Annual report pursuant to Section 13 and 15(d)

Derivative Financial Instruments and Fair Value (Tables)

v3.20.1
Derivative Financial Instruments and Fair Value (Tables)
12 Months Ended
Dec. 31, 2019
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, 2019 and 2018:

 

    Level 1     Level 2     Level 3     Total  
                         
As of December 31, 2019:                                
Embedded conversion options   $    -     $    -     $ 455,336     $ 455,336  
Total   $ -     $ -     $ 455,336     $ 455,336  
                                 
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 years ended December 31, 2018 and 2019:

 

Balance at December 31, 2017   $ 12,435,250  
Gain on change in fair value of debentures and warrants (1)     (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  
Change in fair value of debentures     105,076  
Balance at December 31, 2019   $ 455,336  

 

  (1) 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 for shares of its Series I-2 Preferred Stock of approximately $1.5 million, as more fully discussed in Note 13. Therefore, the total change in the fair value of derivative instruments for the year ended December 31, 2018 was a net gain of $13.7 million.