MANAGEMENT'S LIQUIDITY PLANS

6 Months Ended

Jun. 30, 2019

MANAGEMENT'S LIQUIDITY PLANS

MANAGEMENT'S LIQUIDITY PLANS

NOTE 2 — MANAGEMENT’S LIQUIDITY PLANS

As of June 30, 2019, the Company had cash of $2,804,456 and a working capital deficit of $130,363. In addition, the Company used actual net cash in operations of $1,291,581 and $2,917,072 during the three- and six-months ended June 30, 2019.

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 July and August 2019, the Company held discussions and negotiations 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. Potential proceeds if all 1,280,709 amended warrants are exercised would be approximately $2.2 million.

In August 2019, the Company negotiated an agreement for a $2.0 million Line of Credit (the "LOC") with a private lender. 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 early warrant exercises and the LOC, it is anticipated that the Company will have cash sufficient to fund operations for the next twelve months.