10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2018

or

[  ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from _____________ to _____________

Commission File Number 001-38185

PRESSURE BIOSCIENCES, INC.

(Exact name of registrant as specified in its charter)

Massachusetts	04-2652826
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

14 Norfolk Avenue
South Easton, Massachusetts	02375
(Address of principal executive offices)	(Zip Code)

(508) 230-1828

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

[X] Yes [  ] No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

[X] Yes [  ] No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer [  ]	Accelerated filer [  ]	Non-accelerated filer [  ]	Smaller reporting company [X]	Emerging growth company [  ]
		(Do not check if a smaller reporting company)

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [  ]

Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2 of the Exchange Act.

[  ] Yes [X] No

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of November 7, 2018.

Class	Number of Shares
Common Stock, par value $.01 per share	1,751,846

TABLE OF CONTENTS

	Page
PART I - FINANCIAL INFORMATION	3
Item 1. Unaudited Financial Statements	3
Consolidated Balance Sheets as of September 30, 2018 and December 31, 2017	3
Consolidated Statements of Operations for the Three- and Nine-Months Ended September 30, 2018 and 2017	4
Consolidated Statements of Comprehensive Loss for the Three Months and Nine Months Ended September 30, 2018 and 2017	5
Consolidated Statements of Cash Flows for the Nine-Month Periods Ended September 30, 2018 and 2017	6
Notes to Unaudited Consolidated Financial Statements	7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	32
Item 3. Quantitative and Qualitative Disclosure About Market Risk	37
Item 4. Controls and Procedures	37
PART II - OTHER INFORMATION	38
Item 1. Legal Proceedings	38
Item 1A. Risk Factors	38
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 3. Defaults Upon Senior Securities	39
Item 4. Mine Safety Disclosures	39
Item 5. Other Information	39
Item 6. Exhibits	40
SIGNATURES	41

2

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

PRESSURE BIOSCIENCES, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

	September 30, 2018			December 31, 2017
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	5,919		$	81,033
Accounts receivable		374,329			206,848
Inventories, net of $139,700 reserve at September 30, 2018 and $179,600 at December 31, 2017		899,934			857,662
Prepaid expenses and other current assets		254,464			222,158
Total current assets		1,534,646			1,367,701
Intangible assets, net of amortization of $64,904 and $0, respectively		685,096			750,000
Investment in available-for-sale equity securities		16,643			19,825
Property and equipment, net		16,885			22,662
TOTAL ASSETS	$	2,253,270		$	2,160,188
LIABILITIES AND STOCKHOLDERS’ DEFICIT
CURRENT LIABILITIES
Accounts payable	$	605,653		$	589,263
Accrued employee compensation		372,402			368,700
Accrued professional fees and other		942,077			800,620
Other current liabilities		1,041,193			1,536,507
Deferred revenue		161,301			263,106
Revolving note payable		-			3,500,000
Related party convertible debt, net of debt discount of $0 and $31,372, respectively		-			259,762
Convertible debt, net of unamortized debt discounts of $239,872 and $401,856, respectively		3,619,565			8,028,014
Other debt, net of unamortized discounts of $6,343 and $48,194, respectively		663,184			1,379,863
Related party other debt		22,500			-
Total current liabilities		7,427,875			16,725,835
LONG TERM LIABILITIES
Deferred revenue		44,356			57,149
TOTAL LIABILITIES		7,472,231			16,782,984
COMMITMENTS AND CONTINGENCIES (Note 5)
STOCKHOLDERS’ DEFICIT
Series D Convertible Preferred Stock, $.01 par value; 850 shares authorized; 300 shares issued and outstanding on September 30, 2018 and December 31, 2017, respectively (Liquidation value of $300,000)		3			3
Series G Convertible Preferred Stock, $.01 par value; 240,000 shares authorized; 80,570 shares issued and outstanding on September 30, 2018 and December 31, 2017, respectively		806			806
Series H Convertible Preferred Stock, $.01 par value; 10,000 shares authorized; 10,000 shares issued and outstanding on September 30, 2018 and December 31, 2017, respectively		100			100
Series H2 Convertible Preferred Stock, $.01 par value; 21 shares authorized; 21 shares issued and outstanding on September 30, 2018 and December 31, 2017, respectively		-			-
Series J Convertible Preferred Stock, $.01 par value; 6,250 shares authorized; 3,458 shares issued and outstanding on September 30, 2018 and December 31, 2017, respectively		35			35
Series K Convertible Preferred Stock, $.01 par value; 15,000 shares authorized; 6,880 shares issued and outstanding on September 30, 2018 and December 31, 2017, respectively		68			68
Series AA Convertible Preferred Stock, $.01 par value; 10,000 shares authorized; 5,655 and 0 shares issued and outstanding on September 30, 2018 and December 31, 2017, respectively		57			-
Common stock, $.01 par value; 100,000,000 shares authorized; 1,657,136 and 1,342,858 shares issued and outstanding on September 30, 2018 and December 31, 2017, respectively		16,571			13,429
Warrants to acquire common stock		18,290,689			9,878,513
Additional paid-in capital		38,516,869			30,833,549
Accumulated deficit		(62,044,159	)		(55,349,299	)
Total stockholders’ deficit		(5,218,961	)		(14,622,796	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	2,253,270		$	2,160,188

The accompanying notes are an integral part of these unaudited consolidated financial statements

3

PRESSURE BIOSCIENCES, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2018			2017			2018			2017
Revenue:
Products, services, other	$	461,017		$	603,726		$	1,664,679		$	1,610,124
Grant revenue		60,749			42,335			106,634			127,666
Total revenue		521,766			646,061			1,771,313			1,737,790
Costs and expenses:
Cost of products and services		234,320			328,743			829,155			852,039
Research and development		262,054			239,326			910,862			744,565
Selling and marketing		223,286			301,676			722,696			814,796
General and administrative		735,505			901,588			2,270,953			2,655,054
Total operating costs and expenses		1,455,165			1,771,333			4,733,666			5,066,454
Operating loss		(933,399	)		(1,125,272	)		(2,962,353	)		(3,328,664	)
Other expense:
Interest expense		(733,209	)		(1,554,379	)		(3,015,596	)		(4,431,950	)
Other expense		(1,283	)		-			(15,595	)		(7,108	)
(Loss) gain on extinguishment of debt		(140,765	)		90,862			335,132			90,862
Incentive shares/warrants		-			-			(663,130	)		(186,802	)
Change in fair value of derivative liabilities		-			245,213			-			(26,014	)
Total other (expense) income		(875,257	)		(1,218,304	)		(3,359,189	)		(4,561,012	)
Net loss		(1,808,656	)		(2,343,576	)		(6,321,542	)		(7,889,676	)
Deemed dividend on down round feature		-			-			(213,012	)		-
Deemed dividend on beneficial conversion feature		(1,146,280	)		-			(11,678,571	)		-
Preferred stock dividends		(277,439	)		-			(373,318	)		-
Net loss attributable to common stockholders	$	(3,232,375	)	$	(2,343,576	)	$	(18,586,443	)	$	(7,889,676	)
Basic and diluted net loss per share attributable to common stockholders	$	(2.01	)	$	(2.07	)	$	(12.67	)	$	(7.28	)
Weighted average common stock shares outstanding used in the basic and diluted net loss per share calculation		1,606,575			1,133,791			1,466,424			1,084,370

The accompanying notes are an integral part of these unaudited consolidated financial statements

4

PRESSURE BIOSCIENCES, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(UNAUDITED)

	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Comprehensive Loss
Net loss	$	(1,808,656	)	$	(2,343,576	)	$	(6,321,542	)	$	(7,889,676	)
Other comprehensive loss
Unrealized income on marketable securities		-			-			-			6,190
Comprehensive loss	$	(1,808,656	)	$	(2,343,576	)	$	(6,321,542	)	$	(7,883,486	)

The accompanying notes are an integral part of these unaudited consolidated financial statements

5

PRESSURE BIOSCIENCES, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	For the Nine Months Ended
	September 30,
	2018			2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(6,321,542	)	$	(7,889,676	)
Adjustments to reconcile net loss to net cash used in operating activities:
Common stock issued for debt extension		33,218			10,000
Depreciation and amortization		70,681			7,027
Accretion of interest and amortization of debt discount		1,405,490			3,548,244
Issuance of incentive shares and common stock warrants		663,130			186,802
Inventory reserve recovery		(39,900	)		-
Gain on extinguishment of debt		(335,132	)		(90,862	)
Stock-based compensation expense		299,584			318,910
Amortization of third party fees paid in common stock and warrants		-			46,558
Shares issued with debt		7,800			-
Change in fair value of derivative liabilities		-			26,014
Impairment loss on investment		3,182			6,069
Changes in operating assets and liabilities:
Accounts receivable		(167,481	)		(266,996	)
Inventories		(2,372	)		(217,498	)
Prepaid expenses and other assets		141,214			111,748
Accounts payable		16,390			445,924
Accrued employee compensation		3,702			49,079
Deferred revenue and other accrued expenses		606,454			618,890
Net cash used in operating activities		(3,615,582	)		(3,089,767	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property plant and equipment		-			(16,617	)
Net cash used in investing activities		-			(16,617	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from revolving note payable		460,000			2,070,000
Net proceeds from warrant exercises		-			140,215
Net proceeds from Series AA convertible preferred stock		1,255,463			-
Net proceeds from convertible debt		3,848,484			-
Net proceeds from non-convertible debt – third party		1,595,901			2,400,752
Net proceeds from non-convertible debt – related party		116,100			-
Payments on convertible debt		(2,097,750	)		(840,541	)
Payments on non-convertible debt		(1,579,130	)		(783,682	)
Payments on non-convertible debt – related party		(58,600	)		-
Net cash provided by financing activities		3,540,468			2,986,744
NET INCREASE (DECREASE) IN CASH		(75,114	)		(119,640	)
CASH AT BEGINNING OF YEAR		81,033			138,363
CASH AT END OF PERIOD	$	5,919		$	18,723
SUPPLEMENTAL INFORMATION
Interest paid in cash	$	856,562		$	282,906
Income taxes paid		-			-
NON CASH TRANSACTIONS:
Common stock issued in lieu of cash for interest		201,432			185,603
Common stock issued for services to be rendered		173,520			-
Common stock issued with debt		222,272			321,127
Discount from warrants issued with convertible debt		162,023			668,544
Discount from one-time interest		169,500			225,000
Unrealized gain from available-for-sale equity securities		-			6,190
Preferred stock dividends		373,318			-
Conversion of debt into preferred stock		12,688,634			-
Conversion of preferred stock into common stock		-			55,200
Contingent beneficial conversion feature on convertible note		253,000			-
Deemed dividend-triggered down round feature		213,012			-
Deemed dividend-beneficial conversion feature		11,678,571			-
Derivative liability released upon warrant exercise		-			49,327
Reclassification of derivative liabilities to equity and cumulative effect of adoption of ASU 2017-11		-			1,689,386

The accompanying notes are an integral part of these unaudited consolidated financial statements

6

PRESSURE BIOSCIENCES, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2018

(UNAUDITED)

1) Business Overview, Liquidity and Management Plans

Pressure BioSciences, Inc. (“we”, “our”, “the Company”) is focused on solving the challenging problems inherent in biological sample preparation, a crucial laboratory step performed by scientists worldwide working in biological life sciences research. Sample preparation is a term that refers to a wide range of activities that precede most forms of scientific analysis. Sample preparation is often complex, time-consuming, and in our belief, one of the most error-prone steps of scientific research. It is a widely-used laboratory undertaking, the requirements of which drive what we believe is a large and growing worldwide market. We have developed and patented a novel, enabling technology platform that can control the sample preparation process. It is based on harnessing the unique properties of high hydrostatic pressure. This process, called pressure cycling technology, or PCT, uses alternating cycles of hydrostatic pressure between ambient and ultra-high levels (45,000 psi or greater) to safely, conveniently and reproducibly control the actions of molecules in biological samples, such as cells and tissues from human, animal, plant, and microbial sources.

Our pressure cycling technology uses internally developed instrumentation that is capable of cycling pressure between ambient and ultra-high levels - at controlled temperatures and specific time intervals - to rapidly and repeatedly control the interactions of bio-molecules, such as DNA, RNA, proteins, lipids, and small molecules. Our laboratory instrument, the Barocycler®, and our internally developed consumables product line, including PULSE® (Pressure Used to Lyse Samples for Extraction) Tubes, other processing tubes, and application specific kits (which include consumable products and reagents) together make up our PCT Sample Preparation System, or PCT SPS.

In 2015, together with an investment bank, we formed a subsidiary called Pressure BioSciences Europe (“PBI Europe”) in Poland. We have 49% ownership interest with the investment bank retaining 51%. As of now, PBI Europe does not have any operating activities and we cannot reasonably predict when operations will commence. Therefore, we do not have control of the subsidiary and did not consolidate in our financial statements. PBI Europe did not have any operations in the nine months ended September 30, 2018 or in fiscal year 2017.

2) Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. However, we have experienced negative cash flows from operations with respect to our pressure cycling technology business since our inception. As of September 30, 2018, we do not have adequate working capital resources to satisfy our current liabilities and as a result, there is substantial doubt regarding our ability to continue as a going concern. We have been successful in raising cash through debt and equity offerings in the past and as described in Notes 6 and 7. In addition we raised cash through equity and debt financing after September 30, 2018 as described in Note 8. We have financing efforts in place to continue to raise cash through debt and equity offerings. Although we have successfully completed financings and reduced expenses in the past, we cannot assure you that our plans to address these matters in the future will be successful. These financial statements do not include any adjustments that might result from this uncertainty.

In August 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-15, Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. (“ASU 2015-14”). Under the new standard, management must evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. This evaluation initially does not take into consideration the potential mitigating effect of management’s plans that have not been fully implemented as of the date the financial statements are issued. When substantial doubt exists under this methodology, management evaluates whether the mitigating effect of its plans sufficiently alleviates substantial doubt about the Company’s ability to continue as a going concern. The mitigating effect of management’s plans, however, is only considered if both (1) it is probable that the plans will be effectively implemented within one year after the date that the financial statements are issued, and (2) it is probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued. This standard was adopted by the Company at January 1, 2017.

7

3) Interim Financial Reporting

The accompanying unaudited consolidated balance sheet as of December 31, 2017, which was derived from audited financial statements, and the unaudited interim consolidated financial statements of Pressure BioSciences, Inc. have been prepared in accordance with accounting principles generally accepted in the United States of America (“generally accepted accounting principles” or “GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all material adjustments (consisting of only normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three months and nine months ended September 30, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. For further information, refer to the audited consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K (the “Form 10-K”) for the fiscal year ended December 31, 2017 as filed with the Securities and Exchange Commission on April 2, 2018.

4) Summary of Significant Accounting Policies

Principles of Consolidation

The consolidated financial statements include the accounts of Pressure BioSciences, Inc., and its wholly-owned subsidiary PBI BioSeq, Inc. All intercompany accounts and transactions have been eliminated in consolidation.

Reclassifications

Certain prior year amounts have been reclassified to conform to our current year presentation.

Recent Accounting Standards

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The new standard requires the recognition of assets and liabilities arising from lease transactions on the balance sheet and the disclosure of key information about leasing arrangements. Accordingly, a lessee will recognize a lease asset for its right to use the underlying asset and a lease liability for the corresponding lease obligation. Both the asset and liability will initially be measured at the present value of the future minimum lease payments over the lease term. Subsequent measurement, including the presentation of expenses and cash flows, will depend on the classification of the lease as either finance or an operating lease. Initial costs directly attributable to negotiating and arranging the lease will be included in the asset. Lessees will also be required to provide additional qualitative and quantitative disclosures regarding the amount, timing and uncertainty of cash flows arising from leases. The new standard is effective for fiscal years beginning after December 15, 2018, and interim periods therein. We will adopt ASC 842 effective January 1, 2019. This new guidance is not expected to have a material impact on the Company’s consolidated financial statements.

In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, which requires restricted cash to be presented with cash and cash equivalents on the statement of cash flows and disclosure of how the statement of cash flows reconciles to the balance sheet if restricted cash is shown separately from cash and cash equivalents on the balance sheet. The guidance is effective for interim and annual periods beginning after December 15, 2017, and early adoption is permitted. The Company early adopted the ASU 2016-18 on January 1, 2017.

In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which clarifies the definition of a business to provide additional guidance with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. This ASU is effective for annual periods beginning after December 15, 2017, including interim periods within those periods. The Company early adopted the ASU 2016-18 on January 1, 2017 starting with its purchase of BaroFold assets.

In May 2017, the FASB issued ASU 2017-09, Compensation – Stock Compensation (Topic 718) Scope of Modification Accounting, which clarifies that an entity should account for the effects of a modification unless the fair value, vesting terms and classification as liability or equity of the modified and original awards do not change on the modification date. This ASU is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company adopted this ASU effective on January 1, 2018, on a prospective basis which did not have a material impact on the Company’s condensed consolidated financial statements and related disclosures.

8

Effective January 1, 2018, the Company adopted ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities. The standard amends various aspects of the recognition, measurement, presentation, and disclosure of financial instruments. The most significant impact to our consolidated financial statements relates to the recognition and measurement of equity investments at fair value with changes recognized in Net income. The amendment also updates certain presentation and disclosure requirements. The adoption of ASU 2016-01 did not have a material impact on the consolidated financial statements. The adoption of ASU 2016-01 will result in increased volatility in net income as changes in the fair value of available-for-sale equity investments and changes in observable prices of equity investments without readily determinable fair values will be recorded in net income.

Effective January 1, 2018, the Company adopted ASC Topic 606, Revenue from Contracts with Customers, using the modified retrospective method. This guidance supersedes nearly all existing revenue recognition guidance under US GAAP. The core principle of the guidance is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The Company updated its accounting policy for the new standard based on a detailed review of its business and contracts. Based on the new guidance, the Company continues to recognize revenue at a point in time for the majority of its contracts with customers, which is generally when products are either shipped or delivered. Therefore, the adoption of ASC 606 did not have a material impact on the consolidated financial statements.

In July 2018, the FASB issued ASU 2018-07, Compensation- Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting as an amendment and update expanding the scope of Topic 718. The amendment specifies that Topic 718 now applies to all share-based payment transactions, even non-employee awards, in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. Under the new guidance, awards to nonemployees are measured on the grant date, rather than on the earlier of the performance commitment date or the date at which the nonemployee’s performance is complete. Also, the awards would be measured by estimating the fair value of the equity instruments to be issued, rather than the fair value of the goods or services received or the fair value of the equity instruments issued, whichever can be measured more reliably. In addition, entities may use the expected term to measure nonemployee awards or elect to use the contractual term as the expected term, on an award-by-award basis. The new guidance is effective for the Company in annual periods beginning after December 15, 2018, and interim periods within those annual periods, with early adoption permitted. Based on the new guidance, the Company will measure its nonemployee stock awards at grant date not when the stock awards are vested. This new guidance is not expected to have a material impact on the Company’s consolidated financial statements.

Revenue Recognition

We recognize revenue in accordance with FASB ASC 606, ASC 606, Revenue from Contracts with Customers, and ASC 340-40, Other Assets and Deferred Costs—Contracts with Customers. Revenue is measured based on a consideration specified in a contract with a customer, and excludes any sales incentives and amounts collected on behalf of third parties. We enter into sales contracts that may consist of multiple distinct performance obligations where certain performance obligations of the sales contract are not delivered in one reporting period. We measure and allocate revenue according to ASC 606-10.

We identify a performance obligation as distinct if both the following criteria are true: the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer and the entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract. Determining the standalone selling price (“SSP”) and allocation of consideration from a contract to the individual performance obligations, and the appropriate timing of revenue recognition, is the result of significant qualitative and quantitative judgments. Management considers a variety of factors such as historical sales, usage rates, costs, and expected margin, which may vary over time depending upon the unique facts and circumstances related to each performance obligation in making these estimates. While changes in the allocation of the SSP between performance obligations will not affect the amount of total revenue recognized for a particular contract, any material changes could impact the timing of revenue recognition, which would have a material effect on our financial position and result of operations. This is because the contract consideration is allocated to each performance obligation, delivered or undelivered, at the inception of the contract based on the SSP of each distinct performance obligation.

Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue.

Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are in included in cost of revenues as consistent with treatment in prior periods.

Our current Barocycler® instruments require a basic level of instrumentation expertise to set-up for initial operation. To support a favorable first experience for our customers, upon customer request, and for an additional fee, will send a highly trained technical representative to the customer site to install Barocyclers® that we sell, lease, or rent through our domestic sales force. The installation process includes uncrating and setting up the instrument, followed by introductory user training. Our sales arrangements do not provide our customers with a right of return. Any shipping costs billed to customers are recognized as revenue.

The majority of our instrument and consumable contracts contain pricing that is based on the market price for the product at the time of delivery. Our obligations to deliver product volumes are typically satisfied and revenue is recognized when control of the product transfers to our customers. Concurrent with the transfer of control, we typically receive the right to payment for the shipped product and the customer has significant risks and rewards of ownership of the product. Payment terms require customers to pay shortly after delivery and do not contain significant financing components.

We apply ASC 845, “Accounting for Non-Monetary Transactions”, to account for products and services sold through non-cash transactions based on the fair values of the products and services involved, where such values can be determined. Non-cash exchanges would require revenue to be recognized at recorded cost or carrying value of the assets or services sold if any of the following conditions apply:

9

a)	The fair value of the asset or service involved is not determinable.
b)	The transaction is an exchange of a product or property held for sale in the ordinary course of business for a product or property to be sold in the same line of business to facilitate sales to customers other than the parties to the exchange.
c)	The transaction lacks commercial substance.

We currently record revenue for its non-cash transactions at recorded cost or carrying value of the assets or services sold.

In accordance with FASB ASC 840, Leases, we account for our lease agreements under the operating method. We record revenue over the life of the lease term and we record depreciation expense on a straight-line basis over the thirty-six-month estimated useful life of the Barocycler® instrument. The depreciation expense associated with assets under lease agreement is included in the “Cost of PCT products and services” line item in our accompanying consolidated statements of operations. Many of our lease and rental agreements allow the lessee to purchase the instrument at any point during the term of the agreement with partial or full credit for payments previously made. We pay all maintenance costs associated with the instrument during the term of the leases.

Revenue from government grants is recorded when expenses are incurred under the grant in accordance with the terms of the grant award.

Deferred revenue represents amounts received from grants and service contracts for which the related revenues have not been recognized because one or more of the revenue recognition criteria have not been met. Revenue from service contracts is recorded ratably over the length of the contract.

Disaggregation of revenue

In the following table, revenue is disaggregated by primary geographical market, major product line, and timing of revenue recognition.

In thousands of US dollars ($)	Three Months Ended September 30,				Nine Months Ended September 30,
Primary geographical markets	2018		2017		2018		2017
North America		408		401		1,123		1,124
Europe		59		3		278		161
Asia		55		242		370		453
		522		646		1,771		1,738

	Three Months Ended September 30,				Nine Months Ended September 30,
Major products/services lines	2018		2017		2018		2017
Hardware		278		411		1,094		1,154
Grants		61		42		106		127
Consumables		43		85		182		200
Contract research services		80		-		147		-
Sample preparation accessories		22		47		118		121
Technical support/extended service contracts		20		35		70		78
Shipping and handling		10		17		38		38
Other		8		9		16		20
		522		646		1,771		1,738

10

	Three Months Ended September 30,				Nine Months Ended September 30,
Timing of revenue recognition	2018		2017		2018		2017
Products transferred at a point in time		362		560		1,546		1,546
Products and services transferred over time		160		86		225		192
		522		646		1,771		1,738

Contract balances

In thousands of US dollars ($)	September 30, 2018		December 31, 2017
Receivables, which are included in ‘Accounts Receivable’		374		207
Contract liabilities (deferred revenue)		206		320

Transaction price allocated to the remaining performance obligations

The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period.

In thousands of US dollars ($)	2018		2019		2020		Total
Extended warranty service		7		199		-		206

All consideration from contracts with customers is included in the amounts presented above.

Contract Costs

The Company recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that the Company otherwise would have recognized is one year or less. These costs are included in selling, general, and administrative expenses. The costs to obtain a contract are recorded immediately in the period when the revenue is recognized either upon shipment or installation. The costs to obtain a service contract are considered immaterial when spread over the life of the contract so the Company records the costs immediately upon billing.

Use of Estimates

To prepare our consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, we are required to make significant estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. In addition, significant estimates were made in projecting future cash flows to quantify deferred tax assets, the costs associated with fulfilling our warranty obligations for the instruments that we sell, and the estimates employed in our calculation of fair value of stock options awarded and warrant derivative liability. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from the estimates and assumptions used.

11

Concentrations

Credit Risk

Our financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash, cash equivalents, and trade receivables. We have cash investment policies which, among other things, limit investments to investment-grade securities. We perform ongoing credit evaluations of our customers, and the risk with respect to trade receivables is further mitigated by the fact that many of our customers are government institutions, large pharmaceutical and biotechnology companies, and academic laboratories.

The following table illustrates the level of concentration as a percentage of total revenues during the three months and nine months ended September 30, 2018 and 2017.

	For the Three Months Ended
	September 30,
	2018			2017
Top Five Customers		59	%		73	%
Federal Agencies		12	%		30	%

	For the Nine Months Ended
	September 30,
	2018			2017
Top Five Customers		36	%		38	%
Federal Agencies		10	%		19	%

The following table illustrates the level of concentration as a percentage of net accounts receivable balance as of September 30, 2018 and December 31, 2017. The Top Five Customers category may include federal agency receivable balances if applicable.

	September 30, 2018			December, 31, 2017
Top Five Customers		76	%		85	%
Federal Agencies		1	%		1	%

Product Supply

CBM Industries (Taunton, MA) has recently become the manufacturer of the Barocycler® 2320EXT. CBM is ISO 13485:2003 and 9001:2008 Certified. CBM provides us with precision manufacturing services that include management support services to meet our specific application and operational requirements. Among the services provided by CBM to us are:

● CNC Machining

● Contract Assembly & Kitting

● Component and Subassembly Design

● Inventory Management

● ISO certification

At this time, we believe that outsourcing the manufacturing of our new Barocycler® 2320EXT to CBM is the most cost-effective method for us to obtain and maintain ISO Certified, CE and CSA Marked instruments. CBM’s close proximity to our South Easton, MA facility is a significant asset enabling interactions between our Engineering, R&D, and Manufacturing groups and their counterparts at CBM. CBM was instrumental in helping PBI achieve CE Marking on our Barocycler® 2320EXT, as announced on February 2, 2017.

Although we currently manufacture and assemble the Barozyme HT48, Barocycler® HUB440, the SHREDDER SG3, and most of our consumables at our South Easton, MA facility, we plan to take advantage of the established relationship with CBM and transfer manufacturing of the entire Barocycler® product line, future instruments, and other products to CBM.

The Barocycler® NEP3229, launched in 2008, and manufactured by the BIT Group, will be phased out over the next several years and replaced by the new state-of-the-art Barocycler® HUB and Barozyme HT48 product lines.

12

Investment in Available-For-Sale Equity Securities

As of September 30, 2018, we held 100,250 shares of common stock of Everest Investments Holdings S.A. (“Everest”), a Polish publicly traded company listed on the Warsaw Stock Exchange. We account for this investment in accordance with ASC 320 “Investments — Debt and Equity Securities” as securities available for sale. On September 30, 2018, our consolidated balance sheet reflected the fair value of our investment in Everest to be approximately $17,000, based on the closing price of Everest shares of $0.17 USD per share on that day. The carrying value of our investment in Everest common stock held will change from period to period based on the closing price of the common stock of Everest as of the balance sheet date.

Computation of Loss per Share

Basic loss per share is computed by dividing loss available to common shareholders by the weighted average number of common shares outstanding. Diluted loss per share is computed by dividing loss available to common shareholders by the weighted average number of common shares outstanding plus additional common shares that would have been outstanding if dilutive potential common shares had been issued. For purposes of this calculation, convertible preferred stock, common stock dividends, and warrants and options to acquire common stock, are all considered common stock equivalents in periods in which they have a dilutive effect and are excluded from this calculation in periods in which these are anti-dilutive to our net loss.

The following table illustrates our computation of loss per share for the three months and nine months ended September 30, 2018 and 2017:

	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Numerator:
Net loss	$	(1,808,656	)	$	(2,343,576	)	$	(6,321,542	)	$	(7,889,676	)
Deemed dividend on down round feature		-			-			(213,012	)		-
Deemed dividend on beneficial conversion feature		(1,146,280	)		-			(11,678,571	)		-
Preferred stock dividends		(277,439	)		-			(373,318	)		-
Net loss applicable to common shareholders	$	(3,232,375	)	$	(2,343,576	)	$	(18,586,443	)	$	(7,889,676	)
Denominator for basic and diluted loss per share:
Weighted average common stock shares outstanding		1,606,575			1,133,791			1,466,424			1,084,370
Loss per common share – basic and diluted	$	(2.01	)	$	(2.07	)	$	(12.67	)	$	(7.28	)

13

The following table presents securities that could potentially dilute basic loss per share in the future. For all periods presented, the potentially dilutive securities were not included in the computation of diluted loss per share because these securities would have been anti-dilutive to our net loss. The Series D Convertible Preferred Stock, Series G Convertible Preferred Stock, Series H Convertible Preferred Stock, Series H2 Convertible Preferred Stock, Series J Convertible Preferred Stock and Series K Convertible Preferred Stock are presented below as if they were converted into common shares according to the conversion terms.

	As of September 30,
	2018		2017
Stock options		341,790		249,636
Convertible debt		361,391		828,870
Common stock warrants		6,769,607		902,033
Convertible preferred stock:
Series D Convertible Preferred Stock		25,000		25,000
Series G Convertible Preferred Stock		26,857		26,857
Series H Convertible Preferred Stock		33,334		33,334
Series H2 Convertible Preferred Stock		70,000		70,000
Series J Convertible Preferred Stock		115,267		115,267
Series K Convertible Preferred Stock		229,334		227,200
Series AA Convertible Preferred Stock		5,655,454		-
		13,628,034		2,478,197

Accounting for Stock-Based Compensation Expense

We maintain equity compensation plans under which incentive stock options and non-qualified stock options are granted to employees, independent members of our Board of Directors and outside consultants. We recognize stock-based compensation expense over the requisite service period using the Black-Scholes formula to estimate the fair value of the stock options on the date of grant.

Determining Fair Value of Stock Option Grants

Valuation and Amortization Method - The fair value of each option award is estimated on the date of grant using the Black-Scholes pricing model based on certain assumptions. The estimated fair value of employee stock options is amortized to expense using the straight-line method over the vesting period.

Expected Term - The Company uses the simplified calculation of expected life, as the Company does not currently have sufficient historical exercise data on which to base an estimate of expected term. Using this method, the expected term is determined using the average of the vesting period and the contractual life of the stock options granted.

Expected Volatility - Expected volatility is based on the Company’s historical stock volatility data over the expected term of the award.

Risk-Free Interest Rate - The Company bases the risk-free interest rate used in the Black-Scholes valuation method on the implied yield currently available on U.S. Treasury zero-coupon issues with an equivalent remaining term.

Forfeitures - The Company records stock-based compensation expense only for those awards that are expected to vest. The Company estimated a forfeiture rate of 5% for awards granted based on historical experience and future expectations of options vesting. The Company used this historical rate as our assumption in calculating future stock-based compensation expense.

14

The Company recognized stock-based compensation expense of $151,314 and $139,399 for the three months ended September 30, 2018 and 2017, respectively. The Company recognized stock-based compensation expense of $299,584 and $318,910 for the nine months ended September 30, 2018 and 2017, respectively. The following table summarizes the effect of this stock-based compensation expense within each of the line items of our costs and expenses within our Consolidated Statements of Operations:

	For the Three Months Ended				For the Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Cost of products and services	$	4,698	$	-	$	4,698	$	-
Research and development		28,444		37,345		59,592		76,263
Selling and marketing		11,822		21,778		26,298		46,112
General and administrative		106,350		80,276		208,996		196,535
Total stock-based compensation expense	$	151,314	$	139,399	$	299,584	$	318,910

Fair Value of Financial Instruments

Due to their short maturities, the carrying amounts for cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses approximate their fair value. Long-term liabilities are primarily related to convertible debentures and deferred revenue with carrying values that approximate fair value.

The issuances of our convertible promissory notes and common stock purchase warrant are accounted for under the fair value and relative fair value method.

The warrant is first analyzed per its terms as to whether it has derivative features or not. If the warrant is determined to be a derivative, then it is measured at fair value using the Black Scholes Option Model and recorded as a liability on the balance sheet. The warrant is re-measured at its then current fair value at each subsequent reporting date (it is “marked-to-market”).

If the warrant is determined to not have derivative features, it is recorded into equity at its fair value using the Black Scholes option model, however, limited to a relative fair value based upon the percentage of its fair value to the total fair value including the fair value of the convertible note.

The convertible note is recorded at its fair value, limited to a relative fair value based upon the percentage of its fair value to the total fair value including the fair value of the warrant. Further, the convertible promissory note is examined for any intrinsic beneficial conversion feature (“BCF”) of which the convertible price of the note is less than the closing stock price on date of issuance. If the relative fair value method is used to value the convertible promissory note and there is an intrinsic BCF, a further analysis is undertaken of the BCF using an effective conversion price which assumes the conversion price is the relative fair value divided by the number of shares the convertible debt is converted into by its terms. The adjusted BCF value is accounted for as equity.

The warrant and BCF relative fair values are also recorded as a discount to the convertible promissory notes. At present, these equity features of the convertible promissory notes have been recorded at a discount to the convertible notes that is substantially equal to the proceeds received.

Fair Value Measurements

The Company follows the guidance of FASB ASC Topic 820, “Fair Value Measurements and Disclosures” (“ASC 820”) as it related to all financial assets and financial liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis.

In determining the fair value of its assets and liabilities, the Company uses various valuation approaches. The Company employs a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances. The fair value hierarchy is broken down into three levels based on the source of inputs as follows:

Level 1 – Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access.

Level 2–Valuations based on quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and models for which all significant inputs are observable, either directly or indirectly.

Level 3 – Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

15

Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company has determined that its financial assets are classified within Level 1 and its financial liabilities are currently classified within Level 3 in the fair value hierarchy. The development of the unobservable inputs for Level 3 fair value measurements and fair value calculations are the responsibility of the Company’s management.

Adoption of ASU 2017-11

The Company changed its method of accounting for the Debentures, Debenture Warrants and Series D Warrants through the early adoption of ASU 2017-11 during the year ended December 31, 2017 on a modified retrospective basis. Accordingly, the Company reclassified the warrant derivative and conversion option derivative liabilities to additional paid in capital on its January 1, 2017 consolidated balance sheets totaling approximately $2.6 million, reduced debt discount by approximately $0.9 million and recorded the cumulative effect of the adoption to the beginning balance of accumulated deficit of approximately $2.4 million. This resulted to an increase in stock warrants by $2.6 million and additional paid-in capital by $1.4 million. The following table provides a reconciliation of the warrant derivative liability, convertible debt, conversion option derivative liability, stock warrant, additional paid-in capital and accumulated deficit on the consolidated balance sheet as of December 31, 2016:

	Convertible debt, current portion		Convertible debt, long term portion		Warrant Derivative Liability			Conversion Option Liability			Warrants to acquire common stock		Additional Paid-in Capital		Accumulated deficit
Balance, January 1, 2017 (Prior to adoption of ASU 2017-11)	$	4,005,702	$	529,742	$	1,685,108		$	951,059		$	6,325,102	$	27,544,265	$	(42,264,190	)
Reclassified derivative liabilities and cumulative effect of adoption		769,316		154,152		(1,685,108	)		(951,059	)		2,636,236		1,446,011		(2,369,548	)
Balance, January 1, 2017 (After adoption of ASU 2017-11)	$	4,775,018	$	683,894	$	-		$	-		$	8,961,338	$	28,990,276	$	(44,633,738	)

The following tables set forth the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of September 30, 2018:

			Fair value measurements at September 30, 2018 using:
	September 30, 2018		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Available-For-Sale Equity Securities		16,643		16,643		-		-
Total Financial Assets	$	16,643	$	16,643	$	-	$	-

The following tables set forth the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, 2017:

			Fair value measurements at December 31, 2017 using:
	December 31, 2017		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Available-For-Sale Equity Securities		19,825		19,825		-		-
Total Financial Assets	$	19,825	$	19,825	$	-	$	-

16

5) Commitments and Contingencies

Operating Leases

Our corporate office is currently located at 14 Norfolk Avenue, South Easton, Massachusetts 02375. We are currently paying $6,950 per month, on a lease extension, signed on December 29, 2017, that expires December 31, 2018, for our corporate office. We expanded our space to include offices, warehouse and a loading dock on the first floor starting May 1, 2017 with a monthly rent increase already reflected in the current payments.

We extended our lease for our space in Medford, MA to December 30, 2020. The lease requires monthly payments of $6,912.75 subject to annual cost of living increases. The lease shall be automatically extended for additional three years unless either party terminates at least six months prior to the expiration of the current lease term.

Rental costs are expensed as incurred. During the nine months ended September 30, 2018 and 2017 we incurred $137,074 and $112,438 in rent expense, respectively for the use of our corporate office and research and development facilities.

Following is a schedule by years of future minimum rental payments required under operating leases with initial or remaining non-cancelable lease terms in excess of one year as of September 30, 2018:

2018	$	41,588
2019		82,953
2020		82,953
2021		-
Thereafter		-
	$	207,494

Government Grants

We received a $1.02 million NIH SBIR Phase II Grant in November 2014. Under the grant, the NIH has committed to pay the Company to develop a high-throughput, high pressure-based DNA Shearing System for Next Generation Sequencing and other genomic applications. In March 2018, we received an extension on the SBIR Phase II grant to utilize unused funds until November 30, 2018.

6) Convertible Debt and Other Debt

Conversion of Notes

We issued 5,075.40 shares of our Series AA Convertible Preferred Stock in satisfaction of $12,688,634 of convertible promissory notes, Revolving Note and short-term loans issued:

	Debt converted to stock
Current liabilities
Convertible Debentures, face value	$	6,962,634
Revolving Note with interest		4,750,000
May 19, 2017 Promissory Note with interest		750,000
Other Notes with interest		226,000
Total debt converted in the second quarter of 2018	$	12,688,634

Senior Secured Convertible Debentures and Warrants

We entered into Subscription Agreements (the “Subscription Agreement”) with various individuals (each, a “Purchaser”) between July 23, 2015 and March 31, 2016, pursuant to which the Company sold Senior Secured Convertible Debentures (the “Debentures”) and warrants to purchase shares of common stock equal to 50% of the number of shares issuable pursuant to the subscription amount (the “Warrants”) for an aggregate purchase price of $6,329,549 (the “Purchase Price”).

The Company issued a principal aggregate amount of $6,962,634 in Debentures which includes a 10% original issue discount on the Purchase Price. The Debenture does not accrue any additional interest during the first year it is outstanding but accrues interest at a rate equal to 10% per annum for the second year it is outstanding. The Debenture has a maturity date of two years from issuance. The Debenture is convertible any time after its issuance date. The Purchaser has the right to convert the Debenture into shares of the Company’s common stock at a fixed conversion price equal to $8.40 per share, subject to applicable adjustments. In the second year that the Debenture is outstanding, any interest accrued shall be payable quarterly in either cash or common stock, at the Company’s discretion.

In connection with the Debentures issued, the Company issued warrants exercisable into a total of 376,759 shares of our common stock. The Warrants issued in this transaction are immediately exercisable at an exercise price of $12.00 per share, subject to applicable adjustments including full ratchet anti-dilution if we issue any securities at a price lower than the exercise price then in effect. The Warrants have an expiration period of five years from the original issue date. The Warrants are subject to adjustment for stock splits, stock dividends or recapitalizations and also include anti-dilution price protection for subsequent equity sales below the exercise price.

On May 2, 2018, the Company entered into a Securities Purchase Agreement with an existing shareholder pursuant to which the Company sold an aggregate of 100 shares of Series AA Convertible Preferred Stock for an aggregate Purchase Price of $250,000. We issued to the shareholder a new warrant to purchase 100,000 shares of common stock with an exercise price of $3.50 per share.

17

The Company, pursuant to a price protection provision triggered on May 2, 2018 with the sale of Series AA units, amended the Debentures and Warrants to purchase Common Stock held by the Debenture Holders entered into between July 22, 2015 and March 31, 2016 as first disclosed in the Company’s Current Report on Form 8-K filed on July 28, 2015. The fair value of $207,899 relating to the reduction in exercise price was treated as a deemed dividend and recorded as a charge against additional paid-in capital within equity. The amended Debenture conversion price was exempt from revaluation because a beneficial conversion feature had already been recorded on the Debenture at issuance.

Subject to the terms and conditions of the Warrants, at any time commencing six months from the Final Closing, the Company has the right to call the Warrants for cancellation if the volume weighted average price of its Common Stock on the OTCQB (or other primary trading market or exchange on which the Common Stock is then traded) equals or exceeds three times the per share exercise price of the Warrants for 15 out of 20 consecutive trading days.

In connection with the Subscription Agreement and Debenture, the Company entered into Security Agreements with the Purchasers whereby the Company agreed to grant to Purchasers an unconditional and continuing, first priority security interest in all of the assets and property of the Company to secure the prompt payment, performance and discharge in full of all of Company’s obligations under the Debentures, Warrants and the other Transaction Documents. On May 14 and June 11, 2018, the Company signed letter agreements with the Debenture holders as explained below that discharged all of the Company’s obligations within the Debenture Agreement.

Conversion of Debentures

On May 14, 2018, we entered into letter agreements (the “Letter Agreements”) with 22 investors (each a “Debenture Holder” and together the “Debenture Holders”) holding convertible debentures (collectively the “Debentures”) and warrants to purchase common stock (the “Debenture Warrants”) whereby the Debenture Holders agreed to convert a total of $6,220,500 in principal and original issue discount due them under the Debentures into 2,448.20 shares of Series AA Convertible Preferred Stock with a conversion price of $2.50 per share. The Debenture Holders were also: (a) issued amended Debenture Warrants such that the exercise price will be $3.50 per share; and (b) issued a new warrant with an exercise price of $3.50 per share to purchase 2,448,200 shares of common stock (the number of shares of common stock issuable upon conversion of the Series AA Convertible Preferred Stock shares received as a result of the Debenture conversions). The Debenture Holders also agreed to waive any and all defaults or events of default by the Company with respect to any failure by the Company to comply with any covenants contained in the Debentures. The fair value of $29,865 relating to the adjustment in exercise price was treated as a loan modification and recorded as a gain toward the extinguishment of debt.

On June 11, 2018, the Company entered into additional Letter Agreements with 15 Debenture Holders whereby the Debenture Holders agreed to convert a total of $742,134 in principal and original issue discount due them under the Debentures into 296.80 shares of Series AA Convertible Preferred Stock with a conversion price of $2.50 per share. The Debenture Holders were also: (a) issued amended Debenture Warrants such that the exercise price will be $3.50 per share; and (b) issued a new warrant with an exercise price of $3.50 per share to purchase 296,800 shares of common stock (the number of shares of common stock issuable upon conversion of the Series AA Convertible Preferred Stock shares received as a result of the Debenture conversions). The Debenture Holders also agreed to waive any and all defaults or events of default by the Company with respect to any failure by the Company to comply with any covenants contained in the Debentures. The fair value of $3,155 relating to the adjustment in exercise price was treated as a loan modification and recorded as a gain toward the extinguishment of debt.

In connection with the above Debenture conversions and cancellation of the debt term, the Company recorded the full amount of the remaining unamortized Debenture discounts of $157,908 as interest expense by June 11, 2018. The Company recorded $287,676 of the Debenture discounts during 2018 through the cancellation date of June 11, 2018.

On various dates for the nine months ended September 30, 2018, the Company issued 56,007 shares of common stock based on the 10-day VWAP prior to quarter end to holders of the Debentures in payment of the quarterly interest accrued from the Debentures first anniversary date through June 11, 2018 for an aggregate amount of $211,047. We recognized a $9,615 gain on extinguishment of debt for the nine months ended September 30, 2018 by calculating the difference of the shares valued on the issuance date and the amount of accrued interest through June 11, 2018.

Other convertible notes

The Company, pursuant to a price protection provision triggered on May 2, 2018 with the sale of Series AA units, amended the conversion price of a March 12, 2018 loan to $2.50 per share. The fair value of $253,000, limited to the face value of the loan, relating to the reset in the conversion price was recorded as a debt discount and amortized as interest expense over the remaining loan term.

On various dates during the nine months ended September 30, 2018, the Company issued convertible notes for net proceeds of $3,848,484 which contained varied terms and conditions as follows: a) maturity dates ranging from 3 to 12 months; b) interest rates that accrue per annum ranging from 4% to 15%; c) convertible to the Company’s common stock at issuance at a fixed rate of $7.50 or convertible at variable conversion rates either after 6 months after issuance or in the event of a default. Certain of these notes were issued with shares of common stock or warrants to purchase common stock that were fair valued at issuance dates. The aggregate relative fair value of $384,295 of the shares of common stock or warrants to purchase common stock issued with the notes was recorded as a debt discount and amortized over the term of the notes. We then computed the effective conversion price of the notes, noting that no beneficial conversion feature exists. We also evaluated the convertible notes for derivative liability treatment and determined that the notes did not qualify for derivative accounting treatment as of September 30, 2018.

18

The specific terms of the convertible notes and outstanding balances as of September 30, 2018 are listed in the tables below.

Convertible Notes

Inception Date	Term			Loan Amount		Outstanding Balance with OID			Original Issue Discount			Interest Rate			Conversion Price (Convertible at Inception Date)		Deferred Finance Fees		Discount related to fair value of conversion feature and warrants/shares
July 22, 2015		30 months	1	$	2,398,000	$	-	4	$	218,000	2		10	%3	$	8.40	$	388,532	$	2,163,074
September 25, 2015		30 months	1		1,210,000		-	4		110,000	2		10	%3	$	8.40		185,956		1,022,052
October 2, 2015		30 months	1		165,000		-	4		15,000	2		10	%3	$	8.40		26,345		140,832
October 6, 2015		30 months	1		33,000		-	4		3,000	2		10	%3	$	8.40		5,168		26,721
October 14, 2015		30 months	1		55,000		-	4		5,000	2		10	%3	$	8.40		8,954		49,377
November 2, 2015		30 months	1		275,000		-	4		25,000	2		10	%3	$	8.40		43,079		222,723
November 10, 2015		30 months	1		55,000		-	4		5,000	2		10	%3	$	8.40		8,790		46,984
November 12, 2015		30 months	1		236,500		-	4		21,500	2		10	%3	$	8.40		38,518		212,399
November 20, 2015		30 months	1		220,000		-	4		20,000	2		10	%3	$	8.40		37,185		200,000
December 4, 2015		30 months	1		187,000		-	4		17,000	2		10	%3	$	8.40		37,352		170,000
December 11, 2015		30 months	1		396,000		-	4		36,000	2		10	%3	$	8.40		75,449		360,000
December 18, 2015		30 months	1		60,500		-	4		5,500	2		10	%3	$	8.40		11,714		55,000
December 31, 2015		30 months	1		110,000		-	4		10,000	2		10	%3	$	8.40		20,634		100,000
January 11, 2016		30 months	1		110,000		-	4		10,000	2		10	%3	$	8.40		24,966		80,034
January 20, 2016		30 months	1		55,000		-	4		5,000	2		10	%3	$	8.40		9,812		40,188
January 29, 2016		30 months	1		330,000		-	4		30,000	2		10	%3	$	8.40		60,887		239,113
February 26, 2016		30 months	1		220,000		-	4		20,000	2		10	%3	$	8.40		43,952		156,048
March 10, 2016		30 months	1		137,500		-	4		12,500	2		10	%3	$	8.40		18,260		106,740
March 18, 2016		30 months	1		396,000		-	4		36,000	2		10	%3	$	8.40		94,992		265,008
March 24, 2016		30 months	1		117,334		-	4		10,667	2		10	%3	$	8.40		15,427		91,240
March 31, 2016		30 months	1		195,670		-	4		17,788	2		10	%3	$	8.40		2,436		175,446
October 20, 2017		12 months			150,000		-			-			5	%	$	7.50		7,500		-
October 25, 2017		6 months			103,000		-			-			12	%		-		3,000		-
October 27, 2017		12 months			170,000		-			-			5	%		-		4,250		10,000
November 13, 2017		9 months			380,000		-			15,200			8	%	$	7.50		15,200		46,274
November 22, 2017		12 months			100,000		-			10,000			5	%		-		2,000		-
November 28, 2017		10 months			103,000		-			3,000			12	%		-		-		-
November 29, 2017		6 months			150,000		-			-			15	%	$	7.50		-		15,200
November 30, 2017		3 months			50,000		-			-			8	%	$	7.50		-		-
December 5, 2017		3 months			52,500		-			-			10	%	$	7.50		2,500		-
December 6, 2017		4 months			100,000		-			-			10	%	$	7.50		-		-
December 11, 2017		6 months			130,000		-			1,500			5	%		-		6,500		6,460
December 19, 2017		6 months			110,000		-			1,500			5	%		-		5,500		5,775
December 28, 2017		6 months			55,000		-			-			15	%	$	7.50		5,000		-
December 29, 2017		12 months			105,000		-			-			5	%		-		5,000		-
January 3, 2018		12 months			95,000		-			4,750			5	%		-		2,000		-
January 16, 2018		12 months			131,250		-			-						-		6,250		-
January 19, 2018		6 months			150,000		-			-			10	%	$	7.50		6,000		12,267
February 9, 2018		6 months			100,000		-			-			15	%	$	7.50		23,500		-
February 15, 2018		6 months			100,000		-			-			15	%	$	7.50		9,000		10,474
March 12, 2018		6 months			85,000		-			1,150			5	%		-		4,250		5,183
March 12, 2018		6 months			253,000		-			53,000			0	%		-				28,722
April 11, 2018		6 months			100,000		100,000			4,000			15	%	$	7.50		20,000		7,218
April 23, 2018		6 months			103,000		103,000			-			12	%		-		3,000		-
April 24, 2018		9 months			77,000		77,000			-			12	%	$	7.50		2,000		-
April 25, 2018		12 months			105,000		105,000			-			4	%	$	7.50		5,000		4,590
April 25, 2018		12 months			105,000		105,000			-			4	%	$	7.50		5,000		4,590
April 25, 2018		12 months			130,000		130,000			-			6	%	$	7.50		6,500		-
April 26, 2018		12 months			65,000		65,000			6,500			5	%		-		2,000		-
May 9, 2018		12 months			250,000		250,000			-			10	%	$	7.50		12,500		26,466
May 11, 2018		6 months			161,250		161,250			11,250			15	%	$	7.50		10,000		-
May 14, 2018		9 months			50,000		50,000			2,500			15	%	$	7.50		2,500		3,704
May 17, 2018		12 months			380,000		380,000			15,200			8	%	$	7.50		15,200		43,607
May 23, 2018		9 months			103,000		103,000			-			12	%		-		3,000		-
May 24, 2018		9 months			52,500		52,500			2,500			4	%		-		-		2,075
May 25, 2018		12 months			78,750		78,750			-			4	%	$	7.50		3,750		3,112
May 30, 2018		2 months			150,000		-			-			8	%	$	7.50		-		6,870
June 4, 2018		12 months			75,000		75,000			7,500			5	%		-		2,000		3,869
June 8, 2018		6 months			50,000		50,000			2,500			15	%	$	7.50		2,500		3,271
June 12, 2018		6 months			100,000		-			-			5	%	$	7.50		5,000		-
June 14, 2018		9 months			280,000		280,000			25,000			10	%		-		5,000		17,573
June 16, 2018		9 months			130,000		130,000			-			5	%		-		-		-
June 16, 2018		6 months			110,000		110,000			-			5	%		-		-		-
June 26, 2018		3 months			150,000		150,000			-			15	%	$	7.50		-		20,242
June 28, 2018		6 months			50,000		50,000			-			15	%	$	7.50		-		10,518
July 2, 2018		12 months			125,000		125,000			-			4	%		-		6,250		5,588
July 10, 2018		12 months			95,000		95,000			6,750			5	%		-		-		-
July 13, 2018		9 months			103,000		103,000			-			12	%		-		3,000		-
July 17, 2018		3 months			100,000		100,000			15,000			15	%	$	7.50		-		16,944
July 19, 2018		12 months			184,685		184,685			34,685			10	%	$	7.50		-		-
July 30, 2018		12 months			80,000		80,000			-			6	%	$	7.50		4,000		-
July 31, 2018		3 months			150,000		150,000			-			12	%	$	7.50		-		6,578
August 8, 2018		6 months			100,000		100,000			-			15	%	$	7.50		-		-
August 15, 2018		4 months			100,000		100,000			-			15	%	$	7.50		-		-
August 28, 2018		12 months			131,250		131,250			-			4	%		-		6,250		4,443
September 7, 2018		6 months			85,000		85,000			-			5	%		-		-		4,364
				$	13,744,689	$	3,859,435		$	856,440							$	1,390,308	$	6,258,956

1. The loan term was extended by 180 days and further extended on January 15, 2018 by 60 days to repay in common stock. The Debenture holders signed letter agreements on May 14, 2018 and June 11, 2018 to waive default penalties relating to the maturity date.

2. The original issue discount is reflected in the first year.

3. The annual interest started accruing in the second year.

4. The Debentures were converted into Series AA Convertible Preferred Stock.

For the nine months ended September 30, 2018, the Company recognized amortization expense related to the convertible debt discounts indicated above of $1,327,983. The unamortized debt discounts as of September 30, 2018 related to the convertible debentures and other convertible notes amounted to $239,872.

19

Revolving Note Payable and May 19, 2017 Promissory Note

On October 28, 2016, an accredited investor (the “Investor”) purchased from us a promissory note in the aggregate principal amount of up to $2,000,000 (the “Revolving Note”) due and payable on the earlier of October 28, 2017 (the “Maturity Date”) or on the seventh business day after the closing of a Qualified Offering (as defined in the Revolving Note). Although the Revolving Note is dated October 26, 2016, the transaction did not close until October 28, 2016, when we received its initial $250,000 advance pursuant to the Revolving Note. As a result, on the same day and pursuant to the Revolving Note, we issued to the Investor a Common Stock Purchase Warrant (the “Line of Credit Warrants”) to purchase 20,834 shares of our common stock at an exercise price per share equal to $12.00 per share. The Investor is obligated to provide us with advances of $250,000 under the Revolving Note, but the Investor shall not be required to advance more than $250,000 in any individual fifteen (15) day period and no more than $500,000 in the thirty (30) day period immediately following the date of the initial advance. We received $3,500,000 pursuant to the Revolving Note as amended of which $2,070,000 net proceeds was received in 2017 and we issued to the Investor Line of Credit Warrants to purchase 291,667 shares of our Common Stock at an exercise price per share equal to $12.00 per share. The terms of the Line of Credit Warrants are identical except for the exercise date, issue date, and termination date which are based on the advance date.

The Revolving Note was amended on May 2, 2017 to increase the aggregate principal amount to $3,000,000, to issue 16,667 shares of our Common Stock to the Investor, to decrease the exercise price per share of the warrants to the lower of (i) $12.00 or (ii) the per share purchase price of the shares of our Common Stock sold in the Qualified Offering, and to change the references in the Revolving Note from “the six (6) month anniversary of October 28, 2016” to “July 25, 2017.” The fair value of the 16,667 shares issued of $149,018 was accounted for as a note discount and are amortized to interest expense over the life of the loan. We evaluated the accounting impact of the Revolving Note amendment and deemed that the amendment did not have a material impact on our consolidated financial statements.

The Revolving Note was amended on August 18, 2017 to increase the aggregate principal amount to $3,500,000 with all other terms unchanged. The Revolving Note, previously amended, was further amended on January 30, 2018 to increase the aggregate principal amount to $4,000,000 with all other terms unchanged.

In the event that a Qualified Offering had occurred after July 25, 2017, but prior to the Maturity Date, within seven (7) Business Days of the closing of the Qualified Offering, the Company was to pay a cash fee equal to five percent (5%) of the total outstanding amount owed by the Company to the Holder as of the closing date of the Qualified Offering or, at the option of the Company, issue to the Holder a number of restricted shares of the Company’s common stock equal to (x) five percent (5%) of the total outstanding amount owed by the Company to the Holder as of the closing date of the Qualified Offering divided by (y) the purchase price provided by the documents governing the Qualified Offering. A Qualified Offering means the completion of a public offering of the Company’s securities pursuant to which the Company receives aggregate gross proceeds of at least Seven Million United States Dollars (US$7,000,000) in consideration of the purchase of its securities and resulting in, pursuant to the effectiveness of the registration statement for such offering, the Company’s common stock being traded on the NASDAQ Capital Market, NASDAQ Global Select Market or the New York Stock Exchange. A Qualified Offering did not occur on or prior to the Maturity Date.

Interest on the principal balance of the Revolving Note shall be paid in full on the Maturity Date, unless otherwise paid prior to the Maturity Date. Interest shall be assessed as follows: (i) a one-time interest of 10% on all principal amounts advanced prior to April 28, 2017; (ii) the foregoing and 4% on any amount remaining outstanding if the principal amount is repaid between April 28, 2017 and July 28, 2017; or (iii) both of the foregoing and 4% on any amount remaining outstanding if the principal amount is repaid between July 28, 2017 and October 28, 2017.

Broker fees amounting to $336,500, the one-time interest of $400,000 and the relative fair value of the 333,334 warrants issued to the Investor amounting to $1,266,691 were recorded as debt discounts and amortized over the term of the revolving note. The unamortized debt discounts related to the Revolving Note were fully amortized as of December 31, 2017. The finance costs from advances after December 31, 2017 were charged to interest expense directly because the maturity date had passed.

20

On May 19, 2017, we received a 45-day non-convertible loan of $630,000 from the Investor. The loan provided guaranteed interest of $63,000 and had an origination fee of $32,000. We paid a broker $31,500 in connection with this loan. The unamortized debt discount as of September 30, 2018 was zero.

Conversion of October 26, 2016 Revolving Note and May 19, 2017 Promissory Note

On June 11, 2018, the Company entered into a Letter Agreement with the Investor to convert a total of $5,500,000 in principal and interest due to the Investor pursuant to the Revolving Note and the May 19, 2017 promissory note into 2,200 shares of Series AA Convertible Preferred Stock with a conversion price of $2.50 per share. The Company also amended the Line of Credit Warrants held by the Investor. The Company lowered the Line of Credit Warrants’ exercise price from $12.00 per share to $3.50 per share. The fair value of $82,904 relating to the reduction in exercise price was treated as a loan modification and recorded as a charge against the extinguishment of debt.

The Company also issued a new warrant to the Investor with an exercise price of $3.50 per share to purchase 2,200,000 shares of common stock (the number of shares of common stock issuable upon conversion of the Series AA Convertible Preferred Stock shares received as a result of the conversion of a total of $5,500,000). In connection with the Letter Agreement, the Investor also waived $520,680 of interest and fees owed as of September 30, 2018. We recognized $520,680 as a gain on extinguishment of debt.

Convertible Loan modifications and extinguishments

We refinanced certain convertible loans during the three months ended September 30, 2018 at substantially the same terms for extensions of six months. We amortized any remaining unamortized debt discount as of the modification date over the remaining, extended term of the new loans. We applied ASC 470 of modification accounting to the debt instruments which were modified during the quarter or those settled with new notes issued concurrently for the same amounts but different maturity dates. The terms such as the interest rate, prepayment penalties, and default rates will be the same over the new extensions. According to ASC 470, an exchange of debt instruments between or a modification of a debt instrument by a debtor and a creditor in a nontroubled debt situation is deemed to have been accomplished with debt instruments that are substantially different if the present value of the cash flows under the terms of the new debt instrument is at least 10 percent different from the present value of the remaining cash flows under the terms of the original instrument. If the terms of a debt instrument are changed or modified and the cash flow effect on a present value basis is less than 10 percent, the debt instruments are not considered to be substantially different and will be accounted for as modifications.

21

The cash flows of new debt exceeded 10% of the remaining cash flows of the original debt on five loans. We recorded losses on debt extinguishment of $124,879 on these five loans by calculating the difference of the fair value of the new debt and the carrying value of the old debt. The loss was primarily from the fair value of common stock issued in connection with these refinancings. The fees paid to the lenders which formed part of the $124,879 loss on debt extinguishment included the aggregate fair value of $68,334 for the shares issued with the new debt, the writedown of $5,883 for unamortized discounts remaining on the original debt and cash fees of $50,662.

Origination Date	Amended Start Date		New Maturity Date			Loan Amount		New Loan Amount		Total Unamortized Discount as of June 30, 2018		Amortization from July 1, 2018 to Modification Date			Unamortized discount
12/11/2017		6/15/2018		12/11/2018	*	$	130,000	$	130,000	$	-	$	-		$	-
12/19/2017		6/15/2018		12/19/2018	*		110,000		110,000		-		-			-
1/3/2018		7/11/2018		7/10/2019			95,000		95,000		3,458		(69	)		3,389
1/17/2018		8/29/2018		8/27/2019			131,250		131,250		3,442		(352	)		3,090
1/19/2018		7/19/2018		8/22/2019	*		150,000		184,685		1,288		(42	)		1,246
2/9/2018		8/8/2018		2/8/2019	*		100,000		100,000		5,193		(556	)		4,637
2/15/2018		8/15/2018		12/15/2018	*		100,000		100,000		2,662		(2,662	)		-
3/12/2018		9/7/2018		3/12/2019			85,000		85,000		2,172		(411	)		1,761
5/30/2018		7/31/2018		10/31/2018			150,000		150,000		9,280		(1,868	)		7,412
3/30/2018		4/30/2018		9/30/2018			170,000		170,000		-		-			-
						$	1,221,250	$	1,255,935	$	27,495	$	(5,960	)	$	21,535

* The original loans were recorded as extinguished, the unamortized debt discounts on the old debt were written off on extinguishment date, and a loss was recorded for each extinguishment. The July 19, 2018 Note includes an original issue discount of $34,685 added to the new loan.

The following table provides a summary of the changes in convertible debt and revolving note payable, net of unamortized discounts, during 2018:

	2018
Balance at January 1,	$	11,787,776
Issuance of convertible debt, face value		4,664,000
Deferred financing cost		(315,516	)
Debt discount related to one-time interest charge		(147,000	)
Contingent beneficial conversion feature on convertible note		(253,000	)
Debt discount from warrants issued with debt		(162,023	)
Debt discount from shares issued with the notes		(222,272	)
Conversion of debt into equity		(10,962,634	)
Payments		(2,097,750	)
Accretion of interest and amortization of debt discount to interest expense through September 30,		1,327,984
Balance at September 30,		3,619,565
Less: current portion		3,619,565
Convertible debt, long-term portion	$	-

22

Other Notes

On March 21, 2017, we received an eight-month, non-convertible loan of $170,000 from an accredited investor. The loan earns an annual interest rate of 10% and includes a 10% original issue discount. We also agreed to issue the investor 5,667 shares of restricted common stock. We recorded the fair value of the shares amounting to $35,079 as a debt discount that will be amortized to interest expense during the term of the loan. The loan still remains outstanding as of September 30, 2018 with a balance of $170,000. The lender extended the term to December 31, 2017 and further to March 31, 2018 in exchange for a total of 9,500 shares of common stock with a fair value of $28,490 recorded as interest expense. The lender further extended the term to April 30, 2018 then to September 30, 2018 in exchange for an aggregate of 7,200 shares of company stock. We fully amortized $52,079 of the original debt discount in the year ended December 31, 2017. We recorded a loss of $20,400 relating to the fair value of common stock issued for the September 30 extension.

On August 1, 2017, we signed a non-convertible installment loan with a lender. Under the agreement we received a loan of $75,000 with a weekly repayment of $3,500 until payment in full. The loan includes $18,750 representing an original issue discount, interest and fees resulting in a total payable of $93,750. The loan was paid off entirely as of September 30, 2018.

On September 12, 2017, we received a 9-month non-convertible loan of $225,000 from a privately-held investment firm. The loan earns an annual interest rate of 10%. The Company paid total fees of $25,000 including original issue discount and other costs related to this loan. We agreed to issue 3,333 shares at closing. We recorded the fair value of the shares as a debt discount that will be amortized to interest expense during the term of the loan. We amortized the entire debt discount of $38,000 as of September 30, 2018. In the event of default and at the option of the holder, the loan is convertible into common stock at a 35% discount to the average of the two lowest daily volume weighted average closing stock price for the 20 trading days prior to conversion. The loan was paid off entirely as of September 30, 2018.

In March 2018, we received non-convertible loans totaling $150,000 from private investors. The loans include one-year term and 10% guaranteed interest. We converted these loans into Series AA Units. See below.

In April 2018, we received a non-convertible loan for $10,000 from a private investor. The loan includes a one-year term and 10% guaranteed interest. We converted this loan into Series AA Units. See below.

On July 16, 2018 we signed a Merchant Agreement with a lender. Under the agreement we received $180,000, of which $103,450 was used to pay off the outstanding balance on a previous loan dated April 11, 2018 from this lender, in exchange for rights to all customer receipts until the lender is paid $246,600, which is collected at the rate of $1,790.00 per business day. The $66,600 imputed interest will be recorded as interest expense when paid each day. Fees of $3,600 were deducted from the initial advance. The payments were secured by second position rights to all customer receipts until the loan has been paid in full. We accounted for the Merchant Agreement as a secured loan under ASC 860 because while we provided rights to current and future receipts, we still had control over the receipts.

On August 8, 2018, we received a non-convertible loan of $50,000 from a private investor. The loan does not charge interest and was repaid entirely on October 3, 2018.

In September 2018, we received a non-convertible loan of $67,000 from a private investor. The loan does not charge interest and was repaid entirely in October 2018.

On September 14, 2018, we received a short-term non-convertible loan of $350,000 from an accredited investor. The loan was repaid entirely on September 18, 2018. We paid $20,000 in interest on this loan which includes a $15,000 original issue discount.

Conversion of Non-Convertible Notes

On June 11, 2018, the Company entered into Letter Agreements with certain private investors to convert a total of $176,000 in principal and interest due to the private investors pursuant to certain loan documents into 70.4 Series AA Units representing 70.4 shares of Series AA Convertible Preferred Stock with a conversion price of $2.50 per share and warrants to purchase 70,400 shares of common stock.

23

Merchant Agreements

We have signed various Merchant Agreements which entitle the lenders to our customer receipts. We accounted for the Merchant Agreements as loans under ASC 860 because while we provided rights to current and future receipts, we still had control over the receipts. The following table shows our Merchant Agreements as of September 30, 2018.

Inception Date	Purchase Price		Purchased Amount		Outstanding Balance		Daily Payment		Interest Rate			Deferred Finance Fees
September 29, 2017		75,000		102,000	$	-		1,200.00		15	%		1,500
October 25, 2017		110,000		153,890		-		1,539.00		15	%		8,800
December 7, 2017		160,000		212,800		-		1,251.76		25	%		5,799
December 12, 2017		160,000		212,800		-		1,251.76		15	%		5,258
February 27, 2018		110,000		147,400		-		921.25		25	%		1,650
April 11, 2018		140,000		187,600		-		1,275.00		13	%		2,800
May 11, 2018		180,000		243,000		82,468		1,518.75		25	%		2,599
May 15, 2018		180,000		244,800		86,858		1,530.00		15	%		3,600
June 29, 2018		140,000		190,400		88,657		1,269.33		25	%		2,100
July 16, 2018		180,000		246,600		124,544		1,790.00		13	%		3,600
	$	1,435,000	$	1,941,290	$	382,527						$	37,706

We amortized $94,050 and $225,508 of debt discounts during the nine months ended September 30, 2018 and 2017, respectively for all non-convertible notes. The total unamortized discount for all non-convertible notes as of September 30, 2018 was $6,343.

Related Party Notes

On March 14, 2018, we received a one-year, non-convertible loan of $50,000 from a related party (a member of the Company’s Board of Directors). This loan is included in net proceeds from non-convertible debt in the Statement of Cash Flows. The amount of $50,000 was converted on June 11, 2018 into 20 shares of Series AA Convertible Preferred Stock and 20,000 warrants to purchase common stock. The $7,500 guaranteed interest on the loan was recorded as a debt discount and amortized over the term of the debt. The interest is outstanding as of September 30, 2018.

On May 31, 2018, we received two short-term loans of $46,500 and $5,600 from two members of the Company’s Board of Directors, respectively. We repaid both loans in full during June 2018 and paid interest of $6,975.

On June 11, 2018, the Company entered into a Letter Agreement with one non-employee member of the Board, to convert $50,000 in principal due to the board member pursuant to a certain loan document into 20 Series AA Units representing 20 shares of Series AA Convertible Preferred Stock with a conversion price of $2.50 per share and warrants to purchase 20,000 shares of common stock.

In June 2018, we received a non-convertible loan of $15,000 from a private investor. The loan includes a one-year term and 10% guaranteed interest.

On August 6, 2018 and on September 28, 2018, we received two short-term loans of $6,500 and $7,500 from an employee and an officer of the Company, respectively. We repaid both loans in full in August and October 2018, respectively. There was no interest charged on these loans.

7) Stockholders’ Deficit

Preferred Stock

We are authorized to issue 1,000,000 shares of preferred stock with a par value of $0.01. Of the 1,000,000 shares of preferred stock:

1)	20,000 shares have been designated as Series A Junior Participating Preferred Stock (“Junior A”)
2)	313,960 shares have been designated as Series A Convertible Preferred Stock (“Series A”)
3)	279,256 shares have been designated as Series B Convertible Preferred Stock (“Series B”)
4)	88,098 shares have been designated as Series C Convertible Preferred Stock (“Series C”)
5)	850 shares have been designated as Series D Convertible Preferred Stock (“Series D”)
6)	500 shares have been designated as Series E Convertible Preferred Stock (“Series E”)
7)	240,000 shares have been designated as Series G Convertible Preferred Stock (“Series G”)
8)	10,000 shares have been designated as Series H Convertible Preferred Stock (“Series H”)
9)	21 shares have been designated as Series H2 Convertible Preferred Stock (“Series H2”)
10)	6,250 shares have been designated as Series J Convertible Preferred Stock (“Series J”)
11)	15,000 shares have been designated as Series K Convertible Preferred Stock (“Series K”)
12)	10,000 shares have been designated as Series AA Convertible Preferred Stock (“Series AA”)

As of September 30, 2018, there were no shares of Junior A, and Series A, B, C, and E issued and outstanding. See our Annual Report on Form 10-K for the year ended December 31, 2017 for the pertinent disclosures of preferred stock.

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Series AA Convertible Preferred Stock and Warrants

On May 2, 2018, the Company entered into a Securities Purchase Agreement with an existing shareholder pursuant to which the Company sold an aggregate of 100 shares of Series AA Convertible Preferred Stock, each preferred share convertible into 1,000 shares of the Company’s common stock, par value $0.01 per share, for an aggregate Purchase Price of $250,000. Each share of Series AA Convertible Preferred Stock will receive a cumulative dividend at the annual rate of eight percent (8%) payable quarterly commencing on September 30, 2018 on those shares of Series AA Convertible Preferred Stock purchased from the Company.

We issued to the shareholder a new warrant to purchase 100,000 shares of common stock with an exercise price of $3.50 per share. The Warrant will expire on the fifth-year anniversary after issuance. The exercise price is also subject to adjustment in the event that we issue any shares of common stock or common stock equivalents at a per share price that is lower than the exercise price for the Series AA Warrants then in effect. Upon any such issuance, subject to certain exceptions, the exercise price will be reduced to the per share price at which such shares of common stock or common stock equivalents are issued.

On May 14, 2018, we entered into Letter Agreements with 22 Debenture Holders holding Debentures and Debenture Warrants whereby the Debenture Holders agreed to convert a total of $6,220,500 in principal and original issue discount due them under the Debentures into 2,448.20 shares of Series AA Convertible Preferred Stock with a conversion price of $2.50 per share. The Debenture Holders were also: (a) issued amended Debenture Warrants such that the exercise price will be $3.50 per share; and (b) issued a new warrant with an exercise price of $3.50 per share to purchase 2,448,200 shares of common stock (the number of shares of common stock issuable upon conversion of the Series AA Convertible Preferred Stock shares received as a result of the Debenture conversions).

On June 1, 2018, the Company entered into a Securities Purchase Agreement with accredited investors pursuant to which the Company sold an aggregate of 20 shares of Series AA Convertible Preferred Stock, each preferred share convertible into 1,000 shares of the Company’s common stock, par value $0.01 per share, for an aggregate Purchase Price of $50,000. We issued to the shareholders a new warrant to purchase 20,000 shares of common stock with an exercise price of $3.50 per share.

On June 11, 2018, the Company entered into additional Letter Agreements with 15 Debenture Holders whereby the Debenture Holders agreed to convert a total of $742,134 in principal and original issue discount due them under the Debentures into 296.80 shares of Series AA Convertible Preferred Stock with a conversion price of $2.50 per share. The Debenture Holders were also: (a) issued amended Debenture Warrants such that the exercise price will be $3.50 per share; and (b) issued a new warrant with an exercise price of $3.50 per share to purchase 296,800 shares of common stock (the number of shares of common stock issuable upon conversion of the Series AA Convertible Preferred Stock shares received as a result of the Debenture conversions).

During the quarter ended September 30, 2018, the Company entered into Securities Purchase Agreements with accredited investors pursuant to which the Company sold an aggregate of 460 shares of Series AA Convertible Preferred Stock, each preferred share convertible into 1,000 shares of the Company’s common stock, par value $0.01 per share, for an aggregate Purchase price of $1,150,000. We issued to the investors warrants to purchase an aggregate 460,000 shares of common stock with an exercise price of $3.50 per share.

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The issuances of our convertible preferred stock and common stock purchase warrants are accounted for under the fair value and relative fair value method.

The warrant is first analyzed per its terms as to whether it has derivative features or not. If the warrant is determined to be a derivative, then it is measured at fair value using the Black Scholes Option Model and recorded as a liability on the balance sheet. The warrant is re-measured at its then current fair value at each subsequent reporting date (it is “marked-to-market”).

If the warrant is determined to not have derivative features, it is recorded into equity at its fair value using the Black Scholes option model, however, limited to a relative fair value based upon the percentage of its fair value to the total fair value including the fair value of the convertible preferred stock.

We analyzed these warrants and determined that they were not considered derivatives and therefore recorded the aggregate relative fair value of $7,877,396 into equity relating to the 5,655,454 warrants and 57,000 broker warrants issued.

The convertible preferred stock is recorded at its fair value, limited to a relative fair value based upon the percentage of its fair value to the total fair value including the fair value of the warrant. Further, the convertible preferred stock is examined for any intrinsic beneficial conversion feature (“BCF”) of which the convertible price of the preferred stock is less than the closing stock price on date of issuance. If the relative fair value method is used to value the convertible preferred stock and there is an intrinsic BCF, a further analysis is undertaken of the BCF using an effective conversion price which assumes the conversion price is the relative fair value divided by the number of shares of common stock the convertible preferred stock is converted into by its terms. The adjusted BCF value of $11,678,571 was accounted for as a deemed dividend within equity and was included in the earnings per share calculation.

Stock Options and Warrants

Our stockholders approved our amended 2005 Equity Incentive Plan (the “Plan”) pursuant to which an aggregate of 1,800,000 shares of our common stock were reserved for issuance upon exercise of stock options or other equity awards made under the Plan. Under the Plan, we may award stock options, shares of common stock, and other equity interests in the Company to employees, officers, directors, consultants, and advisors, and to any other persons the Board of Directors deems appropriate. The Plan has expired and on July 18, 2018, the outstanding options to acquire 32,605 shares were transferred as discussed below to one of the other plans.

At the Company’s December 12, 2013 Special Meeting, the shareholders approved the 2013 Equity Incentive Plan (the “2013 Plan”) pursuant to which 3,000,000 shares of our common stock were reserved for issuance upon exercise of stock options or other equity awards. Under the 2013 Plan, we may award stock options, shares of common stock, and other equity interests in the Company to employees, officers, directors, consultants, and advisors, and to any other persons the Board of Directors deems appropriate. As of September 30, 2018, options to acquire 138,056 shares were outstanding under the Plan with 2,861,944 shares available for future grant under the 2013 Plan.

On November 29, 2015 the Company’s Board of Directors adopted the 2015 Nonqualified Stock Option Plan (the “2015 Plan”) pursuant to which 5,000,000 shares of our common stock were reserved for issuance upon exercise of non-qualified stock options. Under the 2015 Plan, we may award non-qualified stock options in the Company to employees, officers, directors, consultants, and advisors, and to any other persons the Board of Directors deems appropriate. As of September 30, 2018, non-qualified options to acquire 203,734 shares were outstanding under the Plan.

All of the outstanding non-qualified options had an exercise price that was at or above the Company’s common stock share price at time of issuance.

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On July 18, 2018, the Board of Directors approved the immediate termination of 244,467 outstanding stock options held by current officers, employees and board members (32,605 stock options under the Plan, 81,925 stock options under the 2013 Plan, and 129,937 stock options under the 2015 Plan) and the issuance of new stock options to the same holders with an exercise price of $3.40 per share equal to the closing market price on July 18, 2018 and an expiration date of July 18, 2028. The new stock options for board members will vest 1/12th per month for 12 months. The new stock options for officers and employees will vest 1/36th per month for 36 months. The Plan expired in 2015 so of the 32,605 terminated stock options, 16,641 stock options under the 2013 Plan and 15,964 stock options under the 2015 Plan were issued (in addition to the reissuance of 81,925 stock options under the 2013 Plan, and 129,937 stock options under the 2015 Plan). The Board of Directors also awarded 101,267 stock options to officers, employees and board members separately based on the annual compensation committee recommendation. Of the 101,267 stock options issued, 51,934 stock options were issued under the 2013 Plan and 49,333 stock options were issued under the 2015 Plan.

We evaluated this exchange and concluded that it was a modification under ASU 2017-09. Under ASU 2017-09, a cancelled equity award accompanied by the concurrent grant of (or offer to grant) a replacement award or other valuable consideration shall be accounted for as a modification of the terms of the cancelled award. Therefore, incremental compensation cost shall be measured as the excess of the fair value of the replacement award or other valuable consideration over the fair value of the cancelled award at the cancellation date in accordance with paragraph ASC 718-20-35-3. The total compensation cost measured at the date of a cancellation and replacement shall be the portion of the grant-date fair value of the original award for which the requisite service is expected to be rendered (or has already been rendered) at that date plus the incremental cost resulting from the cancellation and replacement. The compensation value created by the termination and issuance of new stock options, as determined under the Black Scholes method, was approximately $267,000 and under ASU 2017-09 results in a non-cash expense in current and future periods not to exceed the vesting periods of the stock options. The Board of Directors also awarded 101,267 to officers, employees and board members separately based on the annual compensation committee recommendation.

The following tables summarize information concerning options and warrants outstanding and exercisable:

	Stock Options					Warrants
	Weighted					Weighted
	Average					Average								Total
	Shares			Price per share		Shares			Price per share		Shares			Exercisable
Balance outstanding, 12/31/17		247,692		$	10.95		899,542		$	12.03		1,147,234			1,073,850
Granted		345,734			3.40		5,882,734			3.50		6,228,468
Exercised		-			-		-			-		-
Expired		(334	)		30.00		(12,669	)		12.00		(13,003	)
Forfeited		(251,302	)		10.80		-			-		(251,302	)
Balance outstanding, 9/30/2018		341,790		$	3.40		6,769,607		$	3.57		7,111,397			6,797,356

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		Options Outstanding						Options Exercisable
		Weighted Average						Weighted Average
Range of Exercise Prices		Number of Options		Remaining Contractual Life (Years)		Exercise Price		Number of Options		Remaining Contractual Life (Years)		Exercise Price
$	3.40		341,790		9.8	$	3.40		27,749		9.8	$	3.40

As of September 30, 2018, total unrecognized compensation cost related to the unvested stock-based awards was $937,216, which is expected to be recognized over weighted average period of 1.85 years. The aggregate intrinsic value associated with the options outstanding and exercisable as of September 30, 2018 was $8,325. The aggregate intrinsic value associated with the warrants outstanding and exercisable as of September 30, 2018 was approximately $1.3 million.

The loans from November 13, 2017 and May 17, 2018 included Warrants that contains a price protection provision such that if we issue a warrant with any term more favorable to the holder of such warrant that was not similarly provided in these loans, then we shall notify the lender of such additional or more favorable term and such term, shall become a part of the loan agreements. The fair value of the reduction in exercise price was recorded as a deemed dividend of $5,113 in additional paid in capital.

The Company, pursuant to a price protection provision triggered on May 2, 2018 with the sale of Series AA units, amended the Debentures and Warrants to purchase Common Stock held by the Debenture Holders entered into between July 22, 2015 and March 31, 2016 as first disclosed in the Company’s Current Report on Form 8-K filed on July 28, 2015. The fair value of $207,899 relating to the reduction in exercise price was treated as a deemed dividend and recorded as a charge against additional paid-in capital within equity. The amended Debenture conversion price was exempt from revaluation because a beneficial conversion feature had already been recorded on the Debenture at issuance.

Common Stock Issuances

During the nine months ended September 30, 2018, we issued to Debenture holders 56,007 shares of common stock for quarterly interest of $211,047 issued in stock in lieu of cash. Of the 56,007 shares issued, 4,681 shares were issued to members of the Company’s Board of Directors, who are also Debenture holders.

On January 19, 2018, we received a six-month, convertible loan of $150,000 from an accredited investor. The loan earns a one-time interest of 10% and includes a 10% original issue discount. We also issued the investor 4,000 shares of restricted common stock with a relative fair value of $12,267 recorded as a debt discount to be amortized over the six-month term. The loan can be converted at any time into common stock at a conversion price of $7.50.

On February 12, 2018, we received a six-month, convertible loan of $100,000 from an accredited investor. The loan earns a one-time interest of 10%. $50,000 of the proceeds were used to pay off the outstanding balance of a previous loan from this lender. The loan can be converted at any time into common stock at a conversion price of $7.50. We issued the investor 5,000 shares of restricted common stock with a relative fair value of $18,274 of which $10,474 was recorded as a debt discount to be amortized over the six-month term while $7,800 was recorded to interest expense immediately because it related to the previous loan paid off.

On February 12, 2018, we issued 3,500 shares of restricted common stock to an accredited investor to extend the maturity date of our eight-month, non-convertible loan of $170,000 originated on March 21, 2017 to February 15, 2018. The accredited investor agreed to a further extension to March 31, 2018 in exchange for 3,500 shares of restricted common stock issued on March 27, 2018. The lender further extended the term to April 30, 2018 then to September 30, 2018 in exchange for an aggregate of 7,200 shares of company stock. We fully amortized $52,079 of the original debt discount in the year ended December 31, 2017. We recorded a loss of $20,400 relating to the fair value of common stock issued for the September 30 extension.

On March 12, 2018, we received a six-month, convertible loan of $253,000 from an accredited investor. The loan has an original issue discount of $53,000. The loan can be converted at any time into common stock at a conversion price of $7.50. We agreed to issue the investor 6,750 shares of restricted common stock with a relative fair value of $28,722 recorded as a debt discount to be amortized over the six-month term.

On April 2, 2018, we issued 1,150 shares of restricted common stock with a fair value of $5,183 to the lender in connection with the March 12, 2018 5% one-year, convertible loan of $85,000. The fair value of the stock was recorded as a debt discount to be amortized over the one-year term.

On April 12, 2018, we received a 15% six-month, convertible loan of $100,000 from an accredited investor. The loan includes total costs of $24,000 representing guaranteed interest, an original issue discount and legal fees. The loan can be converted at any time into common stock at a conversion price of $7.50. We agreed to issue the investor 2,000 shares of restricted common stock with a fair value of $7,218 recorded as a debt discount to be amortized over the six-month term.

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On April 25, 2018, we received a 4% one-year, convertible loan of $105,000 from an accredited investor. The note is convertible on issuance date at $7.50 per share and after 180 days to be 60% of the lowest trading price for the common stock during the 20-trading day period prior to conversion. The loan includes $5,000 in fees. We agreed to issue the investor 1,200 shares of restricted common stock with a fair value of $4,590 recorded as a debt discount to be amortized over the one-year term.

On April 25, 2018, we received another 4% one-year, convertible loan of $105,000 from an accredited investor. The note is convertible on issuance date at $7.50 per share and after 180 days to be 60% of the lowest trading price for the common stock during the 20-trading day period prior to conversion. The loan includes $5,000 in fees. We agreed to issue the investor 1,200 shares of restricted common stock with a fair value of $4,590 recorded as a debt discount to be amortized over the one-year term.

On May 9, 2018, we received a 10% six-month, convertible loan of $250,000 from an accredited investor. The loan includes total costs of $62,500 representing guaranteed interest, an original issue discount and legal fees. The loan can be converted at any time into common stock at a conversion price of $7.50. We agreed to issue the investor 8,000 shares of restricted common stock with a fair value of $26,466 recorded as a debt discount to be amortized over the six-month term.

On May 14, 2018, we received a 15% nine-month, convertible loan of $50,000 from an accredited investor. The loan includes total costs of $12,500 representing guaranteed interest, an original issue discount and legal fees. The loan can be converted at any time into common stock at a conversion price of $7.50. We agreed to issue the investor 1,000 shares of restricted common stock with a fair value of $3,704 recorded as a debt discount to be amortized over the nine-month term.

On May 24, 2018, we received a 4% one-year, convertible loan of $50,000 from an accredited investor. The loan includes an original issue discount of $2,500. The note is convertible on issuance date at $7.50 per share and after 180 days to be 60% of the lowest trading price for the common stock during the 20-trading day period prior to conversion. We agreed to issue the investor 600 shares of restricted common stock with a fair value of $2,075 recorded as a debt discount to be amortized over the one-year term.

On May 25, 2018, we received a 4% one-year, convertible loan of $75,000 from an accredited investor. The loan includes legal fees of $3,750. The note is convertible on issuance date at $7.50 per share and after 180 days to be 60% of the lowest trading price for the common stock during the 20-trading day period prior to conversion. We agreed to issue the investor 900 shares of restricted common stock with a fair value of $3,112 recorded as a debt discount to be amortized over the one-year term.

On May 30, 2018, we received an 8% two-month, convertible loan of $150,000 from an accredited investor. The loan includes guaranteed interest of $12,000. The loan can be converted at any time into common stock at a conversion price of $7.50. We agreed to issue the investor 2,000 shares of restricted common stock with a fair value of $6,870 recorded as a debt discount to be amortized over the two-month term.

On June 4, 2018, we received a 5% one-year, convertible loan of $75,000 from an accredited investor. The loan includes total costs of $9,500 representing an original issue discount and legal fees. The note is convertible after 180 days to be 60% of the lowest trading price for the common stock during the 20-trading day period prior to conversion. We agreed to issue the investor 1,360 shares of restricted common stock with a fair value of $3,869 recorded as a debt discount to be amortized over the one-year term.

On June 8, 2018, we received a 15% 6-month, convertible loan of $50,000 from an accredited investor. The loan includes total costs of $12,500 representing guaranteed interest, an original issue discount and legal fees. The loan can be converted at any time into common stock at a conversion price of $7.50. We agreed to issue the investor 1,000 shares of restricted common stock with a fair value of $3,271 recorded as a debt discount to be amortized over the 6-month term.

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On June 11, 2018, the Company entered into a Letter Agreement with an accredited investor in which we agreed to issue 110,833 additional shares of common stock at $2.50 per share to the investor. The fair value was recorded as other charge of $340,257. We also issued 110,833 additional warrants with an exercise price of $3.50 and an expiration period of five years from the original issue date. The fair value was recorded as other charges of $312,637. The Company also amended 29,167 Warrants held by the Investor. The Company lowered the Warrants’ exercise price from $15.00 per share to $3.50 per share. The fair value of $10,236 relating to the reduction in exercise price was treated as an equity modification and recorded as a charge to other expenses.

On June 14, 2018, we received a 10% nine-month, convertible loan of $250,000 from an accredited investor. The loan includes total costs of $30,000 representing an original issue discount and legal fees. The note is convertible after 180 days to be 65% of the average of the two lowest trading prices for the common stock during the 25-trading day period prior to conversion. We agreed to issue the investor 5,000 shares of restricted common stock with a fair value of $17,573 recorded as a debt discount to be amortized over the nine-month term.

On June 16, 2018, we refinanced the December 12, 2017 and December 17, 2017 5% one-year, convertible loans for a total of $240,000 with an accredited investor. The refinanced loans will now be due on December 17, 2018. We issued the investor 3,700 shares of restricted common stock with a fair value of $13,611 for both new loans. We recorded a loss of $50,662 for the interest and fees paid on the refinancing.

On June 26, 2018, we received a 5% 3-month, convertible loan of $150,000 from an accredited investor. The loan includes total costs of $7,500 representing guaranteed interest. The loan can be converted at any time into common stock at a conversion price of $7.50. We agreed to issue the investor 6,000 shares of restricted common stock with a fair value of $20,242 recorded as a debt discount to be amortized over the 3-month term.

On June 28, 2018, we received a 5% 6-month, convertible loan of $50,000 from an accredited investor. The loan includes $2,500 monthly guaranteed interest. The loan can be converted at any time into common stock at a conversion price of $7.50. We agreed to issue the investor 4,000 shares of restricted common stock with a fair value of $10,518 recorded as a debt discount to be amortized over the 6-month term.

On July 1, 2018, we signed a six-month agreement with a firm to provide consulting services. We issued 24,000 shares of restricted common stock at inception of contract. The stock’s fair value of $93,600 based on the trading stock price on contract date is amortized to expense over the service period of 6 months.

On July 2, 2018, we received a 4% one-year, convertible loan of $125,000 from an accredited investor. The note is convertible on issuance date at $7.50 per share and after 180 days to be 60% of the lowest trading price for the common stock during the 15-trading day period prior to conversion. The loan includes $6,250 in fees. We issued the investor 1,500 shares of restricted common stock with a fair value of $5,588 recorded as a debt discount to be amortized over the one-year term.

On July 5, 2018, we signed a six-month agreement with a firm to provide consulting services. We issued 24,000 shares of restricted common stock at inception of contract. The stock’s fair value of $79,920 based on the trading stock price on contract date is amortized to expense over the service period of 6 months.

On July 17, 2018, we received a 15% three-month, convertible loan for $100,000 from an accredited investor. The loan can be converted at any time into common stock at a conversion price of $7.50. We agreed to issue the investor 2,000 shares monthly over three months for a total of 6,000 shares of restricted common stock with a fair value of $16,944 that was recorded as a debt discount to be amortized over the three-month term.

On July 18, 2018, our lender extended the term of our March 21, 2017 non-convertible loan of $170,000 to September 30, 2018 in exchange for 6,000 shares of company stock. The loan continues to earn an annual interest rate of 10%. We recorded a loss of $20,400 relating to the fair value of common stock issued for the September 30 extension.

On July 19, 2018, we refinanced the January 19, 2018 10% one-year, convertible loan of $150,000 with an accredited investor. The refinanced loan will now be due on January 19, 2019. We paid $36,000 in interest and fees on the January 19, 2018 loan in connection with the refinancing. We agreed to issue the investor 4,500 shares of restricted common stock. We recorded a loss of $18,346 relating to this refinancing. The loss was from the fair value of common stock of $17,100 issued and the write-down of $1,246 for the unamortized discount remaining on the original debt.

On July 31, 2018, we refinanced the May 30, 2018 8% two-month, convertible loan of $150,000 from an accredited investor. The loan will now be due on October 31, 2018 and includes guaranteed interest of $18,000. The loan can be converted at any time into common stock at a conversion price of $7.50. We agreed to issue the investor 2,000 shares of restricted common stock with a relative fair value of $6,578 recorded as a debt discount to be amortized over the three-month term. We expect to refinance the July 31, 2018 loan.

On August 8, 2018, we refinanced the February 9, 2018 six-month, convertible loan of $100,000 with an accredited investor. The refinanced loan will now be due on February 8, 2019 and earns 5% monthly. We agreed to issue the investor 7,800 shares of restricted common stock. We recorded a loss of $32,171 relating to this refinancing. The loss was from the fair value of common stock of $27,534 issued and the write-down of $4,637 for the unamortized discount remaining on the original debt.

On August 15, 2018, we received a four-month, convertible loan for $100,000 from an accredited investor. The loan accrues interest at 5% monthly and can be converted at any time into common stock at a conversion price of $7.50. We agreed to issue the investor 1,500 shares monthly over four months for a total of 6,000 shares of restricted common stock. We recorded a loss of $23,700 relating to this refinancing for the fair value of common stock issued.

On August 27, 2018, we received a 4% one-year, convertible loan of $125,000 from an accredited investor. The loan includes legal fees of $6,250. The note is convertible on issuance date at $7.50 per share and after 180 days to be 60% of the lowest trading price for the common stock during the 20-trading day period prior to conversion. We issued the investor 1,428 shares of restricted common stock with a fair value of $4,443 recorded as a debt discount to be amortized over the one-year term.

On September 7, 2018, we refinanced the March 12, 2018 5% one-year, convertible loan of $85,000 with an accredited investor. The refinanced loan will now be due on March 12, 2019. We paid $17,361 in interest and fees on the March 12, 2018 loan in connection with the refinancing. We agreed to issue the investor 1,150 shares of restricted common stock with a fair value of $4,364 recorded as a debt discount to be amortized over the one-year term.

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8) Subsequent Events

On October 1, 2018, we received a 4% one-year, convertible loan of $118,800 from an accredited investor. The note is convertible on issuance date at $7.50 per share and after 180 days to be 60% of the lowest trading price for the common stock during the 20-trading day period prior to conversion. The loan includes an original issue discount of $8,800 and $3,000 in fees.

On October 3, 2018, we paid $75,000 towards principal with $22,500 interest on our June 26, 2018 5% three-month, convertible loan of $150,000. Our lender agreed to extend the maturity date for the outstanding loan of $75,000 to December 26, 2018. In connection with the extension, we agreed to issue 1,000 shares monthly for a total fair value of $10,800 while the note is outstanding and will continue to pay 5% monthly. All other terms remain the same.

On October 12, 2018, we paid $24,000 in interest and fees on our April 11, 2018 15% six-month, convertible loan of $100,000. Our lender agreed to extend the maturity date for the outstanding loan of $100,000 to April 11, 2019. In connection with the extension, we agreed to issue 1,500 shares monthly for a total fair value of $29,250 while the note is outstanding and will continue to pay 4% monthly. All other terms remain the same.

On October 17, 2018, we paid $15,000 interest on our July 17, 2018 5% three-month, convertible loan of $100,000. We extended the maturity date for the outstanding loan of $100,000 to April 17, 2019. In connection with the extension, we agreed to issue 1,500 shares monthly for a total fair value of $28,800 while the note is outstanding and will continue to pay 5% monthly. All other terms remain the same.

On October 18, 2018, a shareholder converted 44 shares of Series AA Convertible Preferred Stock into 44,000 shares of common stock.

On October 18, 2018 we signed a Merchant Agreement with a lender. Under the agreement we received $550,000, of which approximately $175,000 was used to pay off the outstanding balances on previous loans dated May 10, 2018 and June 27, 2018 from this lender, in exchange for rights to all customer receipts until the lender is paid $726,000, which is collected at the rate of $3,630.00 per business day. The $176,000 imputed interest will be recorded as interest expense when paid each day. Fees of $5,500 were deducted from the initial advance. The payments were secured by first position rights to all customer receipts until the loan has been paid in full. We accounted for the Merchant Agreement as a secured loan under ASC 860 because while we provided rights to current and future receipts, we still had control over the receipts.

On October 19, 2018, we received a six-month, convertible loan of $100,000 with an accredited investor. The loan includes an interest rate of 5% per month earned on the first day of each month. The loan can be extended a month up to three times for a $5,000 fee for each one-month extension.

On October 22, 2018 we paid off the outstanding balances of approximately $195,000 on merchant loans dated May 15, 2018 and July 16, 2018.

On October 22, 2018, we paid off the April 23, 2018 12% one-year, convertible loan of $103,000 with an accredited investor. We paid $47,194 in interest and fees on the April 23, 2018 loan.

On October 23, 2018, we refinanced the April 23, 2018 12% one-year, convertible loan of $77,000 with an accredited investor. The refinanced loan will now be due on October 23, 2019. We paid $35,407 in interest and fees on the April 23, 2018 loan in connection with the refinancing.

On October 23, 2018, we received a 8% nine-month, convertible loan of $103,000 from an accredited investor. The loan can be converted into common stock after 180 calendar days at a discount of 42% of the average of the lowest two trading prices for the common stock during the 15-trading day period prior to conversion. The loan includes $3,000 in fees.

On October 23, 2018, we received a 4% one-year, convertible loan of $105,000 from an accredited investor. The note is convertible on issuance date at $7.50 per share and after 180 days to be 60% of the lowest trading price for the common stock during the 20-trading day period prior to conversion. The loan includes $5,000 in fees. We issued the investor 1,150 shares of restricted common stock with a relative fair value of $3,930 recorded as a debt discount to be amortized over the one-year term.

On October 25, 2018, we paid off the April 25, 2018 4% one-year, convertible loan of $105,000 with an accredited investor. We paid $38,856 in interest and fees on the April 25, 2018 loan.

On October 25, 2018, we paid off the April 25, 2018 6% one-year, convertible loan of $130,000 with an accredited investor. We paid $49,411 in interest and fees on the April 25, 2018 loan.

On October 26, 2018, we paid $45,859 which includes a $7,000 extension fee to extend the conversion period at a conversion price of $7.50 on the April 25, 2018 convertible loan of $105,000 to November 21, 2018. The loan will become convertible on November 22, 2018 at a conversion price of 60% of the lowest trading price for the common stock during the 20-trading day period prior to conversion.

On October 26, 2018, we paid off the April 23, 2018 5% one-year, convertible loan of $65,000 with an accredited investor. We paid $21,129 in interest and fees on the April 23, 2018 loan.

On October 29, 2018, we received a 6% one-year, convertible loan of $77,000 from an accredited investor. The note is convertible on issuance date at $7.50 per share and after 180 calendar days at a discount of 40% of the average of the lowest two trading prices for the common stock during the 10-trading day period prior to conversion. The loan includes $2,000 in fees.

On October 29, 2018, we signed a six-month agreement with a firm to provide consulting services. We issued 20,000 shares of restricted common stock at inception of contract. The stock’s fair value of $64,600 based on the trading stock price on contract date will be amortized to expense over 6 months.

In October 2018, the Company entered into a Securities Purchase Agreement to which the Company sold an aggregate of 220 shares of Series AA Convertible Preferred Stock for an aggregate Purchase Price of $550,000. We issued to the shareholder a new warrant to purchase 220,000 shares of common stock with an exercise price of $3.50 per share. We analyzed these warrants and determined that they were not considered derivatives and therefore recorded the aggregate relative fair value of $385,128 into equity relating to the 220,000 warrants and 22,000 broker warrants issued. The adjusted BCF value of $546,059 was accounted for as a deemed dividend within equity.

On November 1, 2018, the Company entered into a Securities Purchase Agreement to which the Company sold an aggregate of 75.2 shares of Series AA Convertible Preferred Stock for an aggregate Purchase Price of $188,000. We issued to the shareholder a new warrant to purchase 75,200 shares of common stock with an exercise price of $3.50 per share. We analyzed these warrants and determined that they were not considered derivatives and therefore recorded the aggregate relative fair value of $130,051 into equity relating to the 75,200 warrants and 7,520 broker warrants issued. The adjusted BCF value of $181,035 was accounted for as a deemed dividend within equity.

On November 2, 2018, we paid $18,000 in interest on the July 31, 2018 loan.

On November 2, 2018, we received a 4% one-year, convertible loan of $105,000 from an accredited investor. The note is convertible on issuance date at $7.50 per share and after 180 days to be 60% of the lowest trading price for the common stock during the 20-trading day period prior to conversion. The loan includes $5,000 in fees. We issued the investor 1,200 shares of restricted common stock with a relative fair value of $3,872 recorded as a debt discount to be amortized over the one-year term.

On November 2, 2018, we received a 6% one-year, convertible loan of $130,000 from an accredited investor. The note is convertible on issuance date at $7.50 per share and after 180 days to be 60% of the lowest trading price for the common stock during the 15-trading day period prior to conversion. The loan includes $6,500 in fees.

On November 5, 2018, we received a 4% one-year, convertible loan of $205,000 from an accredited investor. The note is convertible on issuance date at $7.50 per share and after 180 days to be 60% of the lowest trading price for the common stock during the 20-trading day period prior to conversion. The loan includes $5,000 in fees. We issued the investor 6,000 shares of restricted common stock with a relative fair value of $17,906 recorded as a debt discount to be amortized over the one-year term.

On November 8, 2018, our lender agreed to extend the prepayment period of our May 9, 2018 5% nine-month, convertible loan of $161,250 to December 21, 2018. In connection with the extension, we agreed to pay $12,900 (8% of the outstanding balance) on November 13, 2018. All other terms remain the same.

On November 9, 2018, we paid off the May 9, 2018 six-month, convertible loan of $250,000 with an accredited investor. We paid $62,500 in interest and fees on the May 9, 2018 loan.

On November 9, 2018, we received a 5% one-year, convertible loan of $75,000 from an accredited investor. The note is convertible on issuance date at $7.50 per share and after 180 days to be 60% of the lowest trading price for the common stock during the 20-trading day period prior to conversion. The loan includes $9,500 in fees which include a $7,500 original issue discount and $2,000 legal fees. We issued the investor 1,360 shares of restricted common stock with a relative fair value of $4,656 recorded as a debt discount to be amortized over the one-year term.

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ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The events described in forward-looking statements contained in this Quarterly Report may not occur. We caution you that these statements are not guarantees of future performance or events and are subject to a number of uncertainties, risks and other influences, many of which are beyond our control, which may influence the accuracy of the statements and the projections upon which the statements are based. In some cases, forward-looking statements are identified by terms such as “may,” “will,” “should,” “could,” “would,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “projects,” “predicts,” “potential” and similar expressions intended to identify forward-looking statements. Such statements include, without limitation, statements regarding:

● our need for, and our ability to raise, additional equity or debt financing on acceptable terms, if at all;

● our need to take additional cost reduction measures, cease operations or sell our operating assets, if we are unable to obtain sufficient additional financing;

● our belief that we have sufficient liquidity to finance normal operations;

● the options we may pursue in light of our financial condition;

● the amount of cash necessary to operate our business;

● the anticipated uses of grant revenue and the potential for increased grant revenue in future periods;

● our plans and expectations with respect to our continued operations;

● our belief that PCT has achieved initial market acceptance in the mass spectrometry and other markets;

● the expected increase in the number of pressure cycling technology (“PCT”)and constant pressure (“CP”) based units installed and the increase in revenues from the sale of consumable products and extended service contracts;

● the expected development and success of new instrument and consumables product offerings;

● the potential applications for our instrument and consumables product offerings;

● the expected expenses of, and benefits and results from, our research and development efforts;

● the expected benefits and results from our collaboration programs, strategic alliances and joint ventures;

● our expectation of obtaining additional research grants from the government in the future;

● our expectations of the results of our development activities funded by government research grants;

● the potential size of the market for biological sample preparation;

● general economic conditions;

● the anticipated future financial performance and business operations of our company;

● our reasons for focusing our resources in the market for genomic, proteomic, lipidomic and small molecule sample preparation;

● the importance of mass spectrometry as a laboratory tool;

● the advantages of PCT over other current technologies as a method of biological sample preparation in biomarker discovery, forensics, and histology and for other applications;

● the capabilities and benefits of our PCT sample preparation system, consumables and other products;

● our belief that laboratory scientists will achieve results comparable with those reported to date by certain research scientists who have published or presented publicly on PCT and our other products;

● our ability to retain our core group of scientific, administrative and sales personnel; and

● our ability to expand our customer base in sample preparation and for other applications of PCT and our other products.

These forward-looking statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements, expressed or implied, by such forward-looking statements. Also, these forward-looking statements represent our estimates and assumptions only as of the date of this Quarterly Report on Form 10-Q. Except as otherwise required by law, we expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained in this Quarterly Report on Form 10-Q to reflect any change in our expectations or any change in events, conditions or circumstances on which any of our forward-looking statements are based. Factors that could cause or contribute to differences in our future financial and other results include those discussed in the risk factors set forth in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2017. We qualify all of our forward-looking statements by these cautionary statements.

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OVERVIEW

We are focused on solving the challenging problems inherent in biological sample preparation, a crucial laboratory step performed by scientists worldwide working in biological life sciences research. Sample preparation is a term that refers to a wide range of activities that precede most forms of scientific analysis. Sample preparation is often complex, time-consuming and, in our belief, one of the most error-prone steps of scientific research. It is a widely-used laboratory undertaking – the requirements of which drive what we believe is a large and growing worldwide market. We have developed and patented a novel, enabling technology platform that can control the sample preparation process. It is based on harnessing the unique properties of high hydrostatic pressure. This process, which we refer to as Pressure Cycling Technology, or PCT, uses alternating cycles of hydrostatic pressure between ambient and 45,000 psi or greater to safely, conveniently and reproducibly control the actions of molecules in biological samples, such as cells and tissues from human, animal, plant and microbial sources.

Our pressure cycling technology uses internally developed instrumentation that is capable of cycling pressure between ambient and ultra-high levels at controlled temperatures and specific time intervals, to rapidly and repeatedly control the interactions of bio-molecules, such as deoxyribonucleic acid (“DNA”), ribonucleic acid (“RNA”), proteins, lipids and small molecules. Our laboratory instrument, the Barocycler^®, and our internally developed consumables product line, which include our Pressure Used to Lyse Samples for Extraction (“PULSE”) tubes, and other processing tubes, and application specific kits such as consumable products and reagents, together make up our PCT Sample Preparation System (“PCT SPS”).

We have experienced negative cash flows from operations with respect to our pressure cycling technology business since our inception. As of September 30, 2018, we did not have adequate working capital resources to satisfy our current liabilities and as a result we have substantial doubt about our ability to continue as a going concern. Although we need substantial additional capital to fund normal operations in future periods, based on our current projections, including equity financing subsequent to September 30, 2018 as described in Note 8 to our financial statements for the period ended September 30, 2018, we believe we will have the cash resources that will enable us to continue to fund normal operations into the foreseeable future.

If we are able to obtain additional capital or otherwise increase our revenues, we may increase spending in specific research and development applications and engineering projects and may hire additional sales personnel or invest in targeted marketing programs. In the event that we are unable to obtain financing on favorable terms, or at all, we will likely be required to cease our operations, pursue a plan to sell our operating assets, or otherwise modify our business strategy, which could materially harm our future business prospects.

We have 14 United States granted patents and one foreign granted patent (Japan: 5587770, EXTRACTION AND PARTITIONING OF MOLECULES) covering multiple applications of PCT in the life sciences field. We also own eight patents as a result of our purchase of the assets of BaroFold in December 2017. PBI also has 19 pending patents in the USA, Canada, Europe, Australia, China, and Taiwan. PCT employs a unique approach that we believe has the potential for broad use in a number of established and emerging life sciences areas, which include, but are not limited to:

● biological sample preparation – including but not limited to sample extraction, homogenization, and digestion - in such study areas as genomic, proteomic, lipidomic, metabolomic and small molecules;

● pathogen inactivation;

● protein purification;

● control of chemical reactions, particularly enzymatic; and

● immunodiagnostics.

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We reported several accomplishments in the first nine months of 2018, including:

On February 14, 2018, the Company announced it had signed a two-year, global co-marketing and distribution agreement with ISS, Inc., a designer and manufacturer of advanced scientific instrumentation.

On May 3, 2018, the Company announced receipt of the first contract utilizing the high-pressure patents and other IP acquired from BaroFold, Inc. in the Company’s December 2017 Asset Acquisition. The contract related to evaluating the ability of the acquired PreEMT™ technology platform to enhance the manufacturing process and improve the quality of a specific protein therapeutic drug candidate of the third-party.

On May 15, 2018, the Company announced the conversion of $6.39 million of debt into equity.

On June 12, 2018, the Company announced the conversion of an additional $7.24 million of debt into equity.

On August 30, 2018, we announced the award of a key new U.S. patent entitled “Flow-through High Hydrostatic Pressure Microfluidic Sample Preparation Device and Related Methods Therefor.” This new patent (US 9995661) brings the Company’s Intellectual Property (“IP”) estate up to a total of 21 issued patents.

On September 13, 2018, we announced the sale of the first two instruments from our newest line of high-pressure based instrument systems, the HUB880 Explorer.

On September 20, 2018, we announced that our ultra-high-pressure product line of instruments, methods, and technology platforms was prominently featured at the recent Institute of Food Technologists annual meeting in Chicago, IL. The Company’s Ultra Shear Technology platform, particularly its U.S. Department of Agriculture-funded collaborative program with The Ohio State University’s College of Food, Agricultural, and Environmental Sciences, was discussed during the four-day conference.

Results of Operations

Revenues

Product revenues for the three- and nine-month periods ended September 30, 2018 and 2017 were as follows:

	Three months ended September 30,										Nine months ended September 30,
(in thousands, except percentages)	2018		2017		$ Change			% Change			2018		2017		$ Change			% Change
Product and other revenue	$	461	$	604	$	(143	)		(24	)%	$	1,665	$	1,610	$	55			3	%
Grant revenue		61		42		19			45	%		107		128		(21	)		(16	)%
Total revenues	$	522	$	646	$	(124	)		(19	)%	$	1,771	$	1,738	$	33			2	%

Products and services revenues decreased 24% in the current three-month period while they increased 3% in the current nine-month period compared to the corresponding periods in the prior year. This decrease was primarily due to employee turnover in our sales team and lost opportunities in China because of new tariffs imposed by the US and China. Sales of consumables decreased to $43,401 for Q3 2018 compared to $84,594 during the same period in 2017, a decrease of 49%. Sales of consumables decreased to $182,197 for the current nine-month period compared to $200,223 during the same period in 2017, a decrease of 9%. Products, Services, and Other Revenue included $13,793 and $111,215 from non-cash instrument transactions in the current quarter and the nine-month period, respectively while the three-month and nine-month periods in the prior year included $60,000 and $77,088 of similar revenue, respectively. Revenue from non-cash instrument transactions was recognized on the fair value of the assets involved per ASC 845.

Costs and operating expenses

Total costs and operating expenses for the three- and nine-month periods ended September 30, 2018 and 2017 were comprised of the following:

	Three months ended September 30,										Nine months ended September 30,
(in thousands, except percentages)	2018		2017		$ Change			% Change			2018		2017		$ Change			% Change
Cost of product revenue	$	234	$	329	$	(95	)		(29	)%	$	829	$	852	$	(23	)		(3	)%
Research and development		262		239		23			10	%		911		745		166			22	%
Selling and marketing		223		302		(79	)		(26	)%		723		815		(92	)		(11	)%
General and administrative		736		902		(166	)		(18	)%		2,271		2,655		(384	)		(14	)%
Total costs and operating expenses	$	1,455	$	1,772	$	(317	)		(18	)%	$	4,734	$	5,067	$	(333	)		(7	)%

Gross profit margin on products and services increased to 55% in the current period as compared to 49% during the three months ended September 30, 2017. The gross profit margin increased to 53% by 2 percentage points for the current nine-month period compared to the same period in the prior year. This increase is primarily due to lower Barocycler 2320Extreme production costs and the introduction of scientific services for protein refolding with minimal incremental costs. Gross margins may fluctuate in the fourth quarter of 2018 based on expected production volume, services offered and product mix.

Research and development expenses increased 10% and 22% in the current three- and nine-month periods, respectively, compared to the corresponding periods in the prior year. This increase is primarily related to the Ultra-Shear product development project, less absorption of R&D personnel in manufacturing and costs relating to data research performed by collaboration partners. Expenses generally include personnel costs, external development costs, supplies and other expenses related to our new products in development.

Selling and marketing expenses decreased 26% and 11% in the current three- and nine-month periods, respectively, compared to the corresponding periods in the prior year. This decrease is primarily due to employee turnover in our sales team, the completion of a contract to obtain qualified leads and the one-time costs in the prior period relating to a co-marketing campaign with our European dealer.

General and administrative expenses decreased 18% and 14% in the current three- and nine-month periods, respectively, compared to the corresponding periods in the prior year. This decrease is primarily from reduced use of outside investor and public relations services offset to a certain extent by costs related to the quarterly amortization of our BaroFold patent values.

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Interest expense

Interest expense for the three- and nine-month periods ended September 30, 2018 and 2017 was as follows:

	Three months ended September 30,											Nine months ended September 30,
(in thousands, except percentages)	2018			2017			$ Change		% Change			2018			2017			$ Change		% Change
Interest expense	$	(733	)	$	(1,554	)	$	821		53	%	$	(3,016	)	$	(4,432	)	$	1,416		32	%

Decreases in interest expense in the current three- and nine-month periods, respectively, compared to the corresponding periods in the prior year are attributable to fewer loans and the discontinuation of interest expense related to the Revolving Note issued in October 2016 that converted into equity in June 2018.

Other expense

Other expense for the three- and nine-month periods ended September 30, 2018 and 2017 was as follows:

	Three months ended September 30,											Nine months ended September 30,
(in thousands, except percentages)	2018			2017		$ Change			% Change			2018			2017			$ Change			% Change
Other expense	$	(1	)	$	-	$	(1	)		(100	)%	$	(16	)	$	(7	)		(9	)		(129	)%

Changes in other expense in the current three- and nine-month periods, respectively, compared to the corresponding periods in the prior year are primarily attributable to foreign currency exchange losses.

Gain on extinguishment of debt

Gain on extinguishment of debt for the three- and nine-month periods ended September 30, 2018 and 2017 was as follows:

	Three months ended September 30,											Nine months ended September 30,
(in thousands, except percentages)	2018			2017		$ Change			% Change			2018		2017		$ Change		% Change
(Loss) gain on extinguishment of debt	$	(141	)	$	91	$	(232	)		(255	)%	$	335	$	91		244		268	%

Losses and gains on extinguishment of debt in the current three- and nine-month periods, respectively, compared to the corresponding periods in the prior year are primarily attributable to interest forgiveness of $520,680 on the Revolving Note, the Debenture Warrant modifications valued at $33,020 offset by $82,904 in charges relating to the amendment of the Revolving Note Warrants for a reduced exercise price and a loss of $140,765 in the current period relating to debt extinguishments.

Incentive shares/warrants

Incentive shares/warrants for the three- and nine-month periods ended September 30, 2018 and 2017 was as follows:

	Three months ended September 30,									Nine months ended September 30,
(in thousands, except percentages)	2018		2017		$ Change		% Change			2018			2017			$ Change			% Change
Incentive shares/warrants	$	-	$	-	$	-		-	%	$	(663	)	$	(187	)	$	(476	)		(255	)%

Changes in incentive shares/warrants in the current three- and nine-month periods, respectively, compared to the corresponding periods in the prior year are primarily attributable to the fair value of 110,833 shares of common stock and 110,833 warrants to purchase common stock issued to an accredited investor on June 11, 2018. The prior year amount represents the fair value of common stock warrants issued to investors as an incentive to exercise warrants.

Change in fair value of derivative liabilities

No derivative instruments existed in 2018.

During the three months ended September 30, 2017, we reclassified non-cash charges for the six months ended June 30, 2017 of $288,886 for the Debenture warrant revaluation to stockholders’ equity based on new guidance in 2017.

During the three months ended September 30, 2017, we reclassified non-cash income for the six months ended June 30, 2017 of $43,673 for conversion option revaluation to stockholders’ equity based on new guidance in 2017.

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Liquidity and Financial Condition

We have experienced negative cash flows from operations with respect to our pressure cycling technology business since our inception. As of September 30, 2018, we did not have adequate working capital resources to satisfy our current liabilities and as a result, we have substantial doubt regarding our ability to continue as a going concern. We have been successful in raising cash through debt and equity offerings in the past and as described in Note 6 of the accompanying consolidated financial statements, we received $6.0 million in net proceeds from loans and $1.3 million in net proceeds from sales of preferred stock in the nine months ended September 30, 2018. We have efforts in place to continue to raise cash through debt and equity offerings.

We will need substantial additional capital to fund our operations in future periods. If we are unable to obtain financing on acceptable terms, or at all, we will likely be required to cease our operations, pursue a plan to sell our operating assets, or otherwise modify our business strategy, which could materially harm our future business prospects.

Net cash used in operations for the nine months ended September 30, 2018 was $3,615,582 as compared to $3,089,767 for the nine months ended September 30, 2017. We agreed to issue 110,833 additional shares of common stock at $2.50 per share to an investor. The fair value was recorded as other charge of $340,257. We also issued 110,833 additional warrants with an exercise price of $3.50 and an expiration period of five years from the original issue date. The fair value was recorded as other charges of $312,637. We also recorded $335,132 in gains on debt extinguishment. We also paid interest toward loans in 2018.

Net cash used in investing activities for the nine months ended September 30, 2018 was none compared to $16,617 in the prior period. Cash capital expenditures in the prior year included laboratory equipment and IT equipment.

Net cash provided by financing activities for the nine months ended September 30, 2018 was $3,540,468 as compared to $2,986,744 for the same period in the prior year. The cash from financing activities in the period ended September 30, 2018 included $1,255,463 net proceeds from sales of preferred stock, $460,000 from our Revolving Note and $3,848,484 from convertible debt, net of fees and less payment on convertible debt of $2,097,750. We also received $1,595,901 from non-convertible debt, net of fees, less payment on non-convertible debt of $1,579,130. Related parties also lent us $116,100 in short-term non-convertible loans of which we repaid $58,600. The cash from financing activities in the period ending September 30, 2017 included $2,070,000 from our Revolving Note and $140,215 from warrant exercises. We also received $2,400,752 from non-convertible debt, net of fees, less payment on non-convertible debt of $783,682 and payment on convertible debt of $840,541.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

This Item 3 is not applicable to us as a smaller reporting company and has been omitted.

ITEM 4. CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Securities Exchange Act of 1934 filings are recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our President and Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer), as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, as ours are designed to do, and management was necessarily required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As of September 30, 2018, we carried out an evaluation, under the supervision and with the participation of our management, including our Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934. Based upon that evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were not effective.

Our conclusion that our disclosure controls and procedures were not effective as of September 30, 2018 is due to the continued presence of the material weaknesses in our internal control over financial reporting identified in our Annual Report on Form 10-K for the year ended December 31, 2017. These material weaknesses are the following:

●	We identified a lack of sufficient segregation of duties. Specifically, this material weakness is such that the design over these areas relies primarily on detective controls and could be strengthened by adding preventative controls to properly safeguard Company assets.
●	Management has identified a lack of sufficient personnel in the accounting function due to our limited resources with appropriate skills, training and experience to perform the review processes to ensure the complete and proper application of generally accepted accounting principles, particularly as it relates to valuation of warrants and other complex debt /equity transactions. Specifically, this material weakness resulted in audit adjustments to the annual consolidated financial statements and revisions to related disclosures, valuation of warrants and other equity transactions.
●	Limited policies and procedures that cover recording and reporting of financial transactions.
●	Lack of multiple levels of review over the financial reporting process
We continue to plan to remediate those material weaknesses as follows:
●	Improve the effectiveness of the accounting group by augmenting our existing resources with additional consultants or employees to assist in the analysis and recording of complex accounting transactions, and to simultaneously achieve desired organizational structuring for improved segregation of duties. We plan to mitigate this identified deficiency by hiring an independent consultant once we generate significantly more revenue or raise significant additional working capital.
●	Improve expert review and achieve desired segregation procedures by strengthening cross approval of various functions including quarterly internal audit procedures where appropriate.

During the period covered by this Report, we implemented and performed additional substantive procedures, such as supervisory review of work papers and consistent use of financial models used in equity valuations, to ensure our consolidated financial statements as of and for the three-month period ended September 30, 2018, are fairly stated in all material respects in accordance with GAAP. We have not, however, been able to fully remediate the material weaknesses due to our limited financial resources. Our remediation efforts are largely dependent upon our securing additional financing to cover the costs of implementing the changes required. If we are unsuccessful in securing such funds, remediation efforts may be adversely affected in a material manner.

Except as described above, there have been no changes in our internal controls over financial reporting that occurred during the period ended September 30, 2018 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

We are not currently involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. We may, however, from time to time, be named as a defendant or are a plaintiff in various legal actions that arise in the normal course of business. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

Item 1A. Risk Factors

Factors that could cause or contribute to differences in our future financial and operating results include those discussed in the risk factors set forth in Item 1 of our Annual Report on Form 10-K for the year ended December 31, 2017. The risks described in our Form 10-K and this Report are not the only risks that we face. Additional risks not presently known to us or that we do not currently consider significant may also have an adverse effect on the Company. If any of the risks actually occur, our business, results of operations, cash flows or financial condition could suffer.

There have been no material changes to the risk factors set forth in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2017.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Except where noted, all the securities discussed in this Part II, Item 2 were issued in reliance on the exemption under Section 4(a)(2) of the Securities Act. This Part II, Item 2 does not discuss issuances previously disclosed in Form 8-Ks, Form 10-Qs, or the Form 10-K filed by the Company.

On July 1, 2018, we signed a six-month agreement with a firm to provide consulting services. We issued 24,000 shares of restricted common stock at inception of contract. The stock’s fair value of $93,600 based on the trading stock price on contract date is amortized to expense over the service period of 6 months.

On July 2, 2018, we received a 4% one-year, convertible loan of $125,000 from an accredited investor. The note is convertible on issuance date at $7.50 per share and after 180 days to be 60% of the lowest trading price for the common stock during the 15-trading day period prior to conversion. The loan includes $6,250 in fees. We issued the investor 1,500 shares of restricted common stock with a fair value of $5,588 recorded as a debt discount to be amortized over the one-year term.

On July 5, 2018, we signed a six-month agreement with a firm to provide consulting services. We issued 24,000 shares of restricted common stock at inception of contract. The stock’s fair value of $79,920 based on the trading stock price on contract date is amortized to expense over the service period of 6 months

On July 17, 2018, we received a 15% three-month, convertible loan for $100,000 from an accredited investor. The loan can be converted at any time into common stock at a conversion price of $7.50. We agreed to issue the investor 2,000 shares monthly over three months for a total of 6,000 shares of restricted common stock with a fair value of $16,944 that was recorded as a debt discount to be amortized over the three-month term.

On July 18, 2018, our lender extended the term of our March 21, 2017 non-convertible loan of $170,000 to September 30, 2018 in exchange for 6,000 shares of company stock. The loan continues to earn an annual interest rate of 10%. We recorded a loss of $20,400 relating to the fair value of common stock issued for the September 30 extension.

On July 19, 2018, we refinanced the January 19, 2018 10% one-year, convertible loan of $150,000 with an accredited investor. The refinanced loan will now be due on January 19, 2019. We paid $36,000 in interest and fees on the January 19, 2018 loan in connection with the refinancing. We agreed to issue the investor 4,500 shares of restricted common stock. We recorded a loss of $18,346 relating to this refinancing. The loss was from the fair value of common stock of $17,100 issued and the write-down of $1,246 for the unamortized discount remaining on the original debt.

38

On July 31, 2018, we refinanced the May 30, 2018 8% two-month, convertible loan of $150,000 from an accredited investor. The loan will now be due on October 31, 2018 and includes guaranteed interest of $18,000. The loan can be converted at any time into common stock at a conversion price of $7.50. We agreed to issue the investor 2,000 shares of restricted common stock with a relative fair value of $6,578 recorded as a debt discount to be amortized over the three-month term.

On August 8, 2018, we refinanced the February 9, 2018 six-month, convertible loan of $100,000 with an accredited investor. The refinanced loan will now be due on February 8, 2019 and earns 5% monthly. We agreed to issue the investor 7,800 shares of restricted common stock. We recorded a loss of $32,171 relating to this refinancing. The loss was from the fair value of common stock of $27,534 issued and the write-down of $4,637 for the unamortized discount remaining on the original debt.

On August 15, 2018, we received a four-month, convertible loan for $100,000 from an accredited investor. The loan accrues interest at 5% monthly and can be converted at any time into common stock at a conversion price of $7.50. We agreed to issue the investor 1,500 shares monthly over four months for a total of 6,000 shares of restricted common stock. We recorded a loss of $23,700 relating to this refinancing for the fair value of common stock issued.

On August 27, 2018, we received a 4% one-year, convertible loan of $125,000 from an accredited investor. The loan includes legal fees of $6,250. The note is convertible on issuance date at $7.50 per share and after 180 days to be 60% of the lowest trading price for the common stock during the 20-trading day period prior to conversion. We issued the investor 1,428 shares of restricted common stock with a fair value of $4,443 recorded as a debt discount to be amortized over the one-year term.

On September 7, 2018, we refinanced the March 12, 2018 5% one-year, convertible loan of $85,000 with an accredited investor. The refinanced loan will now be due on March 12, 2019. We paid $17,361 in interest and fees on the March 12, 2018 loan in connection with the refinancing. We agreed to issue the investor 1,150 shares of restricted common stock with a fair value of $4,364 recorded as a debt discount to be amortized over the one-year term.

On various dates for the nine months ended September 30, 2018, the Company issued 56,007 shares of common stock based on the 10-day VWAP prior to quarter end to holders of the Debentures in payment of the quarterly interest accrued from the Debentures first anniversary date through June 11, 2018 for an aggregate amount of $211,047. We recognized a $9,615 gain on extinguishment of debt for the nine months ended September 30, 2018 by calculating the difference of the shares valued on the issuance date and the amount of accrued interest through June 11, 2018.

Item 3. Defaults upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On July 18, 2018, the Board of Directors approved the immediate termination of 244,467 outstanding stock options held by current officers, employees and board members (32,605 stock options under the Plan, 81,925 stock options under the 2013 Plan, and 129,937 stock options under the 2015 Plan) and the issuance of new stock options to the same holders with an exercise price of $3.40 per share equal to the closing market price on July 18, 2018 and an expiration date of July 18, 2028. The new stock options for board members will vest 1/12th per month for 12 months. The new stock options for officers and employees will vest 1/36th per month for 36 months. The Plan expired in 2015 so of the 32,605 terminated stock options, 16,641 stock options under the 2013 Plan and 15,964 stock options under the 2015 Plan were issued (in addition to the reissuance of 81,925 stock options under the 2013 Plan, and 129,937 stock options under the 2015 Plan). The Board of Directors also awarded 101,267 stock options to officers, employees and board members separately based on the annual compensation committee recommendation. Of the 101,267 stock options issued, 51,934 stock options were issued under the 2013 Plan and 49,333 stock options were issued under the 2015 Plan.

39

Item 6. Exhibits

Exhibits
31.1*	Principal Executive Officer Certification Pursuant to Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Principal Financial Officer Certification Pursuant to Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**	Principal Executive Officer Certification Pursuant to Item 601(b)(32) of Regulation S-K, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**	Principal Financial Officer Certification Pursuant to Item 601(b)(32) of Regulation S-K, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema Document
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document

* Filed herewith.

** In accordance with SEC Release 33-8238, Exhibits 32.1 and 32.2 are furnished and not filed.

40

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	PRESSURE BIOSCIENCES, INC.
Date: November 14, 2018	By:	/s/ Richard T. Schumacher
		Richard T. Schumacher
		President & Chief Executive Officer
		(Principal Executive Officer)
Date: November 14, 2018	By:	/s/ Joseph L. Damasio, Jr.
		Joseph L. Damasio, Jr.
		Vice President of Finance & Chief Financial Officer
		(Principal Financial Officer)

41

EX-31.1

EXHIBIT 31.1

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Richard T. Schumacher, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Pressure BioSciences, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiary, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal controls over financial reporting, or caused such internal controls over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: November 14, 2018

/s/ Richard T. Schumacher

Richard T. Schumacher

President & Chief Executive Officer

(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Joseph L. Damasio, Jr., certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Pressure BioSciences, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiary, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal controls over financial reporting, or caused such internal controls over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: November 14, 2018

/s/ Joseph L. Damasio, Jr.

Joseph L. Damasio, Jr.

Vice President of Finance & Chief Financial Officer

(Principal Financial Officer)

EX-32.1

EXHIBIT 32.1

Certification

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)

In connection with the Quarterly Report on Form 10-Q of Pressure BioSciences, Inc., a Massachusetts corporation (the “Company”) for the period ended September 30, 2018 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Richard T. Schumacher, President and Chief Executive Officer of the Company, do hereby certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code) that:

(1) The Report of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 14, 2018	By:	/s/ Richard T. Schumacher
		Richard T. Schumacher
		President & Chief Executive Officer
		(Principal Executive Officer)

A signed original of this written statement required by Section 906 has been provided to Pressure BioSciences, Inc. and will be retained by Pressure BioSciences, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

EXHIBIT 32.2

Certification

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)

In connection with the Quarterly Report on Form 10-Q of Pressure BioSciences, Inc., a Massachusetts corporation (the “Company”) for the period ended September 30, 2018 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Joseph L. Damasio, Jr., Principal Financial Officer of the Company, do hereby certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code) that:

(1) The Report of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 14, 2018	By:	/s/ Joseph L. Damasio, Jr.
		Joseph L. Damasio, Jr.
		Vice President & Chief Financial Officer
		(Principal Financial Officer)

A signed original of this written statement required by Section 906 has been provided to Pressure BioSciences, Inc. and will be retained by Pressure BioSciences, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2018	Nov. 07, 2018
Document And Entity Information
Entity Registrant Name	PRESSURE BIOSCIENCES INC
Entity Central Index Key	0000830656
Document Type	10-Q
Document Period End Date	Sep. 30, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Small Business Flag	true
Entity Emerging Growth Company	false
Entity Ex Transition Period	false
Entity Common Stock, Shares Outstanding		1,751,846
Trading Symbol	PBIO
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2018

XML

Consolidated Balance Sheets (Unaudited) - USD ($)	Sep. 30, 2018	Dec. 31, 2017
CURRENT ASSETS
Cash and cash equivalents	$ 5,919	$ 81,033
Accounts receivable	374,329	206,848
Inventories, net of $139,700 reserve at September 30, 2018 and $179,600 at December 31, 2017	899,934	857,662
Prepaid expenses and other current assets	254,464	222,158
Total current assets	1,534,646	1,367,701
Intangible assets, net of amortization of $64,904 and $0, respectively	685,096	750,000
Investment in available-for-sale equity securities	16,643	19,825
Property and equipment, net	16,885	22,662
TOTAL ASSETS	2,253,270	2,160,188
CURRENT LIABILITIES
Accounts payable	605,653	589,263
Accrued employee compensation	372,402	368,700
Accrued professional fees and other	942,077	800,620
Other current liabilities	1,041,193	1,536,507
Deferred revenue	161,301	263,106
Revolving note payable		3,500,000
Related party convertible debt, net of debt discount of $0 and $31,372, respectively		259,762
Convertible debt, net of unamortized debt discounts of $239,872 and $401,856, respectively	3,619,565	8,028,014
Other debt, net of unamortized discounts of $6,343 and $48,194, respectively	663,184	1,379,863
Related party other debt	22,500
Total current liabilities	7,427,875	16,725,835
LONG TERM LIABILITIES
Deferred revenue	44,356	57,149
TOTAL LIABILITIES	7,472,231	16,782,984
COMMITMENTS AND CONTINGENCIES (Note 5)
STOCKHOLDERS' DEFICIT
Common stock, $.01 par value; 100,000,000 shares authorized; 1,657,136 and 1,342,858 shares issued and outstanding on September 30, 2018 and December 31, 2017, respectively	16,571	13,429
Warrants to acquire common stock	18,290,689	9,878,513
Additional paid-in capital	38,516,869	30,833,549
Accumulated deficit	(62,044,159)	(55,349,299)
Total stockholders' deficit	(5,218,961)	(14,622,796)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	2,253,270	2,160,188
Series D Convertible Preferred Stock [Member]
STOCKHOLDERS' DEFICIT
Convertible Preferred Stock, value	3	3
Series G Convertible Preferred Stock [Member]
STOCKHOLDERS' DEFICIT
Convertible Preferred Stock, value	806	806
Series H Convertible Preferred Stock [Member]
STOCKHOLDERS' DEFICIT
Convertible Preferred Stock, value	100	100
Series H2 Convertible Preferred Stock [Member]
STOCKHOLDERS' DEFICIT
Convertible Preferred Stock, value
Series J Convertible Preferred Stock [Member]
STOCKHOLDERS' DEFICIT
Convertible Preferred Stock, value	35	35
Series K Convertible Preferred Stock [Member]
STOCKHOLDERS' DEFICIT
Convertible Preferred Stock, value	68	68
Series AA Convertible Preferred Stock [Member]
STOCKHOLDERS' DEFICIT
Convertible Preferred Stock, value	$ 57

XML

Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Inventories reserve	$ 139,700	$ 179,600
Amortization of intangible assets	64,904	0
Related party debt discount	0	31,372
Convertible debt, current unamortized discounts	239,872	401,856
Other debt, unamortized discounts net	$ 6,343	$ 48,194
Convertible preferred stock, par value	$ 0.01	$ 0.01
Convertible preferred stock, authorized	1,000,000	1,000,000
Convertible preferred stock, shares issued	1,000,000	1,000,000
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	1,657,136	1,342,858
Common stock, shares outstanding	1,657,136	1,342,858
Series D Convertible Preferred Stock [Member]
Convertible preferred stock, par value	$ 0.01	$ 0.01
Convertible preferred stock, authorized	850	850
Convertible preferred stock, shares issued	300	300
Convertible preferred stock, shares outstanding	300	300
Convertible preferred stock, liquidation value	$ 300,000	$ 300,000
Series G Convertible Preferred Stock [Member]
Convertible preferred stock, par value	$ 0.01	$ 0.01
Convertible preferred stock, authorized	240,000	240,000
Convertible preferred stock, shares issued	80,570	80,570
Convertible preferred stock, shares outstanding	80,570	80,570
Series H Convertible Preferred Stock [Member]
Convertible preferred stock, par value	$ 0.01	$ 0.01
Convertible preferred stock, authorized	10,000	10,000
Convertible preferred stock, shares issued	10,000	10,000
Convertible preferred stock, shares outstanding	10,000	10,000
Series H2 Convertible Preferred Stock [Member]
Convertible preferred stock, par value	$ 0.01	$ 0.01
Convertible preferred stock, authorized	21	21
Convertible preferred stock, shares issued	21	21
Convertible preferred stock, shares outstanding	21	21
Series J Convertible Preferred Stock [Member]
Convertible preferred stock, par value	$ 0.01	$ 0.01
Convertible preferred stock, authorized	6,250	6,250
Convertible preferred stock, shares issued	3,458	3,458
Convertible preferred stock, shares outstanding	3,458	3,458
Series K Convertible Preferred Stock [Member]
Convertible preferred stock, par value	$ 0.01	$ 0.01
Convertible preferred stock, authorized	15,000	15,000
Convertible preferred stock, shares issued	6,880	6,880
Convertible preferred stock, shares outstanding	6,880	6,880
Series AA Convertible Preferred Stock [Member]
Convertible preferred stock, par value	$ 0.01	$ 0.01
Convertible preferred stock, authorized	10,000	10,000
Convertible preferred stock, shares issued	5,655	0
Convertible preferred stock, shares outstanding	5,655	0

XML

Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Revenue:
Total revenue	$ 521,766	$ 646,061	$ 1,771,313	$ 1,737,790
Costs and expenses:
Cost of products and services	234,320	328,743	829,155	852,039
Research and development	262,054	239,326	910,862	744,565
Selling and marketing	223,286	301,676	722,696	814,796
General and administrative	735,505	901,588	2,270,953	2,655,054
Total operating costs and expenses	1,455,165	1,771,333	4,733,666	5,066,454
Operating loss	(933,399)	(1,125,272)	(2,962,353)	(3,328,664)
Other expense:
Interest expense	(733,209)	(1,554,379)	(3,015,596)	(4,431,950)
Other expense	(1,283)		(15,595)	(7,108)
(Loss) gain on extinguishment of debt	(140,765)	90,862	335,132	90,862
Incentive shares/warrants			(663,130)	(186,802)
Change in fair value of derivative liabilities		245,213		(26,014)
Total other (expense) income	(875,257)	(1,218,304)	(3,359,189)	(4,561,012)
Net loss	(1,808,656)	(2,343,576)	(6,321,542)	(7,889,676)
Deemed dividend on down round feature			(213,012)
Deemed dividend on beneficial conversion feature	(1,146,280)		(11,678,571)
Preferred stock dividends	(277,439)		(373,318)
Net loss attributable to common stockholders	$ (3,232,375)	$ (2,343,576)	$ (18,586,443)	$ (7,889,676)
Basic and diluted net loss per share attributable to common stockholders	$ (2.01)	$ (2.07)	$ (12.67)	$ (7.28)
Weighted average common stock shares outstanding used in the basic and diluted net loss per share calculation	1,606,575	1,133,791	1,466,424	1,084,370
Products, Services, Other [Member]
Revenue:
Total revenue	$ 461,017	$ 603,726	$ 1,664,679	$ 1,610,124
Grant Revenue [Member]
Revenue:
Total revenue	$ 60,749	$ 42,335	$ 106,634	$ 127,666

XML

Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Comprehensive Loss
Net loss	$ (1,808,656)	$ (2,343,576)	$ (6,321,542)	$ (7,889,676)
Other comprehensive loss
Unrealized income on marketable securities				6,190
Comprehensive loss	$ (1,808,656)	$ (2,343,576)	$ (6,321,542)	$ (7,883,486)

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (6,321,542)	$ (7,889,676)
Adjustments to reconcile net loss to net cash used in operating activities:
Common stock issued for debt extension	33,218	10,000
Depreciation and amortization	70,681	7,027
Accretion of interest and amortization of debt discount	1,405,490	3,548,244
Issuance of incentive shares and common stock warrants	663,130	186,802
Inventory reserve recovery	(39,900)
Gain on extinguishment of debt	(335,132)	(90,862)
Stock-based compensation expense	299,584	318,910
Amortization of third party fees paid in common stock and warrants		46,558
Shares issued with debt	7,800
Change in fair value of derivative liabilities		26,014
Impairment loss on investment	3,182	6,069
Changes in operating assets and liabilities:
Accounts receivable	(167,481)	(266,996)
Inventories	(2,372)	(217,498)
Prepaid expenses and other assets	141,214	111,748
Accounts payable	16,390	445,924
Accrued employee compensation	3,702	49,079
Deferred revenue and other accrued expenses	606,454	618,890
Net cash used in operating activities	(3,615,582)	(3,089,767)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property plant and equipment		(16,617)
Net cash used in investing activities		(16,617)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from revolving note payable	460,000	2,070,000
Net proceeds from warrant exercises		140,215
Net proceeds from Series AA convertible preferred stock	1,255,463
Net proceeds from convertible debt	3,848,484
Net proceeds from non-convertible debt - third party	1,595,901	2,400,752
Net proceeds from non-convertible debt - related party	116,100
Payments on convertible debt	(2,097,750)	(840,541)
Payments on non-convertible debt	(1,579,130)	(783,682)
Payments on non-convertible debt – related party	(58,600)
Net cash provided by financing activities	3,540,468	2,986,744
NET INCREASE (DECREASE) IN CASH	(75,114)	(119,640)
CASH AT BEGINNING OF YEAR	81,033	138,363
CASH AT END OF PERIOD	5,919	18,723
SUPPLEMENTAL INFORMATION
Interest paid in cash	856,562	282,906
Income taxes paid
NON CASH TRANSACTIONS:
Common stock issued in lieu of cash for interest	201,432	185,603
Common stock issued for services to be rendered	173,520
Common stock issued with debt	222,272	321,127
Discount from warrants issued with convertible debt	162,023	668,544
Discount from one-time interest	169,500	225,000
Unrealized gain from available-for-sale equity securities		6,190
Preferred stock dividends	373,318
Conversion of debt into preferred stock	12,688,634
Conversion of preferred stock into common stock		55,200
Contingent beneficial conversion feature on convertible note	253,000
Deemed dividend-triggered down round feature	213,012
Deemed dividend-beneficial conversion feature	11,678,571
Derivative liability released upon warrant exercise		49,327
Reclassification of derivative liabilities to equity and cumulative effect of adoption of ASU 2017-11		$ 1,689,386

XML

Business Overview, Liquidity and Management Plans

9 Months Ended

Sep. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Business Overview, Liquidity and Management Plans

1) Business Overview, Liquidity and Management Plans

Pressure BioSciences, Inc. (“we”, “our”, “the Company”) is focused on solving the challenging problems inherent in biological sample preparation, a crucial laboratory step performed by scientists worldwide working in biological life sciences research. Sample preparation is a term that refers to a wide range of activities that precede most forms of scientific analysis. Sample preparation is often complex, time-consuming, and in our belief, one of the most error-prone steps of scientific research. It is a widely-used laboratory undertaking, the requirements of which drive what we believe is a large and growing worldwide market. We have developed and patented a novel, enabling technology platform that can control the sample preparation process. It is based on harnessing the unique properties of high hydrostatic pressure. This process, called pressure cycling technology, or PCT, uses alternating cycles of hydrostatic pressure between ambient and ultra-high levels (45,000 psi or greater) to safely, conveniently and reproducibly control the actions of molecules in biological samples, such as cells and tissues from human, animal, plant, and microbial sources.

Our pressure cycling technology uses internally developed instrumentation that is capable of cycling pressure between ambient and ultra-high levels - at controlled temperatures and specific time intervals - to rapidly and repeatedly control the interactions of bio-molecules, such as DNA, RNA, proteins, lipids, and small molecules. Our laboratory instrument, the Barocycler®, and our internally developed consumables product line, including PULSE® (Pressure Used to Lyse Samples for Extraction) Tubes, other processing tubes, and application specific kits (which include consumable products and reagents) together make up our PCT Sample Preparation System, or PCT SPS.

In 2015, together with an investment bank, we formed a subsidiary called Pressure BioSciences Europe (“PBI Europe”) in Poland. We have 49% ownership interest with the investment bank retaining 51%. As of now, PBI Europe does not have any operating activities and we cannot reasonably predict when operations will commence. Therefore, we do not have control of the subsidiary and did not consolidate in our financial statements. PBI Europe did not have any operations in the nine months ended September 30, 2018 or in fiscal year 2017.

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Going Concern

9 Months Ended

Sep. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Going Concern

2) Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. However, we have experienced negative cash flows from operations with respect to our pressure cycling technology business since our inception. As of September 30, 2018, we do not have adequate working capital resources to satisfy our current liabilities and as a result, there is substantial doubt regarding our ability to continue as a going concern. We have been successful in raising cash through debt and equity offerings in the past and as described in Notes 6 and 7. In addition we raised cash through equity and debt financing after September 30, 2018 as described in Note 8. We have financing efforts in place to continue to raise cash through debt and equity offerings. Although we have successfully completed financings and reduced expenses in the past, we cannot assure you that our plans to address these matters in the future will be successful. These financial statements do not include any adjustments that might result from this uncertainty.

In August 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-15, Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. (“ASU 2015-14”). Under the new standard, management must evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. This evaluation initially does not take into consideration the potential mitigating effect of management’s plans that have not been fully implemented as of the date the financial statements are issued. When substantial doubt exists under this methodology, management evaluates whether the mitigating effect of its plans sufficiently alleviates substantial doubt about the Company’s ability to continue as a going concern. The mitigating effect of management’s plans, however, is only considered if both (1) it is probable that the plans will be effectively implemented within one year after the date that the financial statements are issued, and (2) it is probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued. This standard was adopted by the Company at January 1, 2017.

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Interim Financial Reporting

9 Months Ended

Sep. 30, 2018

Quarterly Financial Information Disclosure [Abstract]

Interim Financial Reporting

3) Interim Financial Reporting

The accompanying unaudited consolidated balance sheet as of December 31, 2017, which was derived from audited financial statements, and the unaudited interim consolidated financial statements of Pressure BioSciences, Inc. have been prepared in accordance with accounting principles generally accepted in the United States of America (“generally accepted accounting principles” or “GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all material adjustments (consisting of only normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three months and nine months ended September 30, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. For further information, refer to the audited consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K (the “Form 10-K”) for the fiscal year ended December 31, 2017 as filed with the Securities and Exchange Commission on April 2, 2018.

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Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2018

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

4) Summary of Significant Accounting Policies

Principles of Consolidation

The consolidated financial statements include the accounts of Pressure BioSciences, Inc., and its wholly-owned subsidiary PBI BioSeq, Inc. All intercompany accounts and transactions have been eliminated in consolidation.

Reclassifications

Certain prior year amounts have been reclassified to conform to our current year presentation.

Recent Accounting Standards

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The new standard requires the recognition of assets and liabilities arising from lease transactions on the balance sheet and the disclosure of key information about leasing arrangements. Accordingly, a lessee will recognize a lease asset for its right to use the underlying asset and a lease liability for the corresponding lease obligation. Both the asset and liability will initially be measured at the present value of the future minimum lease payments over the lease term. Subsequent measurement, including the presentation of expenses and cash flows, will depend on the classification of the lease as either finance or an operating lease. Initial costs directly attributable to negotiating and arranging the lease will be included in the asset. Lessees will also be required to provide additional qualitative and quantitative disclosures regarding the amount, timing and uncertainty of cash flows arising from leases. The new standard is effective for fiscal years beginning after December 15, 2018, and interim periods therein. We will adopt ASC 842 effective January 1, 2019. This new guidance is not expected to have a material impact on the Company’s consolidated financial statements.

In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, which requires restricted cash to be presented with cash and cash equivalents on the statement of cash flows and disclosure of how the statement of cash flows reconciles to the balance sheet if restricted cash is shown separately from cash and cash equivalents on the balance sheet. The guidance is effective for interim and annual periods beginning after December 15, 2017, and early adoption is permitted. The Company early adopted the ASU 2016-18 on January 1, 2017.

In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which clarifies the definition of a business to provide additional guidance with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. This ASU is effective for annual periods beginning after December 15, 2017, including interim periods within those periods. The Company early adopted the ASU 2016-18 on January 1, 2017 starting with its purchase of BaroFold assets.

In May 2017, the FASB issued ASU 2017-09, Compensation – Stock Compensation (Topic 718) Scope of Modification Accounting, which clarifies that an entity should account for the effects of a modification unless the fair value, vesting terms and classification as liability or equity of the modified and original awards do not change on the modification date. This ASU is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company adopted this ASU effective on January 1, 2018, on a prospective basis which did not have a material impact on the Company’s condensed consolidated financial statements and related disclosures.

Effective January 1, 2018, the Company adopted ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities. The standard amends various aspects of the recognition, measurement, presentation, and disclosure of financial instruments. The most significant impact to our consolidated financial statements relates to the recognition and measurement of equity investments at fair value with changes recognized in Net income. The amendment also updates certain presentation and disclosure requirements. The adoption of ASU 2016-01 did not have a material impact on the consolidated financial statements. The adoption of ASU 2016-01 will result in increased volatility in net income as changes in the fair value of available-for-sale equity investments and changes in observable prices of equity investments without readily determinable fair values will be recorded in net income.

Effective January 1, 2018, the Company adopted ASC Topic 606, Revenue from Contracts with Customers, using the modified retrospective method. This guidance supersedes nearly all existing revenue recognition guidance under US GAAP. The core principle of the guidance is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The Company updated its accounting policy for the new standard based on a detailed review of its business and contracts. Based on the new guidance, the Company continues to recognize revenue at a point in time for the majority of its contracts with customers, which is generally when products are either shipped or delivered. Therefore, the adoption of ASC 606 did not have a material impact on the consolidated financial statements.

In July 2018, the FASB issued ASU 2018-07, Compensation- Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting as an amendment and update expanding the scope of Topic 718. The amendment specifies that Topic 718 now applies to all share-based payment transactions, even non-employee awards, in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. Under the new guidance, awards to nonemployees are measured on the grant date, rather than on the earlier of the performance commitment date or the date at which the nonemployee’s performance is complete. Also, the awards would be measured by estimating the fair value of the equity instruments to be issued, rather than the fair value of the goods or services received or the fair value of the equity instruments issued, whichever can be measured more reliably. In addition, entities may use the expected term to measure nonemployee awards or elect to use the contractual term as the expected term, on an award-by-award basis. The new guidance is effective for the Company in annual periods beginning after December 15, 2018, and interim periods within those annual periods, with early adoption permitted. Based on the new guidance, the Company will measure its nonemployee stock awards at grant date not when the stock awards are vested. This new guidance is not expected to have a material impact on the Company’s consolidated financial statements.

Revenue Recognition

We recognize revenue in accordance with FASB ASC 606, ASC 606, Revenue from Contracts with Customers, and ASC 340-40, Other Assets and Deferred Costs—Contracts with Customers. Revenue is measured based on a consideration specified in a contract with a customer, and excludes any sales incentives and amounts collected on behalf of third parties. We enter into sales contracts that may consist of multiple distinct performance obligations where certain performance obligations of the sales contract are not delivered in one reporting period. We measure and allocate revenue according to ASC 606-10.

We identify a performance obligation as distinct if both the following criteria are true: the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer and the entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract. Determining the standalone selling price (“SSP”) and allocation of consideration from a contract to the individual performance obligations, and the appropriate timing of revenue recognition, is the result of significant qualitative and quantitative judgments. Management considers a variety of factors such as historical sales, usage rates, costs, and expected margin, which may vary over time depending upon the unique facts and circumstances related to each performance obligation in making these estimates. While changes in the allocation of the SSP between performance obligations will not affect the amount of total revenue recognized for a particular contract, any material changes could impact the timing of revenue recognition, which would have a material effect on our financial position and result of operations. This is because the contract consideration is allocated to each performance obligation, delivered or undelivered, at the inception of the contract based on the SSP of each distinct performance obligation.

Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue.

Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are in included in cost of revenues as consistent with treatment in prior periods.

Our current Barocycler® instruments require a basic level of instrumentation expertise to set-up for initial operation. To support a favorable first experience for our customers, upon customer request, and for an additional fee, will send a highly trained technical representative to the customer site to install Barocyclers® that we sell, lease, or rent through our domestic sales force. The installation process includes uncrating and setting up the instrument, followed by introductory user training. Our sales arrangements do not provide our customers with a right of return. Any shipping costs billed to customers are recognized as revenue.

The majority of our instrument and consumable contracts contain pricing that is based on the market price for the product at the time of delivery. Our obligations to deliver product volumes are typically satisfied and revenue is recognized when control of the product transfers to our customers. Concurrent with the transfer of control, we typically receive the right to payment for the shipped product and the customer has significant risks and rewards of ownership of the product. Payment terms require customers to pay shortly after delivery and do not contain significant financing components.

We apply ASC 845, “Accounting for Non-Monetary Transactions”, to account for products and services sold through non-cash transactions based on the fair values of the products and services involved, where such values can be determined. Non-cash exchanges would require revenue to be recognized at recorded cost or carrying value of the assets or services sold if any of the following conditions apply:

a)	The fair value of the asset or service involved is not determinable.
b)	The transaction is an exchange of a product or property held for sale in the ordinary course of business for a product or property to be sold in the same line of business to facilitate sales to customers other than the parties to the exchange.
c)	The transaction lacks commercial substance.

We currently record revenue for its non-cash transactions at recorded cost or carrying value of the assets or services sold.

In accordance with FASB ASC 840, Leases, we account for our lease agreements under the operating method. We record revenue over the life of the lease term and we record depreciation expense on a straight-line basis over the thirty-six-month estimated useful life of the Barocycler® instrument. The depreciation expense associated with assets under lease agreement is included in the “Cost of PCT products and services” line item in our accompanying consolidated statements of operations. Many of our lease and rental agreements allow the lessee to purchase the instrument at any point during the term of the agreement with partial or full credit for payments previously made. We pay all maintenance costs associated with the instrument during the term of the leases.

Revenue from government grants is recorded when expenses are incurred under the grant in accordance with the terms of the grant award.

Deferred revenue represents amounts received from grants and service contracts for which the related revenues have not been recognized because one or more of the revenue recognition criteria have not been met. Revenue from service contracts is recorded ratably over the length of the contract.

Disaggregation of revenue

In the following table, revenue is disaggregated by primary geographical market, major product line, and timing of revenue recognition.

In thousands of US dollars ($)	Three Months Ended September 30,				Nine Months Ended September 30,
Primary geographical markets	2018		2017		2018		2017
North America		408		401		1,123		1,124
Europe		59		3		278		161
Asia		55		242		370		453
		522		646		1,771		1,738

	Three Months Ended September 30,				Nine Months Ended September 30,
Major products/services lines	2018		2017		2018		2017
Hardware		278		411		1,094		1,154
Grants		61		42		106		127
Consumables		43		85		182		200
Contract research services		80		-		147		-
Sample preparation accessories		22		47		118		121
Technical support/extended service contracts		20		35		70		78
Shipping and handling		10		17		38		38
Other		8		9		16		20
		522		646		1,771		1,738

	Three Months Ended September 30,				Nine Months Ended September 30,
Timing of revenue recognition	2018		2017		2018		2017
Products transferred at a point in time		362		560		1,546		1,546
Products and services transferred over time		160		86		225		192
		522		646		1,771		1,738

Contract balances

In thousands of US dollars ($)	September 30, 2018		December 31, 2017
Receivables, which are included in ‘Accounts Receivable’		374		207
Contract liabilities (deferred revenue)		206		320

Transaction price allocated to the remaining performance obligations

The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period.

In thousands of US dollars ($)	2018		2019		2020		Total
Extended warranty service		7		199		-		206

All consideration from contracts with customers is included in the amounts presented above.

Contract Costs

The Company recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that the Company otherwise would have recognized is one year or less. These costs are included in selling, general, and administrative expenses. The costs to obtain a contract are recorded immediately in the period when the revenue is recognized either upon shipment or installation. The costs to obtain a service contract are considered immaterial when spread over the life of the contract so the Company records the costs immediately upon billing.

Use of Estimates

To prepare our consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, we are required to make significant estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. In addition, significant estimates were made in projecting future cash flows to quantify deferred tax assets, the costs associated with fulfilling our warranty obligations for the instruments that we sell, and the estimates employed in our calculation of fair value of stock options awarded and warrant derivative liability. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from the estimates and assumptions used.

Concentrations

Credit Risk

Our financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash, cash equivalents, and trade receivables. We have cash investment policies which, among other things, limit investments to investment-grade securities. We perform ongoing credit evaluations of our customers, and the risk with respect to trade receivables is further mitigated by the fact that many of our customers are government institutions, large pharmaceutical and biotechnology companies, and academic laboratories.

The following table illustrates the level of concentration as a percentage of total revenues during the three months and nine months ended September 30, 2018 and 2017.

	For the Three Months Ended
	September 30,
	2018			2017
Top Five Customers		59	%		73	%
Federal Agencies		12	%		30	%

	For the Nine Months Ended
	September 30,
	2018			2017
Top Five Customers		36	%		38	%
Federal Agencies		10	%		19	%

The following table illustrates the level of concentration as a percentage of net accounts receivable balance as of September 30, 2018 and December 31, 2017. The Top Five Customers category may include federal agency receivable balances if applicable.

	September 30, 2018			December, 31, 2017
Top Five Customers		76	%		85	%
Federal Agencies		1	%		1	%

Product Supply

CBM Industries (Taunton, MA) has recently become the manufacturer of the Barocycler® 2320EXT. CBM is ISO 13485:2003 and 9001:2008 Certified. CBM provides us with precision manufacturing services that include management support services to meet our specific application and operational requirements. Among the services provided by CBM to us are:

● CNC Machining

● Contract Assembly & Kitting

● Component and Subassembly Design

● Inventory Management

● ISO certification

At this time, we believe that outsourcing the manufacturing of our new Barocycler® 2320EXT to CBM is the most cost-effective method for us to obtain and maintain ISO Certified, CE and CSA Marked instruments. CBM’s close proximity to our South Easton, MA facility is a significant asset enabling interactions between our Engineering, R&D, and Manufacturing groups and their counterparts at CBM. CBM was instrumental in helping PBI achieve CE Marking on our Barocycler® 2320EXT, as announced on February 2, 2017.

Although we currently manufacture and assemble the Barozyme HT48, Barocycler® HUB440, the SHREDDER SG3, and most of our consumables at our South Easton, MA facility, we plan to take advantage of the established relationship with CBM and transfer manufacturing of the entire Barocycler® product line, future instruments, and other products to CBM.

The Barocycler® NEP3229, launched in 2008, and manufactured by the BIT Group, will be phased out over the next several years and replaced by the new state-of-the-art Barocycler® HUB and Barozyme HT48 product lines.

Investment in Available-For-Sale Equity Securities

As of September 30, 2018, we held 100,250 shares of common stock of Everest Investments Holdings S.A. (“Everest”), a Polish publicly traded company listed on the Warsaw Stock Exchange. We account for this investment in accordance with ASC 320 “Investments — Debt and Equity Securities” as securities available for sale. On September 30, 2018, our consolidated balance sheet reflected the fair value of our investment in Everest to be approximately $17,000, based on the closing price of Everest shares of $0.17 USD per share on that day. The carrying value of our investment in Everest common stock held will change from period to period based on the closing price of the common stock of Everest as of the balance sheet date.

Computation of Loss per Share

Basic loss per share is computed by dividing loss available to common shareholders by the weighted average number of common shares outstanding. Diluted loss per share is computed by dividing loss available to common shareholders by the weighted average number of common shares outstanding plus additional common shares that would have been outstanding if dilutive potential common shares had been issued. For purposes of this calculation, convertible preferred stock, common stock dividends, and warrants and options to acquire common stock, are all considered common stock equivalents in periods in which they have a dilutive effect and are excluded from this calculation in periods in which these are anti-dilutive to our net loss.

The following table illustrates our computation of loss per share for the three months and nine months ended September 30, 2018 and 2017:

	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Numerator:
Net loss	$	(1,808,656	)	$	(2,343,576	)	$	(6,321,542	)	$	(7,889,676	)
Deemed dividend on down round feature		-			-			(213,012	)		-
Deemed dividend on beneficial conversion feature		(1,146,280	)		-			(11,678,571	)		-
Preferred stock dividends		(277,439	)		-			(373,318	)		-
Net loss applicable to common shareholders	$	(3,232,375	)	$	(2,343,576	)	$	(18,586,443	)	$	(7,889,676	)
Denominator for basic and diluted loss per share:
Weighted average common stock shares outstanding		1,606,575			1,133,791			1,466,424			1,084,370
Loss per common share – basic and diluted	$	(2.01	)	$	(2.07	)	$	(12.67	)	$	(7.28	)

The following table presents securities that could potentially dilute basic loss per share in the future. For all periods presented, the potentially dilutive securities were not included in the computation of diluted loss per share because these securities would have been anti-dilutive to our net loss. The Series D Convertible Preferred Stock, Series G Convertible Preferred Stock, Series H Convertible Preferred Stock, Series H2 Convertible Preferred Stock, Series J Convertible Preferred Stock and Series K Convertible Preferred Stock are presented below as if they were converted into common shares according to the conversion terms.

	As of September 30,
	2018		2017
Stock options		341,790		249,636
Convertible debt		361,391		828,870
Common stock warrants		6,769,607		902,033
Convertible preferred stock:
Series D Convertible Preferred Stock		25,000		25,000
Series G Convertible Preferred Stock		26,857		26,857
Series H Convertible Preferred Stock		33,334		33,334
Series H2 Convertible Preferred Stock		70,000		70,000
Series J Convertible Preferred Stock		115,267		115,267
Series K Convertible Preferred Stock		229,334		227,200
Series AA Convertible Preferred Stock		5,655,454		-
		13,628,034		2,478,197

Accounting for Stock-Based Compensation Expense

We maintain equity compensation plans under which incentive stock options and non-qualified stock options are granted to employees, independent members of our Board of Directors and outside consultants. We recognize stock-based compensation expense over the requisite service period using the Black-Scholes formula to estimate the fair value of the stock options on the date of grant.

Determining Fair Value of Stock Option Grants

Valuation and Amortization Method - The fair value of each option award is estimated on the date of grant using the Black-Scholes pricing model based on certain assumptions. The estimated fair value of employee stock options is amortized to expense using the straight-line method over the vesting period.

Expected Term - The Company uses the simplified calculation of expected life, as the Company does not currently have sufficient historical exercise data on which to base an estimate of expected term. Using this method, the expected term is determined using the average of the vesting period and the contractual life of the stock options granted.

Expected Volatility - Expected volatility is based on the Company’s historical stock volatility data over the expected term of the award.

Risk-Free Interest Rate - The Company bases the risk-free interest rate used in the Black-Scholes valuation method on the implied yield currently available on U.S. Treasury zero-coupon issues with an equivalent remaining term.

Forfeitures - The Company records stock-based compensation expense only for those awards that are expected to vest. The Company estimated a forfeiture rate of 5% for awards granted based on historical experience and future expectations of options vesting. The Company used this historical rate as our assumption in calculating future stock-based compensation expense.

The Company recognized stock-based compensation expense of $151,314 and $139,399 for the three months ended September 30, 2018 and 2017, respectively. The Company recognized stock-based compensation expense of $299,584 and $318,910 for the nine months ended September 30, 2018 and 2017, respectively. The following table summarizes the effect of this stock-based compensation expense within each of the line items of our costs and expenses within our Consolidated Statements of Operations:

	For the Three Months Ended				For the Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Cost of products and services	$	4,698	$	-	$	4,698	$	-
Research and development		28,444		37,345		59,592		76,263
Selling and marketing		11,822		21,778		26,298		46,112
General and administrative		106,350		80,276		208,996		196,535
Total stock-based compensation expense	$	151,314	$	139,399	$	299,584	$	318,910

Fair Value of Financial Instruments

Due to their short maturities, the carrying amounts for cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses approximate their fair value. Long-term liabilities are primarily related to convertible debentures and deferred revenue with carrying values that approximate fair value.

The issuances of our convertible promissory notes and common stock purchase warrant are accounted for under the fair value and relative fair value method.

The warrant is first analyzed per its terms as to whether it has derivative features or not. If the warrant is determined to be a derivative, then it is measured at fair value using the Black Scholes Option Model and recorded as a liability on the balance sheet. The warrant is re-measured at its then current fair value at each subsequent reporting date (it is “marked-to-market”).

If the warrant is determined to not have derivative features, it is recorded into equity at its fair value using the Black Scholes option model, however, limited to a relative fair value based upon the percentage of its fair value to the total fair value including the fair value of the convertible note.

The convertible note is recorded at its fair value, limited to a relative fair value based upon the percentage of its fair value to the total fair value including the fair value of the warrant. Further, the convertible promissory note is examined for any intrinsic beneficial conversion feature (“BCF”) of which the convertible price of the note is less than the closing stock price on date of issuance. If the relative fair value method is used to value the convertible promissory note and there is an intrinsic BCF, a further analysis is undertaken of the BCF using an effective conversion price which assumes the conversion price is the relative fair value divided by the number of shares the convertible debt is converted into by its terms. The adjusted BCF value is accounted for as equity.

The warrant and BCF relative fair values are also recorded as a discount to the convertible promissory notes. At present, these equity features of the convertible promissory notes have been recorded at a discount to the convertible notes that is substantially equal to the proceeds received.

Fair Value Measurements

The Company follows the guidance of FASB ASC Topic 820, “Fair Value Measurements and Disclosures” (“ASC 820”) as it related to all financial assets and financial liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis.

In determining the fair value of its assets and liabilities, the Company uses various valuation approaches. The Company employs a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances. The fair value hierarchy is broken down into three levels based on the source of inputs as follows:

Level 1 – Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access.

Level 2–Valuations based on quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and models for which all significant inputs are observable, either directly or indirectly.

Level 3 – Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company has determined that its financial assets are classified within Level 1 and its financial liabilities are currently classified within Level 3 in the fair value hierarchy. The development of the unobservable inputs for Level 3 fair value measurements and fair value calculations are the responsibility of the Company’s management.

Adoption of ASU 2017-11

The Company changed its method of accounting for the Debentures, Debenture Warrants and Series D Warrants through the early adoption of ASU 2017-11 during the year ended December 31, 2017 on a modified retrospective basis. Accordingly, the Company reclassified the warrant derivative and conversion option derivative liabilities to additional paid in capital on its January 1, 2017 consolidated balance sheets totaling approximately $2.6 million, reduced debt discount by approximately $0.9 million and recorded the cumulative effect of the adoption to the beginning balance of accumulated deficit of approximately $2.4 million. This resulted to an increase in stock warrants by $2.6 million and additional paid-in capital by $1.4 million. The following table provides a reconciliation of the warrant derivative liability, convertible debt, conversion option derivative liability, stock warrant, additional paid-in capital and accumulated deficit on the consolidated balance sheet as of December 31, 2016:

	Convertible debt, current portion		Convertible debt, long term portion		Warrant Derivative Liability			Conversion Option Liability			Warrants to acquire common stock		Additional Paid-in Capital		Accumulated deficit
Balance, January 1, 2017 (Prior to adoption of ASU 2017-11)	$	4,005,702	$	529,742	$	1,685,108		$	951,059		$	6,325,102	$	27,544,265	$	(42,264,190	)
Reclassified derivative liabilities and cumulative effect of adoption		769,316		154,152		(1,685,108	)		(951,059	)		2,636,236		1,446,011		(2,369,548	)
Balance, January 1, 2017 (After adoption of ASU 2017-11)	$	4,775,018	$	683,894	$	-		$	-		$	8,961,338	$	28,990,276	$	(44,633,738	)

The following tables set forth the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of September 30, 2018:

			Fair value measurements at  September 30, 2018 using:
	September 30, 2018		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Available-For-Sale Equity Securities		16,643		16,643		-		-
Total Financial Assets	$	16,643	$	16,643	$	-	$	-

The following tables set forth the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, 2017:

			Fair value measurements at  December 31, 2017 using:
	December 31, 2017		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant  unobservable  inputs (Level 3)
Available-For-Sale Equity Securities		19,825		19,825		-		-
Total Financial Assets	$	19,825	$	19,825	$	-	$	-

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

5) Commitments and Contingencies

Operating Leases

Our corporate office is currently located at 14 Norfolk Avenue, South Easton, Massachusetts 02375. We are currently paying $6,950 per month, on a lease extension, signed on December 29, 2017, that expires December 31, 2018, for our corporate office. We expanded our space to include offices, warehouse and a loading dock on the first floor starting May 1, 2017 with a monthly rent increase already reflected in the current payments.

We extended our lease for our space in Medford, MA to December 30, 2020. The lease requires monthly payments of $6,912.75 subject to annual cost of living increases. The lease shall be automatically extended for additional three years unless either party terminates at least six months prior to the expiration of the current lease term.

Rental costs are expensed as incurred. During the nine months ended September 30, 2018 and 2017 we incurred $137,074 and $112,438 in rent expense, respectively for the use of our corporate office and research and development facilities.

Following is a schedule by years of future minimum rental payments required under operating leases with initial or remaining non-cancelable lease terms in excess of one year as of September 30, 2018:

2018	$	41,588
2019		82,953
2020		82,953
2021		-
Thereafter		-
	$	207,494

Government Grants

We received a $1.02 million NIH SBIR Phase II Grant in November 2014. Under the grant, the NIH has committed to pay the Company to develop a high-throughput, high pressure-based DNA Shearing System for Next Generation Sequencing and other genomic applications. In March 2018, we received an extension on the SBIR Phase II grant to utilize unused funds until November 30, 2018.

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Convertible Debt and Other Debt

9 Months Ended

Sep. 30, 2018

Debt Disclosure [Abstract]

Convertible Debt and Other Debt

6) Convertible Debt and Other Debt

Conversion of Notes

We issued 5,075.40 shares of our Series AA Convertible Preferred Stock in satisfaction of $12,688,634 of convertible promissory notes, Revolving Note and short-term loans issued:

	Debt converted to stock
Current liabilities
Convertible Debentures, face value	$	6,962,634
Revolving Note with interest		4,750,000
May 19, 2017 Promissory Note with interest		750,000
Other Notes with interest		226,000
Total debt converted in the second quarter of 2018	$	12,688,634

Senior Secured Convertible Debentures and Warrants

We entered into Subscription Agreements (the “Subscription Agreement”) with various individuals (each, a “Purchaser”) between July 23, 2015 and March 31, 2016, pursuant to which the Company sold Senior Secured Convertible Debentures (the “Debentures”) and warrants to purchase shares of common stock equal to 50% of the number of shares issuable pursuant to the subscription amount (the “Warrants”) for an aggregate purchase price of $6,329,549 (the “Purchase Price”).

The Company issued a principal aggregate amount of $6,962,634 in Debentures which includes a 10% original issue discount on the Purchase Price. The Debenture does not accrue any additional interest during the first year it is outstanding but accrues interest at a rate equal to 10% per annum for the second year it is outstanding. The Debenture has a maturity date of two years from issuance. The Debenture is convertible any time after its issuance date. The Purchaser has the right to convert the Debenture into shares of the Company’s common stock at a fixed conversion price equal to $8.40 per share, subject to applicable adjustments. In the second year that the Debenture is outstanding, any interest accrued shall be payable quarterly in either cash or common stock, at the Company’s discretion.

In connection with the Debentures issued, the Company issued warrants exercisable into a total of 376,759 shares of our common stock. The Warrants issued in this transaction are immediately exercisable at an exercise price of $12.00 per share, subject to applicable adjustments including full ratchet anti-dilution if we issue any securities at a price lower than the exercise price then in effect. The Warrants have an expiration period of five years from the original issue date. The Warrants are subject to adjustment for stock splits, stock dividends or recapitalizations and also include anti-dilution price protection for subsequent equity sales below the exercise price.

On May 2, 2018, the Company entered into a Securities Purchase Agreement with an existing shareholder pursuant to which the Company sold an aggregate of 100 shares of Series AA Convertible Preferred Stock for an aggregate Purchase Price of $250,000. We issued to the shareholder a new warrant to purchase 100,000 shares of common stock with an exercise price of $3.50 per share.

The Company, pursuant to a price protection provision triggered on May 2, 2018 with the sale of Series AA units, amended the Debentures and Warrants to purchase Common Stock held by the Debenture Holders entered into between July 22, 2015 and March 31, 2016 as first disclosed in the Company’s Current Report on Form 8-K filed on July 28, 2015. The fair value of $207,899 relating to the reduction in exercise price was treated as a deemed dividend and recorded as a charge against additional paid-in capital within equity. The amended Debenture conversion price was exempt from revaluation because a beneficial conversion feature had already been recorded on the Debenture at issuance.

Subject to the terms and conditions of the Warrants, at any time commencing six months from the Final Closing, the Company has the right to call the Warrants for cancellation if the volume weighted average price of its Common Stock on the OTCQB (or other primary trading market or exchange on which the Common Stock is then traded) equals or exceeds three times the per share exercise price of the Warrants for 15 out of 20 consecutive trading days.

In connection with the Subscription Agreement and Debenture, the Company entered into Security Agreements with the Purchasers whereby the Company agreed to grant to Purchasers an unconditional and continuing, first priority security interest in all of the assets and property of the Company to secure the prompt payment, performance and discharge in full of all of Company’s obligations under the Debentures, Warrants and the other Transaction Documents. On May 14 and June 11, 2018, the Company signed letter agreements with the Debenture holders as explained below that discharged all of the Company’s obligations within the Debenture Agreement.

Conversion of Debentures

On May 14, 2018, we entered into letter agreements (the “Letter Agreements”) with 22 investors (each a “Debenture Holder” and together the “Debenture Holders”) holding convertible debentures (collectively the “Debentures”) and warrants to purchase common stock (the “Debenture Warrants”) whereby the Debenture Holders agreed to convert a total of $6,220,500 in principal and original issue discount due them under the Debentures into 2,448.20 shares of Series AA Convertible Preferred Stock with a conversion price of $2.50 per share. The Debenture Holders were also: (a) issued amended Debenture Warrants such that the exercise price will be $3.50 per share; and (b) issued a new warrant with an exercise price of $3.50 per share to purchase 2,448,200 shares of common stock (the number of shares of common stock issuable upon conversion of the Series AA Convertible Preferred Stock shares received as a result of the Debenture conversions). The Debenture Holders also agreed to waive any and all defaults or events of default by the Company with respect to any failure by the Company to comply with any covenants contained in the Debentures. The fair value of $29,865 relating to the adjustment in exercise price was treated as a loan modification and recorded as a gain toward the extinguishment of debt.

On June 11, 2018, the Company entered into additional Letter Agreements with 15 Debenture Holders whereby the Debenture Holders agreed to convert a total of $742,134 in principal and original issue discount due them under the Debentures into 296.80 shares of Series AA Convertible Preferred Stock with a conversion price of $2.50 per share. The Debenture Holders were also: (a) issued amended Debenture Warrants such that the exercise price will be $3.50 per share; and (b) issued a new warrant with an exercise price of $3.50 per share to purchase 296,800 shares of common stock (the number of shares of common stock issuable upon conversion of the Series AA Convertible Preferred Stock shares received as a result of the Debenture conversions). The Debenture Holders also agreed to waive any and all defaults or events of default by the Company with respect to any failure by the Company to comply with any covenants contained in the Debentures. The fair value of $3,155 relating to the adjustment in exercise price was treated as a loan modification and recorded as a gain toward the extinguishment of debt.

In connection with the above Debenture conversions and cancellation of the debt term, the Company recorded the full amount of the remaining unamortized Debenture discounts of $157,908 as interest expense by June 11, 2018. The Company recorded $287,676 of the Debenture discounts during 2018 through the cancellation date of June 11, 2018.

On various dates for the nine months ended September 30, 2018, the Company issued 56,007 shares of common stock based on the 10-day VWAP prior to quarter end to holders of the Debentures in payment of the quarterly interest accrued from the Debentures first anniversary date through June 11, 2018 for an aggregate amount of $211,047. We recognized a $9,615 gain on extinguishment of debt for the nine months ended September 30, 2018 by calculating the difference of the shares valued on the issuance date and the amount of accrued interest through June 11, 2018.

Other convertible notes

The Company, pursuant to a price protection provision triggered on May 2, 2018 with the sale of Series AA units, amended the conversion price of a March 12, 2018 loan to $2.50 per share. The fair value of $253,000, limited to the face value of the loan, relating to the reset in the conversion price was recorded as a debt discount and amortized as interest expense over the remaining loan term.

On various dates during the nine months ended September 30, 2018, the Company issued convertible notes for net proceeds of $3,848,484 which contained varied terms and conditions as follows: a) maturity dates ranging from 3 to 12 months; b) interest rates that accrue per annum ranging from 4% to 15%; c) convertible to the Company’s common stock at issuance at a fixed rate of $7.50 or convertible at variable conversion rates either after 6 months after issuance or in the event of a default. Certain of these notes were issued with shares of common stock or warrants to purchase common stock that were fair valued at issuance dates. The aggregate relative fair value of $384,295 of the shares of common stock or warrants to purchase common stock issued with the notes was recorded as a debt discount and amortized over the term of the notes. We then computed the effective conversion price of the notes, noting that no beneficial conversion feature exists. We also evaluated the convertible notes for derivative liability treatment and determined that the notes did not qualify for derivative accounting treatment as of September 30, 2018.

The specific terms of the convertible notes and outstanding balances as of September 30, 2018 are listed in the tables below.

Convertible Notes

Inception Date	Term			Loan Amount		Outstanding Balance with OID			Original Issue Discount			Interest Rate			Conversion Price (Convertible at Inception Date)		Deferred Finance Fees		Discount related to fair value of conversion feature and warrants/shares
July 22, 2015		30 months	1	$	2,398,000	$	-	4	$	218,000	2		10	%3	$	8.40	$	388,532	$	2,163,074
September 25, 2015		30 months	1		1,210,000		-	4		110,000	2		10	%3	$	8.40		185,956		1,022,052
October 2, 2015		30 months	1		165,000		-	4		15,000	2		10	%3	$	8.40		26,345		140,832
October 6, 2015		30 months	1		33,000		-	4		3,000	2		10	%3	$	8.40		5,168		26,721
October 14, 2015		30 months	1		55,000		-	4		5,000	2		10	%3	$	8.40		8,954		49,377
November 2, 2015		30 months	1		275,000		-	4		25,000	2		10	%3	$	8.40		43,079		222,723
November 10, 2015		30 months	1		55,000		-	4		5,000	2		10	%3	$	8.40		8,790		46,984
November 12, 2015		30 months	1		236,500		-	4		21,500	2		10	%3	$	8.40		38,518		212,399
November 20, 2015		30 months	1		220,000		-	4		20,000	2		10	%3	$	8.40		37,185		200,000
December 4, 2015		30 months	1		187,000		-	4		17,000	2		10	%3	$	8.40		37,352		170,000
December 11, 2015		30 months	1		396,000		-	4		36,000	2		10	%3	$	8.40		75,449		360,000
December 18, 2015		30 months	1		60,500		-	4		5,500	2		10	%3	$	8.40		11,714		55,000
December 31, 2015		30 months	1		110,000		-	4		10,000	2		10	%3	$	8.40		20,634		100,000
January 11, 2016		30 months	1		110,000		-	4		10,000	2		10	%3	$	8.40		24,966		80,034
January 20, 2016		30 months	1		55,000		-	4		5,000	2		10	%3	$	8.40		9,812		40,188
January 29, 2016		30 months	1		330,000		-	4		30,000	2		10	%3	$	8.40		60,887		239,113
February 26, 2016		30 months	1		220,000		-	4		20,000	2		10	%3	$	8.40		43,952		156,048
March 10, 2016		30 months	1		137,500		-	4		12,500	2		10	%3	$	8.40		18,260		106,740
March 18, 2016		30 months	1		396,000		-	4		36,000	2		10	%3	$	8.40		94,992		265,008
March 24, 2016		30 months	1		117,334		-	4		10,667	2		10	%3	$	8.40		15,427		91,240
March 31, 2016		30 months	1		195,670		-	4		17,788	2		10	%3	$	8.40		2,436		175,446
October 20, 2017		12 months			150,000		-			-			5	%	$	7.50		7,500		-
October 25, 2017		6 months			103,000		-			-			12	%		-		3,000		-
October 27, 2017		12 months			170,000		-			-			5	%		-		4,250		10,000
November 13, 2017		9 months			380,000		-			15,200			8	%	$	7.50		15,200		46,274
November 22, 2017		12 months			100,000		-			10,000			5	%		-		2,000		-
November 28, 2017		10 months			103,000		-			3,000			12	%		-		-		-
November 29, 2017		6 months			150,000		-			-			15	%	$	7.50		-		15,200
November 30, 2017		3 months			50,000		-			-			8	%	$	7.50		-		-
December 5, 2017		3 months			52,500		-			-			10	%	$	7.50		2,500		-
December 6, 2017		4 months			100,000		-			-			10	%	$	7.50		-		-
December 11, 2017		6 months			130,000		-			1,500			5	%		-		6,500		6,460
December 19, 2017		6 months			110,000		-			1,500			5	%		-		5,500		5,775
December 28, 2017		6 months			55,000		-			-			15	%	$	7.50		5,000		-
December 29, 2017		12 months			105,000		-			-			5	%		-		5,000		-
January 3, 2018		12 months			95,000		-			4,750			5	%		-		2,000		-
January 16, 2018		12 months			131,250		-			-						-		6,250		-
January 19, 2018		6 months			150,000		-			-			10	%	$	7.50		6,000		12,267
February 9, 2018		6 months			100,000		-			-			15	%	$	7.50		23,500		-
February 15, 2018		6 months			100,000		-			-			15	%	$	7.50		9,000		10,474
March 12, 2018		6 months			85,000		-			1,150			5	%		-		4,250		5,183
March 12, 2018		6 months			253,000		-			53,000			0	%		-				28,722
April 11, 2018		6 months			100,000		100,000			4,000			15	%	$	7.50		20,000		7,218
April 23, 2018		6 months			103,000		103,000			-			12	%		-		3,000		-
April 24, 2018		9 months			77,000		77,000			-			12	%	$	7.50		2,000		-
April 25, 2018		12 months			105,000		105,000			-			4	%	$	7.50		5,000		4,590
April 25, 2018		12 months			105,000		105,000			-			4	%	$	7.50		5,000		4,590
April 25, 2018		12 months			130,000		130,000			-			6	%	$	7.50		6,500		-
April 26, 2018		12 months			65,000		65,000			6,500			5	%		-		2,000		-
May 9, 2018		12 months			250,000		250,000			-			10	%	$	7.50		12,500		26,466
May 11, 2018		6 months			161,250		161,250			11,250			15	%	$	7.50		10,000		-
May 14, 2018		9 months			50,000		50,000			2,500			15	%	$	7.50		2,500		3,704
May 17, 2018		12 months			380,000		380,000			15,200			8	%	$	7.50		15,200		43,607
May 23, 2018		9 months			103,000		103,000			-			12	%		-		3,000		-
May 24, 2018		9 months			52,500		52,500			2,500			4	%		-		-		2,075
May 25, 2018		12 months			78,750		78,750			-			4	%	$	7.50		3,750		3,112
May 30, 2018		2 months			150,000		-			-			8	%	$	7.50		-		6,870
June 4, 2018		12 months			75,000		75,000			7,500			5	%		-		2,000		3,869
June 8, 2018		6 months			50,000		50,000			2,500			15	%	$	7.50		2,500		3,271
June 12, 2018		6 months			100,000		-			-			5	%	$	7.50		5,000		-
June 14, 2018		9 months			280,000		280,000			25,000			10	%		-		5,000		17,573
June 16, 2018		9 months			130,000		130,000			-			5	%		-		-		-
June 16, 2018		6 months			110,000		110,000			-			5	%		-		-		-
June 26, 2018		3 months			150,000		150,000			-			15	%	$	7.50		-		20,242
June 28, 2018		6 months			50,000		50,000			-			15	%	$	7.50		-		10,518
July 2, 2018		12 months			125,000		125,000			-			4	%		-		6,250		5,588
July 10, 2018		12 months			95,000		95,000			6,750			5	%		-		-		-
July 13, 2018		9 months			103,000		103,000			-			12	%		-		3,000		-
July 17, 2018		3 months			100,000		100,000			15,000			15	%	$	7.50		-		16,944
July 19, 2018		12 months			184,685		184,685			34,685			10	%	$	7.50		-		-
July 30, 2018		12 months			80,000		80,000			-			6	%	$	7.50		4,000		-
July 31, 2018		3 months			150,000		150,000			-			12	%	$	7.50		-		6,578
August 8, 2018		6 months			100,000		100,000			-			15	%	$	7.50		-		-
August 15, 2018		4 months			100,000		100,000			-			15	%	$	7.50		-		-
August 28, 2018		12 months			131,250		131,250			-			4	%		-		6,250		4,443
September 7, 2018		6 months			85,000		85,000			-			5	%		-		-		4,364
				$	13,744,689	$	3,859,435		$	856,440							$	1,390,308	$	6,258,956

1. The loan term was extended by 180 days and further extended on January 15, 2018 by 60 days to repay in common stock. The Debenture holders signed letter agreements on May 14, 2018 and June 11, 2018 to waive default penalties relating to the maturity date.

2. The original issue discount is reflected in the first year.

3. The annual interest started accruing in the second year.

4. The Debentures were converted into Series AA Convertible Preferred Stock.

For the nine months ended September 30, 2018, the Company recognized amortization expense related to the convertible debt discounts indicated above of $1,327,983. The unamortized debt discounts as of September 30, 2018 related to the convertible debentures and other convertible notes amounted to $239,872.

Revolving Note Payable and May 19, 2017 Promissory Note

On October 28, 2016, an accredited investor (the “Investor”) purchased from us a promissory note in the aggregate principal amount of up to $2,000,000 (the “Revolving Note”) due and payable on the earlier of October 28, 2017 (the “Maturity Date”) or on the seventh business day after the closing of a Qualified Offering (as defined in the Revolving Note). Although the Revolving Note is dated October 26, 2016, the transaction did not close until October 28, 2016, when we received its initial $250,000 advance pursuant to the Revolving Note. As a result, on the same day and pursuant to the Revolving Note, we issued to the Investor a Common Stock Purchase Warrant (the “Line of Credit Warrants”) to purchase 20,834 shares of our common stock at an exercise price per share equal to $12.00 per share. The Investor is obligated to provide us with advances of $250,000 under the Revolving Note, but the Investor shall not be required to advance more than $250,000 in any individual fifteen (15) day period and no more than $500,000 in the thirty (30) day period immediately following the date of the initial advance. We received $3,500,000 pursuant to the Revolving Note as amended of which $2,070,000 net proceeds was received in 2017 and we issued to the Investor Line of Credit Warrants to purchase 291,667 shares of our Common Stock at an exercise price per share equal to $12.00 per share. The terms of the Line of Credit Warrants are identical except for the exercise date, issue date, and termination date which are based on the advance date.

The Revolving Note was amended on May 2, 2017 to increase the aggregate principal amount to $3,000,000, to issue 16,667 shares of our Common Stock to the Investor, to decrease the exercise price per share of the warrants to the lower of (i) $12.00 or (ii) the per share purchase price of the shares of our Common Stock sold in the Qualified Offering, and to change the references in the Revolving Note from “the six (6) month anniversary of October 28, 2016” to “July 25, 2017.” The fair value of the 16,667 shares issued of $149,018 was accounted for as a note discount and are amortized to interest expense over the life of the loan. We evaluated the accounting impact of the Revolving Note amendment and deemed that the amendment did not have a material impact on our consolidated financial statements.

The Revolving Note was amended on August 18, 2017 to increase the aggregate principal amount to $3,500,000 with all other terms unchanged. The Revolving Note, previously amended, was further amended on January 30, 2018 to increase the aggregate principal amount to $4,000,000 with all other terms unchanged.

In the event that a Qualified Offering had occurred after July 25, 2017, but prior to the Maturity Date, within seven (7) Business Days of the closing of the Qualified Offering, the Company was to pay a cash fee equal to five percent (5%) of the total outstanding amount owed by the Company to the Holder as of the closing date of the Qualified Offering or, at the option of the Company, issue to the Holder a number of restricted shares of the Company’s common stock equal to (x) five percent (5%) of the total outstanding amount owed by the Company to the Holder as of the closing date of the Qualified Offering divided by (y) the purchase price provided by the documents governing the Qualified Offering. A Qualified Offering means the completion of a public offering of the Company’s securities pursuant to which the Company receives aggregate gross proceeds of at least Seven Million United States Dollars (US$7,000,000) in consideration of the purchase of its securities and resulting in, pursuant to the effectiveness of the registration statement for such offering, the Company’s common stock being traded on the NASDAQ Capital Market, NASDAQ Global Select Market or the New York Stock Exchange. A Qualified Offering did not occur on or prior to the Maturity Date.

Interest on the principal balance of the Revolving Note shall be paid in full on the Maturity Date, unless otherwise paid prior to the Maturity Date. Interest shall be assessed as follows: (i) a one-time interest of 10% on all principal amounts advanced prior to April 28, 2017; (ii) the foregoing and 4% on any amount remaining outstanding if the principal amount is repaid between April 28, 2017 and July 28, 2017; or (iii) both of the foregoing and 4% on any amount remaining outstanding if the principal amount is repaid between July 28, 2017 and October 28, 2017.

Broker fees amounting to $336,500, the one-time interest of $400,000 and the relative fair value of the 333,334 warrants issued to the Investor amounting to $1,266,691 were recorded as debt discounts and amortized over the term of the revolving note. The unamortized debt discounts related to the Revolving Note were fully amortized as of December 31, 2017. The finance costs from advances after December 31, 2017 were charged to interest expense directly because the maturity date had passed.

On May 19, 2017, we received a 45-day non-convertible loan of $630,000 from the Investor. The loan provided guaranteed interest of $63,000 and had an origination fee of $32,000. We paid a broker $31,500 in connection with this loan. The unamortized debt discount as of September 30, 2018 was zero.

Conversion of October 26, 2016 Revolving Note and May 19, 2017 Promissory Note

On June 11, 2018, the Company entered into a Letter Agreement with the Investor to convert a total of $5,500,000 in principal and interest due to the Investor pursuant to the Revolving Note and the May 19, 2017 promissory note into 2,200 shares of Series AA Convertible Preferred Stock with a conversion price of $2.50 per share. The Company also amended the Line of Credit Warrants held by the Investor. The Company lowered the Line of Credit Warrants’ exercise price from $12.00 per share to $3.50 per share. The fair value of $82,904 relating to the reduction in exercise price was treated as a loan modification and recorded as a charge against the extinguishment of debt.

The Company also issued a new warrant to the Investor with an exercise price of $3.50 per share to purchase 2,200,000 shares of common stock (the number of shares of common stock issuable upon conversion of the Series AA Convertible Preferred Stock shares received as a result of the conversion of a total of $5,500,000). In connection with the Letter Agreement, the Investor also waived $520,680 of interest and fees owed as of September 30, 2018. We recognized $520,680 as a gain on extinguishment of debt.

Convertible Loan modifications and extinguishments

We refinanced certain convertible loans during the three months ended September 30, 2018 at substantially the same terms for extensions of six months. We amortized any remaining unamortized debt discount as of the modification date over the remaining, extended term of the new loans. We applied ASC 470 of modification accounting to the debt instruments which were modified during the quarter or those settled with new notes issued concurrently for the same amounts but different maturity dates. The terms such as the interest rate, prepayment penalties, and default rates will be the same over the new extensions. According to ASC 470, an exchange of debt instruments between or a modification of a debt instrument by a debtor and a creditor in a nontroubled debt situation is deemed to have been accomplished with debt instruments that are substantially different if the present value of the cash flows under the terms of the new debt instrument is at least 10 percent different from the present value of the remaining cash flows under the terms of the original instrument. If the terms of a debt instrument are changed or modified and the cash flow effect on a present value basis is less than 10 percent, the debt instruments are not considered to be substantially different and will be accounted for as modifications.

The cash flows of new debt exceeded 10% of the remaining cash flows of the original debt on five loans. We recorded losses on debt extinguishment of $124,879 on these five loans by calculating the difference of the fair value of the new debt and the carrying value of the old debt. The loss was primarily from the fair value of common stock issued in connection with these refinancings. The fees paid to the lenders which formed part of the $124,879 loss on debt extinguishment included the aggregate fair value of $68,334 for the shares issued with the new debt, the writedown of $5,883 for unamortized discounts remaining on the original debt and cash fees of $50,662.

Origination Date	Amended Start Date		New Maturity Date			Loan Amount		New Loan Amount		Total Unamortized Discount as of June 30, 2018		Amortization from July 1, 2018 to Modification Date			Unamortized discount
12/11/2017		6/15/2018		12/11/2018	*	$	130,000	$	130,000	$	-	$	-		$	-
12/19/2017		6/15/2018		12/19/2018	*		110,000		110,000		-		-			-
1/3/2018		7/11/2018		7/10/2019			95,000		95,000		3,458		(69	)		3,389
1/17/2018		8/29/2018		8/27/2019			131,250		131,250		3,442		(352	)		3,090
1/19/2018		7/19/2018		8/22/2019	*		150,000		184,685		1,288		(42	)		1,246
2/9/2018		8/8/2018		2/8/2019	*		100,000		100,000		5,193		(556	)		4,637
2/15/2018		8/15/2018		12/15/2018	*		100,000		100,000		2,662		(2,662	)		-
3/12/2018		9/7/2018		3/12/2019			85,000		85,000		2,172		(411	)		1,761
5/30/2018		7/31/2018		10/31/2018			150,000		150,000		9,280		(1,868	)		7,412
3/30/2018		4/30/2018		9/30/2018			170,000		170,000		-		-			-
						$	1,221,250	$	1,255,935	$	27,495	$	(5,960	)	$	21,535

* The original loans were recorded as extinguished, the unamortized debt discounts on the old debt were written off on extinguishment date, and a loss was recorded for each extinguishment. The July 19, 2018 Note includes an original issue discount of $34,685 added to the new loan.

The following table provides a summary of the changes in convertible debt and revolving note payable, net of unamortized discounts, during 2018:

	2018
Balance at January 1,	$	11,787,776
Issuance of convertible debt, face value		4,664,000
Deferred financing cost		(315,516	)
Debt discount related to one-time interest charge		(147,000	)
Contingent beneficial conversion feature on convertible note		(253,000	)
Debt discount from warrants issued with debt		(162,023	)
Debt discount from shares issued with the notes		(222,272	)
Conversion of debt into equity		(10,962,634	)
Payments		(2,097,750	)
Accretion of interest and amortization of debt discount to interest expense through September 30,		1,327,984
Balance at September 30,		3,619,565
Less: current portion		3,619,565
Convertible debt, long-term portion	$	-

Other Notes

On March 21, 2017, we received an eight-month, non-convertible loan of $170,000 from an accredited investor. The loan earns an annual interest rate of 10% and includes a 10% original issue discount. We also agreed to issue the investor 5,667 shares of restricted common stock. We recorded the fair value of the shares amounting to $35,079 as a debt discount that will be amortized to interest expense during the term of the loan. The loan still remains outstanding as of September 30, 2018 with a balance of $170,000. The lender extended the term to December 31, 2017 and further to March 31, 2018 in exchange for a total of 9,500 shares of common stock with a fair value of $28,490 recorded as interest expense. The lender further extended the term to April 30, 2018 then to September 30, 2018 in exchange for an aggregate of 7,200 shares of company stock. We fully amortized $52,079 of the original debt discount in the year ended December 31, 2017. We recorded a loss of $20,400 relating to the fair value of common stock issued for the September 30 extension.

On August 1, 2017, we signed a non-convertible installment loan with a lender. Under the agreement we received a loan of $75,000 with a weekly repayment of $3,500 until payment in full. The loan includes $18,750 representing an original issue discount, interest and fees resulting in a total payable of $93,750. The loan was paid off entirely as of September 30, 2018.

On September 12, 2017, we received a 9-month non-convertible loan of $225,000 from a privately-held investment firm. The loan earns an annual interest rate of 10%. The Company paid total fees of $25,000 including original issue discount and other costs related to this loan. We agreed to issue 3,333 shares at closing. We recorded the fair value of the shares as a debt discount that will be amortized to interest expense during the term of the loan. We amortized the entire debt discount of $38,000 as of September 30, 2018. In the event of default and at the option of the holder, the loan is convertible into common stock at a 35% discount to the average of the two lowest daily volume weighted average closing stock price for the 20 trading days prior to conversion. The loan was paid off entirely as of September 30, 2018.

In March 2018, we received non-convertible loans totaling $150,000 from private investors. The loans include one-year term and 10% guaranteed interest. We converted these loans into Series AA Units. See below.

In April 2018, we received a non-convertible loan for $10,000 from a private investor. The loan includes a one-year term and 10% guaranteed interest. We converted this loan into Series AA Units. See below.

On July 16, 2018 we signed a Merchant Agreement with a lender. Under the agreement we received $180,000, of which $103,450 was used to pay off the outstanding balance on a previous loan dated April 11, 2018 from this lender, in exchange for rights to all customer receipts until the lender is paid $246,600, which is collected at the rate of $1,790.00 per business day. The $66,600 imputed interest will be recorded as interest expense when paid each day. Fees of $3,600 were deducted from the initial advance. The payments were secured by second position rights to all customer receipts until the loan has been paid in full. We accounted for the Merchant Agreement as a secured loan under ASC 860 because while we provided rights to current and future receipts, we still had control over the receipts.

On August 8, 2018, we received a non-convertible loan of $50,000 from a private investor. The loan does not charge interest and was repaid entirely on October 3, 2018.

In September 2018, we received a non-convertible loan of $67,000 from a private investor. The loan does not charge interest and was repaid entirely in October 2018.

On September 14, 2018, we received a short-term non-convertible loan of $350,000 from an accredited investor. The loan was repaid entirely on September 18, 2018. We paid $20,000 in interest on this loan which includes a $15,000 original issue discount.

Conversion of Non-Convertible Notes

On June 11, 2018, the Company entered into Letter Agreements with certain private investors to convert a total of $176,000 in principal and interest due to the private investors pursuant to certain loan documents into 70.4 Series AA Units representing 70.4 shares of Series AA Convertible Preferred Stock with a conversion price of $2.50 per share and warrants to purchase 70,400 shares of common stock.

Merchant Agreements

We have signed various Merchant Agreements which entitle the lenders to our customer receipts. We accounted for the Merchant Agreements as loans under ASC 860 because while we provided rights to current and future receipts, we still had control over the receipts. The following table shows our Merchant Agreements as of September 30, 2018.

Inception Date	Purchase Price		Purchased Amount		Outstanding Balance		Daily Payment		Interest Rate			Deferred Finance Fees
September 29, 2017		75,000		102,000	$	-		1,200.00		15	%		1,500
October 25, 2017		110,000		153,890		-		1,539.00		15	%		8,800
December 7, 2017		160,000		212,800		-		1,251.76		25	%		5,799
December 12, 2017		160,000		212,800		-		1,251.76		15	%		5,258
February 27, 2018		110,000		147,400		-		921.25		25	%		1,650
April 11, 2018		140,000		187,600		-		1,275.00		13	%		2,800
May 11, 2018		180,000		243,000		82,468		1,518.75		25	%		2,599
May 15, 2018		180,000		244,800		86,858		1,530.00		15	%		3,600
June 29, 2018		140,000		190,400		88,657		1,269.33		25	%		2,100
July 16, 2018		180,000		246,600		124,544		1,790.00		13	%		3,600
	$	1,435,000	$	1,941,290	$	382,527						$	37,706

We amortized $94,050 and $225,508 of debt discounts during the nine months ended September 30, 2018 and 2017, respectively for all non-convertible notes. The total unamortized discount for all non-convertible notes as of September 30, 2018 was $6,343.

Related Party Notes

On March 14, 2018, we received a one-year, non-convertible loan of $50,000 from a related party (a member of the Company’s Board of Directors). This loan is included in net proceeds from non-convertible debt in the Statement of Cash Flows. The amount of $50,000 was converted on June 11, 2018 into 20 shares of Series AA Convertible Preferred Stock and 20,000 warrants to purchase common stock. The $7,500 guaranteed interest on the loan was recorded as a debt discount and amortized over the term of the debt. The interest is outstanding as of September 30, 2018.

On May 31, 2018, we received two short-term loans of $46,500 and $5,600 from two members of the Company’s Board of Directors, respectively. We repaid both loans in full during June 2018 and paid interest of $6,975.

On June 11, 2018, the Company entered into a Letter Agreement with one non-employee member of the Board, to convert $50,000 in principal due to the board member pursuant to a certain loan document into 20 Series AA Units representing 20 shares of Series AA Convertible Preferred Stock with a conversion price of $2.50 per share and warrants to purchase 20,000 shares of common stock.

In June 2018, we received a non-convertible loan of $15,000 from a private investor. The loan includes a one-year term and 10% guaranteed interest.

On August 6, 2018 and on September 28, 2018, we received two short-term loans of $6,500 and $7,500 from an employee and an officer of the Company, respectively. We repaid both loans in full in August and October 2018, respectively. There was no interest charged on these loans.

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Stockholders' Deficit

9 Months Ended

Sep. 30, 2018

Equity [Abstract]

Stockholders' Deficit

7) Stockholders’ Deficit

Preferred Stock

We are authorized to issue 1,000,000 shares of preferred stock with a par value of $0.01. Of the 1,000,000 shares of preferred stock:

1)	20,000 shares have been designated as Series A Junior Participating Preferred Stock (“Junior A”)
2)	313,960 shares have been designated as Series A Convertible Preferred Stock (“Series A”)
3)	279,256 shares have been designated as Series B Convertible Preferred Stock (“Series B”)
4)	88,098 shares have been designated as Series C Convertible Preferred Stock (“Series C”)
5)	850 shares have been designated as Series D Convertible Preferred Stock (“Series D”)
6)	500 shares have been designated as Series E Convertible Preferred Stock (“Series E”)
7)	240,000 shares have been designated as Series G Convertible Preferred Stock (“Series G”)
8)	10,000 shares have been designated as Series H Convertible Preferred Stock (“Series H”)
9)	21 shares have been designated as Series H2 Convertible Preferred Stock (“Series H2”)
10)	6,250 shares have been designated as Series J Convertible Preferred Stock (“Series J”)
11)	15,000 shares have been designated as Series K Convertible Preferred Stock (“Series K”)
12)	10,000 shares have been designated as Series AA Convertible Preferred Stock (“Series AA”)

As of September 30, 2018, there were no shares of Junior A, and Series A, B, C, and E issued and outstanding. See our Annual Report on Form 10-K for the year ended December 31, 2017 for the pertinent disclosures of preferred stock.

Series AA Convertible Preferred Stock and Warrants

On May 2, 2018, the Company entered into a Securities Purchase Agreement with an existing shareholder pursuant to which the Company sold an aggregate of 100 shares of Series AA Convertible Preferred Stock, each preferred share convertible into 1,000 shares of the Company’s common stock, par value $0.01 per share, for an aggregate Purchase Price of $250,000. Each share of Series AA Convertible Preferred Stock will receive a cumulative dividend at the annual rate of eight percent (8%) payable quarterly commencing on September 30, 2018 on those shares of Series AA Convertible Preferred Stock purchased from the Company.

We issued to the shareholder a new warrant to purchase 100,000 shares of common stock with an exercise price of $3.50 per share. The Warrant will expire on the fifth-year anniversary after issuance. The exercise price is also subject to adjustment in the event that we issue any shares of common stock or common stock equivalents at a per share price that is lower than the exercise price for the Series AA Warrants then in effect. Upon any such issuance, subject to certain exceptions, the exercise price will be reduced to the per share price at which such shares of common stock or common stock equivalents are issued.

On May 14, 2018, we entered into Letter Agreements with 22 Debenture Holders holding Debentures and Debenture Warrants whereby the Debenture Holders agreed to convert a total of $6,220,500 in principal and original issue discount due them under the Debentures into 2,448.20 shares of Series AA Convertible Preferred Stock with a conversion price of $2.50 per share. The Debenture Holders were also: (a) issued amended Debenture Warrants such that the exercise price will be $3.50 per share; and (b) issued a new warrant with an exercise price of $3.50 per share to purchase 2,448,200 shares of common stock (the number of shares of common stock issuable upon conversion of the Series AA Convertible Preferred Stock shares received as a result of the Debenture conversions).

On June 1, 2018, the Company entered into a Securities Purchase Agreement with accredited investors pursuant to which the Company sold an aggregate of 20 shares of Series AA Convertible Preferred Stock, each preferred share convertible into 1,000 shares of the Company’s common stock, par value $0.01 per share, for an aggregate Purchase Price of $50,000. We issued to the shareholders a new warrant to purchase 20,000 shares of common stock with an exercise price of $3.50 per share.

On June 11, 2018, the Company entered into additional Letter Agreements with 15 Debenture Holders whereby the Debenture Holders agreed to convert a total of $742,134 in principal and original issue discount due them under the Debentures into 296.80 shares of Series AA Convertible Preferred Stock with a conversion price of $2.50 per share. The Debenture Holders were also: (a) issued amended Debenture Warrants such that the exercise price will be $3.50 per share; and (b) issued a new warrant with an exercise price of $3.50 per share to purchase 296,800 shares of common stock (the number of shares of common stock issuable upon conversion of the Series AA Convertible Preferred Stock shares received as a result of the Debenture conversions).

During the quarter ended September 30, 2018, the Company entered into Securities Purchase Agreements with accredited investors pursuant to which the Company sold an aggregate of 460 shares of Series AA Convertible Preferred Stock, each preferred share convertible into 1,000 shares of the Company’s common stock, par value $0.01 per share, for an aggregate Purchase price of $1,150,000. We issued to the investors warrants to purchase an aggregate 460,000 shares of common stock with an exercise price of $3.50 per share.

The issuances of our convertible preferred stock and common stock purchase warrants are accounted for under the fair value and relative fair value method.

The warrant is first analyzed per its terms as to whether it has derivative features or not. If the warrant is determined to be a derivative, then it is measured at fair value using the Black Scholes Option Model and recorded as a liability on the balance sheet. The warrant is re-measured at its then current fair value at each subsequent reporting date (it is “marked-to-market”).

If the warrant is determined to not have derivative features, it is recorded into equity at its fair value using the Black Scholes option model, however, limited to a relative fair value based upon the percentage of its fair value to the total fair value including the fair value of the convertible preferred stock.

We analyzed these warrants and determined that they were not considered derivatives and therefore recorded the aggregate relative fair value of $7,877,396 into equity relating to the 5,655,454 warrants and 57,000 broker warrants issued.

The convertible preferred stock is recorded at its fair value, limited to a relative fair value based upon the percentage of its fair value to the total fair value including the fair value of the warrant. Further, the convertible preferred stock is examined for any intrinsic beneficial conversion feature (“BCF”) of which the convertible price of the preferred stock is less than the closing stock price on date of issuance. If the relative fair value method is used to value the convertible preferred stock and there is an intrinsic BCF, a further analysis is undertaken of the BCF using an effective conversion price which assumes the conversion price is the relative fair value divided by the number of shares of common stock the convertible preferred stock is converted into by its terms. The adjusted BCF value of $11,678,571 was accounted for as a deemed dividend within equity and was included in the earnings per share calculation.

Stock Options and Warrants

Our stockholders approved our amended 2005 Equity Incentive Plan (the “Plan”) pursuant to which an aggregate of 1,800,000 shares of our common stock were reserved for issuance upon exercise of stock options or other equity awards made under the Plan. Under the Plan, we may award stock options, shares of common stock, and other equity interests in the Company to employees, officers, directors, consultants, and advisors, and to any other persons the Board of Directors deems appropriate. The Plan has expired and on July 18, 2018, the outstanding options to acquire 32,605 shares were transferred as discussed below to one of the other plans.

At the Company’s December 12, 2013 Special Meeting, the shareholders approved the 2013 Equity Incentive Plan (the “2013 Plan”) pursuant to which 3,000,000 shares of our common stock were reserved for issuance upon exercise of stock options or other equity awards. Under the 2013 Plan, we may award stock options, shares of common stock, and other equity interests in the Company to employees, officers, directors, consultants, and advisors, and to any other persons the Board of Directors deems appropriate. As of September 30, 2018, options to acquire 138,056 shares were outstanding under the Plan with 2,861,944 shares available for future grant under the 2013 Plan.

On November 29, 2015 the Company’s Board of Directors adopted the 2015 Nonqualified Stock Option Plan (the “2015 Plan”) pursuant to which 5,000,000 shares of our common stock were reserved for issuance upon exercise of non-qualified stock options. Under the 2015 Plan, we may award non-qualified stock options in the Company to employees, officers, directors, consultants, and advisors, and to any other persons the Board of Directors deems appropriate. As of September 30, 2018, non-qualified options to acquire 203,734 shares were outstanding under the Plan.

All of the outstanding non-qualified options had an exercise price that was at or above the Company’s common stock share price at time of issuance.

On July 18, 2018, the Board of Directors approved the immediate termination of 244,467 outstanding stock options held by current officers, employees and board members (32,605 stock options under the Plan, 81,925 stock options under the 2013 Plan, and 129,937 stock options under the 2015 Plan) and the issuance of new stock options to the same holders with an exercise price of $3.40 per share equal to the closing market price on July 18, 2018 and an expiration date of July 18, 2028. The new stock options for board members will vest 1/12th per month for 12 months. The new stock options for officers and employees will vest 1/36th per month for 36 months. The Plan expired in 2015 so of the 32,605 terminated stock options, 16,641 stock options under the 2013 Plan and 15,964 stock options under the 2015 Plan were issued (in addition to the reissuance of 81,925 stock options under the 2013 Plan, and 129,937 stock options under the 2015 Plan). The Board of Directors also awarded 101,267 stock options to officers, employees and board members separately based on the annual compensation committee recommendation. Of the 101,267 stock options issued, 51,934 stock options were issued under the 2013 Plan and 49,333 stock options were issued under the 2015 Plan.

We evaluated this exchange and concluded that it was a modification under ASU 2017-09. Under ASU 2017-09, a cancelled equity award accompanied by the concurrent grant of (or offer to grant) a replacement award or other valuable consideration shall be accounted for as a modification of the terms of the cancelled award. Therefore, incremental compensation cost shall be measured as the excess of the fair value of the replacement award or other valuable consideration over the fair value of the cancelled award at the cancellation date in accordance with paragraph ASC 718-20-35-3. The total compensation cost measured at the date of a cancellation and replacement shall be the portion of the grant-date fair value of the original award for which the requisite service is expected to be rendered (or has already been rendered) at that date plus the incremental cost resulting from the cancellation and replacement. The compensation value created by the termination and issuance of new stock options, as determined under the Black Scholes method, was approximately $267,000 and under ASU 2017-09 results in a non-cash expense in current and future periods not to exceed the vesting periods of the stock options. The Board of Directors also awarded 101,267 to officers, employees and board members separately based on the annual compensation committee recommendation.

The following tables summarize information concerning options and warrants outstanding and exercisable:

	Stock Options					Warrants
	Weighted					Weighted
	Average					Average								Total
	Shares			Price per share		Shares			Price per share		Shares			Exercisable
Balance outstanding, 12/31/17		247,692		$	10.95		899,542		$	12.03		1,147,234			1,073,850
Granted		345,734			3.40		5,882,734			3.50		6,228,468
Exercised		-			-		-			-		-
Expired		(334	)		30.00		(12,669	)		12.00		(13,003	)
Forfeited		(251,302	)		10.80		-			-		(251,302	)
Balance outstanding, 9/30/2018		341,790		$	3.40		6,769,607		$	3.57		7,111,397			6,797,356

		Options Outstanding						Options Exercisable
		Weighted Average						Weighted Average
Range of Exercise Prices		Number of Options		Remaining Contractual Life (Years)		Exercise Price		Number of Options		Remaining Contractual Life (Years)		Exercise Price
$	3.40		341,790		9.8	$	3.40		27,749		9.8	$	3.40

As of September 30, 2018, total unrecognized compensation cost related to the unvested stock-based awards was $937,216, which is expected to be recognized over weighted average period of 1.85 years. The aggregate intrinsic value associated with the options outstanding and exercisable as of September 30, 2018 was $8,325. The aggregate intrinsic value associated with the warrants outstanding and exercisable as of September 30, 2018 was approximately $1.3 million.

The loans from November 13, 2017 and May 17, 2018 included Warrants that contains a price protection provision such that if we issue a warrant with any term more favorable to the holder of such warrant that was not similarly provided in these loans, then we shall notify the lender of such additional or more favorable term and such term, shall become a part of the loan agreements. The fair value of the reduction in exercise price was recorded as a deemed dividend of $5,113 in additional paid in capital.

The Company, pursuant to a price protection provision triggered on May 2, 2018 with the sale of Series AA units, amended the Debentures and Warrants to purchase Common Stock held by the Debenture Holders entered into between July 22, 2015 and March 31, 2016 as first disclosed in the Company’s Current Report on Form 8-K filed on July 28, 2015. The fair value of $207,899 relating to the reduction in exercise price was treated as a deemed dividend and recorded as a charge against additional paid-in capital within equity. The amended Debenture conversion price was exempt from revaluation because a beneficial conversion feature had already been recorded on the Debenture at issuance.

Common Stock Issuances

During the nine months ended September 30, 2018, we issued to Debenture holders 56,007 shares of common stock for quarterly interest of $211,047 issued in stock in lieu of cash. Of the 56,007 shares issued, 4,681 shares were issued to members of the Company’s Board of Directors, who are also Debenture holders.

On January 19, 2018, we received a six-month, convertible loan of $150,000 from an accredited investor. The loan earns a one-time interest of 10% and includes a 10% original issue discount. We also issued the investor 4,000 shares of restricted common stock with a relative fair value of $12,267 recorded as a debt discount to be amortized over the six-month term. The loan can be converted at any time into common stock at a conversion price of $7.50.

On February 12, 2018, we received a six-month, convertible loan of $100,000 from an accredited investor. The loan earns a one-time interest of 10%. $50,000 of the proceeds were used to pay off the outstanding balance of a previous loan from this lender. The loan can be converted at any time into common stock at a conversion price of $7.50. We issued the investor 5,000 shares of restricted common stock with a relative fair value of $18,274 of which $10,474 was recorded as a debt discount to be amortized over the six-month term while $7,800 was recorded to interest expense immediately because it related to the previous loan paid off.

On February 12, 2018, we issued 3,500 shares of restricted common stock to an accredited investor to extend the maturity date of our eight-month, non-convertible loan of $170,000 originated on March 21, 2017 to February 15, 2018. The accredited investor agreed to a further extension to March 31, 2018 in exchange for 3,500 shares of restricted common stock issued on March 27, 2018. The lender further extended the term to April 30, 2018 then to September 30, 2018 in exchange for an aggregate of 7,200 shares of company stock. We fully amortized $52,079 of the original debt discount in the year ended December 31, 2017. We recorded a loss of $20,400 relating to the fair value of common stock issued for the September 30 extension.

On March 12, 2018, we received a six-month, convertible loan of $253,000 from an accredited investor. The loan has an original issue discount of $53,000. The loan can be converted at any time into common stock at a conversion price of $7.50. We agreed to issue the investor 6,750 shares of restricted common stock with a relative fair value of $28,722 recorded as a debt discount to be amortized over the six-month term.

On April 2, 2018, we issued 1,150 shares of restricted common stock with a fair value of $5,183 to the lender in connection with the March 12, 2018 5% one-year, convertible loan of $85,000. The fair value of the stock was recorded as a debt discount to be amortized over the one-year term.

On April 12, 2018, we received a 15% six-month, convertible loan of $100,000 from an accredited investor. The loan includes total costs of $24,000 representing guaranteed interest, an original issue discount and legal fees. The loan can be converted at any time into common stock at a conversion price of $7.50. We agreed to issue the investor 2,000 shares of restricted common stock with a fair value of $7,218 recorded as a debt discount to be amortized over the six-month term.

On April 25, 2018, we received a 4% one-year, convertible loan of $105,000 from an accredited investor. The note is convertible on issuance date at $7.50 per share and after 180 days to be 60% of the lowest trading price for the common stock during the 20-trading day period prior to conversion. The loan includes $5,000 in fees. We agreed to issue the investor 1,200 shares of restricted common stock with a fair value of $4,590 recorded as a debt discount to be amortized over the one-year term.

On April 25, 2018, we received another 4% one-year, convertible loan of $105,000 from an accredited investor. The note is convertible on issuance date at $7.50 per share and after 180 days to be 60% of the lowest trading price for the common stock during the 20-trading day period prior to conversion. The loan includes $5,000 in fees. We agreed to issue the investor 1,200 shares of restricted common stock with a fair value of $4,590 recorded as a debt discount to be amortized over the one-year term.

On May 9, 2018, we received a 10% six-month, convertible loan of $250,000 from an accredited investor. The loan includes total costs of $62,500 representing guaranteed interest, an original issue discount and legal fees. The loan can be converted at any time into common stock at a conversion price of $7.50. We agreed to issue the investor 8,000 shares of restricted common stock with a fair value of $26,466 recorded as a debt discount to be amortized over the six-month term.

On May 14, 2018, we received a 15% nine-month, convertible loan of $50,000 from an accredited investor. The loan includes total costs of $12,500 representing guaranteed interest, an original issue discount and legal fees. The loan can be converted at any time into common stock at a conversion price of $7.50. We agreed to issue the investor 1,000 shares of restricted common stock with a fair value of $3,704 recorded as a debt discount to be amortized over the nine-month term.

On May 24, 2018, we received a 4% one-year, convertible loan of $50,000 from an accredited investor. The loan includes an original issue discount of $2,500. The note is convertible on issuance date at $7.50 per share and after 180 days to be 60% of the lowest trading price for the common stock during the 20-trading day period prior to conversion. We agreed to issue the investor 600 shares of restricted common stock with a fair value of $2,075 recorded as a debt discount to be amortized over the one-year term.

On May 25, 2018, we received a 4% one-year, convertible loan of $75,000 from an accredited investor. The loan includes legal fees of $3,750. The note is convertible on issuance date at $7.50 per share and after 180 days to be 60% of the lowest trading price for the common stock during the 20-trading day period prior to conversion. We agreed to issue the investor 900 shares of restricted common stock with a fair value of $3,112 recorded as a debt discount to be amortized over the one-year term.

On May 30, 2018, we received an 8% two-month, convertible loan of $150,000 from an accredited investor. The loan includes guaranteed interest of $12,000. The loan can be converted at any time into common stock at a conversion price of $7.50. We agreed to issue the investor 2,000 shares of restricted common stock with a fair value of $6,870 recorded as a debt discount to be amortized over the two-month term.

On June 4, 2018, we received a 5% one-year, convertible loan of $75,000 from an accredited investor. The loan includes total costs of $9,500 representing an original issue discount and legal fees. The note is convertible after 180 days to be 60% of the lowest trading price for the common stock during the 20-trading day period prior to conversion. We agreed to issue the investor 1,360 shares of restricted common stock with a fair value of $3,869 recorded as a debt discount to be amortized over the one-year term.

On June 8, 2018, we received a 15% 6-month, convertible loan of $50,000 from an accredited investor. The loan includes total costs of $12,500 representing guaranteed interest, an original issue discount and legal fees. The loan can be converted at any time into common stock at a conversion price of $7.50. We agreed to issue the investor 1,000 shares of restricted common stock with a fair value of $3,271 recorded as a debt discount to be amortized over the 6-month term.

On June 11, 2018, the Company entered into a Letter Agreement with an accredited investor in which we agreed to issue 110,833 additional shares of common stock at $2.50 per share to the investor. The fair value was recorded as other charge of $340,257. We also issued 110,833 additional warrants with an exercise price of $3.50 and an expiration period of five years from the original issue date. The fair value was recorded as other charges of $312,637. The Company also amended 29,167 Warrants held by the Investor. The Company lowered the Warrants’ exercise price from $15.00 per share to $3.50 per share. The fair value of $10,236 relating to the reduction in exercise price was treated as an equity modification and recorded as a charge to other expenses.

On June 14, 2018, we received a 10% nine-month, convertible loan of $250,000 from an accredited investor. The loan includes total costs of $30,000 representing an original issue discount and legal fees. The note is convertible after 180 days to be 65% of the average of the two lowest trading prices for the common stock during the 25-trading day period prior to conversion. We agreed to issue the investor 5,000 shares of restricted common stock with a fair value of $17,573 recorded as a debt discount to be amortized over the nine-month term.

On June 16, 2018, we refinanced the December 12, 2017 and December 17, 2017 5% one-year, convertible loans for a total of $240,000 with an accredited investor. The refinanced loans will now be due on December 17, 2018. We issued the investor 3,700 shares of restricted common stock with a fair value of $13,611 for both new loans. We recorded a loss of $50,662 for the interest and fees paid on the refinancing.

On June 26, 2018, we received a 5% 3-month, convertible loan of $150,000 from an accredited investor. The loan includes total costs of $7,500 representing guaranteed interest. The loan can be converted at any time into common stock at a conversion price of $7.50. We agreed to issue the investor 6,000 shares of restricted common stock with a fair value of $20,242 recorded as a debt discount to be amortized over the 3-month term.

On June 28, 2018, we received a 5% 6-month, convertible loan of $50,000 from an accredited investor. The loan includes $2,500 monthly guaranteed interest. The loan can be converted at any time into common stock at a conversion price of $7.50. We agreed to issue the investor 4,000 shares of restricted common stock with a fair value of $10,518 recorded as a debt discount to be amortized over the 6-month term.

On July 1, 2018, we signed a six-month agreement with a firm to provide consulting services. We issued 24,000 shares of restricted common stock at inception of contract. The stock’s fair value of $93,600 based on the trading stock price on contract date is amortized to expense over the service period of 6 months.

On July 2, 2018, we received a 4% one-year, convertible loan of $125,000 from an accredited investor. The note is convertible on issuance date at $7.50 per share and after 180 days to be 60% of the lowest trading price for the common stock during the 15-trading day period prior to conversion. The loan includes $6,250 in fees. We issued the investor 1,500 shares of restricted common stock with a fair value of $5,588 recorded as a debt discount to be amortized over the one-year term.

On July 5, 2018, we signed a six-month agreement with a firm to provide consulting services. We issued 24,000 shares of restricted common stock at inception of contract. The stock’s fair value of $79,920 based on the trading stock price on contract date is amortized to expense over the service period of 6 months.

On July 17, 2018, we received a 15% three-month, convertible loan for $100,000 from an accredited investor. The loan can be converted at any time into common stock at a conversion price of $7.50. We agreed to issue the investor 2,000 shares monthly over three months for a total of 6,000 shares of restricted common stock with a fair value of $16,944 that was recorded as a debt discount to be amortized over the three-month term.

On July 18, 2018, our lender extended the term of our March 21, 2017 non-convertible loan of $170,000 to September 30, 2018 in exchange for 6,000 shares of company stock. The loan continues to earn an annual interest rate of 10%. We recorded a loss of $20,400 relating to the fair value of common stock issued for the September 30 extension.

On July 19, 2018, we refinanced the January 19, 2018 10% one-year, convertible loan of $150,000 with an accredited investor. The refinanced loan will now be due on January 19, 2019. We paid $36,000 in interest and fees on the January 19, 2018 loan in connection with the refinancing. We agreed to issue the investor 4,500 shares of restricted common stock. We recorded a loss of $18,346 relating to this refinancing. The loss was from the fair value of common stock of $17,100 issued and the write-down of $1,246 for the unamortized discount remaining on the original debt.

On July 31, 2018, we refinanced the May 30, 2018 8% two-month, convertible loan of $150,000 from an accredited investor. The loan will now be due on October 31, 2018 and includes guaranteed interest of $18,000. The loan can be converted at any time into common stock at a conversion price of $7.50. We agreed to issue the investor 2,000 shares of restricted common stock with a relative fair value of $6,578 recorded as a debt discount to be amortized over the three-month term. We expect to refinance the July 31, 2018 loan.

On August 8, 2018, we refinanced the February 9, 2018 six-month, convertible loan of $100,000 with an accredited investor. The refinanced loan will now be due on February 8, 2019 and earns 5% monthly. We agreed to issue the investor 7,800 shares of restricted common stock. We recorded a loss of $32,171 relating to this refinancing. The loss was from the fair value of common stock of $27,534 issued and the write-down of $4,637 for the unamortized discount remaining on the original debt.

On August 15, 2018, we received a four-month, convertible loan for $100,000 from an accredited investor. The loan accrues interest at 5% monthly and can be converted at any time into common stock at a conversion price of $7.50. We agreed to issue the investor 1,500 shares monthly over four months for a total of 6,000 shares of restricted common stock. We recorded a loss of $23,700 relating to this refinancing for the fair value of common stock issued.

On August 27, 2018, we received a 4% one-year, convertible loan of $125,000 from an accredited investor. The loan includes legal fees of $6,250. The note is convertible on issuance date at $7.50 per share and after 180 days to be 60% of the lowest trading price for the common stock during the 20-trading day period prior to conversion. We issued the investor 1,428 shares of restricted common stock with a fair value of $4,443 recorded as a debt discount to be amortized over the one-year term.

On September 7, 2018, we refinanced the March 12, 2018 5% one-year, convertible loan of $85,000 with an accredited investor. The refinanced loan will now be due on March 12, 2019. We paid $17,361 in interest and fees on the March 12, 2018 loan in connection with the refinancing. We agreed to issue the investor 1,150 shares of restricted common stock with a fair value of $4,364 recorded as a debt discount to be amortized over the one-year term.

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Subsequent Events

9 Months Ended

Sep. 30, 2018

Subsequent Events [Abstract]

Subsequent Events

8) Subsequent Events

On October 1, 2018, we received a 4% one-year, convertible loan of $118,800 from an accredited investor. The note is convertible on issuance date at $7.50 per share and after 180 days to be 60% of the lowest trading price for the common stock during the 20-trading day period prior to conversion. The loan includes an original issue discount of $8,800 and $3,000 in fees.

On October 3, 2018, we paid $75,000 towards principal with $22,500 interest on our June 26, 2018 5% three-month, convertible loan of $150,000. Our lender agreed to extend the maturity date for the outstanding loan of $75,000 to December 26, 2018. In connection with the extension, we agreed to issue 1,000 shares monthly for a total fair value of $10,800 while the note is outstanding and will continue to pay 5% monthly. All other terms remain the same.

On October 12, 2018, we paid $24,000 in interest and fees on our April 11, 2018 15% six-month, convertible loan of $100,000. Our lender agreed to extend the maturity date for the outstanding loan of $100,000 to April 11, 2019. In connection with the extension, we agreed to issue 1,500 shares monthly for a total fair value of $29,250 while the note is outstanding and will continue to pay 4% monthly. All other terms remain the same.

On October 17, 2018, we paid $15,000 interest on our July 17, 2018 5% three-month, convertible loan of $100,000. We extended the maturity date for the outstanding loan of $100,000 to April 17, 2019. In connection with the extension, we agreed to issue 1,500 shares monthly for a total fair value of $28,800 while the note is outstanding and will continue to pay 5% monthly. All other terms remain the same.

On October 18, 2018, a shareholder converted 44 shares of Series AA Convertible Preferred Stock into 44,000 shares of common stock.

On October 18, 2018 we signed a Merchant Agreement with a lender. Under the agreement we received $550,000, of which approximately $175,000 was used to pay off the outstanding balances on previous loans dated May 10, 2018 and June 27, 2018 from this lender, in exchange for rights to all customer receipts until the lender is paid $726,000, which is collected at the rate of $3,630.00 per business day. The $176,000 imputed interest will be recorded as interest expense when paid each day. Fees of $5,500 were deducted from the initial advance. The payments were secured by first position rights to all customer receipts until the loan has been paid in full. We accounted for the Merchant Agreement as a secured loan under ASC 860 because while we provided rights to current and future receipts, we still had control over the receipts.

On October 19, 2018, we received a six-month, convertible loan of $100,000 with an accredited investor. The loan includes an interest rate of 5% per month earned on the first day of each month. The loan can be extended a month up to three times for a $5,000 fee for each one-month extension.

On October 22, 2018 we paid off the outstanding balances of approximately $195,000 on merchant loans dated May 15, 2018 and July 16, 2018.

On October 22, 2018, we paid off the April 23, 2018 12% one-year, convertible loan of $103,000 with an accredited investor. We paid $47,194 in interest and fees on the April 23, 2018 loan.

On October 23, 2018, we refinanced the April 23, 2018 12% one-year, convertible loan of $77,000 with an accredited investor. The refinanced loan will now be due on October 23, 2019. We paid $35,407 in interest and fees on the April 23, 2018 loan in connection with the refinancing.

On October 23, 2018, we received a 8% nine-month, convertible loan of $103,000 from an accredited investor. The loan can be converted into common stock after 180 calendar days at a discount of 42% of the average of the lowest two trading prices for the common stock during the 15-trading day period prior to conversion. The loan includes $3,000 in fees.

On October 23, 2018, we received a 4% one-year, convertible loan of $105,000 from an accredited investor. The note is convertible on issuance date at $7.50 per share and after 180 days to be 60% of the lowest trading price for the common stock during the 20-trading day period prior to conversion. The loan includes $5,000 in fees. We issued the investor 1,150 shares of restricted common stock with a relative fair value of $3,930 recorded as a debt discount to be amortized over the one-year term.

On October 25, 2018, we paid off the April 25, 2018 4% one-year, convertible loan of $105,000 with an accredited investor. We paid $38,856 in interest and fees on the April 25, 2018 loan.

On October 25, 2018, we paid off the April 25, 2018 6% one-year, convertible loan of $130,000 with an accredited investor. We paid $49,411 in interest and fees on the April 25, 2018 loan.

On October 26, 2018, we paid $45,859 which includes a $7,000 extension fee to extend the conversion period at a conversion price of $7.50 on the April 25, 2018 convertible loan of $105,000 to November 21, 2018. The loan will become convertible on November 22, 2018 at a conversion price of 60% of the lowest trading price for the common stock during the 20-trading day period prior to conversion.

On October 26, 2018, we paid off the April 23, 2018 5% one-year, convertible loan of $65,000 with an accredited investor. We paid $21,129 in interest and fees on the April 23, 2018 loan.

On October 29, 2018, we received a 6% one-year, convertible loan of $77,000 from an accredited investor. The note is convertible on issuance date at $7.50 per share and after 180 calendar days at a discount of 40% of the average of the lowest two trading prices for the common stock during the 10-trading day period prior to conversion. The loan includes $2,000 in fees.

On October 29, 2018, we signed a six-month agreement with a firm to provide consulting services. We issued 20,000 shares of restricted common stock at inception of contract. The stock’s fair value of $64,600 based on the trading stock price on contract date will be amortized to expense over 6 months.

In October 2018, the Company entered into a Securities Purchase Agreement to which the Company sold an aggregate of 220 shares of Series AA Convertible Preferred Stock for an aggregate Purchase Price of $550,000. We issued to the shareholder a new warrant to purchase 220,000 shares of common stock with an exercise price of $3.50 per share. We analyzed these warrants and determined that they were not considered derivatives and therefore recorded the aggregate relative fair value of $385,128 into equity relating to the 220,000 warrants and 22,000 broker warrants issued. The adjusted BCF value of $546,059 was accounted for as a deemed dividend within equity.

On November 1, 2018, the Company entered into a Securities Purchase Agreement to which the Company sold an aggregate of 75.2 shares of Series AA Convertible Preferred Stock for an aggregate Purchase Price of $188,000. We issued to the shareholder a new warrant to purchase 75,200 shares of common stock with an exercise price of $3.50 per share. We analyzed these warrants and determined that they were not considered derivatives and therefore recorded the aggregate relative fair value of $130,051 into equity relating to the 75,200 warrants and 7,520 broker warrants issued. The adjusted BCF value of $181,035 was accounted for as a deemed dividend within equity.

On November 2, 2018, we paid $18,000 in interest on the July 31, 2018 loan.

On November 2, 2018, we received a 4% one-year, convertible loan of $105,000 from an accredited investor. The note is convertible on issuance date at $7.50 per share and after 180 days to be 60% of the lowest trading price for the common stock during the 20-trading day period prior to conversion. The loan includes $5,000 in fees. We issued the investor 1,200 shares of restricted common stock with a relative fair value of $3,872 recorded as a debt discount to be amortized over the one-year term.

On November 2, 2018, we received a 6% one-year, convertible loan of $130,000 from an accredited investor. The note is convertible on issuance date at $7.50 per share and after 180 days to be 60% of the lowest trading price for the common stock during the 15-trading day period prior to conversion. The loan includes $6,500 in fees.

On November 5, 2018, we received a 4% one-year, convertible loan of $205,000 from an accredited investor. The note is convertible on issuance date at $7.50 per share and after 180 days to be 60% of the lowest trading price for the common stock during the 20-trading day period prior to conversion. The loan includes $5,000 in fees. We issued the investor 6,000 shares of restricted common stock with a relative fair value of $17,906 recorded as a debt discount to be amortized over the one-year term.

On November 8, 2018, our lender agreed to extend the prepayment period of our May 9, 2018 5% nine-month, convertible loan of $161,250 to December 21, 2018. In connection with the extension, we agreed to pay $12,900 (8% of the outstanding balance) on November 13, 2018. All other terms remain the same.

On November 9, 2018, we paid off the May 9, 2018 six-month, convertible loan of $250,000 with an accredited investor. We paid $62,500 in interest and fees on the May 9, 2018 loan.

On November 9, 2018, we received a 5% one-year, convertible loan of $75,000 from an accredited investor. The note is convertible on issuance date at $7.50 per share and after 180 days to be 60% of the lowest trading price for the common stock during the 20-trading day period prior to conversion. The loan includes $9,500 in fees which include a $7,500 original issue discount and $2,000 legal fees. We issued the investor 1,360 shares of restricted common stock with a relative fair value of $4,656 recorded as a debt discount to be amortized over the one-year term.

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2018

Accounting Policies [Abstract]

Principles of Consolidation

Principles of Consolidation

The consolidated financial statements include the accounts of Pressure BioSciences, Inc., and its wholly-owned subsidiary PBI BioSeq, Inc. All intercompany accounts and transactions have been eliminated in consolidation.

Reclassifications

Reclassifications

Certain prior year amounts have been reclassified to conform to our current year presentation.

Recent Accounting Standards

Recent Accounting Standards

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The new standard requires the recognition of assets and liabilities arising from lease transactions on the balance sheet and the disclosure of key information about leasing arrangements. Accordingly, a lessee will recognize a lease asset for its right to use the underlying asset and a lease liability for the corresponding lease obligation. Both the asset and liability will initially be measured at the present value of the future minimum lease payments over the lease term. Subsequent measurement, including the presentation of expenses and cash flows, will depend on the classification of the lease as either finance or an operating lease. Initial costs directly attributable to negotiating and arranging the lease will be included in the asset. Lessees will also be required to provide additional qualitative and quantitative disclosures regarding the amount, timing and uncertainty of cash flows arising from leases. The new standard is effective for fiscal years beginning after December 15, 2018, and interim periods therein. We will adopt ASC 842 effective January 1, 2019. This new guidance is not expected to have a material impact on the Company’s consolidated financial statements.

In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, which requires restricted cash to be presented with cash and cash equivalents on the statement of cash flows and disclosure of how the statement of cash flows reconciles to the balance sheet if restricted cash is shown separately from cash and cash equivalents on the balance sheet. The guidance is effective for interim and annual periods beginning after December 15, 2017, and early adoption is permitted. The Company early adopted the ASU 2016-18 on January 1, 2017.

In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which clarifies the definition of a business to provide additional guidance with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. This ASU is effective for annual periods beginning after December 15, 2017, including interim periods within those periods. The Company early adopted the ASU 2016-18 on January 1, 2017 starting with its purchase of BaroFold assets.

In May 2017, the FASB issued ASU 2017-09, Compensation – Stock Compensation (Topic 718) Scope of Modification Accounting, which clarifies that an entity should account for the effects of a modification unless the fair value, vesting terms and classification as liability or equity of the modified and original awards do not change on the modification date. This ASU is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company adopted this ASU effective on January 1, 2018, on a prospective basis which did not have a material impact on the Company’s condensed consolidated financial statements and related disclosures.

Effective January 1, 2018, the Company adopted ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities. The standard amends various aspects of the recognition, measurement, presentation, and disclosure of financial instruments. The most significant impact to our consolidated financial statements relates to the recognition and measurement of equity investments at fair value with changes recognized in Net income. The amendment also updates certain presentation and disclosure requirements. The adoption of ASU 2016-01 did not have a material impact on the consolidated financial statements. The adoption of ASU 2016-01 will result in increased volatility in net income as changes in the fair value of available-for-sale equity investments and changes in observable prices of equity investments without readily determinable fair values will be recorded in net income.

Effective January 1, 2018, the Company adopted ASC Topic 606, Revenue from Contracts with Customers, using the modified retrospective method. This guidance supersedes nearly all existing revenue recognition guidance under US GAAP. The core principle of the guidance is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The Company updated its accounting policy for the new standard based on a detailed review of its business and contracts. Based on the new guidance, the Company continues to recognize revenue at a point in time for the majority of its contracts with customers, which is generally when products are either shipped or delivered. Therefore, the adoption of ASC 606 did not have a material impact on the consolidated financial statements.

In July 2018, the FASB issued ASU 2018-07, Compensation- Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting as an amendment and update expanding the scope of Topic 718. The amendment specifies that Topic 718 now applies to all share-based payment transactions, even non-employee awards, in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. Under the new guidance, awards to nonemployees are measured on the grant date, rather than on the earlier of the performance commitment date or the date at which the nonemployee’s performance is complete. Also, the awards would be measured by estimating the fair value of the equity instruments to be issued, rather than the fair value of the goods or services received or the fair value of the equity instruments issued, whichever can be measured more reliably. In addition, entities may use the expected term to measure nonemployee awards or elect to use the contractual term as the expected term, on an award-by-award basis. The new guidance is effective for the Company in annual periods beginning after December 15, 2018, and interim periods within those annual periods, with early adoption permitted. Based on the new guidance, the Company will measure its nonemployee stock awards at grant date not when the stock awards are vested. This new guidance is not expected to have a material impact on the Company’s consolidated financial statements.

Revenue Recognition

Revenue Recognition

We recognize revenue in accordance with FASB ASC 606, ASC 606, Revenue from Contracts with Customers, and ASC 340-40, Other Assets and Deferred Costs—Contracts with Customers. Revenue is measured based on a consideration specified in a contract with a customer, and excludes any sales incentives and amounts collected on behalf of third parties. We enter into sales contracts that may consist of multiple distinct performance obligations where certain performance obligations of the sales contract are not delivered in one reporting period. We measure and allocate revenue according to ASC 606-10.

We identify a performance obligation as distinct if both the following criteria are true: the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer and the entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract. Determining the standalone selling price (“SSP”) and allocation of consideration from a contract to the individual performance obligations, and the appropriate timing of revenue recognition, is the result of significant qualitative and quantitative judgments. Management considers a variety of factors such as historical sales, usage rates, costs, and expected margin, which may vary over time depending upon the unique facts and circumstances related to each performance obligation in making these estimates. While changes in the allocation of the SSP between performance obligations will not affect the amount of total revenue recognized for a particular contract, any material changes could impact the timing of revenue recognition, which would have a material effect on our financial position and result of operations. This is because the contract consideration is allocated to each performance obligation, delivered or undelivered, at the inception of the contract based on the SSP of each distinct performance obligation.

Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue.

Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are in included in cost of revenues as consistent with treatment in prior periods.

Our current Barocycler® instruments require a basic level of instrumentation expertise to set-up for initial operation. To support a favorable first experience for our customers, upon customer request, and for an additional fee, will send a highly trained technical representative to the customer site to install Barocyclers® that we sell, lease, or rent through our domestic sales force. The installation process includes uncrating and setting up the instrument, followed by introductory user training. Our sales arrangements do not provide our customers with a right of return. Any shipping costs billed to customers are recognized as revenue.

The majority of our instrument and consumable contracts contain pricing that is based on the market price for the product at the time of delivery. Our obligations to deliver product volumes are typically satisfied and revenue is recognized when control of the product transfers to our customers. Concurrent with the transfer of control, we typically receive the right to payment for the shipped product and the customer has significant risks and rewards of ownership of the product. Payment terms require customers to pay shortly after delivery and do not contain significant financing components.

We apply ASC 845, “Accounting for Non-Monetary Transactions”, to account for products and services sold through non-cash transactions based on the fair values of the products and services involved, where such values can be determined. Non-cash exchanges would require revenue to be recognized at recorded cost or carrying value of the assets or services sold if any of the following conditions apply:

a)	The fair value of the asset or service involved is not determinable.
b)	The transaction is an exchange of a product or property held for sale in the ordinary course of business for a product or property to be sold in the same line of business to facilitate sales to customers other than the parties to the exchange.
c)	The transaction lacks commercial substance.

We currently record revenue for its non-cash transactions at recorded cost or carrying value of the assets or services sold.

In accordance with FASB ASC 840, Leases, we account for our lease agreements under the operating method. We record revenue over the life of the lease term and we record depreciation expense on a straight-line basis over the thirty-six-month estimated useful life of the Barocycler® instrument. The depreciation expense associated with assets under lease agreement is included in the “Cost of PCT products and services” line item in our accompanying consolidated statements of operations. Many of our lease and rental agreements allow the lessee to purchase the instrument at any point during the term of the agreement with partial or full credit for payments previously made. We pay all maintenance costs associated with the instrument during the term of the leases.

Revenue from government grants is recorded when expenses are incurred under the grant in accordance with the terms of the grant award.

Deferred revenue represents amounts received from grants and service contracts for which the related revenues have not been recognized because one or more of the revenue recognition criteria have not been met. Revenue from service contracts is recorded ratably over the length of the contract.

Disaggregation of revenue

In the following table, revenue is disaggregated by primary geographical market, major product line, and timing of revenue recognition.

In thousands of US dollars ($)	Three Months Ended September 30,				Nine Months Ended September 30,
Primary geographical markets	2018		2017		2018		2017
North America		408		401		1,123		1,124
Europe		59		3		278		161
Asia		55		242		370		453
		522		646		1,771		1,738

	Three Months Ended September 30,				Nine Months Ended September 30,
Major products/services lines	2018		2017		2018		2017
Hardware		278		411		1,094		1,155
Grants		61		42		106		127
Consumables		43		85		182		200
Contract research services		80		-		147		-
Sample preparation accessories		22		47		118		121
Technical support/extended service contracts		20		35		70		78
Shipping and handling		10		17		38		38
Other		8		9		16		19
		522		646		1,771		1,738

	Three Months Ended September 30,				Nine Months Ended September 30,
Timing of revenue recognition	2018		2017		2018		2017
Products transferred at a point in time		362		560		1,546		1,546
Products and services transferred over time		160		86		225		192
		522		646		1,771		1,738

Contract balances

In thousands of US dollars ($)	September 30, 2018		December 31, 2017
Receivables, which are included in ‘Accounts Receivable’		374		207
Contract liabilities (deferred revenue)		206		320

Transaction price allocated to the remaining performance obligations

The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period.

In thousands of US dollars ($)	2018		2019		2020		Total
Extended warranty service		7		199		-		206

All consideration from contracts with customers is included in the amounts presented above.

Contract Costs

The Company recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that the Company otherwise would have recognized is one year or less. These costs are included in selling, general, and administrative expenses. The costs to obtain a contract are recorded immediately in the period when the revenue is recognized either upon shipment or installation. The costs to obtain a service contract are considered immaterial when spread over the life of the contract so the Company records the costs immediately upon billing.

Use of Estimates

Use of Estimates

To prepare our consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, we are required to make significant estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. In addition, significant estimates were made in projecting future cash flows to quantify deferred tax assets, the costs associated with fulfilling our warranty obligations for the instruments that we sell, and the estimates employed in our calculation of fair value of stock options awarded and warrant derivative liability. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from the estimates and assumptions used.

Concentrations

Concentrations

Credit Risk

Our financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash, cash equivalents, and trade receivables. We have cash investment policies which, among other things, limit investments to investment-grade securities. We perform ongoing credit evaluations of our customers, and the risk with respect to trade receivables is further mitigated by the fact that many of our customers are government institutions, large pharmaceutical and biotechnology companies, and academic laboratories.

The following table illustrates the level of concentration as a percentage of total revenues during the three months and nine months ended September 30, 2018 and 2017.

	For the Three Months Ended
	September 30,
	2018			2017
Top Five Customers		59	%		73	%
Federal Agencies		12	%		30	%

	For the Nine Months Ended
	September 30,
	2018			2017
Top Five Customers		36	%		38	%
Federal Agencies		10	%		19	%

The following table illustrates the level of concentration as a percentage of net accounts receivable balance as of September 30, 2018 and December 31, 2017. The Top Five Customers category may include federal agency receivable balances if applicable.

	September 30, 2018			December, 31, 2017
Top Five Customers		76	%		85	%
Federal Agencies		1	%		1	%

Product Supply

CBM Industries (Taunton, MA) has recently become the manufacturer of the Barocycler® 2320EXT. CBM is ISO 13485:2003 and 9001:2008 Certified. CBM provides us with precision manufacturing services that include management support services to meet our specific application and operational requirements. Among the services provided by CBM to us are:

● CNC Machining

● Contract Assembly & Kitting

● Component and Subassembly Design

● Inventory Management

● ISO certification

At this time, we believe that outsourcing the manufacturing of our new Barocycler® 2320EXT to CBM is the most cost-effective method for us to obtain and maintain ISO Certified, CE and CSA Marked instruments. CBM’s close proximity to our South Easton, MA facility is a significant asset enabling interactions between our Engineering, R&D, and Manufacturing groups and their counterparts at CBM. CBM was instrumental in helping PBI achieve CE Marking on our Barocycler® 2320EXT, as announced on February 2, 2017.

Although we currently manufacture and assemble the Barozyme HT48, Barocycler® HUB440, the SHREDDER SG3, and most of our consumables at our South Easton, MA facility, we plan to take advantage of the established relationship with CBM and transfer manufacturing of the entire Barocycler® product line, future instruments, and other products to CBM.

The Barocycler® NEP3229, launched in 2008, and manufactured by the BIT Group, will be phased out over the next several years and replaced by the new state-of-the-art Barocycler® HUB and Barozyme HT48 product lines.

Investment in Available-for-sale Equity Securities

Investment in Available-For-Sale Equity Securities

As of September 30, 2018, we held 100,250 shares of common stock of Everest Investments Holdings S.A. (“Everest”), a Polish publicly traded company listed on the Warsaw Stock Exchange. We account for this investment in accordance with ASC 320 “Investments — Debt and Equity Securities” as securities available for sale. On September 30, 2018, our consolidated balance sheet reflected the fair value of our investment in Everest to be approximately $17,000, based on the closing price of Everest shares of $0.17 USD per share on that day. The carrying value of our investment in Everest common stock held will change from period to period based on the closing price of the common stock of Everest as of the balance sheet date.

Computation of Loss Per Share

Computation of Loss per Share

Basic loss per share is computed by dividing loss available to common shareholders by the weighted average number of common shares outstanding. Diluted loss per share is computed by dividing loss available to common shareholders by the weighted average number of common shares outstanding plus additional common shares that would have been outstanding if dilutive potential common shares had been issued. For purposes of this calculation, convertible preferred stock, common stock dividends, and warrants and options to acquire common stock, are all considered common stock equivalents in periods in which they have a dilutive effect and are excluded from this calculation in periods in which these are anti-dilutive to our net loss.

The following table illustrates our computation of loss per share for the three months and nine months ended September 30, 2018 and 2017:

	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Numerator:
Net loss	$	(1,808,656	)	$	(2,343,576	)	$	(6,321,542	)	$	(7,889,676	)
Deemed dividend on down round feature		-			-			(213,012	)		-
Deemed dividend on beneficial conversion feature		(1,146,280	)		-			(11,678,571	)		-
Preferred stock dividends		(277,439	)		-			(373,318	)		-
Net loss applicable to common shareholders	$	(3,232,375	)	$	(2,343,576	)	$	(18,586,443	)	$	(7,889,676	)
Denominator for basic and diluted loss per share:
Weighted average common stock shares outstanding		1,606,575			1,133,791			1,466,424			1,084,370
Loss per common share – basic and diluted	$	(2.01	)	$	(2.07	)	$	(12.67	)	$	(7.28	)

The following table presents securities that could potentially dilute basic loss per share in the future. For all periods presented, the potentially dilutive securities were not included in the computation of diluted loss per share because these securities would have been anti-dilutive to our net loss. The Series D Convertible Preferred Stock, Series G Convertible Preferred Stock, Series H Convertible Preferred Stock, Series H2 Convertible Preferred Stock, Series J Convertible Preferred Stock and Series K Convertible Preferred Stock are presented below as if they were converted into common shares according to the conversion terms.

	As of September 30,
	2018		2017
Stock options		341,790		249,636
Convertible debt		261,251		828,870
Common stock warrants		6,769,607		902,033
Convertible preferred stock:
Series D Convertible Preferred Stock		25,000		25,000
Series G Convertible Preferred Stock		26,857		26,857
Series H Convertible Preferred Stock		33,334		33,334
Series H2 Convertible Preferred Stock		70,000		70,000
Series J Convertible Preferred Stock		115,267		115,267
Series K Convertible Preferred Stock		229,334		227,200
Series AA Convertible Preferred Stock		5,655,400		-
		13,527,840		2,478,197

Accounting for Stock-based Compensation Expense

Accounting for Stock-Based Compensation Expense

We maintain equity compensation plans under which incentive stock options and non-qualified stock options are granted to employees, independent members of our Board of Directors and outside consultants. We recognize stock-based compensation expense over the requisite service period using the Black-Scholes formula to estimate the fair value of the stock options on the date of grant.

Determining Fair Value of Stock Option Grants

Valuation and Amortization Method - The fair value of each option award is estimated on the date of grant using the Black-Scholes pricing model based on certain assumptions. The estimated fair value of employee stock options is amortized to expense using the straight-line method over the vesting period.

Expected Term - The Company uses the simplified calculation of expected life, as the Company does not currently have sufficient historical exercise data on which to base an estimate of expected term. Using this method, the expected term is determined using the average of the vesting period and the contractual life of the stock options granted.

Expected Volatility - Expected volatility is based on the Company’s historical stock volatility data over the expected term of the award.

Risk-Free Interest Rate - The Company bases the risk-free interest rate used in the Black-Scholes valuation method on the implied yield currently available on U.S. Treasury zero-coupon issues with an equivalent remaining term.

Forfeitures - The Company records stock-based compensation expense only for those awards that are expected to vest. The Company estimated a forfeiture rate of 5% for awards granted based on historical experience and future expectations of options vesting. The Company used this historical rate as our assumption in calculating future stock-based compensation expense.

The Company recognized stock-based compensation expense of $151,314 and $139,399 for the three months ended September 30, 2018 and 2017, respectively. The Company recognized stock-based compensation expense of $299,584 and $318,910 for the nine months ended September 30, 2018 and 2017, respectively. The following table summarizes the effect of this stock-based compensation expense within each of the line items of our costs and expenses within our Consolidated Statements of Operations:

	For the Three Months Ended				For the Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Cost of products and services	$	4,698	$	-	$	4,698	$	-
Research and development		28,444		37,345		59,592		76,263
Selling and marketing		11,822		21,778		26,298		46,112
General and administrative		106,350		80,276		208,996		196,535
Total stock-based compensation expense	$	151,314	$	139,399	$	299,584	$	318,910

Fair Value of Financial Instruments

Fair Value of Financial Instruments

Due to their short maturities, the carrying amounts for cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses approximate their fair value. Long-term liabilities are primarily related to convertible debentures and deferred revenue with carrying values that approximate fair value.

The issuances of our convertible promissory notes and common stock purchase warrant are accounted for under the fair value and relative fair value method.

The warrant is first analyzed per its terms as to whether it has derivative features or not. If the warrant is determined to be a derivative, then it is measured at fair value using the Black Scholes Option Model and recorded as a liability on the balance sheet. The warrant is re-measured at its then current fair value at each subsequent reporting date (it is “marked-to-market”).

If the warrant is determined to not have derivative features, it is recorded into equity at its fair value using the Black Scholes option model, however, limited to a relative fair value based upon the percentage of its fair value to the total fair value including the fair value of the convertible note.

The convertible note is recorded at its fair value, limited to a relative fair value based upon the percentage of its fair value to the total fair value including the fair value of the warrant. Further, the convertible promissory note is examined for any intrinsic beneficial conversion feature (“BCF”) of which the convertible price of the note is less than the closing stock price on date of issuance. If the relative fair value method is used to value the convertible promissory note and there is an intrinsic BCF, a further analysis is undertaken of the BCF using an effective conversion price which assumes the conversion price is the relative fair value divided by the number of shares the convertible debt is converted into by its terms. The adjusted BCF value is accounted for as equity.

The warrant and BCF relative fair values are also recorded as a discount to the convertible promissory notes. At present, these equity features of the convertible promissory notes have been recorded at a discount to the convertible notes that is substantially equal to the proceeds received.

Fair Value Measurements

Fair Value Measurements

The Company follows the guidance of FASB ASC Topic 820, “Fair Value Measurements and Disclosures” (“ASC 820”) as it related to all financial assets and financial liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis.

In determining the fair value of its assets and liabilities, the Company uses various valuation approaches. The Company employs a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances. The fair value hierarchy is broken down into three levels based on the source of inputs as follows:

Level 1 – Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access.

Level 2–Valuations based on quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and models for which all significant inputs are observable, either directly or indirectly.

Level 3 – Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company has determined that its financial assets are classified within Level 1 and its financial liabilities are currently classified within Level 3 in the fair value hierarchy. The development of the unobservable inputs for Level 3 fair value measurements and fair value calculations are the responsibility of the Company’s management.

Adoption of ASU 2017-11

The Company changed its method of accounting for the Debentures, Debenture Warrants and Series D Warrants through the early adoption of ASU 2017-11 during the year ended December 31, 2017 on a modified retrospective basis. Accordingly, the Company reclassified the warrant derivative and conversion option derivative liabilities to additional paid in capital on its January 1, 2017 consolidated balance sheets totaling approximately $2.6 million, reduced debt discount by approximately $0.9 million and recorded the cumulative effect of the adoption to the beginning balance of accumulated deficit of approximately $2.4 million. This resulted to an increase in stock warrants by $2.6 million and additional paid-in capital by $1.4 million. The following table provides a reconciliation of the warrant derivative liability, convertible debt, conversion option derivative liability, stock warrant, additional paid-in capital and accumulated deficit on the consolidated balance sheet as of December 31, 2016:

	Convertible debt, current portion		Convertible debt, long term portion		Warrant Derivative Liability			Conversion Option Liability			Warrants to acquire common stock		Additional Paid-in Capital		Accumulated deficit
Balance, January 1, 2017 (Prior to adoption of ASU 2017-11)	$	4,005,702	$	529,742	$	1,685,108		$	951,059		$	6,325,102	$	27,544,265	$	(42,264,190	)
Reclassified derivative liabilities and cumulative effect of adoption		769,316		154,152		(1,685,108	)		(951,059	)		2,636,236		1,446,011		(2,369,548	)
Balance, January 1, 2017 (After adoption of ASU 2017-11)	$	4,775,018	$	683,894	$	-		$	-		$	8,961,338	$	28,990,276	$	(44,633,738	)

The following tables set forth the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of September 30, 2018:

			Fair value measurements at  September 30, 2018 using:
	September 30, 2018		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Available-For-Sale Equity Securities		16,643		16,643		-		-
Total Financial Assets	$	16,643	$	16,643	$	-	$	-

The following tables set forth the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, 2017:

			Fair value measurements at  December 31, 2017 using:
	December 31, 2017		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant  unobservable  inputs (Level 3)
Available-For-Sale Equity Securities		19,825		19,825		-		-
Total Financial Assets	$	19,825	$	19,825	$	-	$	-

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Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2018

Accounting Policies [Abstract]

Schedule of Disaggregation of Revenue

In the following table, revenue is disaggregated by primary geographical market, major product line, and timing of revenue recognition.

In thousands of US dollars ($)	Three Months Ended September 30,				Nine Months Ended September 30,
Primary geographical markets	2018		2017		2018		2017
North America		408		401		1,123		1,124
Europe		59		3		278		161
Asia		55		242		370		453
		522		646		1,771		1,738

	Three Months Ended September 30,				Nine Months Ended September 30,
Major products/services lines	2018		2017		2018		2017
Hardware		278		411		1,094		1,155
Grants		61		42		106		127
Consumables		43		85		182		200
Contract research services		80		-		147		-
Sample preparation accessories		22		47		118		121
Technical support/extended service contracts		20		35		70		78
Shipping and handling		10		17		38		38
Other		8		9		16		19
		522		646		1,771		1,738

	Three Months Ended September 30,				Nine Months Ended September 30,
Timing of revenue recognition	2018		2017		2018		2017
Products transferred at a point in time		362		560		1,546		1,546
Products and services transferred over time		160		86		225		192
		522		646		1,771		1,738

Schedule of Contract Balances

Contract balances

In thousands of US dollars ($)	September 30, 2018		December 31, 2017
Receivables, which are included in ‘Accounts Receivable’		374		207
Contract liabilities (deferred revenue)		206		320

Schedule of Future Related to Performance Obligations

The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period.

In thousands of US dollars ($)	2018		2019		2020		Total
Extended warranty service		7		199		-		206

Schedule of Customer Concentration Risk Percentage

The following table illustrates the level of concentration as a percentage of total revenues during the three months and nine months ended September 30, 2018 and 2017.

	For the Three Months Ended
	September 30,
	2018			2017
Top Five Customers		59	%		73	%
Federal Agencies		12	%		30	%

	For the Nine Months Ended
	September 30,
	2018			2017
Top Five Customers		36	%		38	%
Federal Agencies		10	%		19	%

The following table illustrates the level of concentration as a percentage of net accounts receivable balance as of September 30, 2018 and December 31, 2017. The Top Five Customers category may include federal agency receivable balances if applicable.

	September 30, 2018			December, 31, 2017
Top Five Customers		76	%		85	%
Federal Agencies		1	%		1	%

Schedule of Computation of Loss Per Share

The following table illustrates our computation of loss per share for the three months and nine months ended September 30, 2018 and 2017:

	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Numerator:
Net loss	$	(1,808,656	)	$	(2,343,576	)	$	(6,321,542	)	$	(7,889,676	)
Deemed dividend on down round feature		-			-			(213,012	)		-
Deemed dividend on beneficial conversion feature		(1,146,280	)		-			(11,678,571	)		-
Preferred stock dividends		(277,439	)		-			(373,318	)		-
Net loss applicable to common shareholders	$	(3,232,375	)	$	(2,343,576	)	$	(18,586,443	)	$	(7,889,676	)
Denominator for basic and diluted loss per share:
Weighted average common stock shares outstanding		1,606,575			1,133,791			1,466,424			1,084,370
Loss per common share – basic and diluted	$	(2.01	)	$	(2.07	)	$	(12.67	)	$	(7.28	)

Schedule of Anti-dilutive Securities Excluded from Computation of Earnings Per Share

. The Series D Convertible Preferred Stock, Series G Convertible Preferred Stock, Series H Convertible Preferred Stock, Series H2 Convertible Preferred Stock, Series J Convertible Preferred Stock and Series K Convertible Preferred Stock are presented below as if they were converted into common shares according to the conversion terms.

	As of September 30,
	2018		2017
Stock options		341,790		249,636
Convertible debt		361,391		828,870
Common stock warrants		6,769,607		902,033
Convertible preferred stock:
Series D Convertible Preferred Stock		25,000		25,000
Series G Convertible Preferred Stock		26,857		26,857
Series H Convertible Preferred Stock		33,334		33,334
Series H2 Convertible Preferred Stock		70,000		70,000
Series J Convertible Preferred Stock		115,267		115,267
Series K Convertible Preferred Stock		229,334		227,200
Series AA Convertible Preferred Stock		5,655,454		-
		13,628,034		2,478,197

Schedule of Stock Based Compensation Expense

The following table summarizes the effect of this stock-based compensation expense within each of the line items of our costs and expenses within our Consolidated Statements of Operations:

	For the Three Months Ended				For the Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Cost of products and services	$	4,698	$	-	$	4,698	$	-
Research and development		28,444		37,345		59,592		76,263
Selling and marketing		11,822		21,778		26,298		46,112
General and administrative		106,350		80,276		208,996		196,535
Total stock-based compensation expense	$	151,314	$	139,399	$	299,584	$	318,910

Schedule of Reconciliation Related to Liabilities

The following table provides a reconciliation of the warrant derivative liability, convertible debt, conversion option derivative liability, stock warrant, additional paid-in capital and accumulated deficit on the consolidated balance sheet as of December 31, 2016:

	Convertible debt, current portion		Convertible debt, long term portion		Warrant Derivative Liability			Conversion Option Liability			Warrants to acquire common stock		Additional Paid-in Capital		Accumulated deficit
Balance, January 1, 2017 (Prior to adoption of ASU 2017-11)	$	4,005,702	$	529,742	$	1,685,108		$	951,059		$	6,325,102	$	27,544,265	$	(42,264,190	)
Reclassified derivative liabilities and cumulative effect of adoption		769,316		154,152		(1,685,108	)		(951,059	)		2,636,236		1,446,011		(2,369,548	)
Balance, January 1, 2017 (After adoption of ASU 2017-11)	$	4,775,018	$	683,894	$	-		$	-		$	8,961,338	$	28,990,276	$	(44,633,738	)

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

The following tables set forth the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of September 30, 2018:

			Fair value measurements at  September 30, 2018 using:
	September 30, 2018		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Available-For-Sale Equity Securities		16,643		16,643		-		-
Total Financial Assets	$	16,643	$	16,643	$	-	$	-

The following tables set forth the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, 2017:

			Fair value measurements at  December 31, 2017 using:
	December 31, 2017		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant  unobservable  inputs (Level 3)
Available-For-Sale Equity Securities		19,825		19,825		-		-
Total Financial Assets	$	19,825	$	19,825	$	-	$	-

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Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

Schedule of Future Minimum Rental Payments Required Under Operating Leases

Following is a schedule by years of future minimum rental payments required under operating leases with initial or remaining non-cancelable lease terms in excess of one year as of September 30, 2018:

2018	$	41,588
2019		82,953
2020		82,953
2021		-
Thereafter		-
	$	207,494

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Convertible Debt and Other Debt (Tables)

9 Months Ended

Sep. 30, 2018

Debt Disclosure [Abstract]

Schedule of Convertible Debt

	Debt converted to stock
Current liabilities
Convertible Debentures, face value	$	6,962,634
Revolving Note with interest		4,750,000
May 19, 2017 Promissory Note with interest		750,000
Other Notes with interest		226,000
Total debt converted in the second quarter of 2018	$	12,688,634

Schedule of Convertible Debts and Outstanding Balances

Convertible Notes

Inception Date	Term			Loan Amount		Outstanding Balance with OID			Original Issue Discount			Interest Rate			Conversion Price (Convertible at Inception Date)		Deferred Finance Fees		Discount related to fair value of conversion feature and warrants/shares
July 22, 2015		30 months	1	$	2,398,000	$	-	4	$	218,000	2		10	%3	$	8.40	$	388,532	$	2,163,074
September 25, 2015		30 months	1		1,210,000		-	4		110,000	2		10	%3	$	8.40		185,956		1,022,052
October 2, 2015		30 months	1		165,000		-	4		15,000	2		10	%3	$	8.40		26,345		140,832
October 6, 2015		30 months	1		33,000		-	4		3,000	2		10	%3	$	8.40		5,168		26,721
October 14, 2015		30 months	1		55,000		-	4		5,000	2		10	%3	$	8.40		8,954		49,377
November 2, 2015		30 months	1		275,000		-	4		25,000	2		10	%3	$	8.40		43,079		222,723
November 10, 2015		30 months	1		55,000		-	4		5,000	2		10	%3	$	8.40		8,790		46,984
November 12, 2015		30 months	1		236,500		-	4		21,500	2		10	%3	$	8.40		38,518		212,399
November 20, 2015		30 months	1		220,000		-	4		20,000	2		10	%3	$	8.40		37,185		200,000
December 4, 2015		30 months	1		187,000		-	4		17,000	2		10	%3	$	8.40		37,352		170,000
December 11, 2015		30 months	1		396,000		-	4		36,000	2		10	%3	$	8.40		75,449		360,000
December 18, 2015		30 months	1		60,500		-	4		5,500	2		10	%3	$	8.40		11,714		55,000
December 31, 2015		30 months	1		110,000		-	4		10,000	2		10	%3	$	8.40		20,634		100,000
January 11, 2016		30 months	1		110,000		-	4		10,000	2		10	%3	$	8.40		24,966		80,034
January 20, 2016		30 months	1		55,000		-	4		5,000	2		10	%3	$	8.40		9,812		40,188
January 29, 2016		30 months	1		330,000		-	4		30,000	2		10	%3	$	8.40		60,887		239,113
February 26, 2016		30 months	1		220,000		-	4		20,000	2		10	%3	$	8.40		43,952		156,048
March 10, 2016		30 months	1		137,500		-	4		12,500	2		10	%3	$	8.40		18,260		106,740
March 18, 2016		30 months	1		396,000		-	4		36,000	2		10	%3	$	8.40		94,992		265,008
March 24, 2016		30 months	1		117,334		-	4		10,667	2		10	%3	$	8.40		15,427		91,240
March 31, 2016		30 months	1		195,670		-	4		17,788	2		10	%3	$	8.40		2,436		175,446
October 20, 2017		12 months			150,000		-			-			5	%	$	7.50		7,500		-
October 25, 2017		6 months			103,000		-			-			12	%		-		3,000		-
October 27, 2017		12 months			170,000		-			-			5	%		-		4,250		10,000
November 13, 2017		9 months			380,000		-			15,200			8	%	$	7.50		15,200		46,274
November 22, 2017		12 months			100,000		-			10,000			5	%		-		2,000		-
November 28, 2017		10 months			103,000		-			3,000			12	%		-		-		-
November 29, 2017		6 months			150,000		-			-			15	%	$	7.50		-		15,200
November 30, 2017		3 months			50,000		-			-			8	%	$	7.50		-		-
December 5, 2017		3 months			52,500		-			-			10	%	$	7.50		2,500		-
December 6, 2017		4 months			100,000		-			-			10	%	$	7.50		-		-
December 11, 2017		6 months			130,000		-			1,500			5	%		-		6,500		6,460
December 19, 2017		6 months			110,000		-			1,500			5	%		-		5,500		5,775
December 28, 2017		6 months			55,000		-			-			15	%	$	7.50		5,000		-
December 29, 2017		12 months			105,000		-			-			5	%		-		5,000		-
January 3, 2018		12 months			95,000		-			4,750			5	%		-		2,000		-
January 16, 2018		12 months			131,250		-			-						-		6,250		-
January 19, 2018		6 months			150,000		-			-			10	%	$	7.50		6,000		12,267
February 9, 2018		6 months			100,000		-			-			15	%	$	7.50		23,500		-
February 15, 2018		6 months			100,000		-			-			15	%	$	7.50		9,000		10,474
March 12, 2018		6 months			85,000		-			1,150			5	%		-		4,250		5,183
March 12, 2018		6 months			253,000		-			53,000			0	%		-				28,722
April 11, 2018		6 months			100,000		100,000			4,000			15	%	$	7.50		20,000		7,218
April 23, 2018		6 months			103,000		103,000			-			12	%		-		3,000		-
April 24, 2018		9 months			77,000		77,000			-			12	%	$	7.50		2,000		-
April 25, 2018		12 months			105,000		105,000			-			4	%	$	7.50		5,000		4,590
April 25, 2018		12 months			105,000		105,000			-			4	%	$	7.50		5,000		4,590
April 25, 2018		12 months			130,000		130,000			-			6	%	$	7.50		6,500		-
April 26, 2018		12 months			65,000		65,000			6,500			5	%		-		2,000		-
May 9, 2018		12 months			250,000		250,000			-			10	%	$	7.50		12,500		26,466
May 11, 2018		6 months			161,250		161,250			11,250			15	%	$	7.50		10,000		-
May 14, 2018		9 months			50,000		50,000			2,500			15	%	$	7.50		2,500		3,704
May 17, 2018		12 months			380,000		380,000			15,200			8	%	$	7.50		15,200		43,607
May 23, 2018		9 months			103,000		103,000			-			12	%		-		3,000		-
May 24, 2018		9 months			52,500		52,500			2,500			4	%		-		-		2,075
May 25, 2018		12 months			78,750		78,750			-			4	%	$	7.50		3,750		3,112
May 30, 2018		2 months			150,000		-			-			8	%	$	7.50		-		6,870
June 4, 2018		12 months			75,000		75,000			7,500			5	%		-		2,000		3,869
June 8, 2018		6 months			50,000		50,000			2,500			15	%	$	7.50		2,500		3,271
June 12, 2018		6 months			100,000		-			-			5	%	$	7.50		5,000		-
June 14, 2018		9 months			280,000		280,000			25,000			10	%		-		5,000		17,573
June 16, 2018		9 months			130,000		130,000			-			5	%		-		-		-
June 16, 2018		6 months			110,000		110,000			-			5	%		-		-		-
June 26, 2018		3 months			150,000		150,000			-			15	%	$	7.50		-		20,242
June 28, 2018		6 months			50,000		50,000			-			15	%	$	7.50		-		10,518
July 2, 2018		12 months			125,000		125,000			-			4	%		-		6,250		5,588
July 10, 2018		12 months			95,000		95,000			6,750			5	%		-		-		-
July 13, 2018		9 months			103,000		103,000			-			12	%		-		3,000		-
July 17, 2018		3 months			100,000		100,000			15,000			15	%	$	7.50		-		16,944
July 19, 2018		12 months			184,685		184,685			34,685			10	%	$	7.50		-		-
July 30, 2018		12 months			80,000		80,000			-			6	%	$	7.50		4,000		-
July 31, 2018		3 months			150,000		150,000			-			12	%	$	7.50		-		6,578
August 8, 2018		6 months			100,000		100,000			-			15	%	$	7.50		-		-
August 15, 2018		4 months			100,000		100,000			-			15	%	$	7.50		-		-
August 28, 2018		12 months			131,250		131,250			-			4	%		-		6,250		4,443
September 7, 2018		6 months			85,000		85,000			-			5	%		-		-		4,364
				$	13,744,689	$	3,859,435		$	856,440							$	1,390,308	$	6,258,956

1. The loan term was extended by 180 days and further extended on January 15, 2018 by 60 days to repay in common stock. The Debenture holders signed letter agreements on May 14, 2018 and June 11, 2018 to waive default penalties relating to the maturity date.

2. The original issue discount is reflected in the first year.

3. The annual interest started accruing in the second year.

4. The Debentures were converted into Series AA Convertible Preferred Stock.

Schedule of Fair Value of Common Stock Issued in Connection with Refinancings

Origination Date	Amended Start Date		New Maturity Date			Loan Amount		New Loan Amount		Total Unamortized Discount as of June 30, 2018		Amortization from July 1, 2018 to Modification Date			Unamortized discount
12/11/2017		6/15/2018		12/11/2018	*	$	130,000	$	130,000	$	-	$	-		$	-
12/19/2017		6/15/2018		12/19/2018	*		110,000		110,000		-		-			-
1/3/2018		7/11/2018		7/10/2019			95,000		95,000		3,458		(69	)		3,389
1/17/2018		8/29/2018		8/27/2019			131,250		131,250		3,442		(352	)		3,090
1/19/2018		7/19/2018		8/22/2019	*		150,000		184,685		1,288		(42	)		1,246
2/9/2018		8/8/2018		2/8/2019	*		100,000		100,000		5,193		(556	)		4,637
2/15/2018		8/15/2018		12/15/2018	*		100,000		100,000		2,662		(2,662	)		-
3/12/2018		9/7/2018		3/12/2019			85,000		85,000		2,172		(411	)		1,761
5/30/2018		7/31/2018		10/31/2018			150,000		150,000		9,280		(1,868	)		7,412
3/30/2018		4/30/2018		9/30/2018			170,000		170,000		-		-			-
						$	1,221,250	$	1,255,935	$	27,495	$	(5,960	)	$	21,535

* The original loans were recorded as extinguished, the unamortized debt discounts on the old debt were written off on extinguishment date, and a loss was recorded for each extinguishment. The July 19, 2018 Note includes an original issue discount of $34,685 added to the new loan.

Summary of Changes in Convertible Debt, Net of Unamortized Discounts

The following table provides a summary of the changes in convertible debt and revolving note payable, net of unamortized discounts, during 2018:

	2018
Balance at January 1,	$	11,787,776
Issuance of convertible debt, face value		4,664,000
Deferred financing cost		(315,516	)
Debt discount related to one-time interest charge		(147,000	)
Contingent beneficial conversion feature on convertible note		(253,000	)
Debt discount from warrants issued with debt		(162,023	)
Debt discount from shares issued with the notes		(222,272	)
Conversion of debt into equity		(10,962,634	)
Payments		(2,097,750	)
Accretion of interest and amortization of debt discount to interest expense through September 30,		1,327,984
Balance at September 30,		3,619,565
Less: current portion		3,619,565
Convertible debt, long-term portion	$	-

Schedule of Merchant Agreements

The following table shows our Merchant Agreements as of September 30, 2018.

Inception Date	Purchase Price		Purchased Amount		Outstanding Balance		Daily Payment		Interest Rate			Deferred Finance Fees
September 29, 2017		75,000		102,000	$	-		1,200.00		15	%		1,500
October 25, 2017		110,000		153,890		-		1,539.00		15	%		8,800
December 7, 2017		160,000		212,800		-		1,251.76		25	%		5,799
December 12, 2017		160,000		212,800		-		1,251.76		15	%		5,258
February 27, 2018		110,000		147,400		-		921.25		25	%		1,650
April 11, 2018		140,000		187,600		-		1,275.00		13	%		2,800
May 11, 2018		180,000		243,000		82,468		1,518.75		25	%		2,599
May 15, 2018		180,000		244,800		86,858		1,530.00		15	%		3,600
June 29, 2018		140,000		190,400		88,657		1,269.33		25	%		2,100
July 16, 2018		180,000		246,600		124,544		1,790.00		13	%		3,600
	$	1,435,000	$	1,941,290	$	382,527						$	37,706

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Stockholders' Deficit (Tables)

9 Months Ended

Sep. 30, 2018

Equity [Abstract]

Schedule of Concerning Options and Warrants Outstanding and Exercisable

The following tables summarize information concerning options and warrants outstanding and exercisable:

	Stock Options					Warrants
	Weighted					Weighted
	Average					Average								Total
	Shares			Price per share		Shares			Price per share		Shares			Exercisable
Balance outstanding, 12/31/17		247,692		$	10.95		899,542		$	12.03		1,147,234			1,073,850
Granted		345,734			3.40		5,882,734			3.50		6,228,468
Exercised		-			-		-			-		-
Expired		(334	)		30.00		(12,669	)		12.00		(13,003	)
Forfeited		(251,302	)		10.80		-			-		(251,302	)
Balance outstanding, 9/30/2018		341,790		$	3.40		6,769,607		$	3.57		7,111,397			6,797,356

Schedule of Share-based Compensation Stock Option Plans by Exercise Price Range

		Options Outstanding						Options Exercisable
		Weighted Average						Weighted Average
Range of Exercise Prices		Number of Options		Remaining Contractual Life (Years)		Exercise Price		Number of Options		Remaining Contractual Life (Years)		Exercise Price
$	3.40		341,790		9.8	$	3.40		27,749		9.8	$	3.40

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Business Overview, Liquidity and Management Plans (Details Narrative) - lb	9 Months Ended
	Sep. 30, 2018	Dec. 31, 2015
Pounds per square inch	45,000
PBI Europe [Member]
Percentage of ownership interest		49.00%
Percentage of investment bank retaining		51.00%

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Summary of Significant Accounting Policies (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Forfeiture rate			5.00%
Stock-based compensation expense	$ 151,314	$ 139,399	$ 299,584	$ 318,910
Warrant and option derivative to additional paid in capital	2,600,000		2,600,000
Reduced debt discount	900,000		900,000
Cumulative accumulated deficit	2,400,000		2,400,000
Increase in stock warrant			2,600,000
Additional paid in capital			$ 1,400,000
Everest Investments Holdings S.A. [Member]
Sale of stock number of shares received			100,250
Fair value of investment	$ 17,000		$ 17,000
Shares closing price per share	$ 0.17		$ 0.17

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Summary of Significant Accounting Policies - Schedule of Disaggregation of Revenue (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Revenue	$ 521,766	$ 646,061	$ 1,771,313	$ 1,737,790
Hardware [Member]
Revenue	278,000	411,000	1,094,000	1,154,000
Grants [Member]
Revenue	61,000	42,000	106,000	127,000
Consumables [Member]
Revenue	43,000	85,000	182,000	200,000
Contract Research Services [Member]
Revenue	80,000		147,000
Sample Preparation Accessories [Member]
Revenue	22,000	47,000	118,000	121,000
Technical Support/Extended Service Contracts [Member]
Revenue	20,000	35,000	70,000	78,000
Shipping and Handling [Member]
Revenue	10,000	17,000	38,000	38,000
Others [Member]
Revenue	8,000	9,000	16,000	20,000
Products Transferred at a Point in Time [Member]
Revenue	362,000	560,000	1,546,000	1,546,000
Products and Services Transferred Over Time [Member]
Revenue	160,000	86,000	225,000	192,000
North America [Member]
Revenue	408,000	401,000	1,123,000	1,124,000
Europe [Member]
Revenue	59,000	3,000	278,000	161,000
Asia [Member]
Revenue	$ 55,000	$ 242,000	$ 370,000	$ 453,000

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Summary of Significant Accounting Policies - Schedule of Contract Balances (Details) - USD ($)	Sep. 30, 2018	Dec. 31, 2017
Accounting Policies [Abstract]
Receivables, which are included in 'Accounts Receivable'	$ 374,000	$ 207,000
Contract liabilities (deferred revenue)	$ 206,000	$ 320,000

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Summary of Significant Accounting Policies - Schedule of Future Related to Performance Obligations (Details)	Sep. 30, 2018 USD ($)
Extended warranty service	$ 206,000
2018 [Member]
Extended warranty service	7,000
2019 [Member]
Extended warranty service	199,000
2020 [Member]
Extended warranty service

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Summary of Significant Accounting Policies - Schedule of Customer Concentration Risk Percentage (Details)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Top Five Customers [Member] | Revenue [Member]
Concentration credit risk percentage	59.00%	73.00%	36.00%	38.00%
Top Five Customers [Member] | Accounts Receivable [Member]
Concentration credit risk percentage			76.00%		85.00%
Federal Agencies [Member] | Revenue [Member]
Concentration credit risk percentage	12.00%	30.00%	10.00%	19.00%
Federal Agencies [Member] | Accounts Receivable [Member]
Concentration credit risk percentage			1.00%		1.00%

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Summary of Significant Accounting Policies - Schedule of Computation of Loss Per Share (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Accounting Policies [Abstract]
Net loss	$ (1,808,656)	$ (2,343,576)	$ (6,321,542)	$ (7,889,676)
Deemed dividend on down round feature			(213,012)
Deemed dividend on beneficial conversion feature	(1,146,280)		(11,678,571)
Preferred stock dividends	(277,439)		(373,318)
Net loss applicable to common shareholders	$ (3,232,375)	$ (2,343,576)	$ (18,586,443)	$ (7,889,676)
Weighted average common stock shares outstanding	1,606,575	1,133,791	1,466,424	1,084,370
Loss per common share - basic and diluted	$ (2.01)	$ (2.07)	$ (12.67)	$ (7.28)

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Summary of Significant Accounting Policies - Schedule of Anti-dilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Total potentially dilutive shares	13,628,034	2,478,197
Stock Options [Member]
Total potentially dilutive shares	341,790	361,391
Convertible Debt [Member]
Total potentially dilutive shares	261,251	828,870
Common Stock Warrants [Member]
Total potentially dilutive shares	6,769,607	902,033
Series D Convertible Preferred Stock [Member]
Total potentially dilutive shares	25,000	25,000
Series G Convertible Preferred Stock [Member]
Total potentially dilutive shares	26,857	26,857
Series H Convertible Preferred Stock [Member]
Total potentially dilutive shares	33,334	33,334
Series H2 Convertible Preferred Stock [Member]
Total potentially dilutive shares	70,000	70,000
Series J Convertible Preferred Stock [Member]
Total potentially dilutive shares	115,267	115,267
Series K Convertible Preferred Stock [Member]
Total potentially dilutive shares	229,334	227,200
Series AA Convertible Preferred Stock [Member]
Total potentially dilutive shares	5,655,454

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Summary of Significant Accounting Policies - Schedule of Stock Based Compensation Expense (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Total stock-based compensation expense	$ 151,314	$ 139,399	$ 299,584	$ 318,910
Cost of Products and Services [Member]
Total stock-based compensation expense	4,698		4,698
Research and Development [Member]
Total stock-based compensation expense	28,444	37,345	59,592	76,263
Selling and Marketing [Member]
Total stock-based compensation expense	11,822	21,778	26,298	46,112
General and Administrative [Member]
Total stock-based compensation expense	$ 106,350	$ 80,276	$ 208,996	$ 196,535

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Summary of Significant Accounting Policies - Schedule of Reconciliation Related to Liabilities (Details)	9 Months Ended
	Sep. 30, 2018 USD ($)
Additional Paid-in Capital [Member]
Balance, January 1, 2017 (Prior to adoption of ASU 2017-11)	$ 27,544,265
Reclassified derivative liabilities and cumulative effect of adoption	1,446,011
Balance, January 1, 2017 (After adoption of ASU 2017-11)	28,990,276
Accumulated Deficit [Member]
Balance, January 1, 2017 (Prior to adoption of ASU 2017-11)	(42,264,190)
Reclassified derivative liabilities and cumulative effect of adoption	(2,369,548)
Balance, January 1, 2017 (After adoption of ASU 2017-11)	(44,633,738)
Convertible Debt, Current Portion [Member]
Balance, January 1, 2017 (Prior to adoption of ASU 2017-11)	4,005,702
Reclassified derivative liabilities and cumulative effect of adoption	769,316
Balance, January 1, 2017 (After adoption of ASU 2017-11)	4,775,018
Convertible Debt, Long Term Portion [Member]
Balance, January 1, 2017 (Prior to adoption of ASU 2017-11)	529,742
Reclassified derivative liabilities and cumulative effect of adoption	154,152
Balance, January 1, 2017 (After adoption of ASU 2017-11)	683,894
Warrant Derivative Liability [Member]
Balance, January 1, 2017 (Prior to adoption of ASU 2017-11)	1,685,108
Reclassified derivative liabilities and cumulative effect of adoption	(1,685,108)
Balance, January 1, 2017 (After adoption of ASU 2017-11)
Conversion Option Liability [Member]
Balance, January 1, 2017 (Prior to adoption of ASU 2017-11)	951,059
Reclassified derivative liabilities and cumulative effect of adoption	(951,059)
Balance, January 1, 2017 (After adoption of ASU 2017-11)
Warrants to Acquire Common Stock [Member]
Balance, January 1, 2017 (Prior to adoption of ASU 2017-11)	6,325,102
Reclassified derivative liabilities and cumulative effect of adoption	2,636,236
Balance, January 1, 2017 (After adoption of ASU 2017-11)	$ 8,961,338

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Summary of Significant Accounting Policies - Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($)	Sep. 30, 2018	Dec. 31, 2017
Total Financial Assets	$ 16,643	$ 19,825
Quoted Prices in Active Markets (Level 1) [Member]
Total Financial Assets	16,643	19,825
Significant Other Observable Inputs (Level 2) [Member]
Total Financial Assets
Significant Unobservable Inputs (Level 3) [Member]
Total Financial Assets
Available-For-Sale Equity Securities [Member]
Total Financial Assets	16,643	19,825
Available-For-Sale Equity Securities [Member] | Quoted Prices in Active Markets (Level 1) [Member]
Total Financial Assets	16,643	19,825
Available-For-Sale Equity Securities [Member] | Significant Other Observable Inputs (Level 2) [Member]
Total Financial Assets
Available-For-Sale Equity Securities [Member] | Significant Unobservable Inputs (Level 3) [Member]
Total Financial Assets

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Commitments and Contingencies (Details Narrative) - USD ($)		9 Months Ended
	Dec. 29, 2017	Sep. 30, 2018	Sep. 30, 2017	Nov. 30, 2014
Rental expenses		$ 137,074	$ 112,438
Lease expire date		Dec. 30, 2020
Lease monthly payments		$ 6,913
Lease expiration term		The lease shall be automatically extended for additional three years unless either party terminates at least six months prior to the expiration of the current lease term.
NIH SBIR Phase II [Member]
Grants receivable				$ 1,020,000
Corporate Office [Member]
Rental expenses	$ 6,950
Lease expire date	Dec. 31, 2018

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Commitments and Contingencies - Schedule of Future Minimum Rental Payments Required Under Operating Leases (Details)	Sep. 30, 2018 USD ($)
Commitments and Contingencies Disclosure [Abstract]
2018	$ 41,588
2019	82,953
2020	82,953
2021
Thereafter
Total minimum payments required	$ 207,494

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Convertible Debt and Other Debt (Details Narrative) - USD ($)																										1 Months Ended				3 Months Ended			5 Months Ended	6 Months Ended	9 Months Ended		12 Months Ended
	Sep. 28, 2018	Sep. 14, 2018	Aug. 08, 2018	Aug. 06, 2018	Jul. 18, 2018	Jul. 16, 2018	Jul. 02, 2018	Jun. 30, 2018	Jun. 11, 2018	May 31, 2018	May 14, 2018	May 02, 2018	May 02, 2018	Mar. 27, 2018	Mar. 14, 2018	Feb. 12, 2018	Jan. 30, 2018	Sep. 12, 2017	Aug. 18, 2017	Aug. 02, 2017	Jul. 25, 2017	May 19, 2017	May 02, 2017	Mar. 21, 2017	Oct. 28, 2016	Sep. 30, 2018	Jun. 30, 2018	Apr. 30, 2018	Mar. 31, 2018	Sep. 30, 2018	Mar. 31, 2018	Sep. 30, 2017	Jun. 11, 2018	Sep. 30, 2018	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017	Jun. 02, 2018	Mar. 12, 2018
Debt conversion into common stock shares																																			56,007
Loan Amount																										$ 4,664,000				$ 4,664,000				$ 4,664,000	$ 4,664,000
Debt conversion price per share																										$ 7.50				$ 7.50				$ 7.50	$ 7.50
Warrant exercise price per share									$ 3.50																								$ 3.50
Warrant to purchase shares of common stock									110,833																								110,833
Warrants rights description																																			Subject to the terms and conditions of the Warrants, at any time commencing six months from the Final Closing, the Company has the right to call the Warrants for cancellation if the volume weighted average price of its Common Stock on the OTCQB (or other primary trading market or exchange on which the Common Stock is then traded) equals or exceeds three times the per share exercise price of the Warrants for 15 out of 20 consecutive trading days.
Gain on extinguishment of debt																														$ (140,765)		$ 90,862			$ 335,132	$ 90,862
Unamortized debt discount																										$ 239,872				239,872				$ 239,872	239,872		$ 401,856
Debenture discounts																																	$ 287,676
Proceeds from convertible notes																																			3,848,484
Amortization of debt discount																																			384,295
Proceeds from revolving note payable																																			460,000	2,070,000
Origination fee amount																										37,706				37,706				37,706	37,706
Interest expense																														733,209		$ 1,554,379			3,015,596	4,431,950
Debentures First Anniversary Date Through June 11, 2018 [Member]
Gain on extinguishment of debt																																			9,615
Accrued interest, debt																										$ 211,047				$ 211,047				$ 211,047	211,047
Revolving Note [Member]
Fair value of warrant																																			333,334
Increase in debt principal amount																	$ 4,000,000		$ 3,500,000
Broker fees																																			336,500
One-time interest amount																																			$ 400,000
Revolving Note [Member] | Prior to April 28, 2017 [Member]
Percentage of annual interest rates																										10.00%				10.00%				10.00%	10.00%
Revolving Note [Member] | April 28, 2017 And July 28, 2017 [Member]
Percentage of annual interest rates																										4.00%				4.00%				4.00%	4.00%
Revolving Note [Member] | July 28, 2017 And October 28, 2017 [Member]
Percentage of annual interest rates																										4.00%				4.00%				4.00%	4.00%
Non-Convertible Loan [Member]
Debt conversion into common stock shares									20
Debt conversion amount									$ 50,000
Convertible debentures term															1 year
Warrant to purchase shares of common stock									20,000																								20,000
Amortization of debt discount																																			$ 7,500
Proceeds from loan															$ 50,000
Non-Convertible Loan [Member] | Privately-Held Investment Firm [Member]
Percentage of annual interest rates																		10.00%
Convertible debentures term																		9 months
Amortization of debt discount																																			$ 38,000
Number of shares issued																		3,333
Broker fees																		$ 25,000
Proceeds from loan																		$ 225,000
Debt converted into common stock, percentage																																			35.00%
New Loan [Member]
Percentage of debt original issue discount on purchase price																										10.00%				10.00%				10.00%	10.00%
Original Debt on Five Loans [Member]
Percentage of debt original issue discount on purchase price																										10.00%				10.00%				10.00%	10.00%
Gain on extinguishment of debt																																			$ 124,879
Minimum [Member] | Convertible Notes [Member]
Percentage of annual interest rates																										4.00%				4.00%				4.00%	4.00%
Convertible debentures term																																			3 months
Minimum [Member] | New Loan [Member]
Percentage of annual interest rates																										10.00%				10.00%				10.00%	10.00%
Maximum [Member] | Convertible Notes [Member]
Percentage of annual interest rates																										15.00%				15.00%				15.00%	15.00%
Convertible debentures term																																			12 months
Maximum [Member] | New Loan [Member]
Percentage of annual interest rates																										10.00%				10.00%				10.00%	10.00%
Investor [Member] | Revolving Note [Member]
Amortization of debt discount																																			$ 1,266,691
Private Investor [Member] | Non-Convertible Loan [Member]
Percentage of annual interest rates								10.00%																			10.00%
Convertible debentures term								1 year														45 days
Unamortized debt discount																										$ 0				$ 0				$ 0	0
Broker fees																						$ 31,500
One-time interest amount																						63,000
Proceeds from loan																						630,000
Origination fee amount																						$ 32,000
Loan amount								$ 15,000																			$ 15,000
Private Investor [Member] | Non-Convertible Loans [Member]
Proceeds from loan			$ 50,000																							67,000
Lender [Member] | Original Debt on Five Loans [Member]
Gain on extinguishment of debt																																			124,879
Shares issued for new debt																																			68,334
Unamortized debt discount																										5,883				5,883				5,883	5,883
Origination fee amount																										50,662				50,662				50,662	50,662
Lender [Member] | Non-Convertible Installment Loan [Member]
Broker fees																				$ 93,750
Proceeds from loan																				75,000
Repayment of debt																				3,500
Lender [Member] | Non-Convertible Installment Loan [Member]
Unamortized debt discount																				$ 18,750
Accredited Investor [Member]
Percentage of annual interest rates							4.00%
Convertible debentures term							1 year									8 months
Debt conversion price per share							$ 7.50
Unamortized debt discount							$ 5,588
Proceeds from loan							125,000
Origination fee amount							$ 6,250
Number of restricted stock issued during period							1,500							3,500		3,500
Debt converted into common stock, percentage							60.00%
Accredited Investor [Member] | Non-Convertible Loan [Member]
Loan Amount																										170,000				170,000				$ 170,000	170,000
Percentage of debt original issue discount on purchase price																								10.00%
Percentage of annual interest rates																								10.00%
Amortization of debt discount																								$ 35,079													52,079
Number of shares issued																															9,500			7,200
Proceeds from loan																$ 170,000								$ 170,000
Interest expense																															$ 28,490
Number of restricted stock issued during period																								5,667
Loss on fair value of common stock																																			20,400
Accredited Investor [Member] | Short-term Non-Convertible Loans [Member]
Unamortized debt discount		$ 15,000
Proceeds from loan		350,000
Repayment of debt		$ 20,000
Private Investors [Member] | Non-Convertible Loans [Member]
Percentage of annual interest rates																												10.00%	10.00%		10.00%
Convertible debentures term																												1 year	1 year
Proceeds from loan																												$ 10,000	$ 150,000
Lenders [Member] | Non-Convertible Loan [Member]
Debt conversion into common stock shares					6,000
Percentage of annual interest rates					10.00%
Proceeds from loan					$ 170,000
Loss on fair value of common stock					$ 20,400
Board of Directors [Member] | Short-term Loan One [Member]
Proceeds from loan										$ 46,500
Interest expense																											6,975
Board of Directors [Member] | Short-term Loan Two [Member]
Proceeds from loan										$ 5,600
Interest expense																											$ 6,975
One Employee [Member] | Short-term Loan One [Member]
Proceeds from loan				$ 6,500
One Employee [Member] | Short-term Loan Two [Member]
Proceeds from loan	$ 7,500
Placement Agent [Member] | Other Convertible Notes [Member]
Unamortized debt discount																										$ 239,872				$ 239,872				$ 239,872	239,872
Amortization of debt discount																																			$ 1,327,983
Investor [Member]
Warrant to purchase shares of common stock									29,167																								29,167
Investor [Member] | Revolving Note [Member]
Loan Amount																									$ 2,000,000
Issuance of warrants to purchase of common stock shares																									20,834
Warrant exercise price per share																							$ 12.00		$ 12.00
Debt maturity date																									Oct. 28, 2017
Advance pursuant to revolving note																									$ 3,500,000
Proceeds from revolving note payable																																					$ 2,070,000
Increase in debt principal amount																							$ 3,000,000
Number of shares issued																							16,667
Debt instrument description																							The per share purchase price of the shares of our Common Stock sold in the Qualified Offering, and to change the references in the Revolving Note from "the six (6) month anniversary of October 28, 2016" to "July 25, 2017."
Shares issued during period, value																							$ 149,018
Investor [Member] | Maximum [Member] | Revolving Note [Member]
Issuance of warrants to purchase of common stock shares																									291,667
Warrant exercise price per share																									$ 12.00
Advance pursuant to revolving note																									$ 250,000
Investor [Member] | Maximum [Member] | Revolving Note [Member] | 15 Day Period [Member]
Advance pursuant to revolving note																									250,000
Investor [Member] | Maximum [Member] | Revolving Note [Member] | 30 Day Period [Member]
Advance pursuant to revolving note																									$ 500,000
Holder [Member]
Percentage of outstanding principal amount of debenture																					5.00%
Equity ownership, percentage																					5.00%
Gross proceeds of purchase consideration																					$ 7,000,000
Subscription Agreement [Member] | Individuals [Member] | July 23, 2015 and March 31, 2016 [Member]
Percentage of warrants to purchase shares of common stock																										50.00%				50.00%				50.00%	50.00%
Purchase warrants price amount																										$ 6,329,549				$ 6,329,549				$ 6,329,549	$ 6,329,549
Loan Amount																										$ 6,962,634				$ 6,962,634				$ 6,962,634	$ 6,962,634
Percentage of debt original issue discount on purchase price																										10.00%				10.00%				10.00%	10.00%
Percentage of annual interest rates																										10.00%				10.00%				10.00%	10.00%
Convertible debentures term																																			2 years
Debt conversion price per share																										$ 8.40				$ 8.40				$ 8.40	$ 8.40
Issuance of warrants to purchase of common stock shares																										376,759				376,759				376,759	376,759
Warrants expiration period																																			5 years
Warrant exercise price per share																										$ 12.00				$ 12.00				$ 12.00	$ 12.00
Securities Purchase Agreement [Member] | Warrants [Member]
Warrant exercise price per share												$ 3.50	$ 3.50
Warrant to purchase shares of common stock												100,000	100,000
Securities Purchase Agreement [Member] | New Warrant [Member]
Warrant exercise price per share												$ 3.50	$ 3.50																									$ 3.50
Warrant to purchase shares of common stock												100,000	100,000																									20,000
Letter Agreements [Member]
Gain on extinguishment of debt											$ 29,865
Letter Agreements [Member] | Debenture Warrants [Member]
Issuance of warrants to purchase of common stock shares											2,448,200
Warrant exercise price per share											$ 3.50
Letter Agreements [Member] | New Warrant [Member]
Warrant exercise price per share											$ 3.50
Letter Agreements [Member] | 22 Investors [Member]
Debt conversion amount											$ 6,220,500
Letter Agreements [Member] | Private Investors [Member]
Debt conversion into common stock shares									70.4
Debt conversion amount									$ 176,000
Debt conversion price per share									$ 2.50																								$ 2.50
Warrant to purchase shares of common stock									70,400																								70,400
Letter Agreements [Member] | One Non-Employee [Member]
Debt conversion into common stock shares									20
Debt conversion amount									$ 50,000
Debt conversion price per share									$ 2.50																								$ 2.50
Warrant to purchase shares of common stock									20,000																								20,000
Additional Letter Agreements [Member]
Gain on extinguishment of debt									$ 3,155
Interest expense									$ 157,908
Additional Letter Agreements [Member] | Debenture Warrants [Member]
Warrant exercise price per share									$ 3.50																								$ 3.50
Additional Letter Agreements [Member] | New Warrant [Member]
Issuance of warrants to purchase of common stock shares									296,800																								296,800
Warrant exercise price per share									$ 3.50																								$ 3.50
Additional Letter Agreements [Member] | 15 Debenture Holders [Member]
Debt conversion amount									$ 742,134
Letter Agreement [Member]
Debt conversion into common stock shares									296.80
Debt conversion amount									$ 742,134
Gain on extinguishment of debt																																			$ 520,680
Letter Agreement [Member] | Minimum [Member]
Warrant exercise price per share									$ 3.50																								3.50
Letter Agreement [Member] | Maximum [Member]
Warrant exercise price per share									12.00																								12.00
Letter Agreement [Member] | New Warrant [Member]
Warrant exercise price per share									$ 3.50		$ 3.50																						$ 3.50
Warrant to purchase shares of common stock									296,800		2,448,200																						296,800
Letter Agreement [Member] | Investor [Member]
Debt conversion amount									$ 5,500,000
Letter Agreement [Member] | Investor [Member] | New Warrant [Member]
Issuance of warrants to purchase of common stock shares									2,200,000																								2,200,000
Warrant exercise price per share									$ 3.50																								$ 3.50
Merchant Agreement [Member]
Unamortized debt discount																										$ 6,343				$ 6,343				$ 6,343	6,343
Amortization of debt discount																																			$ 94,050	$ 225,508
Proceeds from loan						$ 180,000
Merchant Agreement [Member] | Lenders [Member]
Proceeds from loan						103,450
Origination fee amount						3,600
Repayment of debt						246,600
Interest expense						$ 66,600
Debt collected rate						$ 1,790
Series AA Convertible Preferred Stock [Member]
Debt conversion into common stock shares																																			5,075.40
Debt conversion amount																																			$ 12,688,634
Debt conversion price per share																																							$ 2.50
Fair value of other convertible notes																																							$ 253,000
Series AA Convertible Preferred Stock [Member] | Securities Purchase Agreement [Member]
Sale of stock												100	100
Sale of stock amount												$ 250,000	$ 250,000
Series AA Convertible Preferred Stock [Member] | Letter Agreements [Member]
Debt conversion into common stock shares											2,448.20
Debt conversion price per share											$ 2.50
Series AA Convertible Preferred Stock [Member] | Additional Letter Agreements [Member]
Debt conversion into common stock shares									296.80
Debt conversion price per share									$ 2.50																								2.50
Series AA Convertible Preferred Stock [Member] | Letter Agreement [Member]
Debt conversion into common stock shares									2,200		2,448.20
Debt conversion amount											$ 6,220,500
Debt conversion price per share									$ 2.50		$ 2.50																						$ 2.50
Debt extinguishment									$ 82,904
Series AA Units [Member]
Reduction in exercise price amount													$ 207,899

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Convertible Debt and Other Debt - Schedule of Convertible Debt (Details)	Sep. 30, 2018 USD ($)
Convertible debt	$ 12,688,634
Convertible Debentures, face value [Member]
Convertible debt	6,962,634
Revolving Note with Interest [Member]
Convertible debt	4,750,000
May 19, 2017 Promissory Note with Interest [Member]
Convertible debt	750,000
Other Notes with Interest [Member]
Convertible debt	$ 226,000

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Convertible Debt and Other Debt - Schedule of Convertible Debts and Outstanding Balances (Details)	9 Months Ended
	Sep. 30, 2018 USD ($) $ / shares
Loan Amount	$ 4,664,000
Outstanding Balance with OID	$ 12,688,634
Conversion Price (Convertible at Inception Date) | $ / shares	$ 7.50
Deferred Finance Fees	$ 37,706
Discount related to fair value of conversion feature and warrants/shares	11,678,571
Convertible Debt Five [Member]
Original Issue Discount	34,685
Convertible Notes [Member]
Loan Amount	13,744,689
Outstanding Balance with OID	3,859,435
Original Issue Discount	$ 856,440
Interest Rate	0.00%
Conversion Price (Convertible at Inception Date) | $ / shares
Deferred Finance Fees	$ 1,390,308
Discount related to fair value of conversion feature and warrants/shares	$ 6,258,956
Convertible Notes [Member] | Convertible Debt One [Member]
Inception Date	Jul. 22, 2015
Term	30 months	[1]
Loan Amount	$ 2,398,000
Outstanding Balance with OID		[2]
Original Issue Discount	$ 218,000	[3]
Interest Rate	10.00%	[4]
Conversion Price (Convertible at Inception Date) | $ / shares	$ 8.40
Deferred Finance Fees	$ 388,532
Discount related to fair value of conversion feature and warrants/shares	$ 2,163,074
Convertible Notes [Member] | Convertible Debt Two [Member]
Inception Date	Sep. 25, 2015
Term	30 months	[1]
Loan Amount	$ 1,210,000
Outstanding Balance with OID		[2]
Original Issue Discount	$ 110,000	[3]
Interest Rate	10.00%	[4]
Conversion Price (Convertible at Inception Date) | $ / shares	$ 8.40
Deferred Finance Fees	$ 185,956
Discount related to fair value of conversion feature and warrants/shares	$ 1,022,052
Convertible Notes [Member] | Convertible Debt Three [Member]
Inception Date	Oct. 02, 2015
Term	30 months	[1]
Loan Amount	$ 165,000
Outstanding Balance with OID		[2]
Original Issue Discount	$ 15,000	[3]
Interest Rate	10.00%	[4]
Conversion Price (Convertible at Inception Date) | $ / shares	$ 8.40
Deferred Finance Fees	$ 26,345
Discount related to fair value of conversion feature and warrants/shares	$ 140,832
Convertible Notes [Member] | Convertible Debt Four [Member]
Inception Date	Oct. 06, 2015
Term	30 months	[1]
Loan Amount	$ 33,000
Outstanding Balance with OID		[2]
Original Issue Discount	$ 3,000	[3]
Interest Rate	10.00%	[4]
Conversion Price (Convertible at Inception Date) | $ / shares	$ 8.40
Deferred Finance Fees	$ 5,168
Discount related to fair value of conversion feature and warrants/shares	$ 26,721
Convertible Notes [Member] | Convertible Debt Five [Member]
Inception Date	Oct. 14, 2015
Term	30 months	[1]
Loan Amount	$ 55,000
Outstanding Balance with OID		[2]
Original Issue Discount	$ 5,000	[3]
Interest Rate	10.00%	[4]
Conversion Price (Convertible at Inception Date) | $ / shares	$ 8.40
Deferred Finance Fees	$ 8,954
Discount related to fair value of conversion feature and warrants/shares	$ 49,377
Convertible Notes [Member] | Convertible Debt Six [Member]
Inception Date	Nov. 02, 2015
Term	30 months	[1]
Loan Amount	$ 275,000
Outstanding Balance with OID		[2]
Original Issue Discount	$ 25,000	[3]
Interest Rate	10.00%	[4]
Conversion Price (Convertible at Inception Date) | $ / shares	$ 8.40
Deferred Finance Fees	$ 43,079
Discount related to fair value of conversion feature and warrants/shares	$ 222,723
Convertible Notes [Member] | Convertible Debt Seven [Member]
Inception Date	Nov. 10, 2015
Term	30 months	[1]
Loan Amount	$ 55,000
Outstanding Balance with OID		[2]
Original Issue Discount	$ 5,000	[3]
Interest Rate	10.00%	[4]
Conversion Price (Convertible at Inception Date) | $ / shares	$ 8.40
Deferred Finance Fees	$ 8,790
Discount related to fair value of conversion feature and warrants/shares	$ 46,984
Convertible Notes [Member] | Convertible Debt Eight [Member]
Inception Date	Nov. 12, 2015
Term	30 months	[1]
Loan Amount	$ 236,500
Outstanding Balance with OID		[2]
Original Issue Discount	$ 21,500	[3]
Interest Rate	10.00%	[4]
Conversion Price (Convertible at Inception Date) | $ / shares	$ 8.40
Deferred Finance Fees	$ 38,518
Discount related to fair value of conversion feature and warrants/shares	$ 212,399
Convertible Notes [Member] | Convertible Debt Nine [Member]
Inception Date	Nov. 20, 2015
Term	30 months	[1]
Loan Amount	$ 220,000
Outstanding Balance with OID		[2]
Original Issue Discount	$ 20,000	[3]
Interest Rate	10.00%	[4]
Conversion Price (Convertible at Inception Date) | $ / shares	$ 8.40
Deferred Finance Fees	$ 37,185
Discount related to fair value of conversion feature and warrants/shares	$ 200,000
Convertible Notes [Member] | Convertible Debt Ten [Member]
Inception Date	Dec. 04, 2015
Term	30 months	[1]
Loan Amount	$ 187,000
Outstanding Balance with OID		[2]
Original Issue Discount	$ 17,000	[3]
Interest Rate	10.00%	[4]
Conversion Price (Convertible at Inception Date) | $ / shares	$ 8.40
Deferred Finance Fees	$ 37,352
Discount related to fair value of conversion feature and warrants/shares	$ 170,000
Convertible Notes [Member] | Convertible Debt Eleven [Member]
Inception Date	Dec. 11, 2015
Term	30 months	[1]
Loan Amount	$ 396,000
Outstanding Balance with OID		[2]
Original Issue Discount	$ 36,000	[3]
Interest Rate	10.00%	[4]
Conversion Price (Convertible at Inception Date) | $ / shares	$ 8.40
Deferred Finance Fees	$ 75,449
Discount related to fair value of conversion feature and warrants/shares	$ 360,000
Convertible Notes [Member] | Convertible Debt Twelve [Member]
Inception Date	Dec. 18, 2015
Term	30 months	[1]
Loan Amount	$ 60,500
Outstanding Balance with OID		[2]
Original Issue Discount	$ 5,500	[3]
Interest Rate	10.00%	[4]
Conversion Price (Convertible at Inception Date) | $ / shares	$ 8.40
Deferred Finance Fees	$ 11,714
Discount related to fair value of conversion feature and warrants/shares	$ 55,000
Convertible Notes [Member] | Convertible Debt Thirteen [Member]
Inception Date	Dec. 31, 2015
Term	30 months	[1]
Loan Amount	$ 110,000
Outstanding Balance with OID		[2]
Original Issue Discount	$ 10,000	[3]
Interest Rate	10.00%	[4]
Conversion Price (Convertible at Inception Date) | $ / shares	$ 8.40
Deferred Finance Fees	$ 20,634
Discount related to fair value of conversion feature and warrants/shares	$ 100,000
Convertible Notes [Member] | Convertible Debt Fourteen [Member]
Inception Date	Jan. 11, 2016
Term	30 months	[1]
Loan Amount	$ 110,000
Outstanding Balance with OID		[2]
Original Issue Discount	$ 10,000	[3]
Interest Rate	10.00%	[4]
Conversion Price (Convertible at Inception Date) | $ / shares	$ 8.40
Deferred Finance Fees	$ 24,966
Discount related to fair value of conversion feature and warrants/shares	$ 80,034
Convertible Notes [Member] | Convertible Debt Fifteen [Member]
Inception Date	Jan. 20, 2016
Term	30 months	[1]
Loan Amount	$ 55,000
Outstanding Balance with OID		[2]
Original Issue Discount	$ 5,000	[3]
Interest Rate	10.00%	[4]
Conversion Price (Convertible at Inception Date) | $ / shares	$ 8.40
Deferred Finance Fees	$ 9,812
Discount related to fair value of conversion feature and warrants/shares	$ 40,188
Convertible Notes [Member] | Convertible Debt Sixteen [Member]
Inception Date	Jan. 29, 2016
Term	30 months	[1]
Loan Amount	$ 330,000
Outstanding Balance with OID		[2]
Original Issue Discount	$ 30,000	[3]
Interest Rate	10.00%	[4]
Conversion Price (Convertible at Inception Date) | $ / shares	$ 8.40
Deferred Finance Fees	$ 60,887
Discount related to fair value of conversion feature and warrants/shares	$ 239,113
Convertible Notes [Member] | Convertible Debt Seventeen [Member]
Inception Date	Feb. 26, 2016
Term	30 months	[1]
Loan Amount	$ 220,000
Outstanding Balance with OID		[2]
Original Issue Discount	$ 20,000	[3]
Interest Rate	10.00%	[4]
Conversion Price (Convertible at Inception Date) | $ / shares	$ 8.40
Deferred Finance Fees	$ 43,952
Discount related to fair value of conversion feature and warrants/shares	$ 156,048
Convertible Notes [Member] | Convertible Debt Eighteen [Member]
Inception Date	Mar. 10, 2016
Term	30 months	[1]
Loan Amount	$ 137,500
Outstanding Balance with OID		[2]
Original Issue Discount	$ 12,500	[3]
Interest Rate	10.00%	[4]
Conversion Price (Convertible at Inception Date) | $ / shares	$ 8.40
Deferred Finance Fees	$ 18,260
Discount related to fair value of conversion feature and warrants/shares	$ 106,740
Convertible Notes [Member] | Convertible Debt Nineteen [Member]
Inception Date	Mar. 18, 2016
Term	30 months	[1]
Loan Amount	$ 396,000
Outstanding Balance with OID		[2]
Original Issue Discount	$ 36,000	[3]
Interest Rate	10.00%	[4]
Conversion Price (Convertible at Inception Date) | $ / shares	$ 8.40
Deferred Finance Fees	$ 94,992
Discount related to fair value of conversion feature and warrants/shares	$ 265,008
Convertible Notes [Member] | Convertible Debt Twenty [Member]
Inception Date	Mar. 24, 2016
Term	30 months	[1]
Loan Amount	$ 117,334
Outstanding Balance with OID		[2]
Original Issue Discount	$ 10,667	[3]
Interest Rate	10.00%	[4]
Conversion Price (Convertible at Inception Date) | $ / shares	$ 8.40
Deferred Finance Fees	$ 15,427
Discount related to fair value of conversion feature and warrants/shares	$ 91,240
Convertible Notes [Member] | Convertible Debt Twenty One [Member]
Inception Date	Mar. 31, 2016
Term	30 months	[1]
Loan Amount	$ 195,670
Outstanding Balance with OID		[2]
Original Issue Discount	$ 17,788	[3]
Interest Rate	10.00%	[4]
Conversion Price (Convertible at Inception Date) | $ / shares	$ 8.40
Deferred Finance Fees	$ 2,436
Discount related to fair value of conversion feature and warrants/shares	$ 175,446
Convertible Notes [Member] | Convertible Debt Twenty Two [Member]
Inception Date	Oct. 20, 2017
Term	12 months
Loan Amount	$ 150,000
Outstanding Balance with OID
Original Issue Discount
Interest Rate	5.00%
Conversion Price (Convertible at Inception Date) | $ / shares	$ 7.50
Deferred Finance Fees	$ 7,500
Discount related to fair value of conversion feature and warrants/shares
Convertible Notes [Member] | Convertible Debt Twenty Three [Member]
Inception Date	Oct. 25, 2017
Term	6 months
Loan Amount	$ 103,000
Outstanding Balance with OID
Original Issue Discount
Interest Rate	12.00%
Conversion Price (Convertible at Inception Date) | $ / shares
Deferred Finance Fees	$ 3,000
Discount related to fair value of conversion feature and warrants/shares
Convertible Notes [Member] | Convertible Debt Twenty Four [Member]
Inception Date	Oct. 27, 2017
Term	12 months
Loan Amount	$ 170,000
Outstanding Balance with OID
Original Issue Discount
Interest Rate	5.00%
Conversion Price (Convertible at Inception Date) | $ / shares
Deferred Finance Fees	$ 4,250
Discount related to fair value of conversion feature and warrants/shares	$ 10,000
Convertible Notes [Member] | Convertible Debt Twenty Five [Member]
Inception Date	Nov. 13, 2017
Term	9 months
Loan Amount	$ 380,000
Outstanding Balance with OID
Original Issue Discount	$ 15,200
Interest Rate	8.00%
Conversion Price (Convertible at Inception Date) | $ / shares	$ 7.50
Deferred Finance Fees	$ 15,200
Discount related to fair value of conversion feature and warrants/shares	$ 46,274
Convertible Notes [Member] | Convertible Debt Twenty Six [Member]
Inception Date	Nov. 22, 2017
Term	12 months
Loan Amount	$ 100,000
Outstanding Balance with OID
Original Issue Discount	$ 10,000
Interest Rate	5.00%
Conversion Price (Convertible at Inception Date) | $ / shares
Deferred Finance Fees	$ 2,000
Discount related to fair value of conversion feature and warrants/shares
Convertible Notes [Member] | Convertible Debt Twenty Seven [Member]
Inception Date	Nov. 28, 2017
Term	10 months
Loan Amount	$ 103,000
Outstanding Balance with OID
Original Issue Discount	$ 3,000
Interest Rate	12.00%
Conversion Price (Convertible at Inception Date) | $ / shares
Deferred Finance Fees
Discount related to fair value of conversion feature and warrants/shares
Convertible Notes [Member] | Convertible Debt Twenty Eight [Member]
Inception Date	Nov. 29, 2017
Term	6 months
Loan Amount	$ 150,000
Outstanding Balance with OID
Original Issue Discount
Interest Rate	15.00%
Conversion Price (Convertible at Inception Date) | $ / shares	$ 7.50
Deferred Finance Fees
Discount related to fair value of conversion feature and warrants/shares	$ 15,200
Convertible Notes [Member] | Convertible Debt Twenty Nine [Member]
Inception Date	Nov. 30, 2017
Term	3 months
Loan Amount	$ 50,000
Outstanding Balance with OID
Original Issue Discount
Interest Rate	8.00%
Conversion Price (Convertible at Inception Date) | $ / shares	$ 7.50
Deferred Finance Fees
Discount related to fair value of conversion feature and warrants/shares
Convertible Notes [Member] | Convertible Debt Thirty [Member]
Inception Date	Dec. 05, 2017
Term	3 months
Loan Amount	$ 52,500
Outstanding Balance with OID
Original Issue Discount
Interest Rate	10.00%
Conversion Price (Convertible at Inception Date) | $ / shares	$ 7.50
Deferred Finance Fees	$ 2,500
Discount related to fair value of conversion feature and warrants/shares
Convertible Notes [Member] | Convertible Debt Thirty One [Member]
Inception Date	Dec. 06, 2017
Term	4 months
Loan Amount	$ 100,000
Outstanding Balance with OID
Original Issue Discount
Interest Rate	10.00%
Conversion Price (Convertible at Inception Date) | $ / shares	$ 7.50
Deferred Finance Fees
Discount related to fair value of conversion feature and warrants/shares
Convertible Notes [Member] | Convertible Debt Thirty Two [Member]
Inception Date	Dec. 11, 2017
Term	6 months
Loan Amount	$ 130,000
Outstanding Balance with OID
Original Issue Discount	$ 1,500
Interest Rate	5.00%
Conversion Price (Convertible at Inception Date) | $ / shares
Deferred Finance Fees	$ 6,500
Discount related to fair value of conversion feature and warrants/shares	$ 6,460
Convertible Notes [Member] | Convertible Debt Thirty Three [Member]
Inception Date	Dec. 19, 2017
Term	6 months
Loan Amount	$ 110,000
Outstanding Balance with OID
Original Issue Discount	$ 1,500
Interest Rate	5.00%
Conversion Price (Convertible at Inception Date) | $ / shares
Deferred Finance Fees	$ 5,500
Discount related to fair value of conversion feature and warrants/shares	$ 5,775
Convertible Notes [Member] | Convertible Debt Thirty Four [Member]
Inception Date	Dec. 28, 2017
Term	6 months
Loan Amount	$ 55,000
Outstanding Balance with OID
Original Issue Discount
Interest Rate	15.00%
Conversion Price (Convertible at Inception Date) | $ / shares	$ 7.50
Deferred Finance Fees	$ 5,000
Discount related to fair value of conversion feature and warrants/shares
Convertible Notes [Member] | Convertible Debt Thirty Five [Member]
Inception Date	Dec. 29, 2017
Term	12 months
Loan Amount	$ 105,000
Outstanding Balance with OID
Original Issue Discount
Interest Rate	5.00%
Conversion Price (Convertible at Inception Date) | $ / shares
Deferred Finance Fees	$ 5,000
Discount related to fair value of conversion feature and warrants/shares
Convertible Notes [Member] | Convertible Debt Thirty Six [Member]
Inception Date	Jan. 03, 2018
Term	12 months
Loan Amount	$ 95,000
Outstanding Balance with OID
Original Issue Discount	$ 4,750
Interest Rate	5.00%
Conversion Price (Convertible at Inception Date) | $ / shares
Deferred Finance Fees	$ 2,000
Discount related to fair value of conversion feature and warrants/shares
Convertible Notes [Member] | Convertible Debt Thirty Seven [Member]
Inception Date	Jan. 16, 2018
Term	12 months
Loan Amount	$ 131,250
Outstanding Balance with OID
Original Issue Discount
Interest Rate
Conversion Price (Convertible at Inception Date) | $ / shares
Deferred Finance Fees	$ 6,250
Discount related to fair value of conversion feature and warrants/shares
Convertible Notes [Member] | Convertible Debt Thirty Eight [Member]
Inception Date	Jan. 19, 2018
Term	6 months
Loan Amount	$ 150,000
Outstanding Balance with OID
Original Issue Discount
Interest Rate	10.00%
Conversion Price (Convertible at Inception Date) | $ / shares	$ 7.50
Deferred Finance Fees	$ 6,000
Discount related to fair value of conversion feature and warrants/shares	$ 12,267
Convertible Notes [Member] | Convertible Debt Thirty Nine [Member]
Inception Date	Feb. 09, 2018
Term	6 months
Loan Amount	$ 100,000
Outstanding Balance with OID
Original Issue Discount
Interest Rate	15.00%
Conversion Price (Convertible at Inception Date) | $ / shares	$ 7.50
Deferred Finance Fees	$ 23,500
Discount related to fair value of conversion feature and warrants/shares
Convertible Notes [Member] | Convertible Debt Forty [Member]
Inception Date	Feb. 15, 2018
Term	6 months
Loan Amount	$ 100,000
Outstanding Balance with OID
Original Issue Discount
Interest Rate	15.00%
Conversion Price (Convertible at Inception Date) | $ / shares	$ 7.50
Deferred Finance Fees	$ 9,000
Discount related to fair value of conversion feature and warrants/shares	$ 10,474
Convertible Notes [Member] | Convertible Debt Forty One [Member]
Inception Date	Mar. 12, 2018
Term	6 months
Loan Amount	$ 85,000
Outstanding Balance with OID
Original Issue Discount	$ 1,150
Interest Rate	5.00%
Conversion Price (Convertible at Inception Date) | $ / shares
Deferred Finance Fees	$ 4,250
Discount related to fair value of conversion feature and warrants/shares	$ 5,183
Convertible Notes [Member] | Convertible Debt Forty Two [Member]
Inception Date	Mar. 12, 2018
Term	6 months
Loan Amount	$ 253,000
Outstanding Balance with OID
Original Issue Discount	$ 53,000
Interest Rate	0.00%
Conversion Price (Convertible at Inception Date) | $ / shares
Deferred Finance Fees
Discount related to fair value of conversion feature and warrants/shares	$ 28,722
Convertible Notes [Member] | Convertible Debt Forty Three [Member]
Inception Date	Apr. 11, 2018
Term	6 months
Loan Amount	$ 100,000
Outstanding Balance with OID	100,000
Original Issue Discount	$ 4,000
Interest Rate	15.00%
Conversion Price (Convertible at Inception Date) | $ / shares	$ 7.50
Deferred Finance Fees	$ 20,000
Discount related to fair value of conversion feature and warrants/shares	$ 7,218
Convertible Notes [Member] | Convertible Debt Forty four [Member]
Inception Date	Apr. 23, 2018
Term	6 months
Loan Amount	$ 103,000
Outstanding Balance with OID	103,000
Original Issue Discount
Interest Rate	12.00%
Conversion Price (Convertible at Inception Date) | $ / shares
Deferred Finance Fees	$ 3,000
Discount related to fair value of conversion feature and warrants/shares
Convertible Notes [Member] | Convertible Debt Forty Five [Member]
Inception Date	Apr. 24, 2018
Term	9 months
Loan Amount	$ 77,000
Outstanding Balance with OID	77,000
Original Issue Discount
Interest Rate	12.00%
Conversion Price (Convertible at Inception Date) | $ / shares	$ 7.50
Deferred Finance Fees	$ 2,000
Discount related to fair value of conversion feature and warrants/shares
Convertible Notes [Member] | Convertible Debt Forty Six [Member]
Inception Date	Apr. 25, 2018
Term	12 months
Loan Amount	$ 105,000
Outstanding Balance with OID	105,000
Original Issue Discount
Interest Rate	4.00%
Conversion Price (Convertible at Inception Date) | $ / shares	$ 7.50
Deferred Finance Fees	$ 5,000
Discount related to fair value of conversion feature and warrants/shares	$ 4,590
Convertible Notes [Member] | Convertible Debt Forty Seven [Member]
Inception Date	Apr. 25, 2018
Term	12 months
Loan Amount	$ 105,000
Outstanding Balance with OID	105,000
Original Issue Discount
Interest Rate	4.00%
Conversion Price (Convertible at Inception Date) | $ / shares	$ 7.50
Deferred Finance Fees	$ 5,000
Discount related to fair value of conversion feature and warrants/shares	$ 4,590
Convertible Notes [Member] | Convertible Debt Forty Eight [Member]
Inception Date	Apr. 25, 2018
Term	12 months
Loan Amount	$ 130,000
Outstanding Balance with OID	130,000
Original Issue Discount
Interest Rate	6.00%
Conversion Price (Convertible at Inception Date) | $ / shares	$ 7.50
Deferred Finance Fees	$ 6,500
Discount related to fair value of conversion feature and warrants/shares
Convertible Notes [Member] | Convertible Debt Forty Nine [Member]
Inception Date	Apr. 26, 2018
Term	12 months
Loan Amount	$ 65,000
Outstanding Balance with OID	65,000
Original Issue Discount	$ 6,500
Interest Rate	5.00%
Conversion Price (Convertible at Inception Date) | $ / shares
Deferred Finance Fees	$ 2,000
Discount related to fair value of conversion feature and warrants/shares
Convertible Notes [Member] | Convertible Debt Fifty [Member]
Inception Date	May 09, 2018
Term	12 months
Loan Amount	$ 250,000
Outstanding Balance with OID	250,000
Original Issue Discount
Interest Rate	10.00%
Conversion Price (Convertible at Inception Date) | $ / shares	$ 7.50
Deferred Finance Fees	$ 12,500
Discount related to fair value of conversion feature and warrants/shares	$ 26,466
Convertible Notes [Member] | Convertible Debt Fifty One [Member]
Inception Date	May 11, 2018
Term	6 months
Loan Amount	$ 161,250
Outstanding Balance with OID	161,250
Original Issue Discount	$ 11,250
Interest Rate	15.00%
Conversion Price (Convertible at Inception Date) | $ / shares	$ 7.50
Deferred Finance Fees	$ 10,000
Discount related to fair value of conversion feature and warrants/shares
Convertible Notes [Member] | Convertible Debt Fifty Two [Member]
Inception Date	May 14, 2018
Term	9 months
Loan Amount	$ 50,000
Outstanding Balance with OID	50,000
Original Issue Discount	$ 2,500
Interest Rate	15.00%
Conversion Price (Convertible at Inception Date) | $ / shares	$ 7.50
Deferred Finance Fees	$ 2,500
Discount related to fair value of conversion feature and warrants/shares	$ 3,704
Convertible Notes [Member] | Convertible Debt Fifty Three [Member]
Inception Date	May 17, 2018
Term	12 months
Loan Amount	$ 380,000
Outstanding Balance with OID	380,000
Original Issue Discount	$ 15,200
Interest Rate	8.00%
Conversion Price (Convertible at Inception Date) | $ / shares	$ 7.50
Deferred Finance Fees	$ 15,200
Discount related to fair value of conversion feature and warrants/shares	$ 43,607
Convertible Notes [Member] | Convertible Debt Fifty Four [Member]
Inception Date	May 23, 2018
Term	9 months
Loan Amount	$ 103,000
Outstanding Balance with OID	103,000
Original Issue Discount
Interest Rate	12.00%
Conversion Price (Convertible at Inception Date) | $ / shares
Deferred Finance Fees	$ 3,000
Discount related to fair value of conversion feature and warrants/shares
Convertible Notes [Member] | Convertible Debt Fifty Five [Member]
Inception Date	May 24, 2018
Term	9 months
Loan Amount	$ 52,500
Outstanding Balance with OID	52,500
Original Issue Discount	$ 2,500
Interest Rate	4.00%
Conversion Price (Convertible at Inception Date) | $ / shares
Deferred Finance Fees
Discount related to fair value of conversion feature and warrants/shares	$ 2,075
Convertible Notes [Member] | Convertible Debt Fifty Six [Member]
Inception Date	May 25, 2018
Term	12 months
Loan Amount	$ 78,750
Outstanding Balance with OID	78,750
Original Issue Discount
Interest Rate	4.00%
Conversion Price (Convertible at Inception Date) | $ / shares	$ 7.50
Deferred Finance Fees	$ 3,750
Discount related to fair value of conversion feature and warrants/shares	$ 3,112
Convertible Notes [Member] | Convertible Debt Fifty Seven [Member]
Inception Date	May 30, 2018
Term	2 months
Loan Amount	$ 150,000
Outstanding Balance with OID
Original Issue Discount
Interest Rate	8.00%
Conversion Price (Convertible at Inception Date) | $ / shares	$ 7.50
Deferred Finance Fees
Discount related to fair value of conversion feature and warrants/shares	$ 6,870
Convertible Notes [Member] | Convertible Debt Fifty Eight [Member]
Inception Date	Jun. 04, 2018
Term	12 months
Loan Amount	$ 75,000
Outstanding Balance with OID	75,000
Original Issue Discount	$ 7,500
Interest Rate	5.00%
Conversion Price (Convertible at Inception Date) | $ / shares
Deferred Finance Fees	$ 2,000
Discount related to fair value of conversion feature and warrants/shares	$ 3,869
Convertible Notes [Member] | Convertible Debt Fifty Nine [Member]
Inception Date	Jun. 08, 2018
Term	6 months
Loan Amount	$ 50,000
Outstanding Balance with OID	50,000
Original Issue Discount	$ 2,500
Interest Rate	15.00%
Conversion Price (Convertible at Inception Date) | $ / shares	$ 7.50
Deferred Finance Fees	$ 2,500
Discount related to fair value of conversion feature and warrants/shares	$ 3,271
Convertible Notes [Member] | Convertible Debt Sixty [Member]
Inception Date	Jun. 12, 2018
Term	6 months
Loan Amount	$ 100,000
Outstanding Balance with OID
Original Issue Discount
Interest Rate	5.00%
Conversion Price (Convertible at Inception Date) | $ / shares	$ 7.50
Deferred Finance Fees	$ 5,000
Discount related to fair value of conversion feature and warrants/shares
Convertible Notes [Member] | Convertible Debt Sixty One [Member]
Inception Date	Jun. 14, 2018
Term	9 months
Loan Amount	$ 280,000
Outstanding Balance with OID	280,000
Original Issue Discount	$ 25,000
Interest Rate	10.00%
Conversion Price (Convertible at Inception Date) | $ / shares
Deferred Finance Fees	$ 5,000
Discount related to fair value of conversion feature and warrants/shares	$ 17,573
Convertible Notes [Member] | Convertible Debt Sixty Two [Member]
Inception Date	Jun. 16, 2018
Term	9 months
Loan Amount	$ 130,000
Outstanding Balance with OID	130,000
Original Issue Discount
Interest Rate	5.00%
Conversion Price (Convertible at Inception Date) | $ / shares
Deferred Finance Fees
Discount related to fair value of conversion feature and warrants/shares
Convertible Notes [Member] | Convertible Debt Sixty Three [Member]
Inception Date	Jun. 16, 2018
Term	6 months
Loan Amount	$ 110,000
Outstanding Balance with OID	110,000
Original Issue Discount
Interest Rate	5.00%
Conversion Price (Convertible at Inception Date) | $ / shares
Deferred Finance Fees
Discount related to fair value of conversion feature and warrants/shares
Convertible Notes [Member] | Convertible Debt Sixty Four [Member]
Inception Date	Jun. 26, 2018
Term	3 months
Loan Amount	$ 150,000
Outstanding Balance with OID	150,000
Original Issue Discount
Interest Rate	15.00%
Conversion Price (Convertible at Inception Date) | $ / shares	$ 7.50
Deferred Finance Fees
Discount related to fair value of conversion feature and warrants/shares	$ 20,242
Convertible Notes [Member] | Convertible Debt Sixty Five [Member]
Inception Date	Jun. 28, 2018
Term	6 months
Loan Amount	$ 50,000
Outstanding Balance with OID	50,000
Original Issue Discount
Interest Rate	15.00%
Conversion Price (Convertible at Inception Date) | $ / shares	$ 7.50
Deferred Finance Fees
Discount related to fair value of conversion feature and warrants/shares	$ 10,518
Convertible Notes [Member] | Convertible Debt Sixty Six [Member]
Inception Date	Jul. 02, 2018
Term	12 months
Loan Amount	$ 125,000
Outstanding Balance with OID	125,000
Original Issue Discount
Interest Rate	4.00%
Conversion Price (Convertible at Inception Date) | $ / shares
Deferred Finance Fees	$ 6,250
Discount related to fair value of conversion feature and warrants/shares	$ 5,588
Convertible Notes [Member] | Convertible Debt Sixty Seven [Member]
Inception Date	Jul. 10, 2018
Term	12 months
Loan Amount	$ 95,000
Outstanding Balance with OID	95,000
Original Issue Discount	$ 6,750
Interest Rate	5.00%
Conversion Price (Convertible at Inception Date) | $ / shares
Deferred Finance Fees
Discount related to fair value of conversion feature and warrants/shares
Convertible Notes [Member] | Convertible Debt Sixty Eight [Member]
Inception Date	Jul. 13, 2018
Term	9 months
Loan Amount	$ 103,000
Outstanding Balance with OID	103,000
Original Issue Discount
Interest Rate	12.00%
Conversion Price (Convertible at Inception Date) | $ / shares
Deferred Finance Fees	$ 3,000
Discount related to fair value of conversion feature and warrants/shares
Convertible Notes [Member] | Convertible Debt Sixty Nine [Member]
Inception Date	Jul. 17, 2018
Term	3 months
Loan Amount	$ 100,000
Outstanding Balance with OID	100,000
Original Issue Discount	$ 15,000
Interest Rate	15.00%
Conversion Price (Convertible at Inception Date) | $ / shares	$ 7.50
Deferred Finance Fees
Discount related to fair value of conversion feature and warrants/shares	$ 16,944
Convertible Notes [Member] | Convertible Debt Seventy [Member]
Inception Date	Jul. 19, 2018
Term	12 months
Loan Amount	$ 184,685
Outstanding Balance with OID	184,685
Original Issue Discount	$ 34,685
Interest Rate	10.00%
Conversion Price (Convertible at Inception Date) | $ / shares	$ 7.50
Deferred Finance Fees
Discount related to fair value of conversion feature and warrants/shares
Convertible Notes [Member] | Convertible Debt Seventy One [Member]
Inception Date	Jul. 30, 2018
Term	12 months
Loan Amount	$ 80,000
Outstanding Balance with OID	80,000
Original Issue Discount
Interest Rate	6.00%
Conversion Price (Convertible at Inception Date) | $ / shares	$ 7.50
Deferred Finance Fees	$ 4,000
Discount related to fair value of conversion feature and warrants/shares
Convertible Notes [Member] | Convertible Debt Seventy Two [Member]
Inception Date	Jul. 31, 2018
Term	3 months
Loan Amount	$ 150,000
Outstanding Balance with OID	150,000
Original Issue Discount
Interest Rate	12.00%
Conversion Price (Convertible at Inception Date) | $ / shares	$ 7.50
Deferred Finance Fees
Discount related to fair value of conversion feature and warrants/shares	$ 6,578
Convertible Notes [Member] | Convertible Debt Seventy Three [Member]
Inception Date	Aug. 08, 2018
Term	6 months
Loan Amount	$ 100,000
Outstanding Balance with OID	100,000
Original Issue Discount
Interest Rate	15.00%
Conversion Price (Convertible at Inception Date) | $ / shares	$ 7.50
Deferred Finance Fees
Discount related to fair value of conversion feature and warrants/shares
Convertible Notes [Member] | Convertible Debt Seventy Four [Member]
Inception Date	Aug. 15, 2018
Term	4 months
Loan Amount	$ 100,000
Outstanding Balance with OID	100,000
Original Issue Discount
Interest Rate	15.00%
Conversion Price (Convertible at Inception Date) | $ / shares	$ 7.50
Deferred Finance Fees
Discount related to fair value of conversion feature and warrants/shares
Convertible Notes [Member] | Convertible Debt Seventy Five [Member]
Inception Date	Aug. 28, 2018
Term	12 months
Loan Amount	$ 131,250
Outstanding Balance with OID	131,250
Original Issue Discount
Interest Rate	4.00%
Conversion Price (Convertible at Inception Date) | $ / shares
Deferred Finance Fees	$ 6,250
Discount related to fair value of conversion feature and warrants/shares	$ 4,443
Convertible Notes [Member] | Convertible Debt Seventy Six [Member]
Inception Date	Sep. 07, 2018
Term	6 months
Loan Amount	$ 85,000
Outstanding Balance with OID	85,000
Original Issue Discount
Interest Rate	5.00%
Conversion Price (Convertible at Inception Date) | $ / shares
Deferred Finance Fees
Discount related to fair value of conversion feature and warrants/shares	$ 4,364

[1] The loan term was extended by 180 days and further extended on January 15, 2018 by 60 days to repay in common stock. The July 22, 2015 Debentures of $3,773,000 is currently past due as of March 19, 2018. The affected Debenture holders signed letter agreements on May 15, 2018 to waive default penalties relating to the maturity date.

[2] The Debentures were converted into Series AA Convertible Preferred Stock.

[3] The original issue discount is reflected in the first year.

[4] The annual interest starts accruing in the second year.

XML

Convertible Debt and Other Debt - Schedule of Convertible Debts and Outstanding Balances (Details) (Parenthetical)	Jul. 22, 2015
Debt Disclosure [Abstract]
Debt maturity description	The loan term was extended by 180 days and further extended on January 15, 2018 by 60 days to repay in common stock. The Debenture holders signed letter agreements on May 14, 2018 and June 11, 2018 to waive default penalties relating to the maturity date

XML

Convertible Debt and Other Debt - Schedule of Fair Value of Common Stock Issued in Connection with Refinancings (Details) - USD ($)		9 Months Ended
		Sep. 30, 2018	Jun. 30, 2018	Dec. 31, 2017
New Loan Amount		$ 4,664,000
Unamortized Discount		$ 239,872		$ 401,856
Convertible Loan One [Member]
Origination Date		Dec. 11, 2017
Amended Start Date		Jun. 15, 2018
New Maturity Date	[1]	Dec. 11, 2018
Loan Amount		$ 130,000
New Loan Amount		130,000
Unamortized Discount
Amortization
Convertible Loan One [Member] | July 1, 2018 to Modification Date [Member]
Unamortized Discount
Convertible Loan Two [Member]
Origination Date		Dec. 19, 2017
Amended Start Date		Jun. 15, 2018
New Maturity Date	[1]	Dec. 19, 2018
Loan Amount		$ 110,000
New Loan Amount		110,000
Unamortized Discount
Amortization
Convertible Loan Two [Member] | July 1, 2018 to Modification Date [Member]
Unamortized Discount
Convertible Loan Three [Member]
Origination Date		Jan. 03, 2018
Amended Start Date		Jul. 11, 2018
New Maturity Date		Jul. 10, 2019
Loan Amount		$ 95,000
New Loan Amount		95,000
Unamortized Discount			3,458
Amortization		(69)
Convertible Loan Three [Member] | July 1, 2018 to Modification Date [Member]
Unamortized Discount		$ 3,389
Convertible Loan Four [Member]
Origination Date		Jan. 17, 2018
Amended Start Date		Aug. 29, 2018
New Maturity Date		Aug. 27, 2019
Loan Amount		$ 131,250
New Loan Amount		131,250
Unamortized Discount			3,442
Amortization		(352)
Convertible Loan Four [Member] | July 1, 2018 to Modification Date [Member]
Unamortized Discount		$ 3,090
Convertible Loan Five [Member]
Origination Date		Jan. 19, 2018
Amended Start Date		Jul. 19, 2018
New Maturity Date	[1]	Aug. 22, 2019
Loan Amount		$ 150,000
New Loan Amount		184,685
Unamortized Discount			1,288
Amortization		(42)
Convertible Loan Five [Member] | July 1, 2018 to Modification Date [Member]
Unamortized Discount		$ 1,246
Convertible Loan Six [Member]
Origination Date		Feb. 09, 2018
Amended Start Date		Aug. 08, 2018
New Maturity Date	[1]	Feb. 08, 2019
Loan Amount		$ 100,000
New Loan Amount		100,000
Unamortized Discount			5,193
Amortization		(556)
Convertible Loan Six [Member] | July 1, 2018 to Modification Date [Member]
Unamortized Discount		$ 4,637
Convertible Loan Seven [Member]
Origination Date		Feb. 15, 2018
Amended Start Date		Aug. 15, 2018
New Maturity Date	[1]	Dec. 15, 2018
Loan Amount		$ 100,000
New Loan Amount		100,000
Unamortized Discount			2,662
Amortization		(2,662)
Convertible Loan Seven [Member] | July 1, 2018 to Modification Date [Member]
Unamortized Discount
Convertible Loan Eight [Member]
Origination Date		Mar. 12, 2018
Amended Start Date		Sep. 07, 2018
New Maturity Date		Mar. 12, 2019
Loan Amount		$ 85,000
New Loan Amount		85,000
Unamortized Discount			2,172
Amortization		(411)
Convertible Loan Eight [Member] | July 1, 2018 to Modification Date [Member]
Unamortized Discount		$ 1,761
Convertible Loan Nine [Member]
Origination Date		May 30, 2018
Amended Start Date		Jul. 31, 2018
New Maturity Date		Oct. 31, 2018
Loan Amount		$ 150,000
New Loan Amount		150,000
Unamortized Discount			9,280
Amortization		(1,868)
Convertible Loan Nine [Member] | July 1, 2018 to Modification Date [Member]
Unamortized Discount		$ 7,412
Convertible Loan Ten [Member]
Origination Date		Mar. 30, 2018
Amended Start Date		Apr. 30, 2018
New Maturity Date		Sep. 30, 2018
Loan Amount		$ 170,000
New Loan Amount		170,000
Unamortized Discount
Amortization
Convertible Loan Ten [Member] | July 1, 2018 to Modification Date [Member]
Unamortized Discount
Convertible Loan [Member]
Loan Amount		1,221,250
New Loan Amount		1,255,935
Unamortized Discount			$ 27,495
Amortization		(5,960)
Convertible Loan [Member] | July 1, 2018 to Modification Date [Member]
Unamortized Discount		$ 21,535

[1] The original loans were recorded as extinguished, the unamortized debt discounts on the old debt were written off on extinguishment date, and a loss was recorded for each extinguishment. The July 19, 2018 Note includes an original issue discount of $34,685 added to the new loan.

XML

Convertible Debt and Other Debt - Schedule of Fair Value of Common Stock Issued in Connection with Refinancings (Details) (Parenthetical)	9 Months Ended
	Sep. 30, 2018 USD ($)
Convertible Debt Five [Member]
Original Issue Discount	$ 34,685

XML

Convertible Debt and Other Debt - Summary of Changes in Convertible Debt, Net of Unamortized Discounts (Details) - USD ($)	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Debt Disclosure [Abstract]
Balance at January 1,	$ 11,787,776
Issuance of convertible debt, face value	4,664,000
Deferred financing cost	(315,516)
Debt discount related to one-time interest charge	(147,000)
Contingent beneficial conversion feature on convertible note	(253,000)
Debt discount from warrants issued with debt	(162,023)
Debt discount from shares issued with the notes	(222,272)
Conversion of debt into equity	(10,962,634)
Payments	(2,097,750)	$ (840,541)
Accretion of interest and amortization of debt discount to interest expense through September 30,	1,327,984
Balance at September 30,	3,619,565
Less: current portion	3,619,565
Convertible debt, long-term portion

XML

Convertible Debt and Other Debt - Schedule of Merchant Agreements (Details)	9 Months Ended
	Sep. 30, 2018 USD ($)
Purchase Price	$ 1,435,000
Purchased Amount	1,941,290
Outstanding Balance	382,527
Deferred Finance Fees	$ 37,706
Merchant Agreements One [Member]
Inception Date	Sep. 29, 2017
Purchase Price	$ 75,000
Purchased Amount	102,000
Outstanding Balance
Daily Payment	$ 1,200
Interest Rate	15.00%
Deferred Finance Fees	$ 1,500
Merchant Agreements Two [Member]
Inception Date	Oct. 25, 2017
Purchase Price	$ 110,000
Purchased Amount	153,890
Outstanding Balance
Daily Payment	$ 1,539
Interest Rate	15.00%
Deferred Finance Fees	$ 8,800
Merchant Agreements Three [Member]
Inception Date	Dec. 07, 2017
Purchase Price	$ 160,000
Purchased Amount	212,800
Outstanding Balance
Daily Payment	$ 1,252
Interest Rate	25.00%
Deferred Finance Fees	$ 5,799
Merchant Agreements Four [Member]
Inception Date	Dec. 12, 2017
Purchase Price	$ 160,000
Purchased Amount	212,800
Outstanding Balance
Daily Payment	$ 1,252
Interest Rate	15.00%
Deferred Finance Fees	$ 5,258
Merchant Agreements Five [Member]
Inception Date	Feb. 27, 2018
Purchase Price	$ 110,000
Purchased Amount	147,400
Outstanding Balance
Daily Payment	$ 921
Interest Rate	25.00%
Deferred Finance Fees	$ 1,650
Merchant Agreements Six [Member]
Inception Date	Apr. 11, 2018
Purchase Price	$ 140,000
Purchased Amount	187,600
Outstanding Balance
Daily Payment	$ 1,275
Interest Rate	13.00%
Deferred Finance Fees	$ 2,800
Merchant Agreements Seven [Member]
Inception Date	May 11, 2018
Purchase Price	$ 180,000
Purchased Amount	243,000
Outstanding Balance	82,468
Daily Payment	$ 1,519
Interest Rate	25.00%
Deferred Finance Fees	$ 2,599
Merchant Agreements Eight [Member]
Inception Date	May 15, 2018
Purchase Price	$ 180,000
Purchased Amount	244,800
Outstanding Balance	86,858
Daily Payment	$ 1,530
Interest Rate	15.00%
Deferred Finance Fees	$ 3,600
Merchant Agreements Nine [Member]
Inception Date	Jun. 29, 2018
Purchase Price	$ 140,000
Purchased Amount	190,400
Outstanding Balance	88,657
Daily Payment	$ 1,269
Interest Rate	25.00%
Deferred Finance Fees	$ 2,100
Merchant Agreements Ten [Member]
Inception Date	Jul. 16, 2018
Purchase Price	$ 180,000
Purchased Amount	246,600
Outstanding Balance	124,544
Daily Payment	$ 1,790
Interest Rate	13.00%
Deferred Finance Fees	$ 3,600

XML

Stockholders' Deficit (Details Narrative)																																						3 Months Ended		6 Months Ended	9 Months Ended	12 Months Ended
		Sep. 30, 2018 USD ($) $ / shares shares	Sep. 07, 2018 USD ($) $ / shares shares	Aug. 27, 2018 USD ($) $ / shares shares	Aug. 15, 2018 USD ($) $ / shares shares	Aug. 08, 2018 USD ($) shares	Jul. 31, 2018 USD ($) shares	Jul. 19, 2018 USD ($) shares	Jul. 18, 2018 USD ($) $ / shares shares	Jul. 18, 2018 $ / shares shares	Jul. 17, 2018 USD ($) $ / shares shares	Jul. 05, 2018 USD ($) shares	Jul. 02, 2018 USD ($) Integer $ / shares shares	Jun. 28, 2018 USD ($) $ / shares shares	Jun. 26, 2018 USD ($) $ / shares shares	Jun. 16, 2018 USD ($) shares	Jun. 14, 2018 USD ($) shares	Jun. 11, 2018 USD ($) $ / shares shares	Jun. 08, 2018 USD ($) $ / shares shares	Jun. 04, 2018 USD ($) shares	Jun. 02, 2018 USD ($) $ / shares shares	May 30, 2018 USD ($) $ / shares shares	May 25, 2018 USD ($) $ / shares shares	May 24, 2018 USD ($) $ / shares shares	May 14, 2018 USD ($) $ / shares shares	May 09, 2018 USD ($) $ / shares shares	May 02, 2018 USD ($) $ / shares shares	May 02, 2018 USD ($) $ / shares shares	Apr. 25, 2018 USD ($) $ / shares shares	Apr. 12, 2018 USD ($) $ / shares shares	Apr. 02, 2018 USD ($) shares	Mar. 27, 2018 shares	Mar. 14, 2018 USD ($)	Mar. 12, 2018 USD ($) $ / shares shares	Feb. 12, 2018 USD ($) $ / shares shares	Jan. 19, 2018 USD ($) $ / shares shares	Mar. 21, 2017 USD ($) shares	Sep. 30, 2018 USD ($) $ / shares shares	Mar. 31, 2018 shares	Sep. 30, 2018 USD ($) $ / shares shares	Sep. 30, 2018 USD ($) $ / shares shares	Dec. 31, 2017 USD ($) $ / shares shares	Jun. 30, 2018 USD ($)	Nov. 29, 2015 shares	Dec. 12, 2013 shares
Convertible preferred stock, authorized		1,000,000																																				1,000,000		1,000,000	1,000,000	1,000,000
Convertible preferred stock, par value | $ / shares		$ 0.01																																				$ 0.01		$ 0.01	$ 0.01	$ 0.01
Convertible preferred stock, shares issued		1,000,000																																				1,000,000		1,000,000	1,000,000	1,000,000
Warrant to purchase shares of common stock																		110,833
Warrant exercise price per share | $ / shares																		$ 3.50
Debt converted of shares																																									56,007
Debt conversion price per share | $ / shares		$ 7.50																																				$ 7.50		$ 7.50	$ 7.50
Fair value of derivatives | $		$ 7,877,396																																				$ 7,877,396		$ 7,877,396	$ 7,877,396
Adjusted value of beneficial conversion feature | $																																									$ 11,678,571
Common stock, shares outstanding under the plan		7,111,397																																				7,111,397		7,111,397	7,111,397	1,147,234
Outstanding stock options, terminated																																									251,302
New stock options, exercise price | $ / shares		$ 3.40																																				$ 3.40		$ 3.40	$ 3.40
Stock options issued																																									6,228,468
Total unrecognized compensation cost | $		$ 937,216																																				$ 937,216		$ 937,216	$ 937,216
Unvested stock options weighted average period																																									1 year 10 months 6 days
Aggregate intrinsic value of options outstanding and exercisable | $		8,325																																				8,325		8,325	$ 8,325
Intrinsic value warrant outstanding and exercisable | $		1,300,000																																				1,300,000		1,300,000	1,300,000
Amortized of debt discount | $																																									384,295
Unamortized debt discount | $		239,872																																				239,872		239,872	239,872	$ 401,856
Fair value recorded as other charges | $		312,637																$ 340,257																				312,637		312,637	312,637
Warrants term																		5 years
Warrant exercise price increase | $ / shares																		$ 15.00
Warrant exercise price decrease | $ / shares																		$ 3.50
Modification of debt | $																		$ 10,236
Debt instrument, fee | $		$ 37,706																																				$ 37,706		$ 37,706	$ 37,706
Debenture Holders [Member]
Number of common stock shares issued, shares																																									56,007
Interest expenses debt | $																																									$ 211,047
Convertible Loan [Member]
Unamortized debt discount | $																																											$ 27,495
Non-Convertible Loan [Member]
Warrant to purchase shares of common stock																		20,000
Debt converted principal amount | $																		$ 50,000
Debt converted of shares																		20
Convertible debentures term																																	1 year
Proceeds from loan | $																																	$ 50,000
Amortized of debt discount | $																																									$ 7,500
Convertible Loan One [Member]
Debt maturity date	[1]																																								Dec. 11, 2018
Unamortized debt discount | $
Convertible Loan Two [Member]
Debt maturity date	[1]																																								Dec. 19, 2018
Number of restricted stock issued during period											6,000
Unamortized debt discount | $
Number of restricted stock issued during period, value | $											$ 16,944
Monthly installments shares											2,000
Current Officers, Employees and Board Members [Member]
New stock options, exercise price | $ / shares									$ 3.40	$ 3.40
Number of shares awarded									101,267	101,267
Board Members [Member]
Stock options, vesting period										12 months
Debt maturity date										Jul. 18, 2028
Current Officers and Employees [Member]
Stock options, vesting period										36 months
Board of Directors [Member] | Debenture Holders [Member]
Number of common stock shares issued, shares																																									4,681
Accredited Investor [Member]
Debt conversion price per share | $ / shares													$ 7.50
Convertible debentures term													1 year																						8 months
Proceeds from loan | $													$ 125,000
Number of restricted stock issued during period													1,500																			3,500			3,500
Unamortized debt discount | $													$ 5,588
Debt interest rate per annum													4.00%
Debt converted into common stock, percentage													60.00%
Debt instrument, fee | $													$ 6,250
Debt conversion, trading days | Integer													15
Accredited Investor [Member] | April 30, 2018 then to September 30, 2018 [Member]
Amortized of debt discount | $																																									$ 7,200
Unamortized debt discount | $																																										52,079
Loss on fair value of common stock | $																																									20,400
Accredited Investor [Member] | Convertible Loan [Member]
Debt conversion price per share | $ / shares														$ 7.50	$ 7.50				$ 7.50			$ 7.50	$ 7.50	$ 7.50	$ 7.50	$ 7.50			$ 7.50	$ 7.50				$ 7.50	$ 7.50	$ 7.50
Interest expenses debt | $																																			$ 7,800
Convertible debentures term														6 months	3 months	1 year	9 months		6 months	1 year		2 months	1 year	1 year	9 months	6 months			1 year	6 months				6 months	6 months	6 months
Proceeds from loan | $														$ 50,000	$ 150,000	$ 240,000	$ 250,000		$ 50,000	$ 75,000		$ 150,000	$ 75,000	$ 50,000	$ 50,000	$ 250,000			$ 105,000	$ 100,000				$ 253,000	$ 100,000	$ 150,000
One-time interest percentage																																			10.00%	10.00%
Original issue of discount percentage																																				10.00%
Number of restricted stock issued during period														4,000	6,000	3,700	5,000		1,000	1,360		2,000	900	600	1,000	8,000			1,200	2,000				6,750	5,000	4,000
Amortized of debt discount | $																																		$ 53,000
Unamortized debt discount | $														$ 10,518	$ 20,242		$ 17,573		$ 3,271	$ 3,869		$ 6,870	$ 3,112	$ 2,075	$ 3,704	$ 26,466			$ 4,590	$ 7,218				$ 28,722	$ 10,474	$ 12,267
Debt interest rate per annum														5.00%	5.00%	5.00%	10.00%		15.00%	5.00%		8.00%	4.00%	4.00%	15.00%	10.00%			4.00%	15.00%
Number of restricted stock issued during period, value | $																$ 13,611																			18,274
Debt issuance costs | $														$ 2,500	$ 7,500		$ 30,000		$ 12,500	$ 9,500		$ 12,000	$ 3,750	$ 2,500	$ 12,500	$ 62,500			$ 5,000	$ 24,000
Debt converted into common stock, percentage																	65.00%			60.00%			60.00%	60.00%					60.00%
Loss on refinancing | $																$ 50,662
Accredited Investor [Member] | Non-Convertible Loan [Member]
Number of common stock shares issued, shares																																							9,500	7,200
Proceeds from loan | $																																			170,000		$ 170,000
Original issue of discount percentage																																					10.00%
Number of restricted stock issued during period																																					5,667
Amortized of debt discount | $																																					$ 35,079					$ 52,079
Debt interest rate per annum																																					10.00%
Loss on fair value of common stock | $																																									$ 20,400
Accredited Investor [Member] | Convertible Loan One [Member]
Debt conversion price per share | $ / shares																													$ 7.50
Convertible debentures term																													1 year
Proceeds from loan | $																													$ 105,000
Number of restricted stock issued during period																													1,200
Unamortized debt discount | $																													$ 4,590
Debt interest rate per annum																													4.00%
Debt issuance costs | $																													$ 5,000
Debt converted into common stock, percentage																													60.00%
Lenders [Member] | Convertible Loan [Member]
Repayment of loans | $																																			$ 50,000
Lenders [Member] | Non-Convertible Loan [Member]
Debt converted of shares									6,000
Proceeds from loan | $									$ 170,000
Debt interest rate per annum									10.00%	10.00%
Loss on fair value of common stock | $									$ 20,400
Lender [Member] | Convertible Loan [Member]
Convertible debentures term																															1 year
Proceeds from loan | $																															$ 85,000
Number of restricted stock issued during period																															1,150
Debt interest rate per annum																															5.00%
Number of restricted stock issued during period, value | $																															$ 5,183
2005 Equity Incentive Plan [Member]
Common stock reserved for stock option plan		1,800,000																																				1,800,000		1,800,000	1,800,000
Other Plans [Member]
Common stock, shares outstanding under the plan		32,605																																				32,605		32,605	32,605
2013 Equity Incentive Plan [Member]
Common stock reserved for stock option plan		2,861,944																																				2,861,944		2,861,944	2,861,944				3,000,000
Common stock, shares outstanding under the plan		138,056																																				138,056		138,056	138,056
Stock options issued		51,934
2015 Nonqualified Stock Option Plan [Member]
Common stock reserved for stock option plan																																												5,000,000
Common stock, shares outstanding under the plan		203,734																																				203,734		203,734	203,734
Stock options issued		49,333
Accredited Investor [Member] | Convertible Loan [Member]
Debt maturity date			Mar. 12, 2019
Convertible debentures term			1 year	1 year	4 months						3 months
Proceeds from loan | $			$ 85,000	$ 125,000	$ 100,000						$ 100,000
Number of restricted stock issued during period			1,150	1,428	6,000						2,000
Amortized of debt discount | $			$ 4,364
Number of restricted stock issued during period, value | $					$ 19,159
Debt converted into common stock, percentage				60.00%
Monthly installments shares					1,500
Repayment interest and fees | $			$ 17,361
Accredited Investor [Member] | Convertible Loan Two [Member]
Debt conversion price per share | $ / shares			$ 7.50	$ 7.50	$ 7.50						$ 7.50
Unamortized debt discount | $				$ 4,443
Debt interest rate per annum			5.00%	4.00%							15.00%
Debt instrument, fee | $				$ 6,250
Investor [Member]
Warrant to purchase shares of common stock																		29,167
Accredited Investor [Member] | Convertible Loan [Member]
Debt maturity date						Feb. 08, 2019	Oct. 31, 2018	Jan. 19, 2019
Interest expenses debt | $							$ 18,000
Convertible debentures term								1 year
Proceeds from loan | $						$ 100,000	150,000	$ 150,000
One-time interest percentage						5.00%
Number of restricted stock issued during period						7,800		4,500
Unamortized debt discount | $						$ 4,637	$ 6,578	$ 1,246
Debt interest rate per annum							8.00%	10.00%
Loss on fair value of common stock | $						27,534		$ 17,100
Monthly installments shares							2,000
Interest paid | $								36,000
Loss on refinancing | $						$ 32,171		$ 18,346
Warrant [Member]
Common stock, shares outstanding under the plan		6,769,607																																				6,769,607		6,769,607	6,769,607	899,542
Outstanding stock options, terminated
Stock options issued																																									5,882,734
Warrants [Member]
Number of warrants shares issued		5,655,454																																				5,655,454		5,655,454	5,655,454
Broker Warrants [Member]
Number of warrants shares issued		57,000																																				57,000		57,000	57,000
Securities Purchase Agreement [Member] | New Warrant [Member]
Warrant to purchase shares of common stock																					20,000						100,000	100,000
Warrant exercise price per share | $ / shares																					$ 3.50						$ 3.50	$ 3.50
Securities Purchase Agreement [Member] | Warrant [Member]
Warrant to purchase shares of common stock		460,000																																				460,000		460,000	460,000
Warrant exercise price per share | $ / shares		$ 3.50																																				$ 3.50		$ 3.50	$ 3.50
Securities Purchase Agreement [Member] | Warrants [Member]
Warrant to purchase shares of common stock																											100,000	100,000
Warrant exercise price per share | $ / shares																											$ 3.50	$ 3.50
Letter Agreement [Member]
Debt converted principal amount | $																		$ 742,134
Debt converted of shares																		296.80
Letter Agreement [Member] | New Warrant [Member]
Warrant to purchase shares of common stock																		296,800							2,448,200
Warrant exercise price per share | $ / shares																		$ 3.50							$ 3.50
Letter Agreement [Member] | New Warrant [Member] | Investor [Member]
Warrant exercise price per share | $ / shares																		3.50
Letter Agreement [Member] | Warrant [Member]
Warrant exercise price per share | $ / shares																		$ 3.50							3.50
Terminated and Reissues [Member] | Current Officers, Employees and Board Members [Member]
Outstanding stock options, terminated										244,467
Terminated and Reissues [Member] | Other Plans [Member]
Outstanding stock options, terminated		32,605
Stock options issued		32,605
Terminated and Reissues [Member] | 2013 Equity Incentive Plan [Member]
Outstanding stock options, terminated		81,925
Stock options issued		16,641
Reissuance of stock options		81,925
Terminated and Reissues [Member] | 2015 Nonqualified Stock Option Plan [Member]
Outstanding stock options, terminated		129,937
Stock options issued		15,964
Reissuance of stock options		129,937
Letter Agreements [Member] | Accredited Investor [Member]
Number of common stock shares issued, shares																		110,833
Share issued price per shares | $ / shares																		$ 2.50
Letter Agreements [Member] | New Warrant [Member]
Warrant exercise price per share | $ / shares																									$ 3.50
Six Month Agreement [Member]
Number of restricted stock issued during period												24,000	24,000
Number of restricted stock issued during period, value | $												$ 79,920	$ 93,600
Series A Junior Participating Preferred Stock [Member]
Number of stock designated		20,000																																				20,000		20,000	20,000
Series A Convertible Preferred Stock [Member]
Number of stock designated		313,960																																				313,960		313,960	313,960
Series B Convertible Preferred Stock [Member]
Number of stock designated		279,256																																				279,256		279,256	279,256
Series C Convertible Preferred Stock [Member]
Number of stock designated		88,098																																				88,098		88,098	88,098
Series D Convertible Preferred Stock [Member]
Convertible preferred stock, authorized		850																																				850		850	850	850
Convertible preferred stock, par value | $ / shares		$ 0.01																																				$ 0.01		$ 0.01	$ 0.01	$ 0.01
Convertible preferred stock, shares issued		300																																				300		300	300	300
Number of stock designated		850																																				850		850	850
Series E Convertible Preferred Stock [Member]
Number of stock designated		500																																				500		500	500
Series G Convertible Preferred Stock [Member]
Convertible preferred stock, authorized		240,000																																				240,000		240,000	240,000	240,000
Convertible preferred stock, par value | $ / shares		$ 0.01																																				$ 0.01		$ 0.01	$ 0.01	$ 0.01
Convertible preferred stock, shares issued		80,570																																				80,570		80,570	80,570	80,570
Number of stock designated		240,000																																				240,000		240,000	240,000
Series H Convertible Preferred Stock [Member]
Convertible preferred stock, authorized		10,000																																				10,000		10,000	10,000	10,000
Convertible preferred stock, par value | $ / shares		$ 0.01																																				$ 0.01		$ 0.01	$ 0.01	$ 0.01
Convertible preferred stock, shares issued		10,000																																				10,000		10,000	10,000	10,000
Number of stock designated		10,000																																				10,000		10,000	10,000
Series H2 Convertible Preferred Stock [Member]
Convertible preferred stock, authorized		21																																				21		21	21	21
Convertible preferred stock, par value | $ / shares		$ 0.01																																				$ 0.01		$ 0.01	$ 0.01	$ 0.01
Convertible preferred stock, shares issued		21																																				21		21	21	21
Number of stock designated		21																																				21		21	21
Series J Convertible Preferred Stock [Member]
Convertible preferred stock, authorized		6,250																																				6,250		6,250	6,250	6,250
Convertible preferred stock, par value | $ / shares		$ 0.01																																				$ 0.01		$ 0.01	$ 0.01	$ 0.01
Convertible preferred stock, shares issued		3,458																																				3,458		3,458	3,458	3,458
Number of stock designated		6,250																																				6,250		6,250	6,250
Series K Convertible Preferred Stock [Member]
Convertible preferred stock, authorized		15,000																																				15,000		15,000	15,000	15,000
Convertible preferred stock, par value | $ / shares		$ 0.01																																				$ 0.01		$ 0.01	$ 0.01	$ 0.01
Convertible preferred stock, shares issued		6,880																																				6,880		6,880	6,880	6,880
Number of stock designated		15,000																																				15,000		15,000	15,000
Series AA Convertible Preferred Stock [Member]
Convertible preferred stock, authorized		10,000																																				10,000		10,000	10,000	10,000
Convertible preferred stock, par value | $ / shares		$ 0.01																																				$ 0.01		$ 0.01	$ 0.01	$ 0.01
Convertible preferred stock, shares issued		5,655																																				5,655		5,655	5,655	0
Number of stock designated		10,000																																				10,000		10,000	10,000
Debt converted principal amount | $																																									$ 12,688,634
Debt converted of shares																																									5,075.40
Debt conversion price per share | $ / shares																																		$ 2.50
Series AA Convertible Preferred Stock [Member] | Securities Purchase Agreement [Member]
Convertible preferred stock, par value | $ / shares																											$ 0.01	$ 0.01
Sale of stock																											100	100
Number of preferred stock issued upon conversion																											1,000	1,000
Sale of stock, amount | $																											$ 250,000	$ 250,000
Cumulative dividend percentage																																									8.00%
Series AA Convertible Preferred Stock [Member] | Securities Purchase Agreement [Member] | Accredited Investor [Member]
Convertible preferred stock, par value | $ / shares		$ 0.01																			$ 0.01																	$ 0.01		$ 0.01	$ 0.01
Sale of stock																					20																	160
Number of preferred stock issued upon conversion		1,000																			1,000																	1,000		1,000	1,000
Sale of stock, amount | $																					$ 50,000																	$ 1,150,000
Series AA Convertible Preferred Stock [Member] | Letter Agreement [Member]
Debt converted principal amount | $																									$ 6,220,500
Debt converted of shares																		2,200							2,448.20
Debt conversion price per share | $ / shares																		$ 2.50							$ 2.50
Series AA Convertible Preferred Stock [Member] | Letter Agreements [Member]
Debt converted of shares																									2,448.20
Debt conversion price per share | $ / shares																									$ 2.50
Series AA Preferred Stock with Warrants [Member] | Loan Agreements [Member]
Deemed dividend additional paid in capital | $		$ 5,113																																				$ 5,113		$ 5,113	$ 5,113
Series AA Units [Member]
Reduction in exercise price amount | $																												$ 207,899

[1] The original loans were recorded as extinguished, the unamortized debt discounts on the old debt were written off on extinguishment date, and a loss was recorded for each extinguishment. The July 19, 2018 Note includes an original issue discount of $34,685 added to the new loan.

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Stockholders' Deficit - Schedule of Concerning Options and Warrants Outstanding and Exercisable (Details)	9 Months Ended
	Sep. 30, 2018 $ / shares shares
Shares, Beginning balance	1,147,234
Shares, Granted	6,228,468
Shares, Exercised
Shares, Expired	(13,003)
Shares, Forfeited	(251,302)
Shares, Ending balance	7,111,397
Exercisable, Beginning balance	1,073,850
Exercisable, Ending balance	6,797,356
Warrant [Member]
Shares, Beginning balance	899,542
Shares, Granted	5,882,734
Shares, Exercised
Shares, Expired	(12,669)
Shares, Forfeited
Shares, Ending balance	6,769,607
Weighted average price per share, Beginning balance | $ / shares	$ 12.03
Weighted average price per share, Granted | $ / shares	3.50
Weighted average price per share, Exercised | $ / shares
Weighted average price per share, Expired | $ / shares	12.00
Weighted average price per share, Forfeited | $ / shares
Weighted average price per share, Ending balance | $ / shares	$ 3.57
Stock Option [Member]
Shares, Beginning balance	247,692
Shares, Granted	345,734
Shares, Exercised
Shares, Expired	(334)
Shares, Forfeited	(251,302)
Shares, Ending balance	341,790
Weighted average price per share, Beginning balance | $ / shares	$ 10.95
Weighted average price per share, Granted | $ / shares	3.40
Weighted average price per share, Exercised | $ / shares
Weighted average price per share, Expired | $ / shares	30.00
Weighted average price per share, Forfeited | $ / shares	10.80
Weighted average price per share, Ending balance | $ / shares	$ 3.40

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Stockholders' Deficit - Schedule of Share-based Compensation Stock Option Plans by Exercise Price Range (Details)	9 Months Ended
	Sep. 30, 2018 $ / shares shares
Equity [Abstract]
Exercise price range, upper range limit	$ 3.40
Options outstanding, number of options | shares	341,790
Options outstanding, weighted average remaining contractual life (years)	9 years 9 months 18 days
Options outstanding, weighted average exercise price	$ 3.40
Options exercisable, number of options | shares	27,749
Options exercisable, weighted average remaining contractual life (years)	9 years 9 months 18 days
Options exercisable, weighted average exercise price	$ 3.40

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Subsequent Events (Details Narrative)																																3 Months Ended		9 Months Ended
	Nov. 09, 2018 USD ($) $ / shares	Nov. 09, 2018 USD ($) Integer $ / shares shares	Nov. 08, 2018 USD ($)	Nov. 05, 2018 USD ($) Integer $ / shares shares	Nov. 02, 2018 USD ($) Integer $ / shares shares	Nov. 01, 2018 USD ($) $ / shares shares	Oct. 31, 2018 USD ($) $ / shares shares	Oct. 29, 2018 USD ($) Integer $ / shares	Oct. 29, 2018 USD ($) $ / shares shares	Oct. 26, 2018 USD ($) Integer $ / shares	Oct. 25, 2018 USD ($)	Oct. 23, 2018 USD ($) Integer $ / shares	Oct. 23, 2018 USD ($) Integer $ / shares shares	Oct. 22, 2018 USD ($)	Oct. 22, 2018 USD ($)	Oct. 19, 2018 USD ($)	Oct. 18, 2018 USD ($) shares	Oct. 17, 2018 USD ($) shares	Oct. 12, 2018 USD ($) shares	Oct. 03, 2018 USD ($) shares	Oct. 01, 2018 USD ($) Integer $ / shares	Sep. 07, 2018 USD ($) shares	Aug. 27, 2018 USD ($) shares	Aug. 15, 2018 USD ($) shares	Jul. 17, 2018 USD ($) shares	Jul. 16, 2018 USD ($)	Jul. 05, 2018 shares	Jul. 02, 2018 shares	Jun. 02, 2018 USD ($) shares	May 02, 2018 USD ($) shares	May 02, 2018 USD ($) shares	Sep. 30, 2018 USD ($) $ / shares shares	Sep. 30, 2017 USD ($)	Sep. 30, 2018 USD ($) $ / shares	Sep. 30, 2017 USD ($)	Nov. 13, 2018 USD ($)	Jun. 30, 2018 USD ($)	Jun. 11, 2018 $ / shares shares	Mar. 12, 2018 $ / shares	Dec. 31, 2017 USD ($)
Debt conversion price per share | $ / shares																																$ 7.50		$ 7.50
Debt instrument, fee																																$ 37,706		$ 37,706
Unamortized debt discount																																239,872		239,872						$ 401,856
Interest paid																																		856,562	$ 282,906
Imputed interest recorded as interest expense																																733,209	$ 1,554,379	3,015,596	4,431,950
Amortized of debt discount																																		384,295
Warrant to purchase shares of common stock | shares																																						110,833
Warrant exercise price per share | $ / shares																																						$ 3.50
Merchant Agreement [Member]
Proceeds from loan																										$ 180,000
Unamortized debt discount																																$ 6,343		6,343
Amortized of debt discount																																		94,050	$ 225,508
Six-month Agreement [Member]
Number of restricted stock issued during period | shares																											24,000	24,000
Series AA Convertible Preferred Stock [Member]
Debt conversion price per share | $ / shares																																							$ 2.50
Series AA Convertible Preferred Stock [Member] | Securities Purchase Agreement [Member]
Number of preferred stock sold | shares																														100	100
Number of preferred stock sold, amount																														$ 250,000	$ 250,000
Subsequent Event [Member]
Debt interest rate per annum																5.00%
Proceeds from loan										$ 105,000
Debt conversion price per share | $ / shares										$ 7.50
Debt conversion, percentage										60.00%
Debt conversion, trading days | Integer										20
Debt instrument, fee										$ 7,000
Repayment of convertible loan										$ 45,859
Convertible preferred stock, shares converted | shares																	44,000
Subsequent Event [Member] | Merchant Agreement [Member]
Proceeds from loan																	$ 550,000
Repayment of convertible loan																	175,000
Interest and fees paid																	5,500
Amount to be paid to lender																	726,000
Installment amount to the lender																	3,630
Imputed interest recorded as interest expense																	$ 176,000
Subsequent Event [Member] | Six-month Agreement [Member]
Number of restricted stock issued during period | shares									20,000
Fair value of common stock									$ 64,400
Subsequent Event [Member] | Series AA Convertible Preferred Stock [Member]
Convertible preferred stock, shares converted | shares																	44
Subsequent Event [Member] | Series AA Convertible Preferred Stock [Member] | Securities Purchase Agreement [Member]
Number of preferred stock sold | shares						75.2	220
Number of preferred stock sold, amount						$ 188,000	$ 550,000
Warrant to purchase shares of common stock | shares						75,200	220,000
Warrant exercise price per share | $ / shares						$ 3.50	$ 3.50
Fair value of equity						$ 130,051	$ 385,128
Broker warrants issued | shares						7,520	22,000
Deemed dividend						$ 181,035	$ 546,059
Accredited Investor [Member] | Series AA Convertible Preferred Stock [Member] | Securities Purchase Agreement [Member]
Number of preferred stock sold | shares																													20			160
Number of preferred stock sold, amount																													$ 50,000			$ 1,150,000
Accredited Investor [Member] | Subsequent Event [Member]
Debt interest rate per annum												8.00%	8.00%
Convertible debentures term	6 months											9 months				6 months
Proceeds from loan	$ 250,000											$ 103,000				$ 100,000
Debt conversion, trading days | Integer												15
Debt instrument, fee	$ 62,500	$ 62,500										$ 3,000	$ 3,000
Interest paid					$ 18,000
Extension fee, description																The loan can be extended a month up to three times for a $5,000 fee for each one-month extension
Debt discount, percentage												42.00%	42.00%
Convertible Loan [Member]
Unamortized debt discount																																					$ 27,495
Loan Amount																																$ 1,221,250		$ 1,221,250
Convertible Loan [Member] | Subsequent Event [Member]
Debt interest rate per annum																		5.00%	15.00%	5.00%
Convertible debentures term																		3 months	6 months	3 months
Proceeds from loan																		$ 100,000	$ 100,000	$ 150,000
Repayment of convertible loan																		100,000	$ 100,000	75,000
Interest paid																		$ 15,000		$ 22,500
Debt maturity date																		Apr. 17, 2019	Apr. 11, 2019	Dec. 26, 2018
Number of restricted stock issued during period | shares																		1,500	1,500	1,000
Fair value of common stock																		$ 28,800	$ 29,250	$ 10,800
Monthly paid, percentage																		5.00%	4.00%	5.00%
Interest and fees paid																			$ 24,000
Convertible Loan [Member] | Accredited Investor [Member]
Convertible debentures term																						1 year	1 year	4 months	3 months
Proceeds from loan																						$ 85,000	$ 125,000	$ 100,000	$ 100,000
Debt conversion, percentage																							60.00%
Debt maturity date																						Mar. 12, 2019
Number of restricted stock issued during period | shares																						1,150	1,428	6,000	2,000
Amortized of debt discount																						$ 4,364
Convertible Loan [Member] | Accredited Investor [Member] | Subsequent Event [Member]
Debt interest rate per annum																					4.00%
Convertible debentures term																					1 year
Proceeds from loan																					$ 118,800
Debt conversion price per share | $ / shares																					$ 7.50
Debt conversion, percentage																					60.00%
Debt conversion, trading days | Integer																					20
Debt instrument, fee																					$ 3,000
Unamortized debt discount																					$ 8,800
May 15, 2018 And July 16, 2018 ConvertibleLoans [Member] | Subsequent Event [Member]
Repayment of convertible loan															$ 195,000
April 23, 2018 Convertible Loan [Member] | Subsequent Event [Member]
Debt interest rate per annum														12.00%	12.00%
Convertible debentures term														1 year
Proceeds from loan														$ 103,000
Interest and fees paid														$ 47,194
April 23, 2018 Convertible Loan [Member] | Accredited Investor [Member] | Subsequent Event [Member]
Debt interest rate per annum												12.00%	12.00%
Convertible debentures term													1 year
Proceeds from loan													$ 77,000
Interest and fees paid													$ 35,407
4% Convertible Loan [Member] | Accredited Investor [Member] | Subsequent Event [Member]
Debt interest rate per annum				4.00%	4.00%						4.00%	4.00%	4.00%
Convertible debentures term				1 year	1 year						1 year		1 year
Proceeds from loan				$ 205,000	$ 105,000						$ 105,000		$ 105,000
Debt conversion price per share | $ / shares				$ 7.50	$ 7.50							$ 7.50	$ 7.50
Debt conversion, percentage				60.00%	60.00%								60.00%
Debt conversion, trading days | Integer				20	20								20
Debt instrument, fee				$ 5,000	$ 5,000							$ 5,000	$ 5,000
Number of restricted stock issued during period | shares				6,000	1,200								1,150
Interest and fees paid											$ 38,856
Amortized of debt discount				$ 17,906	$ 3,872								$ 3,930
6% Convertible Loan [Member] | Accredited Investor [Member] | Subsequent Event [Member]
Debt interest rate per annum					6.00%			6.00%	6.00%		6.00%
Convertible debentures term					1 year			1 year			1 year
Proceeds from loan					$ 130,000			$ 77,000			$ 130,000
Debt conversion price per share | $ / shares					$ 7.50			$ 7.50	$ 7.50
Debt conversion, percentage					60.00%			40.00%
Debt conversion, trading days | Integer					15			10
Debt instrument, fee					$ 6,500			$ 2,000	$ 2,000
Interest and fees paid											$ 49,411
5% Convertible Loan [Member] | Accredited Investor [Member] | Subsequent Event [Member]
Debt interest rate per annum	5.00%	5.00%								5.00%
Convertible debentures term		1 year								1 year
Proceeds from loan		$ 75,000								$ 65,000
Debt conversion price per share | $ / shares	$ 7.50	$ 7.50
Debt conversion, percentage		60.00%
Debt conversion, trading days | Integer		20
Debt instrument, fee	$ 8,500	$ 8,500								$ 21,129
Unamortized debt discount	$ 7,500	$ 7,500
Number of restricted stock issued during period | shares		1,360
Amortized of debt discount		$ 4,656
Legal fee		$ 2,000
5% Convertible Loan [Member] | Lender [Member] | Subsequent Event [Member]
Debt interest rate per annum			5.00%																																	8.00%
Debt maturity date			Dec. 21, 2018
Loan Amount			$ 161,250																																	$ 12,900