Annual report pursuant to Section 13 and 15(d)

NOTE 15 - COMMON STOCK PURCHASE WARRANTS

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NOTE 15 - COMMON STOCK PURCHASE WARRANTS
 12 Months Ended
Dec. 31, 2016
Other Liabilities Disclosure [Abstract]  
NOTE 15 - COMMON STOCK PURCHASE WARRANTS

NOTE 15 – COMMON STOCK PURCHASE WARRANTS


Warrants


The following is a summary of activity for warrants to purchase common stock for the year ended December 31, 2016:


 

 

December 31, 2016

 

 

 

Number of Warrants

 

 

Weighted

Avg.

Exercise

Price

 

 

Remaining Contractual Life (Years)

 

Outstanding at the beginning of the year

 

 

609,340

 

 

$

.54

 

 

 

4.5

 

Warrants expired, forfeited or cancelled

 

 

(307,250

)

 

 

.41

 

 

 

 

 

Warrants issued with debt, debt modifications or services

 

 

7,359,893

 

 

 

.23

 

 

 

4.6

 

Warrants exchanged for common stock

 

 

(5,250

)

 

 

6.67

 

 

 

 

 

Outstanding at end of period

 

 

7,656,733

 

 

 

.24

 

 

 

4.6

 

Exercisable at end of period

 

 

7,656,733

 

 

$

.24

 

 

 

4.6

 


On April 1, 2016, the Company issued a warrant exercisable into 2.5 million shares with a term of five years and exercise price of $0.35 per share in conjunction with a Securities Purchase Agreement.  The Warrants also contain certain anti-dilution provisions that apply in connection with any stock split, stock dividend, stock combination, recapitalization or similar transactions as well as a potential adjustment to the exercise price based on certain events. The relative fair value of the warrants of $466,031 was recorded as a debt discount and additional paid in capital and will be amortized to interest expense over the term of the debt.


On April 1, 2016, the Company issued three-year warrants for 200,000 common shares with an exercise price of $0.40 to the placement agent as additional compensation for arrangement of financing through the Securities Purchase Agreement.  The fair value of the warrants of $43,272 was recorded as a discount and will be amortized to interest expense over the term of the debt.


In the first quarter of 2016, 5,250 warrants were exchanged for 2,100 common shares resulting in a loss on exchange of $630 charged to operations.  During the same period, 1,500 warrants expired.


In the second quarter of 2016, 3,750 warrants expired.


During 2016, an additional 4,659,893 warrants were issued with the Securities Purchase Agreements and the amended Placement Agent Agreements.  In December of 2016, 302,000 warrants were cancelled.