Quarterly report pursuant to Section 13 or 15(d)

Restricted Stock Awarded Outside the 2013 Stock Incentive Plan

Restricted Stock Awarded Outside the 2013 Stock Incentive Plan

3 Months Ended

Dec. 31, 2017

Restricted Stock Awarded Outside the 2013 Stock Incentive Plan

5.	Restricted Stock Awarded Outside the 2013 Stock Incentive Plan

On May 3, 2016, the Company awarded 2,000,000 shares of Restricted Stock to members of the Board of Directors and management in a private placement in reliance upon an exemption from registration afforded by Section 4(a)(2) of the Securities Act. The shares subject to this grant are outside the 2013 Plan and 100% shall fully vest on the second anniversary of the date of grant. In addition, in the event of a Change of Control (as such term is defined in the 2013 Plan), 100% of the grants will immediately vest.

Restricted Stock activity for the three months ended December 31, 2017 and 2016 is as follows:

	2017		2016
Non Vested at beginning of year		2,000,000		2,000,000
Awarded		-		-
Vested		-		-
Forfeited		-		-
Non Vested at December 31, 2017 and 2016		2,000,000		2,000,000

The weighted average restricted stock award date fair value information for the three months ended December 31, 2017 and 2016 follows:

	2017		2016
Non Vested at beginning of year	$	0.39	$	0.39
Awarded		-		-
Vested		-		-
Forfeited		-		-
Non Vested at December 31, 2017 and 2016	$	0.39	$	0.39

For the three months ended December 31, 2017 and 2016, compensation expense recorded for the restricted stock awards was approximately $98,000 and $98,000, respectively.