Annual report pursuant to Section 13 and 15(d)

Stock Warrants

v3.6.0.2
Stock Warrants
12 Months Ended
Dec. 31, 2016
Stockholders' Equity Note [Abstract]  
Stock Warrants
Note 12 — Stock Warrants
 
The following table shows the various changes in warrants for the years ended:
 
 
 
December 31,
 
December 31,
 
 
 
2016
 
2015
 
 
 
 
 
 
 
Warrants Outstanding, Beginning of Year
 
 
535,091
 
 
5,236,660
 
Exercised During the Year
 
 
(133,232)
 
 
(4,746,755)
 
Issued During the Year
 
 
-
 
 
60,000
 
Forfeited During the Year
 
 
-
 
 
(14,814)
 
 
 
 
 
 
 
 
 
Warrants Outstanding, End of Year
 
 
401,859
 
 
535,091
 
 
The outstanding warrants as of December 31, 2016 expire from November 3, 2017 to August 5, 2018. The weighted average remaining term of the warrants is 1.3 years. The weighted average exercise price is $2.41 per share.
 
During the year ended December 31, 2016 a total of 111,232 warrants were exercised on a cashless basis resulting in the issuance of 74,621 shares. An additional 22,000 warrants were exercised on cash basis resulting in proceeds of $60,750. During the year ended December 31, 2015, a total of 4,178,267 warrants were exercised on a cashless basis resulting in the issuance of 3,559,783 shares.
 
The Black-Scholes-Merton pricing model was used to estimate the fair value of share-based awards under FASB ASC Topic 718. The Black-Scholes-Merton pricing model incorporates various highly subjective assumptions, including expected term and share price volatility.
 
There were no new warrants issued during the year ended December 31, 2016. During the year ended December 31, 2015, 60,000 warrants were issued. The following summary table shows the assumptions used to compute the fair value of the 60,000 warrants granted during the year ending December 31, 2015 for investor relations services and their estimated value:
 
  
·
Expected term in years
2.8 to 3.0 years
 
·
Volatility
122.8 to 122.9%
 
·
Risk-free interest rate
0.90 to 0.99%
 
·
Expected annual dividends
None
 
·
Fair value of warrants issued
$260,373
 
The entire fair value amount of the warrants issued was recognized during the year ended December 31, 2015.