock grant are granted by a majority of the Company’s independent directors other than the proposed grantee.  As of December 31, 2016, the Company had issued a total of 105,000 shares of common stock under the plan.