Quarterly report pursuant to Section 13 or 15(d)

Accrued Expenses

Accrued Expenses
6 Months Ended
Jun. 30, 2016
Payables and Accruals [Abstract]  
Accrued Expenses





Accrued expenses consist of the following:


    June 30, 2016     December 31, 2015  
Registration rights penalty   $ 866,250     $ 728,750  
Accrued consulting fees     975,425       916,925  
Accrued host fees     1,117,208       873,544  
Accrued professional, board and other fees     1,265,881       1,069,341  
Accrued wages     194,369       187,779  
Warranty payable     290,131       223,988  
Accrued taxes payable     413,722       355,950  
Warrants payable     295,106       77,761  
Accrued issuable equity     737,895       324,894  
Accrued interest expense     154,092       83,842  
Dividend payable     365,300       293,200  
Other accrued expenses     70,264       10,750  
    $ 6,745,643     $ 5,146,724  




In connection with the sale of the Company’s Series C Convertible Preferred Stock, the Company granted the purchasers certain registration rights. As of June 30, 2016 and December 31, 2015, the Company had not yet filed a registration statement under the Securities Act of 1933. The registration rights agreements entered into with the Series C Convertible Preferred Stock purchasers provide that the Company has to pay liquidated damages equal to 1% of all Series C subscription amounts received on the date the Series C resale registration statement was due to be filed pursuant to such registration rights agreements. The Company needs to pay such penalty each month thereafter until the resale registration statement is filed. The maximum liquidated damages amount is 10% of all Series C subscription amounts received. Failure to pay such liquidated damages results in interest on such damages at a rate of 18% per annum becoming due. As a result, the Company accrued $866,250 and $728,750 of Series C Convertible Preferred Stock registration rights damages at June 30, 2016 and December 31, 2015, respectively.




As of June 30, 2016 and December 31, 2015, the Company accrued $294,111 and $77,735, respectively, related to investment banking fees which were payable in warrants. See Note 7 – Fair Value Measurement – Warrants Payable and Note 8 – Stockholders’ Deficiency – Preferred Stock - Series C Convertible Preferred Stock for additional details.