Quarterly report pursuant to Section 13 or 15(d)

EQUITY

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EQUITY
6 Months Ended
Jun. 30, 2017
Notes to Financial Statements  
Note 12. EQUITY

Preferred Stock

 

Series A Preferred Stock is convertible on a one-for-one basis into common stock and has all of the voting rights of the Company’s common stock.

 

Each share of Series B Preferred Stock: (i) is entitled to 100 votes for each share of common stock into which a share of Series B Preferred Stock is convertible and (ii) is convertible, at the option of the holder, on a 1-for-5.384325537 basis, into shares of the Company’s common stock.

 

See “Note 16 – Subsequent Events” for additional disclosure regarding changes to the Company’s Series B Preferred Stock subsequent to June 30, 2017.

 

During the six months ended June 30, 2017, the Company issued 600,000 shares of Series B Preferred Stock for compensation in the amount of $1,035,406.

 

During the six months ended June 30, 2017, the Company cancelled 4,279,841 shares of Series B Preferred Stock that had been previously issued and held in escrow in connection with the contingent consideration related to the Black Oak acquisition. See “Note 9 – Contingent Consideration Liability” for further information.

 

Common Stock

 

During the six months ended June 30, 2017, senior secured convertible promissory notes and accrued interest in the amount of $8,839,084 were converted into 50,710,473 shares of common stock.

 

During the six months ended June 30, 2017, the Company issued 17,674,027 shares of common stock for cash in the amount of $3,750,000 pursuant to an equity financing facility with an accredited investor.

 

During the six months ended June 30, 2017, the Company issued 1,215,909 shares of common stock for director fees in the amount of $221,973, issued 2,859,005 shares of common stock for services performed in the amount of $591,359 and issued 1,635,780 shares of common stock for compensation in the amount of $320,732.

 

During the six months ended June 30, 2017, the Company cancelled 9,291,744 shares of common stock that had been previously issued and held in escrow in connection with the contingent consideration related to the Black Oak acquisition. See “Note 9 – Contingent Consideration Liability” for further information.

 

During the six months ended June 30, 2016, senior secured convertible promissory notes and accrued interest in the amount of $961,740 were converted into 13,906,149 shares of common stock.

 

During the six months ended June 30, 2016, the Company sold 25,715,674 shares of common stock for the net amount of $3,208,134 pursuant to an equity financing facility with an accredited investor.

   

Stock-Based Compensation Expense

 

A summary of stock-based compensation for the three months ended June 30, 2017 and 2016 is as follows:

 

    For the Three Months Ended  
    June 30, 2017     June 30, 2016  
Type of Award   Number of Shares or Options Granted     Stock-Based Compensation Expense     Number of Shares or Options Granted     Stock-Based Compensation Expense  
                         
Stock Options     8,250,000     $ 157,430           $ 47,589  
                                 
Stock Grants:                                
Employees (Common Stock)     1,535,780       294,632              
Employees (Series B Preferred Stock)                        
Directors (Common Stock)     1,090,909       184,473              
Non–Employee Consultants (Common Stock)     2,391,358       446,348              
                                 
Total Stock-Based Compensation     13,268,047     $ 1,082,883           $ 47,589  

 

A summary of stock-based compensation for the six months ended June 30, 2017 and 2016 is as follows:

 

    For the Six Months Ended  
    June 30, 2017     June 30, 2016  
Type of Award   Number of
Shares or
Options
Granted
    Stock-Based Compensation Expense     Number of
Shares or
Options
Granted
    Stock-Based Compensation Expense  
                         
Stock Options     8,250,000     $ 205,019       6,700,000     $ 95,178  
                                 
Stock Grants:                                
Employees (Common Stock)     1,635,780       320,732              
Employees (Series B Preferred Stock)     600,000       1,035,406              
Directors (Common Stock)     1,215,909       221,973       350,000       60,550  
Non–Employee Consultants (Common Stock)     2,859,005       591,359       70,000       20,727  
                                 
Total Stock–Based Compensation     14,560,694     $ 2,374,489       7,120,000     $ 176,455