Note 3 - Equity Transactions

3 Months Ended

Mar. 31, 2018

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

(

3

) EQUITY TRANSACTIONS:

The Company expensed

$14,190

and

$21,500

in employee and board member stock compensation for the

three

months ended

March 31, 2018

and

2017,

respectively. The Company accrues stock compensation expense over the period earned for employees and board members. On

March 31, 2017,

the Company issued

172,000

shares of common stock valued at

$67,100

to

eight

board members and the Company’s secretary as settlement of accrued stock compensation for prior service.

In

April 2018,

the Company completed a private placement of

20,350

“Units”, at a price of

$100

per Unit, resulting in gross proceeds to the Company of

$2,035,000.

Each Unit consisted of

one

share of Series B Convertible Preferred Stock (“Series B Preferred Stock”) convertible into

400

shares of Common Stock, and

seven

-year warrants to purchase

400

shares of Common Stock at an exercise price of

$0.25

per share. Prior to

March 31, 2018,

the Company received

$74,983

in advance from these investors, which has been recorded as a current liability in the accompanying consolidated balance sheet. Upon the closing of the private placement subsequent to

March 31, 2018,

the Company reclassified the advance to stockholders’ equity. Scarsdale acted as financial advisor to the Company in connection with the private placement and was paid a cash fee of

$50,000.

In

October 2017,

the Company completed a private placement of

15,500

Units at a purchase price of

$100

per Unit, each Unit consisting of

one

share of Series B Preferred Stock, and

seven

-year warrants to purchase

400

shares of Common Stock at an exercise price of

$0.25

per share. Scarsdale acted as financial advisor to the Company in connection with the private placement and was paid a cash fee of

$60,000,

and it and its designees were issued

seven

-year warrants to purchase

600

Units at an exercise price of

$100

per Unit.

The Series B Preferred Stock will automatically convert into Common Stock on the date the Company effects an increase of its authorized shares of Common Stock and/or a reverse stock split of its Common Stock, so that the Company has a sufficient number of authorized and unissued shares of Common Stock to permit the conversion or exercise, as applicable, of all outstanding shares of preferred stock, warrants and other convertible securities. The Series B Preferred Stock has a liquidation preference of

$100

per share, is

not

redeemable, and does

not

entitle the holder to special dividends. In the event the Company were to pay dividends on its Common Stock, holders of Series B Preferred Stock would receive dividends based on the number of shares of Common Stock into which their shares of Series B Preferred Stock are then convertible.

On

February 23, 2017,

the Company issued

5,754,832

units (“Units”) at a purchase price of

$0.35

per Unit in a private placement, each Unit consisting of

one

share of its common stock, and a

seven

-year warrant to purchase an additional share of common stock at an exercise price of

$0.35,

for aggregate gross proceeds to the Company of

$2

million. Scarsdale Equities LLC acted as financial advisor to the Company in connection with the private placement and was paid a cash fee of approximately

$153,000,

and it and its designees were issued

seven

-year warrants to purchase

164,074

Units at an exercise price of

$0.35

per Unit.

As of

March 31, 2018,

the Company had warrants outstanding to purchase

20,532,331

shares of common stock at exercise prices of

$0.25

-

$1.00

per share that expire at various dates through

2024.

 In addition, there are

seven

-year warrants outstanding at

March 31, 2018

to purchase

480,000

Units sold in our

May 2016

private placement at an exercise price of

$0.25

per Unit,

164,074

Units sold in our

February 2017

private placement at an exercise price of

$0.35

per Unit, and

600

Units sold in our

October 2017

private placement at an exercise price of

$100

per Unit. In

April 2018,

the Company issued additional warrants to purchase

8,140,000

shares of common stock at an exercise price of

$0.25

in the private placement discussed above.