Annual report pursuant to Section 13 and 15(d)

Derivative Financial Instruments and Fair Value (Tables)

Derivative Financial Instruments and Fair Value (Tables)

12 Months Ended

Dec. 31, 2018

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Fair Value of Assets and Liabilities Measured on Recurring Basis

The following table sets forth the financial assets and liabilities carried at fair value measured on a recurring basis as of December 31, 2018 and 2017:

	Level 1		Level 2		Level 3		Total
As of December 31, 2017:
Embedded conversion options	$	-	$	-	$	1,577,025	$	1,577,025
Common stock warrants		-		-		10,858,225		10,858,225
Total	$	-	$	-	$	12,435,250	$	12,435,250

As of December 31, 2018:
Embedded conversion options		-		-		350,260		350,260
Total	$	-	$	-	$	350,260	$	350,260

Schedule of Changes in Liabilities with Level 3 of Fair Value

The following table reconciles the changes in the liabilities categorized within Level 3 of the fair value hierarchy for the year ended December 31, 2018:

Balance at December 31, 2017	$	12,435,250
Gain on change in fair value of debentures and warrants*		(15,167,335	)
Fair value of warrants exercised		(4,619,150	)
Fair value of debentures converted		(1,408,901	)
Fair value of debentures exchanged for Series I-2 Preferred Stock		(1,420	)
Modification of warrants		8,603,069
Convertible debt		508,747
Balance at December 31, 2018	$	350,260

*In addition to the gain on change in fair value of debentures and warrants of $15.2 million during the year ended December 31, 2018, the Company recorded a loss on the exchange of convertible debentures into shares of its Series I-2 Preferred Stock of approximately $1.5 million, as more fully discussed in Note 13.