Annual report pursuant to Section 13 and 15(d)

Debt (Tables)

v3.19.1
Debt (Tables)
12 Months Ended
Dec. 31, 2018
Schedule of Fair Value Assumption Used

Fair Value Assumptions
Senior Secured Convertible Note
  Issue Date
December 27, 2018
    December 31, 2018  
Fair value   $ 7,750,000     $ 7,903,000  
Face value principal payable   $ 7,750,000     $ 7,750,000  
Required rate of return     13.2 %     13.1 %
Conversion price   $ 1.60     $ 1.60  
Value of common stock   $ 0.92     $ 0.96  
Expected term (years)     2.0       2.0  
Volatility     46 %     50 %
Risk free rate     2.5 %     2.5 %
Dividend yield     0 %     0 %

Series S Warrants [Member]  
Schedule of Senior Convertible Note Estimated Fair Value

The Senior Convertible Note estimated fair value as of the December 27, 2018 issue date is as follows:

 

Senior Secured Convertible Note - Issue Date - December 27, 2018   Fair Value  
Face value principal payable - issue date December 27, 2018   $ 7,750,000  
Lender fees paid - issue date December 27, 2018     (750,000 )
Proceeds, net - issue date December 27, 2018   $ 7,000,000  
Fair value adjustment - December 27, 2018     750,000  
Fair value - issue date December 27, 2018   $ 7,750,000  

Schedule of Senior Convertible Note Estimated Fair Value and Changes in Face Value Principal Payable

The Senior Convertible Note estimated fair value, changes in fair value, face value principal payable, and changes in face value principal payable, as of December 31, 2018 is as follows:

 

          Face Value  
          Principal  
Senior Secured Convertible Note - December 31, 2018   Fair Value     Payable  
Fair Value /Face Value Principal Payable - issue date December 27, 2018   $ 7,750,000     $ 7,750,000  
Less: bi-monthly Installment Repayments - as of December 31, 2018            
Less: bi-monthly Non-Installment Payments - as of December 31, 2018            
Fair Value /Face Value Principal Payable - before fair value adjustment     7,750,000       7,750,000  
Fair value adjustment - December 31, 2018     153,000        
Fair Value /Face Value Principal Payable - December 31, 2018   $ 7,903,000     $ 7,750,000  

Schedule of extinguishment of debt

Senior Secured Note - Debt Extinguishment   December 27, 2018  
Cash payment   $ 5,000,000  
Fair value - 600,000 shares of common stock issued     550,440  
Debt reacquisition price Senior Secured Note   $ 5,550,440  
         
Senior Secured Note - original principal   $ 5,000,000  
Senior Secured Note - additional principal - unpaid interest expense     780,116  
Senior Secured Note - total principal   $ 5,780,116  
Less: Senior Secured Note - remaining unamortized debt discount     (1,637,972 )
Senior Secured Note - debt carrying value, net   $ 4,142,144  
         
Debt extinguishment loss   $ (1,408,296 )

Schedule of Fair Value Assumption Used

The Series S Warrants issue-date fair value of $10.0 million was estimated using a Black-Scholes valuation model using the following assumptions:

 

Series S Warrants   Issue Date  
Exercise price per share   $ 0.01  
Value of common stock   $ 4.50  
Expected term (years)     15.0  
Volatility     48 %
Risk free rate     2.4 %
Dividend yield     0 %