Item
15. Recent Sales of Unregistered Securities.
Fiscal
Year 2020
Private
Placement
On
February 5, 2020, we initiated a private placement for the sale and issuance of up to five million shares of our common stock
at a per-share price of $1.20, which amount represents a 20% discount to the $1.50 closing price of our common stock on that day,
and is memorialized by a subscription agreement.
As
a result of this private placement, from February 25 through March 31, 2020, a total of 4,237,833 shares of our common stock were
subscribed. Total subscribed shares of 3,392,833 shares of common stock were issued with net cash proceeds of $3,430,000 after
direct costs received as of March 31, 2020. The remaining subscribed shares of 845,000 shares of common stock were issued in April
and May 2020 upon receipt of cash proceeds of $1,014,000.
Our
private placement is exempt from the registration requirements of Section 5 of the Securities Act in reliance on Section 4(a)(2)
thereof and/or Rule 506 of Regulation D and Regulation S thereunder, each as promulgated by the SEC. Our private placement was
managed by us; however, in connection with the closings, we paid a non-U.S. based consultant (i) as a cash fee, an aggregate amount
of $499,000 (or 10% of the gross proceeds of the closings), (ii) as a non-accountable expense allowance, an aggregate of $100,000
(or 2% of the gross proceeds of the closings), (iii) five-year warrants, exercisable for an aggregate of up to 416,199 shares
of our common stock at a cash-only exercise price of $1.92 per share, and (iv) 100,000 shares of our common stock. We made the
above-referenced payments only in respect of that portion of the gross proceeds from the closings for investors introduced to
us by the consultant. In addition, we also incurred various expenses totaling $42,000 that are directly related to this private
placement.
In
preparation for this private placement offering, we separately negotiated with certain Series A Preferred stockholders to waive
their rights in order not to ratchet down the conversion price of their Series A preferred shares. In return for the waiver, we
granted these Series A Preferred stockholders warrants to purchase 2,303,861 shares of our common stock. The warrants are exercisable
in August 2020, expire in 5 years and are exercisable at $1.20 per share, as adjusted. The exercise price is subject to certain
customary adjustments, including subsequent equity sales and rights offerings.
Fiscal
Year 2019
Common
Stock Issuances
On
January 8, 2019, we issued 13,332 shares of our common stock to consultants as payment for services to be rendered. The shares
had an aggregate value of $58,000, which was based on the closing price of our common stock as reported by the OTC Markets Group
Inc.’s OTCQB® tier Venture Market, or OTCQB, on the date of issuance, or $4.35 per share. We offered and sold the shares
in reliance on the exemption from registration pursuant to Section 4(a)(2) of the Securities Act (in that the shares of our common
stock were issued by us in a transaction not involving any public offering).
On
February 8, 2019, we issued 13,334 shares of our common stock to consultants as payment for services to be rendered. The shares
had an aggregate value of $130,000, which was based on the closing price of our common stock as reported by the OTCQB, on the
date of issuance, or $9.75 per share. We offered and sold the shares in reliance on the exemption from registration pursuant to
Section 4(a)(2) of the Securities Act (in that the shares of our common stock were issued by us in a transaction not involving
any public offering).
On
March 8, 2019, we issued 13,334 shares of our common stock to consultants as payment for services to be rendered. The shares had
an aggregate value of $200,000, which was based on the closing price of our common stock as reported by the OTCQB, on the date
of issuance, or $15.00 per share. We offered and sold the shares in reliance on the exemption from registration pursuant to Section
4(a)(2) of the Securities Act (in that the shares of our common stock were issued by us in a transaction not involving any public
offering).
On
April 8, 2019, we issued 40,000 shares of our common stock to consultants as payment for services to be rendered. The shares had
an aggregate value of $103,000, which was based on the closing price of our common stock as reported by The Nasdaq Capital Market,
on the date of issuance, or $2.58 per share. We offered and sold the shares in reliance on the exemption from registration pursuant
to Section 4(a)(2) of the Securities Act (in that the shares of our common stock were issued by us in a transaction not involving
any public offering).
On
April 12, 2019, we completed our acquisition of Sound Concepts pursuant to an agreement and plan of merger. On the terms and subject
to the conditions set forth in the agreement and plan of merger, at the effective time, each share of Sound Concepts capital stock
was cancelled in exchange for cash payment by us of an aggregate of $15,000,000 and the issuance of an aggregate of 3,327,791
restricted shares of our common stock. We offered and sold the shares in reliance on the exemption from registration pursuant
to Section 4(a)(2) of the Securities Act (in that the shares of our common stock were issued by us in a transaction not involving
any public offering).
On
April 25, 2019, we issued 12,438 shares of our common stock to consultants as payment for services to be rendered. The shares
had an aggregate value of $25,000, which was based on the closing price of our common stock as reported by The Nasdaq Capital
Market, on the date of issuance, or $2.01 per share. We offered and sold the shares in reliance on the exemption from registration
pursuant to Section 4(a)(2) of the Securities Act (in that the shares of our common stock were issued by us in a transaction not
involving any public offering).
On
May 8, 2019, we issued 40,000 shares of our common stock to consultants as payment for services to be rendered. The shares had
an aggregate value of $85,000, which was based on the closing price of our common stock as reported by The Nasdaq Capital Market,
on the date of issuance, or $2.13 per share. We offered and sold the shares in reliance on the exemption from registration pursuant
to Section 4(a)(2) of the Securities Act (in that the shares of our common stock were issued by us in a transaction not involving
any public offering).
On
May 19, 2019, we issued 2,475 shares of our common stock to a consultant as payment for services to be rendered. The shares had
an aggregate value of $5,000, which was based on the closing price of our common stock as reported by The Nasdaq Capital Market,
on the date of issuance, or $2.02 per share. We offered and sold the shares in reliance on the exemption from registration pursuant
to Section 4(a)(2) of the Securities Act (in that the shares of our common stock were issued by us in a transaction not involving
any public offering).
On
June 8, 2019, we issued 40,000 shares of our common stock to consultants as payment for services to be rendered. The shares had
an aggregate value of $72,000, which was based on the closing price of our common stock as reported by The Nasdaq Capital Market,
on the date of issuance, or $1.79 per share. We offered and sold the shares in reliance on the exemption from registration pursuant
to Section 4(a)(2) of the Securities Act (in that the shares of our common stock were issued by us in a transaction not involving
any public offering).
On
June 29, 2019, we issued 3,876 shares of our common stock to consultants as payment for services to be rendered. The shares
had an aggregate value of $10,000, which was based on the closing price of our common stock as reported by The Nasdaq Capital
Market, on the date of issuance, or $2.58 per share. We offered and sold the shares in reliance on the exemption from registration
pursuant to Section 4(a)(2) of the Securities Act (in that the shares of our common stock were issued by us in a transaction not
involving any public offering).
On
June 30, 2019, we issued 19,021 shares of our common stock to consultants as payment for services to be rendered. The shares had
an aggregate value of $38,000, which was based on the closing price of our common stock as reported by The Nasdaq Capital Market,
on the date of issuance, or $2.00 per share. We offered and sold the shares in reliance on the exemption from registration pursuant
to Section 4(a)(2) of the Securities Act (in that the shares of our common stock were issued by us in a transaction not involving
any public offering).
On
July 8, 2019, we issued 5,000 shares of our common stock to consultants as payment for services to be rendered. The shares had
an aggregate value of $10,000, which was based on the closing price of our common stock as reported by The Nasdaq Capital Market,
on the date of issuance, or $2.03 per share. We offered and sold the shares in reliance on the exemption from registration pursuant
to Section 4(a)(2) of the Securities Act (in that the shares of our common stock were issued by us in a transaction not involving
any public offering).
On
July 19, 2019, we issued 4,716 shares of our common stock to consultants as payment for services to be rendered. The shares had
an aggregate value of $10,000, which was based on the closing price of our common stock as reported by The Nasdaq Capital Market,
on the date of issuance, or $2.12 per share. We offered and sold the shares in reliance on the exemption from registration pursuant
to Section 4(a)(2) of the Securities Act (in that the shares of our common stock were issued by us in a transaction not involving
any public offering).
On
August 15, 2019, we issued 100,000 shares of our common stock to a consultant as payment for services to be rendered. The shares
had an aggregate value of $128,000, which was based on the closing price of our common stock as reported by The Nasdaq Capital
Market, on the date of issuance, or $1.28 per share. We offered and sold the shares in reliance on the exemption from registration
pursuant to Section 4(a)(2) of the Securities Act (in that the shares of our common stock were issued by us in a transaction not
involving any public offering).
On
August 19, 2019, we issued 7,752 shares of our common stock to consultants as payment for services to be rendered. The shares
had an aggregate value of $10,000, which was based on the closing price of our common stock as reported by The Nasdaq Capital
Market, on the date of issuance, or $1.29 per share. We offered and sold the shares in reliance on the exemption from registration
pursuant to Section 4(a)(2) of the Securities Act (in that the shares of our common stock were issued by us in a transaction not
involving any public offering).
On
September 11, 2019, we issued 20,000 shares of our common stock to consultants as payment for services to be rendered. The shares
had an aggregate value of $24,000, which was based on the closing price of our common stock as reported by The Nasdaq Capital
Market, on the date of issuance, or $1.22 per share. We offered and sold the shares in reliance on the exemption from registration
pursuant to Section 4(a)(2) of the Securities Act (in that the shares of our common stock were issued by us in a transaction not
involving any public offering).
On
September 16, 2019, we issued 10,000 shares of our common stock to a consultant as payment for services to be rendered. The shares
had an aggregate value of $12,000, which was based on the closing price of our common stock as reported by The Nasdaq Capital
Market, on the date of issuance, or $1.20 per share. We offered and sold the shares in reliance on the exemption from registration
pursuant to Section 4(a)(2) of the Securities Act (in that the shares of our common stock were issued by us in a transaction not
involving any public offering).
On
September 19, 2019, we issued 9,010 shares of our common stock to consultants as payment for services to be rendered. The shares
had an aggregate value of $10,000, which was based on the closing price of our common stock as reported by The Nasdaq Capital
Market, on the date of issuance, or $1.11 per share. We offered and sold the shares in reliance on the exemption from registration
pursuant to Section 4(a)(2) of the Securities Act (in that the shares of our common stock were issued by us in a transaction not
involving any public offering).
On
October 11, 2019, we issued 20,000 shares of our common stock to consultants as payment for services to be rendered. The shares
had an aggregate value of $12,000, which was based on the closing price of our common stock as reported by The Nasdaq Capital
Market, on the date of issuance, or $1.08 per share. We offered and sold the shares in reliance on the exemption from registration
pursuant to Section 4(a)(2) of the Securities Act (in that the shares of our common stock were issued by us in a transaction not
involving any public offering).
On
October 16, 2019, we issued 10,000 shares of our common stock to a consultant as payment for services to be rendered. The shares
had an aggregate value of $10,000, which was based on the closing price of our common stock as reported by The Nasdaq Capital
Market, on the date of issuance, or $1.07 per share. We offered and sold the shares in reliance on the exemption from registration
pursuant to Section 4(a)(2) of the Securities Act (in that the shares of our common stock were issued by us in a transaction not
involving any public offering).
On
October 19, 2019, we issued 9,804 shares of our common stock to consultants as payment for services to be rendered. The shares
had an aggregate value of $10,000, which was based on the closing price of our common stock as reported by The Nasdaq Capital
Market, on the date of issuance, or $1.04 per share. We offered and sold the shares in reliance on the exemption from registration
pursuant to Section 4(a)(2) of the Securities Act (in that the shares of our common stock were issued by us in a transaction not
involving any public offering).
On
November 8, 2019, we issued 45,000 shares of our common stock to a consultant as payment for services to be rendered. The shares
had an aggregate value of $41,000 which was based on the closing price of our common stock as reported by The Nasdaq Capital Market,
on the date of issuance, or $0.91 per share. We offered and sold the shares in reliance on the exemption from registration pursuant
to Section 4(a)(2) of the Securities Act (in that the shares of our common stock were issued by us in a transaction not involving
any public offering).
On
November 11, 2019, we issued 30,000 shares of our common stock to consultants as payment for services to be rendered. The shares
had an aggregate value of $29,000 which was based on the closing price of our common stock as reported by The Nasdaq Capital Market,
on the date of issuance, or $0.96 per share. We offered and sold the shares in reliance on the exemption from registration pursuant
to Section 4(a)(2) of the Securities Act (in that the shares of our common stock were issued by us in a transaction not involving
any public offering).
On
November 16, 2019, we issued 10,000 shares of our common stock to consultants as payment for services to be rendered. The shares
had an aggregate value of $8,000 which was based on the closing price of our common stock as reported by The Nasdaq Capital Market,
on the date of issuance, or $0.76 per share. We offered and sold the shares in reliance on the exemption from registration pursuant
to Section 4(a)(2) of the Securities Act (in that the shares of our common stock were issued by us in a transaction not involving
any public offering).
On
November 16, 2019, we issued 10,000 shares of our common stock to a consultant as payment for services to be rendered. The shares
had an aggregate value of $8,000 which was based on the closing price of our common stock as reported by The Nasdaq Capital Market,
on the date of issuance, or $0.76 per share. We offered and sold the shares in reliance on the exemption from registration pursuant
to Section 4(a)(2) of the Securities Act (in that the shares of our common stock were issued by us in a transaction not involving
any public offering).
On
November 19, 2019, we issued 12,048 shares of our common stock to consultants as payment for services to be rendered. The shares
had an aggregate value of $10,000 which was based on the closing price of our common stock as reported by The Nasdaq Capital Market,
on the date of issuance, or $0.83 per share. We offered and sold the shares in reliance on the exemption from registration pursuant
to Section 4(a)(2) of the Securities Act (in that the shares of our common stock were issued by us in a transaction not involving
any public offering).
On
December 8, 2019, we issued 46,000 shares of our common stock to a consultant as payment for services to be rendered. The shares
had an aggregate value of $40,000 which was based on the closing price of our common stock as reported by The Nasdaq Capital Market,
on the date of issuance, or $0.86 per share. We offered and sold the shares in reliance on the exemption from registration pursuant
to Section 4(a)(2) of the Securities Act (in that the shares of our common stock were issued by us in a transaction not involving
any public offering).
On
December 16, 2019, we issued 10,000 shares of our common stock to a consultant as payment for services to be rendered. The shares
had an aggregate value of $14,000 which was based on the closing price of our common stock as reported by The Nasdaq Capital Market,
on the date of issuance, or $1.36 per share. We offered and sold the shares in reliance on the exemption from registration pursuant
to Section 4(a)(2) of the Securities Act (in that the shares of our common stock were issued by us in a transaction not involving
any public offering).
On
December 19, 2019, we issued 7,194 shares of our common stock to consultants as payment for services to be rendered. The shares
had an aggregate value of $10,000 which was based on the closing price of our common stock as reported by The Nasdaq Capital Market,
on the date of issuance, or $1.39 per share. We offered and sold the shares in reliance on the exemption from registration pursuant
to Section 4(a)(2) of the Securities Act (in that the shares of our common stock were issued by us in a transaction not involving
any public offering).
Grants
of Stock Options
On
January 9, 2019, we granted stock options to an officer to purchase up to 16,667 shares of our common stock pursuant to the officer’s
employment agreement. The options have an exercise price of $4.35 per share, have a five-year term, and vest 50% on grant date
and the remaining 50% will vest on the 12-month anniversary of the grant date. The total fair value of these options at the grant
date was approximately $71,000, which was based upon the closing price of our common stock as reported by the OTCQB on the grant
date. The grant of the options and the issuance of the shares of our common stock underlying the options is and will be exempt
from the registration requirements pursuant to Section 4(a)(2) of the Securities Act (in that the shares of our common stock were
issued by us in a transaction not involving any public offering).
On
January 28, 2019, we granted stock options to a consultant to purchase up to 1,667 shares of our common stock for services to
be rendered. The options have an exercise price of $7.80 per share, have a five-year term, and vest over a period of two months
from the grant date. The total fair value of these options at the grant date was approximately $13,000, which was based upon the
closing price of our common stock as reported by the OTCQB on the grant date. The grant of the options and the issuance of the
shares of our common stock underlying the options is and will be exempt from the registration requirements pursuant to Section
4(a)(2) of the Securities Act (in that the shares of our common stock were issued by us in a transaction not involving any public
offering).
On
February 6, 2019, we granted stock options to an employee to purchase up to 66,667 shares of our common for services to be rendered.
The options have an exercise price of $7.50 per share, have a five-year term and vest over a period of three years from the grant
date. The total fair value of these options at the grant date was approximately $489,000, which was based upon the closing price
of our common stock as reported by the OTCQB on the grant date. The grant of the options and the issuance of the shares of our
common stock underlying the options are and will be exempt from the registration requirements pursuant to Section 4(a)(2) of the
Securities Act (in that the shares of our common stock were issued by us in a transaction not involving any public offering).
On
February 7, 2019, we granted stock options to a consultant to purchase up to 66,667 shares of our common stock for services to
be rendered. The options have an exercise price of $8.10 per share, have a five-year term, and 25% vest on the grant date and
the remaining over a period of three years from the grant date. The total fair value of these options at the grant date was approximately
$528,000, which was based upon the closing price of our common stock as reported by the OTCQB on the grant date. The grant of
the options and the issuance of the shares of our common stock underlying the options are and will be exempt from the registration
requirements pursuant to Section 4(a)(2) of the Securities Act (in that the shares of our common stock were issued by us in a
transaction not involving any public offering).
On
February 28, 2019, we granted stock options to employees to purchase up to 9,000 shares of common stock for services to be rendered.
The options have an exercise price of $14.90 per share, have a five-year term, and vest equally on the anniversary dates over
a period of three years from the grant date. The total fair value of these options at the grant date was approximately $71,000,
which was based upon the closing price of our common stock as reported by the OTCQB on the grant date. The grant of the options
and the issuance of the shares of our common stock underlying the options are and will be exempt from the registration requirements
pursuant to Section 4(a)(2) of the Securities Act (in that the shares of our common stock were issued by us in a transaction not
involving any public offering).
On
April 8, 2019, we granted stock options to an employee to purchase up to 667 shares of our common stock for services to be rendered.
The options have an exercise price of $3.13 per share, have a five-year term, and vest over a period of four years from the grant
date on the grant date. The total fair value of these options at the grant date was approximately $2,000, which was based upon
the closing price of our common stock as reported by The Nasdaq Capital Market on the grant date. The grant of the options and
the issuance of the shares of our common stock underlying the options is and will be exempt from the registration requirements
of the Securities Act pursuant to Section 4(a)(2) of the Securities Act.
On
April 15, 2019, we granted stock options to an employee to purchase up to 1,667 shares of our common stock for services to be
rendered. The options have an exercise price of $3.13 per share, have a five-year term, and vest over a period of four years from
the grant date on the grant date. The total fair value of these options at the grant date was approximately $4,000, which was
based upon the closing price of our common stock as reported by The Nasdaq Capital Market on the grant date. The grant of the
options and the issuance of the shares of our common stock underlying the options is and will be exempt from the registration
requirements of the Securities Act pursuant to Section 4(a)(2) of the Securities Act.
On
April 20, 2019, we granted stock options to an employee to purchase up to 60,000 shares of our common stock for services to be
rendered. The options have an exercise price of $3.13 per share, have a five-year term, and vest over a period of three years
from the grant date on the grant date. The total fair value of these options at the grant date was approximately $119,000, which
was based upon the closing price of our common stock as reported by The Nasdaq Capital Market on the grant date. The grant of
the options and the issuance of the shares of our common stock underlying the options is and will be exempt from the registration
requirements of the Securities Act pursuant to Section 4(a)(2) of the Securities Act.
On
June 3, 2019, we granted stock options to an employee to purchase up to 833 shares of our common stock for services to be rendered.
The options have an exercise price of $3.13 per share, have a five-year term, and vest over a period of four years from the grant
date on the grant date. The total fair value of these options at the grant date was approximately $2,000, which was based upon
the closing price of our common stock as reported by The Nasdaq Capital Market on the grant date. The grant of the options and
the issuance of the shares of our common stock underlying the options is and will be exempt from the registration requirements
of the Securities Act pursuant to Section 4(a)(2) of the Securities Act.
On
June 10, 2019, we granted stock options to employees to purchase up to 360,000 shares of our common stock for services to be rendered.
The options have an exercise price of $3.13 per share, have a five-year term, and vest over a period of three or four years from
the grant date on the grant date or vest on performance. The total fair value of these options at the grant date was approximately
$678,000, which was based upon the closing price of our common stock as reported by The Nasdaq Capital Market on the grant date.
The grant of the options and the issuance of the shares of our common stock underlying the options is and will be exempt from
the registration requirements of the Securities Act pursuant to Section 4(a)(2) of the Securities Act.
On
June 17, 2019, we granted stock options to an employee to purchase up to 1,667 shares of our common stock for services to rendered.
The options have an exercise price of $3.13 per share, have a five-year term, and vest over a period of four years from the grant
date on the grant date. The total fair value of these options at the grant date was approximately $3,000, which was based upon
the closing price of our common stock as reported by The Nasdaq Capital Market on the grant date. The grant of the options and
the issuance of the shares of our common stock underlying the options is and will be exempt from the registration requirements
of the Securities Act pursuant to Section 4(a)(2) of the Securities Act.
On
June 19, 2019, we granted stock options to an employee to purchase up to 5,000 shares of our common stock for services to rendered.
The options have an exercise price of $3.13 per share, have a five-year term, and vest over a period of four years from the grant
date on the grant date. The total fair value of these options at the grant date was approximately $13,000, which was based upon
the closing price of our common stock as reported by The Nasdaq Capital Market on the grant date. The grant of the options and
the issuance of the shares of our common stock underlying the options is and will be exempt from the registration requirements
of the Securities Act pursuant to Section 4(a)(2) of the Securities Act.
On
July 1, 2019, we granted stock options to consultants to purchase up to 4,000 shares of our common stock for services to be rendered.
The options have an exercise price of $3.13 per share, have a five-year term, and vest over a period of four years from the grant
date on the grant date. The total fair value of these options at the grant date was approximately $8,000, which was based upon
the closing price of our common stock as reported by The Nasdaq Capital Market on the grant date. The grant of the options and
the issuance of the shares of our common stock underlying the options is and will be exempt from the registration requirements
of the Securities Act pursuant to Section 4(a)(2) of the Securities Act.
On
July 1, 2019, we granted stock options to an employee to purchase up to 27,500 shares of our common stock for services to be rendered.
The options have an exercise price of $3.13 per share, have a five-year term, and 25,000 vest on grant date, the remaining vest
over a period of four years from the grant date on the grant date. The total fair value of these options at the grant date was
approximately $57,000, which was based upon the closing price of our common stock as reported by The Nasdaq Capital Market on
the grant date. The grant of the options and the issuance of the shares of our common stock underlying the options is and will
be exempt from the registration requirements of the Securities Act pursuant to Section 4(a)(2) of the Securities Act.
On
July 15, 2019, we granted stock options to employees to purchase up to 12,000 shares of our common stock for services to be rendered.
The options have an exercise price of $3.13 per share, have a five-year term, and vest over a period of three years from the grant
date on the grant date. The total fair value of these options at the grant date was approximately $24,000, which was based upon
the closing price of our common stock as reported by The Nasdaq Capital Market on the grant date. The grant of the options and
the issuance of the shares of our common stock underlying the options is and will be exempt from the registration requirements
of the Securities Act pursuant to Section 4(a)(2) of the Securities Act.
On
August 6, 2019, we granted stock options to an employee to purchase up to 1,667 shares of our common stock for services to be
rendered. The options have an exercise price of $3.13 per share, have a five-year term, and vest over a period of four years from
the grant date on the grant date. The total fair value of these options at the grant date was approximately $2,000, which was
based upon the closing price of our common stock as reported by The Nasdaq Capital Market on the grant date. The grant of the
options and the issuance of the shares of our common stock underlying the options is and will be exempt from the registration
requirements of the Securities Act pursuant to Section 4(a)(2) of the Securities Act.
On
August 15, 2019, we granted stock options to a consultant to purchase up to 100,000 shares of our common stock for services to
be rendered. The options have an exercise price of $1.85 per share, have a three year and six month term, and vest on grant date.
The total fair value of these options at the grant date was approximately $72,000, which was based upon the closing price of our
common stock as reported by The Nasdaq Capital Market on the grant date. The grant of the options and the issuance of the shares
of our common stock underlying the options is and will be exempt from the registration requirements of the Securities Act pursuant
to Section 4(a)(2) of the Securities Act.
On
October 1, 2019, we granted stock options to an employee to purchase up to 25,000 shares of our common stock for services to be
rendered. The options have an exercise price of $1.07 per share, have a five-year term, and vest over a period of four years from
the grant date on the grant date. The total fair value of these options at the grant date was approximately $27,000, which was
based upon the closing price of our common stock as reported by The Nasdaq Capital Market on the grant date. The grant of the
options and the issuance of the shares of our common stock underlying the options is and will be exempt from the registration
requirements of the Securities Act pursuant to Section 4(a)(2) of the Securities Act.
On
November 1, 2019, we granted stock options to a consultant to purchase up to 1,000 shares of our common stock for services to
be rendered. The options have an exercise price of $1.08 per share, have a five-year term, and vest on the grant date. The total
fair value of these options at the grant date was approximately $1,000, which was based upon the closing price of our common stock
as reported by The Nasdaq Capital Market on the grant date. The grant of the options and the issuance of the shares of our common
stock underlying the options is and will be exempt from the registration requirements of the Securities Act pursuant to Section
4(a)(2) of the Securities Act.
Grant
of Warrants
On
April 11, 2019, we granted warrants to purchase up to 163,739 shares of our common stock for services rendered. The warrants are
exercisable at an average price of $3.76 per share and will expire in April 2024. The grant of the warrants and the shares of
our common stock underlying the warrants is and will be exempt from the registration requirements of the Securities Act pursuant
to Section 4(a)(2) of the Securities Act (in that the warrants were sold by us, and the shares of our common stock underlying
the warrants will be issued, in transactions not involving any public offering).
Common
Stock Issued Upon Exercise of Warrants
On
January 25, 2019, we issued a total of 148,714 shares of our common stock in connection with the cashless exercise of warrants.
We issued the shares in reliance on the exemption from registration pursuant to Section 4(a)(2) of the Securities Act (in that
the shares of our common stock issued by us in connection with the exercise of warrants did not involve any public offering).
On
April 8, 2019, we issued a total of 25,000 shares of our common stock in connection with the exercise of warrants and received
$45,000. We issued the shares in reliance on the exemption from registration pursuant to Section 4(a)(2) of the Securities Act
(in that the shares of our common stock issued by us in connection with the exercise of warrants did not involve any public offering).
On
December 23, 2019, we issued a total of 15,523 shares of our common stock in connection with the cashless exercise of warrants.
We issued the shares in reliance on the exemption from registration pursuant to Section 4(a)(2) of the Securities Act (in that
the shares of our common stock issued by us in connection with the exercise of warrants did not involve any public offering).
Convertible
Notes Issuances
On
February 1, 2019, we issued an unsecured convertible note to Bellridge Capital, LP, or Bellridge, in the aggregate principal amount
of $500,000 in exchange for net proceeds of $432,000, after an original issue discount of $250,000 and legal and financing expenses
of $43,000. The financing expenses represent fees paid to A.G.P./Alliance Global Partners, or AGP, as placement agent. In addition,
we issued 16,667 shares of our common stock in connection with the note issuance. The notes are convertible into shares of our
common stock at a conversion price equal to 70% of the lowest volume weighted average price during the ten trading days immediately
preceding the date of the notice of conversion. As of the issue dates, the notes were convertible into an aggregate of 107,979
shares of our common stock. On April 2, 2019, we increased the outstanding principal amount of the note by $25,000 to an aggregate
of $525,000 and issued 8,606 shares of common stock with a fair value of $55,000. The issuance of the notes and the issuance of
shares of our common stock underlying the notes is and will be exempt from the registration requirements of the Securities Act
pursuant to Section 4(a)(2) of the Securities Act (in that the transactions did not, and will not, involve any public offering).
Conversion
of Convertible Notes Payable
On
April 9, 2019, we issued 182,333 shares of common stock upon conversion of convertible notes payable and accrued interest of $410,000.
We issued the shares in reliance on the exemption from registration pursuant to Section 4(a)(2) of the Securities Act (in that
the shares of our common stock were issued by us in a transaction not involving any public offering).
Conversion
of Notes Payable
On
July 10, 2019, we issued 108,196 shares of common stock and warrants to purchase up to 108,196 shares of common stock, with an
exercise price of $3.44, upon the upon the conversion of the principal and accrued interest of $213,000. We issued the shares
in reliance on the exemption from registration pursuant to Section 4(a)(2) of the Securities Act (in that the shares of our common
stock were issued by us in a transaction not involving any public offering).
On
July 29, 2019, we issued 490,090 shares of common stock upon conversion of notes payable and accrued interest of $506,000. We
issued the shares in reliance on the exemption from registration pursuant to Section 4(a)(2) of the Securities Act (in that the
shares of our common stock were issued by us in a transaction not involving any public offering).
Conversion
of Accounts Payable
On
April 30, 2019, we converted accounts payable of $10,000 into 4,142 shares of common stock with a fair value of $10,000 at the
date of conversion. We issued the shares in reliance on the exemption from registration pursuant to Section 4(a)(2) of the Securities
Act (in that the shares of our common stock were issued by us in a transaction not involving any public offering).
Preferred
Stock Issuances
On
August 14, 2019, we entered into the SPA with the Preferred Purchasers pursuant to which we agreed to issue and sell to the Preferred
Purchasers up to an aggregate of 6,000 shares of our Series A Preferred Stock and warrants to purchase an aggregate of up to 3.87
million shares of common stock (an amount equivalent to the number of shares of common stock into which the Series A Preferred
Stock is initially convertible). Each share of Series A Preferred Stock is convertible, at any time and from time to time from
and after the issuance date, at the holder’s option into that number of shares of common stock equal to the stated value
per share (or $1,000) divided by the conversion price (initially, $1.55); thus, initially, each share of Series A Preferred Stock
is convertible into approximately 645 shares of common stock. The warrants have an initial exercise price of $1.88 per share,
subject to customary adjustments, are exercisable from and after six months after the date of issuance and will expire five years
from the date of issuance. We closed the offering on August 14, 2019 and issued 5,030 shares of Series A Preferred Stock and granted
warrants to issue up to 3,245,162 shares of common stock in connection therewith resulting in aggregate proceeds of $5,030,000.
Both the conversion price of the Series A Preferred Stock and the exercise price of the warrants are subject to downward price
adjustments in the event of certain future equity sales or rights offerings. We issued the shares in reliance on the exemption
from registration pursuant to Section 4(a)(2) of the Securities Act (in that the shares of our Series A Preferred Stock were issued
by us in a transaction not involving any public offering).
Fiscal
2018
Common
Stock Issuances
On
January 22, 2018, we issued 95,2381 shares of our common stock to an investor at a price of $1.05 per share for net proceeds of
$100,000. We offered and sold the shares of our common stock in reliance on the exemption from registration pursuant to Section
4(a)(2) of the Securities Act (in that the shares of our common stock were sold by us in a transaction not involving any public
offering). We used the proceeds to repay debt and for operations.
On
January 26, 2018, we issued 4,545 shares of our common stock to a vendor as payment for services rendered. The shares had an aggregate
value of $7,000, which was based on the closing price of our common stock as reported by the OTCQB on the date of issuance, or
$1.65 per share. We offered and sold the shares in reliance on the exemption from registration pursuant to Section 4(a)(2) of
the Securities Act (in that the shares of our common stock were issued by us in a transaction not involving any public offering).
On
January 26, 2018, we issued 166,667 shares of our common stock to an investor at a price of $0.90 per share for net proceeds of
$150,000. We offered and sold the shares of our common stock in reliance on the exemption from registration pursuant to Section
4(a)(2) of the Securities Act (in that the shares of our common stock were sold by us in a transaction not involving any public
offering). We used the proceeds to repay debt and for operations.
On
January 27, 2018, we issued 3,333 shares of our common stock to a consultant as payment for services rendered. The shares had
an aggregate value of $5,000, which was based on the closing price of our common stock as reported by the OTCQB on the date of
issuance, or $1.65 per share. We offered and sold the shares in reliance on the exemption from registration pursuant to Section
4(a)(2) of the Securities Act (in that the shares of our common stock were issued by us in a transaction not involving any public
offering).
On
January 29, 2018, we issued 2,778 shares of our common stock to a former advisory board member as payment for services rendered.
The shares had an aggregate value of $6,000, which was based on the closing price of our common stock as reported by the OTCQB
on the date of issuance, or $2.10 per share. We offered and sold the shares in reliance on the exemption from registration pursuant
to Section 4(a)(2) of the Securities Act (in that the shares of our common stock were issued by us in a transaction not involving
any public offering).
On
January 30, 2018, we issued 2,083 shares of our common stock to a vendor as payment for services rendered. The shares had an aggregate
value of $8,000, which was based on the closing price of our common stock as reported by the OTCQB on the date of issuance, or
$3.60 per share. We offered and sold the shares in reliance on the exemption from registration pursuant to Section 4(a)(2) of
the Securities Act (in that the shares of our common stock were issued by us in a transaction not involving any public offering).
On
January 30, 2018, we issued 142,857 shares of our common stock to an investor at a price of $1.05 per share for net proceeds of
$150,000. We offered and sold the shares of our common stock in reliance on the exemption from registration pursuant to Section
4(a)(2) of the Securities Act (in that the shares of our common stock were sold by us in a transaction not involving any public
offering). We used the proceeds to repay debt and for operations.
On
January 31, 2018, we issued 66,667 shares of our common stock to an investor at a price of $1.05 per share for net proceeds of
$70,000. We offered and sold the shares of our common stock in reliance on the exemption from registration pursuant to Section
4(a)(2) of the Securities Act (in that the shares of our common stock were sold by us in a transaction not involving any public
offering). We used the proceeds to repay debt and for operations.
On
February 7, 2018, we issued 110,000 shares of our common stock to an investor at a price of $1.50 per share for net proceeds of
$165,000. We offered and sold the shares of our common stock in reliance on the exemption from registration pursuant to Section
4(a)(2) of the Securities Act (in that the shares of our common stock were sold by us in a transaction not involving any public
offering). We used the proceeds for working capital and general corporate purposes.
On
February 12, 2018, we issued 43,467 shares of our common stock to an investor at a price of $1.20 per share for net proceeds of
$50,000. We offered and sold the shares of our common stock in reliance on the exemption from registration pursuant to Section
4(a)(2) of the Securities Act (in that the shares of our common stock were sold by us in a transaction not involving any public
offering). We used the proceeds for working capital and general corporate purposes.
On
February 16, 2018, we issued 87,500 shares of our common stock to two investors at a weighted average price of $2.88 per share
for net proceeds of $118,000. We offered and sold the shares of our common stock in reliance on the exemption from registration
pursuant to Section 4(a)(2) of the Securities Act (in that the shares of our common stock were sold by us in transactions not
involving any public offering). We used the proceeds for working capital and general corporate purposes.
On
February 20, 2018, we issued 41,000 shares of our common stock to three investors at a weighted average price of $2.88 per share
for net proceeds of $118,000. We offered and sold the shares of our common stock in reliance on the exemption from registration
pursuant to Section 4(a)(2) of the Securities Act (in that the shares of our common stock were sold by us in transactions not
involving any public offering). We used the proceeds for working capital and general corporate purposes.
On
February 21, 2018, we issued 494 shares of our common stock to a vendor as payment for services rendered. The shares had an aggregate
value of $4,000, which was based on the closing price of our common stock as reported by the OTCQB on the date of issuance, or
$8.85 per share. We offered and sold the shares in reliance on the exemption from registration pursuant to Section 4(a)(2) of
the Securities Act (in that the shares of our common stock were issued by us in a transaction not involving any public offering).
On
February 21, 2018, we issued 58,333 shares of our common stock to four investors at a weighted average price of $0.1857 per share
for net proceeds of $163,000. We offered and sold the shares of our common stock in reliance on the exemption from registration
pursuant to Section 4(a)(2) of the Securities Act (in that the shares of our common stock were sold by us in transactions not
involving any public offering). We used the proceeds for working capital and general corporate purposes.
On
February 22, 2018, we issued 18,333 shares of our common stock to an investor at a price of $3.00 per share for net proceeds of
$55,000. We offered and sold the shares of our common stock in reliance on the exemption from registration pursuant to Section
4(a)(2) of the Securities Act (in that the shares of our common stock were sold by us in a transaction not involving any public
offering). We used the proceeds for working capital and general corporate purposes.
On
February 23, 2018, we issued 107,222 shares of our common stock to three investors at a weighted average price of $2.33 per share
for net proceeds of $250,000. We offered and sold the shares of our common stock in reliance on the exemption from registration
pursuant to Section 4(a)(2) of the Securities Act (in that the shares of our common stock were sold by us in transactions not
involving any public offering). We used the proceeds for working capital and general corporate purposes.
On
February 27, 2018, we issued 3,333 shares of our common stock to a consultant as payment for services rendered. The shares had
an aggregate value of $24,000, which was based on the closing price of our common stock as reported by the OTCQB on the date of
issuance, or $7.05 per share. We offered and sold the shares in reliance on the exemption from registration pursuant to Section
4(a)(2) of the Securities Act (in that the shares of our common stock were issued by us in a transaction not involving any public
offering).
On
February 27, 2018, we issued 13,333 shares of our common stock to an investor at a price of $3.00 per share for net proceeds of
$40,000. We offered and sold the shares of our common stock in reliance on the exemption from registration pursuant to Section
4(a)(2) of the Securities Act (in that the shares of our common stock were sold by us in a transaction not involving any public
offering). We used the proceeds for working capital and general corporate purposes.
On
March 1, 2018, we issued 8,333 shares of our common stock to an investor at a price of $3.00 per share for net proceeds of $25,000.
We offered and sold the shares of our common stock in reliance on the exemption from registration pursuant to Section 4(a)(2)
of the Securities Act (in that the shares of our common stock were sold by us in a transaction not involving any public offering).
We used the proceeds for working capital and general corporate purposes.
On
March 8, 2018, we issued 200,000 restricted shares of our common stock to two officers and 10,000 restricted shares of our common
stock to a director with an aggregate fair market value of $1,980,000, which was based on the closing price of our common stock
as reported by the OTCQB on the date of issuance, or $6.60 per share. We issued the shares in reliance on the exemption from registration
pursuant to Section 4(a)(2) of the Securities Act (in that the shares of our common stock were issued by us in a transaction not
involving any public offering).
On
March 15, 2018, we issued 22,222 shares of our common stock to an investor at a price of $4.50 per share for net proceeds of $100,000.
We offered and sold the shares of our common stock in reliance on the exemption from registration pursuant to Section 4(a)(2)
of the Securities Act (in that the shares of our common stock were sold by us in a transaction not involving any public offering).
We used the proceeds for working capital and general corporate purposes.
On
March 16, 2018, we issued 66,667 shares of our common stock to an investor at a price of $3.75 per share for net proceeds of $250,000.
We offered and sold the shares of our common stock in reliance on the exemption from registration pursuant to Section 4(a)(2)
of the Securities Act (in that the shares of our common stock were sold by us in a transaction not involving any public offering).
We used the proceeds for working capital and general corporate purposes.
On
March 19, 2018, we issued 1,667 shares of our common stock to an investor at a price of $3.00 per share for net proceeds of $5,000.
We offered and sold the shares of our common stock in reliance on the exemption from registration pursuant to Section 4(a)(2)
of the Securities Act (in that the shares of our common stock were sold by us in a transaction not involving any public offering).
We used the proceeds for working capital and general corporate purposes.
On
March 21, 2018, we issued 3,704 shares of our common stock to an investor at a price of $6.75 per share for net proceeds of $25,000.
We offered and sold the shares of our common stock in reliance on the exemption from registration pursuant to Section 4(a)(2)
of the Securities Act (in that the shares of our common stock were sold by us in a transaction not involving any public offering).
We used the proceeds for working capital and general corporate purposes.
On
March 23, 2018, we issued 10,861 shares of our common stock to two investors at a weighted average price of $4.88 per share for
net proceeds of $53,000. We offered and sold the shares of our common stock in reliance on the exemption from registration pursuant
to Section 4(a)(2) of the Securities Act (in that the shares of our common stock were sold by us in transactions not involving
any public offering). We used the proceeds for working capital and general corporate purposes.
On
March 26, 2018, we issued 1,667 shares of our common stock to an investor at a price of $9.00 per share for net proceeds of $15,000.
We offered and sold the shares of our common stock in reliance on the exemption from registration pursuant to Section 4(a)(2)
of the Securities Act (in that the shares of our common stock were sold by us in a transaction not involving any public offering).
We used the proceeds for working capital and general corporate purposes.
On
March 27, 2018, we issued 3,889 shares of our common stock to two investors at a price of $9.00 per share for net proceeds of
$35,000. We offered and sold the shares of our common stock in reliance on the exemption from registration pursuant to Section
4(a)(2) of the Securities Act (in that the shares of our common stock were sold by us in transactions not involving any public
offering). We used the proceeds for working capital and general corporate purposes.
On
March 28, 2018, we converted our Chief Executive Officer’s accrued salary of $582,000 into 27,148 restricted shares of our
common stock at a price of $21.45 per share, which represents the closing price of our common stock as reported by the OTCQB on
March 28, 2018. We issued the shares in reliance on the exemption from registration pursuant to Section 4(a)(2) of the Securities
Act (in that the shares of common stock were issued by us in a transaction not involving any public offering).
On
March 28, 2018, we issued 6,667 shares of our common stock to an investor at a price of $9.00 per share for net proceeds of $60,000.
We offered and sold the shares of our common stock in reliance on the exemption from registration pursuant to Section 4(a)(2)
of the Securities Act (in that the shares of our common stock were sold by us in a transaction not involving any public offering).
We used the proceeds for working capital and general corporate purposes.
On
March 28, 2018, we issued a total of 25,000 shares of our common stock in connection with the exercise of warrants at an exercise
price of $1.80 per share. We received $45,000 in proceeds in connection with the exercises of these warrants. We issued the shares
in reliance on the exemption from registration pursuant to Section 4(a)(2) of the Securities Act (in that the shares of our common
stock issued by us in connection with the exercise of warrants did not involve any public offering). We used the proceeds for
operations.
On
March 29, 2018, we issued 1,111 shares of our common stock to an investor at a price of $9.00 per share for net proceeds of $10,000.
We offered and sold the shares of our common stock in reliance on the exemption from registration pursuant to Section 4(a)(2)
of the Securities Act (in that the shares of our common stock were sold by us in a transaction not involving any public offering).
We used the proceeds for working capital and general corporate purposes.
On
March 30, 2018, we issued 1,000 shares of our common stock to an investor at a price of $9.00 per share for net proceeds of $10,000.
We offered and sold the shares of our common stock in reliance on the exemption from registration pursuant to Section 4(a)(2)
of the Securities Act (in that the shares of our common stock were sold by us in a transaction not involving any public offering).
We used the proceeds for working capital and general corporate purposes.
On
March 31, 2018, we issued 17,222 shares of our common stock to an investor at a price of $9.00 per share for net proceeds of $155,000.
We offered and sold the shares of our common stock in reliance on the exemption from registration pursuant to Section 4(a)(2)
of the Securities Act (in that the shares of our common stock were sold by us in a transaction not involving any public offering).
We used the proceeds for working capital and general corporate purposes.
On
April 13, 2018, we issued 20,513 shares of our common stock to an investor at price of $9.75 per share for net proceeds of $200,000.
We offered and sold the shares of our common stock in reliance on the exemption from registration pursuant to Section 4(a)(2)
of the Securities Act (in that the shares of our common stock were sold by us in a transaction not involving any public offering).
We used the proceeds for working capital and general corporate purposes.
On
April 20, 2018, we issued 46,154 shares of our common stock to an investor at a price of $9.75 per share for net proceeds of $450,000.
We offered and sold the shares of our common stock in reliance on the exemption from registration pursuant to Section 4(a)(2)
of the Securities Act (in that the shares of our common stock were sold by us in a transaction not involving any public offering).
We used the proceeds for working capital and general corporate purposes.
On
April 29, 2018, we issued 2,778 shares of our common stock to a former advisory board member as payment for services rendered.
The shares had an aggregate value of $53,000, which was based on the closing price of our common stock as reported by the OTCQB
on the date of issuance, or $19.20 per share. We offered and sold the shares in reliance on the exemption from registration pursuant
to Section 4(a)(2) of the Securities Act (in that the shares of our common stock were issued by us in a transaction not involving
any public offering).
On
May 2, 2018, we issued 3,333 shares of our common stock to an investor at a price of $15.00 per share for net proceeds of $50,000.
We offered and sold the shares of our common stock in reliance on the exemption from registration pursuant to Section 4(a)(2)
of the Securities Act (in that the shares of our common stock were sold by us in a transaction not involving any public offering).
We used the proceeds to repay debt and for operations.
On
August 4, 2018, we issued to our Chief Executive Officer 250,000 restricted shares of our common stock with a fair value of $563,000
based on a price per share of $2.25, which was the closing price of our common stock as reported by the OTCQB on the issuance
date. We issued the shares in reliance on the exemption from registration pursuant to Section 4(a)(2) of the Securities Act (in
that the shares of our common stock were issued by us in a transaction not involving any public offering).
Common
Stock Issued Upon Conversion of Notes Payable
On
January 29, 2018, we issued 83,333 shares of our common stock upon the conversion of an outstanding convertible note. The aggregate
principal amount of the note that was converted was $125,000. We issued the shares in reliance on the exemption from registration
pursuant to Section 3(a)(9) of the Securities Act.
On
February 14, 2018, we issued 29,400 shares of our common stock upon the conversion of an outstanding convertible note. The aggregate
principal amount of the note that was converted was $110,000. We issued the shares in reliance on the exemption from registration
pursuant to Section 3(a)(9) of the Securities Act.
On
February 21, 2018, we issued 73,500 shares of our common stock upon the conversion of an outstanding convertible note. The aggregate
principal amount of the note that converted was $110,000. We issued the shares in reliance on the exemption from registration
pursuant to Section 3(a)(9) of the Securities Act.
On
March 27, 2018, we issued 305,967 shares of our common stock upon the conversion of an outstanding convertible note. The aggregate
principal amount of the note that converted was $842,000. We issued the shares in reliance on the exemption from registration
pursuant to Section 3(a)(9) of the Securities Act.
On
September 30, 2018, we issued 356,824 shares of our common stock upon the partial conversion of an outstanding convertible note.
The aggregate principal amount of the note that converted was $376,000. We issued the shares in reliance on the exemption from
registration pursuant to Section 3(a)(9) of the Securities Act.
On
September 30, 2018, we issued 98,093 shares of our common stock upon the partial conversion of an outstanding convertible note.
The aggregate principal amount of the note that converted was $103,000. We issued the shares in reliance on the exemption from
registration pursuant to Section 3(a)(9) of the Securities Act.
On
September 30, 2018, we issued 180,000 shares of our common stock upon the conversion of an outstanding convertible note. The aggregate
principal amount of the note that converted was $189,000. We issued the shares in reliance on the exemption from registration
pursuant to Section 3(a)(9) of the Securities Act.
On
September 30, 2018, we issued 116,093 shares of our common stock upon the conversion of an outstanding convertible note. The aggregate
principal amount of the note that converted was $122,000. We issued the shares in reliance on the exemption from registration
pursuant to Section 3(a)(9) of the Securities Act.
Common
Stock Issued Upon Exercise of Options
On
April 19, 2018, we issued a total of 32,508 shares of our common stock issued in connection with the exercise of options at a
weighted average exercise price of $1.05. We received proceeds of $34,000 in connection with the exercises. We issued the shares
in reliance on the exemption from registration pursuant to Section 4(a)(2) of the Securities Act. We used the proceeds for operations.
Common
Stock Issued Upon Exercise of Warrants
On
February 8, 2018, we issued a total of 18,333 shares of our common stock in connection with the exercise of warrants at an exercise
price of $1.20 per share. We received $22,000 in proceeds in connection with the exercises of these warrants. We issued the shares
in reliance on the exemption from registration pursuant to Section 4(a)(2) of the Securities Act (in that the shares of our common
stock issued by us in connection with the exercise of warrants did not involve any public offering). We used the proceeds for
operations.
On
February 19, 2018, we issued a total of 7,001 shares of our common stock in connection with the cashless exercise of warrants.
We issued the shares in reliance on the exemption from registration pursuant to Section 4(a)(2) of the Securities Act (in that
the shares of our common stock issued by us in connection with the exercise of warrants did not involve any public offering).
On
February 19, 2018, we issued a total of 11,353 shares of our common stock in connection with the cashless exercise of warrants.
We issued the shares in reliance on the exemption from registration pursuant to Section 4(a)(2) of the Securities Act (in that
the shares of our common stock issued by us in connection with the exercise of warrants did not involve any public offering).
On
March 28, 2018, we issued a total of 76,934 shares of our common stock in connection with the cashless exercise of warrants. We
issued the shares in reliance on the exemption from registration pursuant to Section 4(a)(2) of the Securities Act (in that the
shares of our common stock issued by us in connection with the exercise of warrants did not involve any public offering).
On
September 30, 2018, we issued a total of 680,892 shares of our common stock in connection with the cashless exercise of warrants.
We issued the shares in reliance on the exemption from registration pursuant to Section 4(a)(2) of the Securities Act (in that
the shares of our common stock issued by us in connection with the exercise of warrants did not involve any public offering).
On
October 11, 2018, we issued a total of 254,145 shares of our common stock in connection with the cashless exercise of warrants.
We issued the shares in reliance on the exemption from registration pursuant to Section 4(a)(2) of the Securities Act (in that
the shares of our common stock issued by us in connection with the exercise of warrants did not involve any public offering).
On
October 12, 2018, we issued a total of 26,263 shares of our common stock in connection with the cashless exercise of warrants.
We issued the shares in reliance on the exemption from registration pursuant to Section 4(a)(2) of the Securities Act (in that
the shares of our common stock issued by us in connection with the exercise of warrants did not involve any public offering).
Grants
of Warrants
On
January 10, 2018, we granted warrants to a certain note holder to purchase up to 33,333 shares of our common stock. The warrants
are exercisable at an average price of $2.10 per share and will expire in January 2023. The grant of the warrants and the shares
of our common stock underlying the warrants is and will be exempt from the registration requirements of the Securities Act pursuant
to Section 4(a)(2) of the Securities Act (in that the warrants were sold by us, and the shares of our common stock underlying
the warrants will be issued, in transactions not involving any public offering).
On
January 11, 2018, we granted warrants to a certain note holder to purchase up to 33,333 shares of our common stock. The warrants
are exercisable at an average price of $2.10 per share and will expire in January 2023. The grant of the warrants and the shares
of our common stock underlying the warrants is and will be exempt from the registration requirements of the Securities Act pursuant
to Section 4(a)(2) of the Securities Act (in that the warrants were sold by us, and the shares of our common stock underlying
the warrants will be issued, in transactions not involving any public offering).
On
February 21, 2018, we granted warrants to a certain note holder to purchase up to 133,333 shares of our common stock. The warrants
are exercisable at an average price of $3.75 per share and will expire in February 2023. The grant of the warrants and the shares
of our common stock underlying the warrants is and will be exempt from the registration requirements of the Securities Act pursuant
to Section 4(a)(2) of the Securities Act (in that the warrants were sold by us, and the shares of our common stock underlying
the warrants will be issued, in transactions not involving any public offering).
On
August 8, 2018, Mr. Cutaia and we agreed to extend the maturity date of a convertible note previously issued in favor of Mr. Cutaia.
As of May 8, 2018, the aggregate outstanding principal amount of the note was $1,199,000. In consideration for extending the maturity
date of the note, we granted to Mr. Cutaia a warrant to purchase up to 163,113 shares of our common stock at an exercise price
of $7.35 per share. The grant of the warrants and the shares of our common stock underlying the warrants is and will be exempt
from the registration requirements of the Securities Act pursuant to Section 4(a)(2) of the Securities Act (in that the warrants
were sold by us, and the shares of our common stock underlying the warrants will be issued, in transactions not involving any
public offering).
Grants
of Stock Options
On
January 1, 2018, we granted stock options to an employee to purchase up to 66,667 shares of our common stock for services rendered.
The options have an exercise price of $3.75 per share, have a five-year term, and vest over a period of three years from the grant
date. The total fair value of these options at the grant date was approximately $94,000, which was based upon the closing price
of our common stock as reported by the OTCQB on the grant date. The grant of the options and the issuance of the shares of our
common stock underlying the options is and will be exempt from the registration requirements of the Securities Act pursuant to
Section 4(a)(2) of the Securities Act.
On
January 22, 2018, we granted stock options to an employee and a consultant to purchase up to 17,085 shares of our common stock
for services rendered. The options have an exercise price of $1.35 per share, have a five-year term, and vest on the grant date.
The total fair value of these options at the grant date was approximately $22,215, which was based upon the closing price of our
common stock as reported by the OTCQB on the grant date. The grant of the options and the issuance of the shares of our common
stock underlying the options is and will be exempt from the registration requirements of the Securities Act pursuant to Section
4(a)(2) of the Securities Act.
On
February 1, 2018, we granted stock options to a consultant to purchase up to 53,333 shares of our common stock for services rendered.
The options have an exercise price of $3.75 per share, have a five-year term, and vest over a period of three years from the grant
date. The total fair value of these options at the grant date was approximately $8,000, which was based upon the closing price
of our common stock as reported by the OTCQB on the grant date. The grant of the options and the issuance of the shares of our
common stock underlying the options is and will be exempt from the registration requirements of the Securities Act pursuant to
Section 4(a)(2) of the Securities Act.
On
February 22, 2018, we granted stock options to consultants to purchase up to 13,333 shares of our common stock for services rendered.
The options have an exercise price of $7.50 per share, have a five-year term, and vest over a period of three years from the grant
date. The total fair value of these options at the grant date was approximately $96,000, which was based upon the closing price
of our common stock as reported by the OTCQB on the grant date. The grant of the options and the issuance of the shares of our
common stock underlying the options is and will be exempt from the registration requirements of the Securities Act pursuant to
Section 4(a)(2) of the Securities Act.
On
April 3, 2018, we granted stock options to an employee to purchase up to 3,333 shares of our common stock for services rendered.
The options have an exercise price of $15.00 per share, have a five-year term, and vest over a period of three years from the
grant date. The total fair value of these options at the grant date was approximately $48,000, which was based upon the closing
price of our common stock as reported by the OTCQB on the grant date. The grant of the options and the issuance of the shares
of our common stock underlying the options is and will be exempt from the registration requirements of the Securities Act pursuant
to Section 4(a)(2) of the Securities Act.
On
May 14, 2018, we granted stock options to consultants to purchase up to 3,333 shares of our common stock for services rendered.
The options have an exercise price of $14.40 per share, have a five-year term, and vest over a period of three years from the
grant date. The total fair value of these options at the grant date was approximately $47,000, which was based upon the closing
price of our common stock as reported by the OTCQB on the grant date. The grant of the options and the issuance of the shares
of our common stock underlying the options is and will be exempt from the registration requirements of the Securities Act pursuant
to Section 4(a)(2) of the Securities Act.
On
July 1, 2018, we granted stock options to employees to purchase up to 320,000 shares of our common stock for services rendered.
The options have an average exercise price of $5.40 per share and have a five-year term. On the grant date, 100,000 shares immediately
vested, with the remaining 220,000 to vest over a period of three years from the grant date. The total fair value of these options
at the grant date was approximately $2,892,000, which was based on the closing price of our common stock as reported by the OTCQB
on the grant date. The grant of the options and the issuance of the shares of our common stock underlying the options is and will
be exempt from the registration requirements of the Securities Act pursuant to Section 4(a)(2) of the Securities Act.
On
July 12, 2018, we granted stock options to consultants to purchase up to 3,333 shares of our common stock for services rendered.
The options have an exercise price of $9.00 per share, have a five-year term, and vest over a period of three years from the grant
date. The total fair value of these options at the grant date was approximately $28,000, which was based on the closing price
of our common stock as reported by the OTCQB on the grant date. The grant of the options and the issuance of the shares of our
common stock underlying the options is and will be exempt from the registration requirements of the Securities Act pursuant to
Section 4(a)(2) of the Securities Act.
On
July 16, 2018, we granted stock options to consultants to purchase up to 10,000 shares of our common stock for services rendered.
The options have an exercise price of $9.00 per share, have a five-year term, and vest over a period of three years from the grant
date. The total fair value of these options at the grant date was approximately $86,000, which was based on the closing price
of our common stock as reported by the OTCQB on the grant date. The grant of the options and the issuance of the shares of our
common stock underlying the options is and will be exempt from the registration requirements of the Securities Act pursuant to
Section 4(a)(2) of the Securities Act.
On
July 20, 2018, we granted stock options to a consultant to purchase up to 1,667 shares of our common stock for services rendered.
The options have an exercise price of $9.00 per share, have a five-year term, and vest over a period of three years from the grant
date. The total fair value of these options at the grant date was approximately $14,000, which was based on the closing price
of our common stock as reported by the OTCQB on the grant date. The grant of the options and the issuance of the shares of our
common stock underlying the options is and will be exempt from the registration requirements of the Securities Act pursuant to
Section 4(a)(2) of the Securities Act.
On
July 23, 2018, we granted stock options to consultants to purchase up to 1,667 shares of our common stock for services rendered.
The options have an exercise price of $9.00 per share, have a five-year term, and vest over a period of three years from the grant
date. The total fair value of these options at the grant date was approximately $13,000, which was based on the closing price
of our common stock as reported by the OTCQB on the grant date. The grant of the options and the issuance of the shares of our
common stock underlying the options is and will be exempt from the registration requirements of the Securities Act pursuant to
Section 4(a)(2) of the Securities Act.
On
July 27, 2018, we granted stock options to an employee to purchase up to 16,667 shares of our common stock for services rendered.
The options have an exercise price of $9.00 per share, have a five-year term, and vest over a period of three years from the grant
date. The total fair value of these options at the grant date was approximately $128,000, which was based on the closing price
of our common stock as reported by the OTCQB on the grant date. The grant of the options and the issuance of the shares of our
common stock underlying the options is and will be exempt from the registration requirements of the Securities Act pursuant to
Section 4(a)(2) of the Securities Act.
On
July 30, 2018, we granted stock options to a consultant to purchase up to 1,667 shares of our common stock for services rendered.
The options have an exercise price of $9.00 per share, have a five-year term, and vest over a period of three years from the grant
date. The total fair value of these options at the grant date was approximately $13,000, which was based on the closing price
of our common stock as reported by the OTCQB on the grant date. The grant of the options and the issuance of the shares of our
common stock underlying the options is and will be exempt from the registration requirements of the Securities Act pursuant to
Section 4(a)(2) of the Securities Act.
On
August 1, 2018, we granted stock options to a consultant to purchase up to 1,667 shares of our common stock for services rendered.
The options have an exercise price of $9.00 per share, have a five-year term, and vest over a period of three years from the grant
date. The total fair value of these options at the grant date was approximately $12,000, which was based on the closing price
of our common stock as reported by the OTCQB on the grant date. The grant of the options and the issuance of the shares of our
common stock underlying the options is and will be exempt from the registration requirements of the Securities Act pursuant to
Section 4(a)(2) of the Securities Act.
On
August 13, 2018, we granted stock options to a consultant to purchase up to 1,667 shares of our common stock for services rendered.
The options have an exercise price of $9.00 per share, have a five-year term, and vest over a period of three years from the grant
date. The total fair value of these options at the grant date was approximately $13,000, which was based on the closing price
of our common stock as reported by the OTCQB on the grant date. The grant of the options and the issuance of the shares of our
common stock underlying the options is and will be exempt from the registration requirements of the Securities Act pursuant to
Section 4(a)(2) of the Securities Act.
On
August 15, 2018, we granted stock options to an employee to purchase up to 13,333 shares of our common stock for services rendered.
The options have an exercise price of $9.00 per share, have a five-year term, and vest over a period of three years from the grant
date. The total fair value of these options at the grant date was approximately $88,000, which was based on the closing price
of our common stock as reported by the OTCQB on the grant date. The grant of the options and the issuance of the shares of our
common stock underlying the options is and will be exempt from the registration requirements of the Securities Act pursuant to
Section 4(a)(2) of the Securities Act.
On
August 16, 2018, we granted stock options to consultants to purchase up to 3,333 shares of our common stock for services rendered.
The options have an exercise price of $9.00 per share, have a five-year term, and vest over a period of three years from the grant
date. The total fair value of these options at the grant date was approximately $21,000, which was based on the closing price
of our common stock as reported by the OTCQB on the grant date. The grant of the options and the issuance of the shares of our
common stock underlying the options is and will be exempt from the registration requirements of the Securities Act pursuant to
Section 4(a)(2) of the Securities Act.
On
August 31, 2018, we granted stock options to an advisory board member to purchase up to 66,667 shares of our common stock for
services rendered. The options have an exercise price of $9.30 per share, have a five-year term, and vest over a period of four
years from the grant date. The total fair value of these options at the grant date was approximately $598,000, which was based
on the closing price of our common stock as reported by the OTCQB on the grant date. The grant of the options and the issuance
of the shares of our common stock underlying the options is and will be exempt from the registration requirements of the Securities
Act pursuant to Section 4(a)(2) of the Securities Act.
On
August 27, 2018, we granted stock options to board members to purchase up to 133,333 shares of our common stock for services rendered.
The options have an exercise price of $7.50 per share, have a five-year term, 13,333 vest on the grant date, with the remainder
vesting over a period of four years from the grant date. The total fair value of these options at the grant date was approximately
$965,000, which was based on the closing price of our common stock as reported by the OTCQB on the grant date. The grant of the
options and the issuance of the shares of our common stock underlying the options is and will be exempt from the registration
requirements of the Securities Act pursuant to Section 4(a)(2) of the Securities Act.
On
September 7, 2018, we granted stock options to advisory board members to purchase a up to 133,333 shares of our common stock for
services rendered. The options have an exercise price of $7.50 per share, have a five-year term, and vest over a period of four
years from the grant date. The total fair value of these options at the grant date was approximately $965,000, which was based
on the closing price of our common stock as reported by the OTCQB on the grant date. The grant of the options and the issuance
of the shares of our common stock underlying the options is and will be exempt from the registration requirements of the Securities
Act pursuant to Section 4(a)(2) of the Securities Act.
On
September 11, 2018, we granted stock options to an advisory board member to purchase a up to 66,667 shares of our common stock
for services rendered. The options have an exercise price of $6.75 per share, have a five-year term, and vest over a period of
four years from the grant date. The total fair value of these options at the grant date was approximately $434,000, which was
based on the closing price of our common stock as reported by the OTCQB on the grant date. The grant of the options and the issuance
of the shares of our common stock underlying the options is and will be exempt from the registration requirements of the Securities
Act pursuant to Section 4(a)(2) of the Securities Act.
On
September 13, 2018, we granted stock options to an advisory board member to purchase a up to 66,667 shares of our common stock
for services rendered. The options have an exercise price of $6.30 per share, have a five-year term, and vest over a period of
four years from the grant date. The total fair value of these options at the grant date was approximately $405,000, which was
based on the closing price of our common stock as reported by the OTCQB on the grant date. The grant of the options and the issuance
of the shares of our common stock underlying the options is and will be exempt from the registration requirements of the Securities
Act pursuant to Section 4(a)(2) of the Securities Act.
On
September 17, 2018, we granted stock options to an employee and a consultant to purchase a up to 35,000 shares of our common stock
for services rendered. The options have an exercise price of $9.00 per share, have a five-year term, and vest over a period of
three years from the grant date. The total fair value of these options at the grant date was approximately $227,000, which was
based on the closing price of our common stock as reported by the OTCQB on the grant date. The grant of the options and the issuance
of the shares of our common stock underlying the options is and will be exempt from the registration requirements of the Securities
Act pursuant to Section 4(a)(2) of the Securities Act.
On
September 25, 2018, we granted stock options to consultants to purchase up to 5,000 shares of our common stock for services rendered.
The options have an exercise price of $9.00 per share, have a five-year term, and vest over a period of three years from the grant
date. The total fair value of these options at the grant date was approximately $28,000, which was based on the closing price
of our common stock as reported by the OTCQB on the grant date. The grant of the options and the issuance of the shares of our
common stock underlying the options is and will be exempt from the registration requirements of the Securities Act pursuant to
Section 4(a)(2) of the Securities Act.
On
September 25, 2018, we granted stock options to an advisory board member to purchase a up to 66,667 shares of our common stock
for services rendered. The options have an exercise price of $5.85 per share, have a five-year term, and vest over a period of
four years from the grant date. The total fair value of these options at the grant date was approximately $371,000, which was
based on the closing price of our common stock as reported by the OTCQB on the grant date. The grant of the options and the issuance
of the shares of our common stock underlying the options is and will be exempt from the registration requirements of the Securities
Act pursuant to Section 4(a)(2) of the Securities Act.
On
September 27, 2018, we granted stock options to an employee to purchase up to 66,667 shares of our common stock for services rendered.
The options have an exercise price of $7.50 per share, have a five-year term, and vest over a period of three years from grant
date. The total fair value of these options at the grant date was approximately $404,000, which was based on the closing price
of our common stock as reported by the OTCQB on the grant date. The grant of the options and the issuance of the shares of our
common stock underlying the options is and will be exempt from the registration requirements of the Securities Act pursuant to
Section 4(a)(2) of the Securities Act.
On
October 1, 2018, we granted stock options to consultants to purchase up to 3,333 shares of our common stock for services rendered.
The options have an exercise price of $9.00 per share, have a five-year term, and vest over a period of three years from the grant
date. The total fair value of these options at the grant date was approximately $29,000, which was based on the closing price
of our common stock as reported by the OTCQB on the grant date. The grant of the options and the issuance of the shares of our
common stock underlying the options is and will be exempt from the registration requirements of the Securities Act pursuant to
Section 4(a)(2) of the Securities Act.
On
October 12, 2018, we granted stock options to an employee to purchase up to 133,333 shares of our common stock for services rendered.
The options have an exercise price of $7.50 per share, have a five-year term, and vest over a period of three years from the grant
date. The total fair value of these options at the grant date was approximately $965,000, which was based on the closing price
of our common stock as reported by the OTCQB on the grant date. The grant of the options and the issuance of the shares of our
common stock underlying the options is and will be exempt from the registration requirements of the Securities Act pursuant to
Section 4(a)(2) of the Securities Act.
On
October 29, 2018, we granted stock options to an employee to purchase up to 5,000 shares of our common stock for services rendered.
The options have an exercise price of $7.50 per share, have a five-year term, and vest over a period of three years from the grant
date. The total fair value of these options at the grant date was approximately $28,000, which was based on the closing price
of our common stock as reported by the OTCQB on the grant date. The grant of the options and the issuance of the shares of our
common stock underlying the options is and will be exempt from the registration requirements of the Securities Act pursuant to
Section 4(a)(2) of the Securities Act.
Convertible
Notes Issuances
On
January 10, 2018 and January 11, 2018, we issued unsecured convertible notes to EMA and Auctus Fund, LLC, or Auctus Fund, in the
aggregate principal amount of $150,000, net of an original issue discount of $20,000. The notes bear interest at a rate of 8%
per annum and will mature in January 2019. The notes are convertible into shares of our common stock at a conversion price equal
to the lower of: (i) the closing sale price of our common stock on the principal market on the trading day immediately preceding
the closing date, and (ii) 70% of either the lowest sale price of our common stock on the principal market during the ten (10)
consecutive trading days including and immediately preceding the conversion date, or the closing bid price. As of the issue dates,
the notes were convertible into an aggregate of 187,970 shares of our common stock. The issuance of the notes and the issuance
of shares of our common stock underlying the notes is and will be exempt from the registration requirements of the Securities
Act pursuant to Section 4(a)(2) of the Securities Act (in that the transactions did not, and will not, involve any public offering).
The loan underlying the transaction was repaid, in full, approximately three months after it was issued, on March 8, 2018, together
with all accrued interest, prior to any conversion or attempted conversion of the note. Accordingly, the convertible notes are
no longer outstanding.
On
October 19, 2018, we issued an unsecured convertible note to Bellridge in the aggregate principal amount of $1,500,000 in exchange
for net proceeds of $1,242,000, after an original issue discount of $150,000 and legal and financing expenses of $109,000. The
financing expenses represent fees paid to AGP as placement agent. In addition, we issued 1,450,000 shares of our common stock
in connection with the note issuance. The notes are convertible into shares of our common stock at a conversion price equal to
70% of the lowest volume weighted average price during the ten trading days immediately preceding the date of the notice of conversion.
As of the issue dates, the notes were convertible into an aggregate of 373,580 shares of our common stock. The issuance of the
notes and the issuance of shares of our common stock underlying the notes is and will be exempt from the registration requirements
of the Securities Act pursuant to Section 4(a)(2) of the Securities Act (in that the transactions did not, and will not, involve
any public offering).
Fiscal
Year 2017
Common
Stock Issuances
From
January to March 2017, we issued 68,944 shares of our common stock to vendors as payment for services rendered. The shares had
an aggregate fair market value of $146,000, based upon a weighted average of $2.10 per share. The fair market value was based
on the closing price of our common stock as reported by the OTCQB at each respective issuance date. We offered and sold the shares
in reliance on the exemption from registration pursuant to Section 4(a)(2) of the Securities Act (in that the shares of our common
stock were issued by us in a transaction not involving any public offering).
From
April to June 2017, we issued 1112,678 shares of our common stock to vendors as payment for services rendered. The shares had
an aggregate fair market value of $385,000, based upon a weighted average of $0.35 per share. The fair market value was based
on the closing price of our common stock as reported by the OTCQB at each respective issuance date. We offered and sold the shares
in reliance on the exemption from registration pursuant to Section 4(a)(2) of the Securities Act (in that the shares of our common
stock were issued by us in a transaction not involving any public offering).
On
April 1, 2018, we offered and sold 25,000 shares of our common stock to an investor at a price of $1.20 per share for net proceeds
of $30,000. We offered and sold the shares of our common stock in reliance on the exemption from registration pursuant to Section
4(a)(2) of the Securities Act (in that the shares of our common stock were sold by us in a transaction not involving any public
offering). We used the proceeds to repay debt and for operations.
On
April 24, 2017, we offered and sold 333,333 shares of our common stock to an investor at a price of $0.90 per share for net proceeds
of $300,000. We offered and sold the shares of our common stock in reliance on the exemption from registration pursuant to Section
4(a)(2) of the Securities Act (in that the shares of our common stock were sold by us in a transaction not involving any public
offering). We used the proceeds to repay debt and for operations.
On
April 25, 2017, we offered and sold 333,333 shares of our common stock to an investor at a price of $1.50 per share for net proceeds
of $50,000. We offered and sold the shares of our common stock in reliance on the exemption from registration pursuant to Section
4(a)(2) of the Securities Act (in that the shares of our common stock were sold by us in a transaction not involving any public
offering). We used the proceeds to repay debt and for operations.
On
April 30, 2017, we offered and sold 20,000 shares of our common stock to an investor at a price of $1.50 per share for net proceeds
of $30,000. We offered and sold the shares of our common stock in reliance on the exemption from registration pursuant to Section
4(a)(2) of the Securities Act (in that the shares of our common stock were sold by us in a transaction not involving any public
offering). We used the proceeds to repay debt and for operations.
On
May 4, 2017, we issued to our Chief Financial Officer 33,333 restricted shares of our common stock with a fair value of $178,000
based on a price per share of $5.40, which was the market price of our common stock as reported by the OTCQB on the issuance date.
We issued the shares in reliance on the exemption from registration pursuant to Section 4(a)(2) of the Securities Act (in that
the shares of our common stock were issued by us in a transaction not involving any public offering).
On
May 22, 2017, we offered and sold 6,667 shares of our common stock to an investor at a price of $3.00 per share for net proceeds
of $20,000. We offered and sold the shares of our common stock in reliance on the exemption from registration pursuant to Section
4(a)(2) of the Securities Act (in that the shares of our common stock were sold by us in a transaction not involving any public
offering). We used the proceeds to repay debt and for operations.
On
June 16, 2017, we issued 30,800 shares of our common stock in connection with the conversion of a note with an aggregate principal
amount of $101,000 and conversion price of $3.30 per share. We issued the shares of our common stock in reliance on the exemption
from registration pursuant to Section 3(a)(9) of the Securities Act.
In
June 2017, we issued 3,333 shares of our common stock, with a fair value of $12,500, upon the conversion of a note. The shares
of our common stock were issued in reliance on the exemptions from registration pursuant to Section 3(a)(9) of the Securities
Act.
From
July to August 2017, we issued 48,629 shares of our common stock to vendors as payment for services rendered. The shares had an
aggregate fair market value of $99,000, based upon a weighted average of $2.10 per share. The fair market value was based on the
closing price of our common stock as reported by the OTCQB at each respective issuance date. We offered and sold the shares in
reliance on the exemption from registration pursuant to Section 4(a)(2) of the Securities Act (in that the shares of our common
stock were issued by us in a transaction not involving any public offering).
On
August 29, 2017, in connection with the conversion of a note, we issued 26,916 make whole shares of our common stock and on September
25, 2017, we issued an additional 10,697 make whole shares of our common stock. The average conversion price was $1.50 per share.
We issued the shares of our common stock in reliance on the exemption from registration pursuant to Section 4(a)(2) of the Securities
Act.
From
September to October 2017, we issued 38,444 shares of our common stock to vendors as payment for services rendered. The shares
had an aggregate fair market value of $55,000, based upon a weighted average of $1.35 per share. The fair market value was based
on the closing price of our common stock as reported by the OTCQB at each respective issuance date. We offered and sold the shares
in reliance on the exemption from registration pursuant to Section 4(a)(2) of the Securities Act (in that the shares of our common
stock were issued by us in a transaction not involving any public offering).
On
September 26, 2017, we entered into a Purchase Agreement with Kodiak Capital Group, LLC, or Kodiak, effective September 15, 2017.
Pursuant to the purchase agreement, we may from time to time, in our discretion, sell shares of our common stock to Kodiak for
aggregate gross proceeds of up to $2,000,000. Unless terminated earlier, Kodiak’s purchase commitment automatically terminates
on the earlier of the date on which Kodiak shall have purchased our shares pursuant to the purchase agreement for an aggregate
purchase price of $2,000,000, or September 15, 2019. We have no obligation to sell any shares under the purchase agreement. In
November 2017, pursuant to the purchase agreement with Kodiak, we issued 43,745 shares of our common stock in exchange for cash
in the amount of $50,000. We issued the shares of our common stock in reliance on the exemption from registration pursuant to
Section 4(a)(2) of the Securities Act (in that the shares of our common stock were sold by us in a transaction not involving any
public offering). The purchase agreement with Kodiak is no longer effective.
On
November 3, 2017, we offered and sold 327,133 shares of our common stock to three investors at a price of $1.20 per share for
net proceeds of $346,000. We offered and sold the shares of our common stock in reliance on the exemption from registration pursuant
to Section 4(a)(2) of the Securities Act (in that the shares of our common stock were sold by us in a transaction not involving
any public offering). We used the proceeds to repay debt and for operations.
Common
Stock Issuances – Accounts Payable
We
issued 26,667 shares of our common stock in exchange for the cancellation of approximately $30,000 of certain accounts payable
owed by us to one of our vendors. The fair value of the shares of our common stock was $56,000 at the date of issuance, and as
such, we recorded a loss on debt extinguishment of $26,000. The shares of our common stock were offered and sold in reliance on
the exemptions from registration pursuant to Section 4(a)(2) of the Securities Act (in that the shares of our common stock were
issued by us in a transaction not involving any public offering).
Convertible
Notes Issuances
On
June 19, 2017, we issued an unsecured convertible note in the original principal amount of $100,000. In addition, we issued 3,333
shares of our common stock and granted a three-year warrant to acquire 22,000 additional shares of our common stock at an exercise
price of $3.75 per share. As of June 19, 2017, the issue date, the note was convertible into 29,400 shares of our common stock.
The offer and sale of the shares of our common stock, the note, the shares of our common stock underlying the note, the warrant,
and the shares of our common stock underlying the warrant is and will be exempt from the registration requirements of the Securities
Act pursuant to Section 4(a)(2) of the Securities Act (in that the convertible note, warrant, and shares of our common stock were
sold by us in a transaction not involving any public offering).
From
September 2017 through November 2017, we issued three convertible notes in the aggregate principal amount of $320,000 in exchange
for net proceeds of $200,000, after an original issue discount of $20,000 and financing expenses of $100,000. The notes are unsecured,
have maturity dates between March 2018 and June 2018, and bear interest at a rate of 5% per annum. As of the respective issuance
dates, the notes were convertible into an aggregate of 468,699 shares of our common stock at price of $3.75 per share or 70% of
10-day volume weighted average price prior to conversion, whichever is lower. The offer and sale of the notes and the issuance
of the shares of our common stock underlying the notes is and will be exempt from the registration requirements of the Securities
Act pursuant to Section 4(a)(2) of the Securities Act (in that the convertible notes were sold by us in a transaction not involving
any public offering).
On
August 21, 2017, we issued an unsecured convertible note in the original principal amount of $110,000, with a five percent original
issue discount. The note had a maturity date of March 21, 2018 and was subject to a one-time interest charge equal to 5% of the
original principal amount. The note was convertible into shares of our common stock at a conversion price per share of $1.50.
As of August 21, 2017, the note was convertible into 73,500 shares of our common stock. The offer and sale of the notes and the
issuance of the shares of our common stock underlying the notes is and will be exempt from the registration requirements of the
Securities Act pursuant to Section 4(a)(2) of the Securities Act (in that the convertible note was sold by us in a transaction
not involving any public offering).
On
December 8, 2017, we issued unsecured convertible notes to EMA and Auctus Fund in the aggregate principal amount of $370,000,
net of an original issue discount of $47,000. The notes bear interest at a rate of 8% per annum and will mature on December 8,
2018. The notes are convertible into shares of our common stock at a conversion price equal to the lower of: (i) the closing sale
price of our common stock on the principal market on the trading day immediately preceding the closing date, and (ii) 70% of either
the lowest sale price of our common stock on the principal market during the ten consecutive trading days including and immediately
preceding the conversion date, or the closing bid price. As of December 8, 2017, the notes were convertible into 496,311 shares
of our common stock. The offer and sale of the notes and the issuance of the shares of our common stock underlying the notes is
and will be exempt from the registration requirements of the Securities Act pursuant to Section 4(a)(2) of the Securities Act
(in that the convertible note was sold by us in a transaction not involving any public offering).
On
December 14, 2017, we issued an unsecured convertible note to PowerUp Lending in the aggregate principal amount of $105,000, net
of an original issue discount of $15,000. The note matures on September 20, 2018 and bears interest at a rate of 8% per annum.
The note is convertible to shares of our common stock at a conversion price equal to the variable conversion price, which is 70%
multiplied by the lowest trading price of our common stock during the ten trading day period ending on the latest complete trading
day prior to the conversion date. As of December 1, 2017, the note was convertible into 140,845 shares of our common stock. The
offer and sale of the notes and the issuance of the shares of our common stock underlying the notes is and will be exempt from
the registration requirements of the Securities Act pursuant to Section 4(a)(2) of the Securities Act (in that the convertible
note was sold by us in a transaction not involving any public offering).
Grants
of Warrants
On
April 1, 2017, we granted warrants to a consultant to purchase up to 25,000 shares of our common stock at an exercise price of
$1.80 per share, with a fair value of $27,000. The grant of the warrants and the shares of our common stock underlying the warrants
is and will be exempt from the registration requirements of the Securities Act pursuant to Section 4(a)(2) of the Securities Act
(in that the warrants and the shares of our common stock underlying the warrants were sold by us, and will be issued by us, in
transactions not involving any public offering).
On
May 4, 2017, Mr. Cutaia and we agreed to extend the maturity date of a convertible note previously issued in favor of Mr. Cutaia.
As of May 4, 2017, the aggregate outstanding principal amount of the note was $1,199,000. In consideration for extending the maturity
date of the note, we granted to Mr. Cutaia a warrant to purchase up to 117,013 shares of our common stock at an exercise price
of $5.33 per share. The grant of the warrants and the shares of our common stock underlying the warrants is and will be exempt
from the registration requirements of the Securities Act pursuant to Section 4(a)(2) of the Securities Act (in that the warrants
and the shares of our common stock underlying the warrants were granted by us, and will be issued by us, in transactions not involving
any public offering).
On
May 22, 2017, we granted warrants to purchase up to 6,667 shares of our common stock at an exercise price of $6.00 per share,
to one investor in connection with an offering. The grant of the warrants and the shares of our common stock underlying the warrants
is and will be exempt from the registration requirements of the Securities Act pursuant to Section 4(a)(2) of the Securities Act
(in that the warrants and the shares of our common stock underlying the warrants were sold by us, and will be issued by us, in
transactions not involving any public offering).
On
June 19, 2017, we granted warrants to a note holder to purchase up to 22,000 shares of our common stock. The warrants are exercisable
at an average price of $4.50 per share and will expire starting June 2020. The grant of the warrants and the shares of our common
stock underlying the warrants is and will be exempt from the registration requirements of the Securities Act pursuant to Section
4(a)(2) of the Securities Act (in that the warrants and the shares of our common stock underlying the warrants were granted by
us, and will be issued by us, in transactions not involving any public offering).
On
August 4, 2017, Mr. Cutaia and we agreed to extend the maturity date of a convertible note previously issued in favor of Mr. Cutaia
from August 4, 2017 to December 4, 2018. As of August 4, 2017, the aggregate outstanding principal amount of the note was $343,000.
In consideration for extending the maturity date of the note, we granted to Mr. Cutaia a warrant to purchase up to 87,787 shares
of our common stock at an exercise price of $2.25 per share. The grant of the warrants and the shares of our common stock underlying
the warrants is and will be exempt from the registration requirements of the Securities Act pursuant to Section 4(a)(2) of the
Securities Act (in that the warrants and the shares of our common stock underlying the warrants were granted by us, and will be
issued by us, in transactions not involving any public offering).
On
August 4, 2017, Oceanside Strategies, Inc., or Oceanside and we agreed to extend the maturity date of a convertible note previously
issued in favor of Oceanside. As of August 4, 2017, the aggregate outstanding principal amount of the note was $680,000. In consideration
for Oceanside’s agreement to extend the maturity date of the note, we granted to Oceanside a warrant to purchase up to 87,787
shares of our common stock at an exercise price of $2.25 per share. The grant of the warrants and the shares of our common stock
underlying the warrants is and will be exempt from the registration requirements of the Securities Act pursuant to Section 4(a)(2)
of the Securities Act (in that the warrants and the shares of our common stock underlying the warrants were granted by us, and
will be issued by us, in transactions not involving any public offering).
On
September 16, 2017, we granted a warrant to purchase up to 18,333 shares of our common stock at an exercise price of $1.20 per
share to Brian Manduca, in full settlement and release of a disputed, unasserted claim. The value of the warrant was $10,007.
The grant of the warrants and the shares of our common stock underlying the warrants is and will be exempt from the registration
requirements of the Securities Act pursuant to Section 4(a)(2) of the Securities Act (in that the warrants and the shares of our
common stock underlying the warrants were sold by us, and will be issued by us, in transactions not involving any public offering).
On
September 25, 2017, we granted warrants to a note holder to purchase up to 66,667 shares of our common stock. The warrants are
exercisable at an average price of $2.25 per share and will expire starting in September 2022. The grant of the warrants and the
shares of our common stock underlying the warrants is and will be exempt from the registration requirements of the Securities
Act pursuant to Section 4(a)(2) of the Securities Act (in that the warrants and the shares of our common stock underlying the
warrants were sold by us, and will be issued by us, in transactions not involving any public offering).
On
October 13, 2017, we granted warrants to a note holder to purchase up to 66,667 shares of our common stock. The warrants are exercisable
at an average price of $3.00 per share and will expire starting in September 2022. The grant of the warrants and the shares of
our common stock underlying the warrants is and will be exempt from the registration requirements of the Securities Act pursuant
to Section 4(a)(2) of the Securities Act (in that the warrants and the shares of our common stock underlying the warrants were
granted by us, and will be issued by us, in transactions not involving any public offering).
On
November 28, 2017, we granted warrants to a note holder to purchase up to 6,667 shares of our common stock. The warrants are exercisable
at an average price of $3.75 per share and will expire starting in September 2022. The grant of the warrants and the shares of
our common stock underlying the warrants is and will be exempt from the registration requirements of the Securities Act pursuant
to Section 4(a)(2) of the Securities Act (in that the warrants and the shares of our common stock underlying the warrants granted
sold by us, and will be issued by us, in transactions not involving any public offering).
On
December 5, 2017, we granted warrants to note holders to purchase up to 160,000 shares of our common stock. The warrants are exercisable
at an average price of $1.65 per share and will expire starting in December 2022. The grant of the warrants and the shares of
our common stock underlying the warrants is and will be exempt from the registration requirements of the Securities Act pursuant
to Section 4(a)(2) of the Securities Act (in that the warrants and the shares of our common stock underlying the warrants were
granted by us, and will be issued by us, in transactions not involving any public offering).
Grants
of Stock Options
On
January 10, 2017, we granted non-qualified stock options to employees to purchase up to 333,333 shares of our common stock, and
granted a stock option to a director to purchase up to 133,333 shares of our common stock for services rendered. The total fair
value of these options at the grant date was approximately $521,000, which was based upon the closing price of our common stock
as reported by the OTCQB on the grant date. The options have an exercise price of $1.20 per share and vest upon the third anniversary
of the grant date. The grant of the options and the issuance of the shares of our common stock underlying the options is and will
be exempt from the registration requirements of the Securities Act pursuant to Section 4(a)(2) of the Securities Act.
On
April 28, 2017, we granted stock options to a consultant to purchase up to 66,667 shares of our common stock for services rendered.
The options have an exercise price of $3.60 per share, have a five-year term, and vest on performance. The total fair value of
these options at the grant date was approximately $221,000, which was based upon the closing price of our common stock as reported
by the OTCQB on the grant date. The grant of the options and the issuance of the shares of our common stock underlying the options
is and will be exempt from the registration requirements of the Securities Act pursuant to Section 4(a)(2) of the Securities Act.
On
May 4, 2017, we granted stock options to an employee to purchase up to 33,333 shares of our common stock for services rendered.
The options have an exercise price of $5.40 per share, have a five-year term, and vest over a period of three years from the grant
date. The total fair value of these options at the grant date was approximately $164,000, which was based upon the closing price
of our common stock as reported by the OTCQB on the grant date. The grant of the options and the issuance of the shares of our
common stock underlying the options is and will be exempt from the registration requirements of the Securities Act pursuant to
Section 4(a)(2) of the Securities Act.
On
June 29, 2017, we granted stock options to a consultant to purchase up to 133,333 shares of our common stock for services
rendered. The options have an exercise price of $4.80 per share, have a five-year term, and vest based on performance. The total
fair value of these options at the grant date was approximately $591,000, which was based upon the closing price of our common
stock as reported by the OTCQB on the grant date. The grant of the options and the issuance of the shares of our common stock
underlying the options is and will be exempt from the registration requirements of the Securities Act pursuant to Section 4(a)(2)
of the Securities Act.
On
August 1, 2017, we granted stock options to an employee and a consultant to purchase up to 46,667 shares of our common stock for
services rendered. The options have an exercise price of $3.75 per share, have a five-year term, and vest over a period of three
years from grant date. The total fair value of these options at the grant date was approximately $98,000, which was based upon
the closing price of our common stock as reported by the OTCQB on the grant date. The grant of the options and the issuance of
the shares of our common stock underlying the options is and will be exempt from the registration requirements of the Securities
Act pursuant to Section 4(a)(2) of the Securities Act.
On
August 15, 2017, we granted stock options to an employee and a consultant to purchase up to 86,667 shares of our common stock
for services rendered. The options have an exercise price of $3.75 per share, have a five-year term, and vest over a period of
three years from grant date. The total fair value of these options at the grant date was approximately $132,000, which was based
upon the closing price of our common stock as reported by the OTCQB on the grant date. The grant of the options and the issuance
of the shares of our common stock underlying the options is and will be exempt from the registration requirements of the Securities
Act pursuant to Section 4(a)(2) of the Securities Act.
On
October 2, 2017, we granted stock options to an employee to purchase a total of 26,667 shares of our common stock for services
rendered. The options have an exercise price of $3.75 per share, have a five-year term, and vest over a period of three years
from grant date. The total fair value of these options at the grant date was approximately $30,000, which was based upon the closing
price of our common stock as reported by the OTCQB on the grant date. The grant of the options and the issuance of the shares
of our common stock underlying the options is and will be exempt from the registration requirements of the Securities Act pursuant
to Section 4(a)(2) of the Securities Act.
On
November 22, 2017, we granted stock options to a consultant to purchase a total of 4,000 shares of our common stock for services
rendered. The options have an exercise price of $3.75 per share, have a five-year term, and vest over a period of six-months from
grant date. The total fair value of these options at the grant date was approximately $6,000, which was based upon the closing
price of our common stock as reported by the OTCQB on the grant date. The grant of the options and the issuance of the shares
of our common stock underlying the options is and will be exempt from the registration requirements of the Securities Act pursuant
to Section 4(a)(2) of the Securities Act.
On
December 19, 2017, we granted stock options to an employee to purchase a total of 16,667 shares of our common stock for services
rendered. The options have an exercise price of $1.20 per share, have a five-year term. At the grant date, 50% of the shares immediately
vested, with the remaining 50% of the shares vesting on the anniversary of the grant date. The total fair value of these options
at the grant date was approximately $18,000, which was based upon the closing price of our common stock as reported by the OTCQB
on the grant date. The grant of the options and the issuance of the shares of our common stock underlying the options is and will
be exempt from the registration requirements of the Securities Act pursuant to Section 4(a)(2) of the Securities Act.
Preferred
Stock Issuances
On
February 14, 2017, we entered into a securities purchase agreement with an unaffiliated, accredited investor for the sale and
issuance of our Series A Preferred Stock. Pursuant to the terms of the securities purchase agreement, the Series A Preferred Stock
purchaser agreed to purchase up to 1,050,000 shares of Series A Preferred Stock valued at $1,050,000. The aggregate amount of
consideration to be received by us in exchange for the issuance of 1,050,000 shares of Series A Preferred Stock was $1,000,000.
During the year ended December 31, 2018, we issued 630,000 shares Series A Preferred Stock pursuant to the securities purchase
agreement and received consideration of $555,000, representing a discount of $75,000. We offered and sold the shares in reliance
on the exemptions from registration pursuant to Section 4(a)(2) of the Securities Act (in that the shares of Series A Preferred
Stock were sold in transactions not involving any public offering). At various times during fiscal year 2017, we issued 190,800
shares of our common stock upon the conversion of these shares of Series A Preferred Stock. The 2,190,800 shares of our common
stock had a fair value of $304,000. The shares of our common stock were offered and sold in reliance on the exemptions from registration
pursuant to Section 4(a)(2) of the Securities Act (in that the shares were sold in transactions not involving any public offering).