|3 Months Ended|
Mar. 31, 2017
|Subsequent Events [Abstract]|
NOTE 13 SUBSEQUENT EVENTS.
On April 1, 2017, the Company entered into the First Amendment to the Executive Employment Agreement with W. Kip Speyer, our Chairman and Chief Executive Officer. This amendment amends certain terms of the Executive Employment Agreement dated June 1, 2014 by and between the Company and Mr. Speyer. Under the terms of the amendment, the term of his employment was extended to April 1, 2020, which may be further extended for additional one year periods upon 180 days notice by us to him. Under the terms of the amendment, Mr. Speyer's base salary was increased to $165,000 annually and he is entitled to earn annual performance bonuses, beginning with the year ending December 31, 2017, ranging from 25% of his base salary to 80% of his base salary upon our achievement of certain annual revenue and EBITDA targets.
Between April 3 2017 and April 19, 2017 Mr. W. Kip Speyer, an executive officer and director, lent us an aggregate of $150,000 under the terms of a series of 12% convertible promissory notes. The notes are unsecured, mature five years from the date of issuance, and are convertible at any time at the option of the holder into shares of our common stock at a conversion price of $0.50 per share. We did not pay any commissions or finders fees and the proceeds were used by us for working capital.
Between May 1, 2017 and May 11, 2017 Mr. Speyer also lent us $175,000 under the terms of a series of 6% convertible promissory note. The notes are unsecured, mature five years from the date of issuance, and are convertible at any time at the option of the holder into shares of our common stock at a conversion price of $0.50 per share. We did not pay any commissions or finders fees and the proceeds were used by us for working capital.
The notes have a conversion price that creates a beneficial conversion. A beneficial conversion feature exists on the date a convertible note is issued when the fair value of the underlying common stock into which the note is convertible exceeds the face amount of the note. In accordance with the guidance, the intrinsic value of the beneficial conversion feature is recorded as a debt discount with a corresponding amount to additional paid in capital. The debt discount is amortized to interest expense over the five-year life of the notes using the effective interest method.
On April 25, 2017 we issued an aggregate of 28,500 shares of our common stock valued at $22,800 to 19 of our employees, including our executive officers as additional compensation at the rate of 1,500 shares per employee. The recipients were accredited or otherwise sophisticated investors who had access to business and financial information on our company.
The entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business.
Reference 1: http://www.xbrl.org/2003/role/presentationRef