5.             STOCKHOLDERS’ EQUITY:

The Company increased the authorized number of shares to 350,000,000 shares of common stock, $0.0001 par value per share, and 10,000,000 shares of Preferred stock, $0.0001 par value per share.

On September 29, 2017, the Company converted 178,924 shares of Series D Preferred Stock and all accrued dividends in the amount of $118,658 into 719,500 shares of common stock.

Stock Options

On September 29, 2017, a former employee, forfeited her vested options for 37,500 shares with an exercise price of $3.00 per share and her vested options for 125,000 shares with an exercise price of $1.50 per share.

107,000 options were cancelled as a result of non-exercise prior to their expiration date.

The Company recognized no stock-based compensation expense during the three and nine months ended September 30, 2017 and no compensation during the three months, and $6,691 during the nine months, ended September 30, 2016, respectively.

As of September 30, 2017 there is no unrecognized compensation expense related to the issuance of the stock options.

Performance Stock Options

There were no performance stock options granted during the three and nine months ended September 30, 2017 and 2016.

Warrants

There were no warrants issued during the three and nine months ended September 30, 2017.

Warrants were cancelled as a result of non-exercise prior to their expiration date.