| Stockholders' Equity Note Disclosure [Text Block] | NOTE 6 STOCKHOLDERS EQUITY
The Company has authorized 190,000,000 shares
of common stock (Common Stock) and 10,000,000 shares of preferred stock (Preferred Stock), each having
a par value of $0.001. In March 2013, the Company approved the 2012
Long-Term Incentive Equity Plan (the 2012 Plan), which provides the Company with the ability to issue stock options,
stock appreciation rights, restricted stock and/or stock based awards for up to an aggregate of 2,050,000 shares of Common Stock.
As of September 30, 2015, there were 111,559 shares available under the 2012 Plan. Private Placement Offerings In August 2015, the Company entered into a
subscription agreement whereby 750,000 shares of Common Stock were sold to an accredited investor for a total of $150,000, along
with a purchase warrant for 1,500,000 shares of Common Stock at a price of $0.40 per share. The five year warrant is immediately
exercisable. In March 2014, the Company consummated two
concurrent private placement offerings, receiving an aggregate of $1,819,832, net of expenses, from accredited investors. The
Company sold an aggregate of 2,016,483 shares of Common Stock for $0.91 per share for a total of $1,835,000. In the
first offering, investors received an immediately exercisable, five year warrant to purchase one share of Common Stock at a price
of $0.91 per share for each share purchased in the offering. The investor in the second concurrent offering did
not receive warrants. Treasury Stock In April 2014, the Company approved a repurchase
of 12,497 shares of Common Stock for $11,372. The shares were subsequently cancelled. Restricted Stock Compensation The Company issued shares of restricted Common
Stock to its directors, executive officers and employees. Unvested restricted shares are subject to forfeiture. With the exception
of 4,689,105 shares which vest based upon achieving certain milestones, the Company records compensation expense over the vesting
period based upon the fair market value on the date of grant for each share, adjusted for forfeitures. In June 2015, the Company awarded 2,023,854 shares of
Common Stock to its officers and employees. The Company issued 226,485 shares in August 2015 and will vest upon the Company reaching
a $3,000,000 revenue threshold during any twelve months period. The balance of 1,797,369 shares will be issued and will vest upon
the Company reaching a $3,000,000 revenue threshold during any twelve month period. See Note 8 to the Notes to Condensed Financial
Statements. In August 2014, the Company issued 1,500,000
shares of Common Stock to an executive officer. The shares are subject to a restricted stock agreement, and the vesting is conditional
upon the Company reaching certain performance goals. Should the executive officers employment with the Company end, any
unvested shares are forfeited. In March 2014, the Company issued 465,000
shares of Common Stock under the 2012 Plan to its directors, executive officers and employees. The shares are subject to
a restricted stock agreement, pursuant to which the shares will vest one year from the date of such agreement if the grantee is
a director or employee (as applicable) of the Company at the time. A summary of the restricted stock issuances
to directors, executive officers and employees is as follows:
Number of Shares
Weighted Average Grant Date Fair Value
Unvested share balance, January 1, 2014 4,790,408 $ 1.45
Granted 1,965,000 0.49
Vested (663,416 ) 2.09
Forfeited - -
Unvested share balance, December 31, 2014 6,091,992 $ 1.07
Granted 2,023,854 0.19
Vested (1,525,546 ) 1.32
Forfeited - -
Unvested share balance, September 30, 2015 6,590,300 $ 0.74 In connection with the issuance of restricted
stock, the Company recorded share-based compensation expense of $857,669 and $2,853,881 for the nine months ended September 30,
2015 and 2014, respectively. As of September 30, 2015, there was $2,725,004 of total unrecognized compensation cost,
net of estimated forfeitures, related to unvested share-based compensation. That cost includes $2,026,884 of unrecognized
compensation cost related to shares that will vest upon the Company reaching certain performance goals. The balance of $698,120
is expected to be recognized during the remainder of 2015 and 2016. Stock Warrants Warrants to purchase 1,500,000 shares of Common
Stock were issued as part of a subscription agreement in August 2015 at a price of $0.40 per share. The warrants are exercisable
for five years from the date of issuance. As part of the private placement offering in
March 2014, the Company issued warrants to purchase 1,114,776 shares of Common Stock at a price of $0.91 per share. The warrants
are exercisable for five years from the date of issuance. Advisory Services In March 2014, the Company entered into two
agreements pursuant to which the Company was to receive advisory services related to strategy, distributorship, sales and sales
channels and investor relations. The Company granted to each advisor 100,000 shares of restricted Common Stock, subject
to forfeiture if the advisor terminated or materially breached the agreement before the six-month anniversary thereof. The
aggregate value of the advisory fees of $260,000 was calculated based upon the closing price of the Companys Common Stock
on the date of the agreement. Advisory fees of $21,667 were charged to income during the nine months ended September 30, 2014. Also in March 2014, the Company issued 82,418
and 1,234 shares of Common Stock for advisory work and consulting work, respectively. The number of shares issued was
calculated based upon the fair market value of the stock. On October 3, 2013, the Company entered into
an advisor agreement whereby the Company would receive strategic business advisory services, distributorship advisory services,
sales and sales channel advisory services and investor relation advisory services in exchange for the issuance of 50,000 shares
of restricted Common Stock. The Common Stock vested on April 3, 2014. In connection with this issuance, the
Company recorded $75,000 in consulting fees during the nine months ended September 30, 2014. On October 3, 2013, the Company entered
into an agreement for strategic business advisory services, public relations services and investor relations services with
Ian Thompson. In connection with this agreement, the Company issued 167,204 shares of restricted Common Stock and
recorded consulting fees of $501,612 during 2013, which was the fair market value of the stock on the date of issue; there
was no cash payment to Ian Thompson by the Company. The stock is fully vested; however it is restricted from
trading. The advisor was also issued an additional 200,000 shares of restricted Common Stock, which was to vest quarterly
based upon the Company reaching certain market capitalization and revenue goals, in addition to providing the above services,
with the last tranche vesting scheduled to vest on June 30, 2014. Consulting fees amounting to $72,500 were recorded during
the nine months ended September 30, 2014 related to the additional shares of Common Stock issued. Throughout the
term of the agreement, the Company requested the advisor to render performance under the agreement and to provide evidence of
same. Ian. Thompson failed to perform in all material respects under the terms of the agreement and failed to provide
evidence. On June 27, 2014, the Company terminated the
agreement. The Company is taking all necessary steps for the cancellation of the shares totaling 367,204 shares, due
to lack of delivery of consideration and material breach of the agreement. |
