Quarterly report pursuant to Section 13 or 15(d)

If current and projected revenue growth does not meet estimates, the Company may call upon the remaining Series A Stock available for sale. The Company has 673,400 Series A Shares available for call by the Company at $5.00 per share.

Preferred stock, conversion terms

The Series A Stock is convertible into shares of the Company’s common stock in an amount initially calculated (subject to adjustment) by dividing the $5.00 stated value of each share of Series A Stock by $2.00. The Preferred Warrants have an initial exercise price of $2.50 per share (subject to adjustment).

Common stock issued for services

182,500

Warrants issued for services

90,000

Securities Purchase Agreement of May 11, 2011

Securities Purchase Agreements (Textual) [Abstract]

Numer of common stock sold

295,833

Number of common stock called by warrants

221,875

Net proceeds from sale of common stock and warrants

2,998,000

Combination of securities offered in Securities Purchase Agreement, description

The common stock and warrants were sold in fixed combinations, with each combination consisting of one share of common stock and 0.75 of one warrant, with each whole warrant exercisable for one share of common stock.

Purchase price per fixed combination

11.28

Description of period for exercisability of warrants

The warrants became exercisable six months and one day following the closing date of the Offering and will remain exercisable for five years thereafter.

Percentage of holding in common stock after which exercisability of warrant may be limited

4.99%

Right to call warrants for cancellation, description

After the one year anniversary of the initial exercise date of the warrants, the Company has the right to call the warrants for cancellation for $.006 per warrant in the event that the volume weighted average price of the Company’s Common Stock for 20 consecutive trading days exceeds $27.12.

Exercise price of warrants

$ 13.56

Securities Purchase Agreement of September 18, 2013

Securities Purchase Agreements (Textual) [Abstract]

Numer of common stock sold

350,931

Proceeds from sale of common stock and warrants, gross

807,000

Net proceeds from sale of common stock and warrants

695,491

Combination of securities offered in Securities Purchase Agreement, description

The common stock and warrants were sold in fixed combinations, with each combination consisting of one share of common stock and one warrant, with each warrant exercisable for one share of common stock.

Purchase price per fixed combination

2.30

Description of period for exercisability of warrants

The exercisability of the warrants may be limited if, upon exercise, the holder or any of its affiliates would beneficially own more that 4.99% of the Common Stock.

Percentage of holding in common stock after which exercisability of warrant may be limited

4.99%

Right to call warrants for cancellation, description

After the one year anniversary of the initial exercise date of the warrants, the Company had the right to call the warrants for cancellation for $.001 per share in the event that the volume weighted average price of the Company’s Common Stock for 20 consecutive trading days exceeds $10.00.

Securities Purchase Agreement of November 17, 2014

Securities Purchase Agreements (Textual) [Abstract]

Price per share

$ 5.00

Sale of Series A preferred stock

600,000

Proceeds from issuance of private placement

2,697,000

Preferred Stock, call or exercise features

At any time from November 17, 2014, and prior to October 20, 2019 (the “Put/Call Exercise Period”), the investors may exercise a right to purchase and require the Company to sell up to an additional 700,000 shares of Series A Stock. If the investors have not exercised this right during the Put/Call Exercise Period, the Company may exercise a right to cause and require the investors to purchase up to an additional 700,000 shares of Series A Stock, for an aggregate purchase price of $3,500,000. Neither party can refuse the put or call. If the maximum additional shares are sold/purchased, the gross proceeds to the Company would be $3,500,000.

Preferred stock, conversion terms

Holders of the Series A Stock shall initially have the right to convert such shares of Series A Stock into the number of authorized but previously unissued shares of the Company’s common stock obtained by dividing the stated value of each share of Series A ($5.00) by $2.00. For each share of Series A Stock, the investors will receive 2.5 Preferred Warrants to purchase the Company’s common stock at an exercise price of $2.50 per share. The Preferred Warrants are exercisable immediately for a period of five years from the date of closing. The exercise price of the Preferred Warrants is subject to adjustments in the case of stock splits, stock dividends, combinations of shares and similar recapitalization transactions. The exercisability of the Preferred Warrants may be limited if upon exercise, the warrant holder or any of its affiliates would beneficially own more than 4.99% of the Company’s Common Stock.

Preferred stock, dividend rate percentage

8.00%

Preferred stock, dividend rate per share amount

$ 0.40

Preferred stock, dividend payment terms

As of January 1, 2015, the Company was in the process of issuing approximately 27,500 shares in settlement of the first dividend payment. The value of these shares is therefore presented on the consolidated balance sheets as Shares to be issued.

Common Stock Purchase Agreement