|6 Months Ended|
Jun. 30, 2016
|Payables and Accruals [Abstract]|
4. ACCRUED EXPENSES
Accrued expenses consist of the following:
REGISTRATION RIGHTS PENALTY
In connection with the sale of the Companys 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.
The entire disclosure for accounts payable and accrued liabilities at the end of the reporting period.
Reference 1: http://www.xbrl.org/2003/role/presentationRef