Annual report pursuant to Section 13 and 15(d)

NOTE 3 - RELATED PARTY TRANSACTIONS

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NOTE 3 - RELATED PARTY TRANSACTIONS
12 Months Ended
Dec. 31, 2018
Related Party Transactions [Abstract]  
Related Party Transactions Disclosure [Text Block]

NOTE 3 – RELATED PARTY TRANSACTIONS


The Company’s President and shareholders have advanced funds to the Company for working capital purposes since the Company’s inception in February 2009.  No formal repayment terms or arrangements exist and the Company is not accruing interest on these advances. The net amount of outstanding advances at December 31, 2018 and 2017 was $-0-.


Accrued expenses related primarily to travel reimbursements due related parties as of December 31, 2018 and 2017 was $32,366 and $27,375, respectively.


On April 1, 2017, the Company received and canceled 4,298 shares of its common stock as payment for short-swing profit pursuant to Section 16(b) of the U.S. Securities Exchange Act of 1934, as amended from Mr. Londoner.


On June 16, 2017 Mr. Cash was granted 40,000 shares of common stock at a cost basis of $3.425 per share in connection with his severance settlement. The granted shares vested immediately.


On November 8, 2017, Mr. Londoner, Mr. Chaussy and Mr. O’Donnell were granted 180,000, 100,000 and 80,000 shares of common stock at a cost basis of $3.80 per share for their 2017 performance, respectively. The granted shares vested immediately.


On November 1, 2017, in connection with Mr. Filler joining the Company’s Board of Directors,  the Company entered into a Master Services Agreement (the “Agreement”) with 3LP Advisors LLC (d/b/a Sherpa Technology Group) (“Sherpa”) and an initial statement of work (the “SOW”), pursuant to which Sherpa will develop, execute and expand the Company’s intellectual property strategy over the course of the next approximately 18 months by evaluating the business and technology landscape in which the Company operates, and charting and executing a strategy of patent filing and licensing. 


In connection with the SOW, the Company paid Sherpa fee of (i) $200,000 in cash, of which $25,000 will be paid on January 1, 2018, with the remainder to be paid upon completion of certain objectives, and (ii) a ten-year option to purchase up to 120,000 shares of the Company’s common stock at an exercise of $3.625 per share of common stock, of which 60,000 options vest immediately and 60,000 options are performance conditioned.  Mr. Filler is the general counsel and partner of Sherpa. 


During the year ended December 31, 2018, the Company paid $427,219 as patent costs, consulting fees and expense reimbursements. As of December 31, 2018 and 2017, there was an unpaid balance of $0.


On November 9, 2017, Mr. Londoner, Mr. O’Donnell and Mr. Weild, as members of the board of directors, were granted each 20,000 shares of common stock at a cost basis of $3.725 per share for their 2017 board and committee service. The granted shares vested immediately.


On November 9, 2017, Mr. Tanaka, Mr. Filler and Mr. Foley, as members of the board of directors, were granted each 12,000 shares of common stock at a cost basis of $3.725 per share for their 2017 board service. The granted shares vested immediately.


On December 22, 2017 Mr. Gallagher and Mr. Fischer were granted options to purchase 15,971 and 26,390 shares of common stock at an exercise price of $3.425 per share for their 2017 board service. The granted options vested as of December 22, 2017 and are exercisable for a ten year term.


On February 15, 2018 Mr. Filler was granted options to purchase 20,000 shares of common stock at an exercise price of $3.55 per share for their 2017 board service. The granted options vested as of February 15, 2018 and are exercisable for a ten year term.


On May 4, 2018, Mr. Londoner and Mr. Chaussy were granted 240,000 and 100,000 shares of common stock at a cost basis of $4.425 per share for their 2017 performance, respectively. The granted shares vested immediately.


On August 16, 2018, Mr. Filler acquired 4,800 shares of the Company’s common stock, 1,200 warrants to acquire the Company’s common stock at an exercise price of $6.85 and exercisable for three years and 1,200 warrants to acquire the Company’s common stock at an exercise price of $3.75 expiring on May 16, 2019 in participation in the Company’s private placement of its common stock. The issued warrants vested as of August 16, 2018.


On October 16, 2018, Mr. Tanaka and Mr. Weild were granted options to purchase 34,566 and 69,132 shares of common stock at an exercise price of $5.09 per share for their 2018 board service. Mr. Tanaka’s options vest with 17,283 vesting on October 16, 2018 and 17,283 vesting January 1, 2019 and are exercisable for a ten year term. Mr. Weild’s options vest with 17,283 on October 16, 2018; 17,283 on January 1, 2019, 2020 and 2021 each and are exercisable for a ten year term.


On October 26, 2018, Mr. Gallaher was issued 94 shares of the Company’s common stock in a cashless exercise 490 warrants to purchase the Company common stock.


On November 6, 2018, Mr. Londoner, as Chairman of the board of directors, was granted 60,000 shares of common stock at a cost basis of $5.33 per share for his 2018 board service. The granted shares vested immediately.


On November 6, 2018, O’Donnell Partners LLC (a company controlled by Mr. O’Donnell), Mr. Filler, Mr. Fischer each were granted 50,000 shares of common stock for their 2018 board of directors of committee chairmanships services at a cost basis of $5.33 per share. The granted shares vested immediately.


On November 6, 2018, Mr. Fischer and Mr. Foley each were granted 25,000 shares of common stock for their 2018 board of directors’ services at a cost basis of $5.33 per share. The granted shares vested immediately.