MANAGEMENT'S LIQUIDITY PLANS

9 Months Ended

Sep. 30, 2019

MANAGEMENT'S LIQUIDITY PLANS

MANAGEMENT'S LIQUIDITY PLANS

NOTE 2 — MANAGEMENT’S LIQUIDITY PLANS

As of September 30, 2019, the Company had cash of $3,463,899 and a working capital of $341,009. In addition, the Company used actual net cash in operations of $1,404,992 and $4,322,064 during the three- and nine-months ended September 30, 2019,  respectively.

In August 2018, the Company sold 1,000,000 shares of its common stock at $6.25 per share for net proceeds of $5,609,215, after costs and expenses of $640,785. In connection with the October 9, 2015 Note and Warrant Purchase Agreement, the Company received proceeds from the issuance of convertible notes payable of $100,000 in September 2018 and $124,975 in October 2018.

In August 2019, the Company negotiated with holders of certain warrants to purchase the Company’s common stock with respect to a transaction in which the Company and the holders agreed to amend certain warrant agreements to provide that from the date of amendment through August 16, 2019, the exercise price was reduced from $2.50 to $1.63 per share for warrants to purchase an aggregate of 1,194,990 shares and from $6.25 to $4.07 per share for warrants to purchase an aggregate of 85,719 shares, provided that any exercise during such period was in full and the exercise price was paid in cash.Proceeds from the amended warrants exercised was approximately $2.1 million.

In August 2019, the Company negotiated an agreement for a $2.0 million Line of Credit (the “LOC”) with Sero Capital LLC, a shareholder who owns more than 10% of the outstanding shares of the Company’s common stock. The Company’s primary source of operating funds has been from revenue generated from sales and cash proceeds from the sale of common stock and the issuance of convertible and other debt. With the August warrant exercises and the LOC, it is anticipated that the Company will have cash sufficient to fund operations for the next twelve months.