Quarterly report pursuant to Section 13 or 15(d)

NOTE 7: EQUITY TRANSACTIONS

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NOTE 7: EQUITY TRANSACTIONS
9 Months Ended
Sep. 30, 2016
Stockholders' Equity Note [Abstract]  
Stockholders' Equity Note Disclosure [Text Block]
NOTE 7: EQUITY TRANSACTIONS

Common Stock

During the nine months ended September 30, 2016, the Company issued an aggregate of 2,557,693 to note holders to suspend the conversion of certain outstanding convertible notes. The fair value of these shares of $1,487,309 was recognized as a debt standstill expense. The Company also issued 434,244 common stock shares to a note holder in an event of default. These shares were originally owned by an officer of the Company and pledged to the note holder.

During the nine months ended September 30, 2016, the Company granted an aggregate of 12,900,000 common shares to various employees and directors for services rendered. The aggregate fair value of these awards was determined to be $6,289,640 and was recognized as stock compensation during the nine months ended September 30, 2016.

During the nine months ended September 30, 2016, the company issued 1,785,714 common shares for the conversion of $500,000 of salary due to an officer. The value of the shares was $1,116,071, of which $616,071 was recorded as additional compensation expense.

During the nine months to September 30, 2016, the Company issued a total of 4,967,617 shares of common stock for the extinguishment of $446,845 in convertible note principal and interest.

During the nine months to September 30, 2016, the Company issued a total of 100,000 common shares for investor relations consulting services valued at $21,975.

Common Stock Options

A summary of common stock option activity for the nine months ended September 30, 2016 is as follows:

 
       
Weighted
   
Weighted
 
 
       
Average
   
Average
 
 
 
Options
   
Exercise Price
   
Remaining Term
 
Outstanding - December 31, 2015
   
714,286
   
$
4.68
     
3.48
 
Granted
   
-
     
-
     
-
 
Expired
   
(28,573
)
   
8.40
     
-
 
Exercised
   
-
     
-
     
-
 
Outstanding – September 30, 2016
   
685,713
   
$
4.52
     
2.87
 
 
                       
Exercisable – September 30, 2016
   
685,713
   
$
4.52
     
2.87
 

The intrinsic value of the exercisable options as of September 30, 2016 was $0. During the nine months ended September 30, 2016 28,573 options expired unexercised.

Common Stock Warrants

The following table presents the common stock warrant activity during the nine months ended September 30, 2016:

 
       
Weighted
   
Weighted
 
 
       
Average
   
Average
 
 
 
Warrants
   
Exercise Price
   
Remaining Term
 
Outstanding - December 31, 2015
   
6,889,891
   
$
0.43
     
4.05
 
Granted
   
381,198
     
0.11
     
-
 
Forfeited/canceled
   
-
     
-
     
-
 
Exercised
   
-
     
-
     
-
 
Outstanding – September 30, 2016
   
7,271,089
   
$
0.41
     
3.36
 
 
                       
Exercisable – September 30, 2016
   
7,271,089
   
$
0.41
     
3.36
 

The intrinsic value of the exercisable warrants as of September 30, 2016 was $34,047.