Preferred Stock

Prefer

red Stock

Summary

We are authorized to issue up to

10,000,000

shares of our Preferred Stock,

$.01

par value, which

may

be issued in

one

or more series. The table below presents our issued and outstanding series of preferred stock as of

June 30, 2019

and

December 31, 2018.

Each series of our outstanding preferred stock has a stated value of

$1,000

per share. Further details concerning each series of preferred stock, and the changes in each series during the

three

-month and

six

-month periods ending

June 30, 2019

and

2018

are discussed in the sections that follow the table.

	June 30, 2019				December 31, 2018
			Carrying				Carrying
	Shares		Value		Shares		Value
Series B Convertible Preferred Stock		100		76,095		100		76,095
Series C Convertible Preferred Stock		-		-		2,150		705,238
Series E Convertible Preferred Stock		-		-		1,200		1,190,000
Series F Convertible Preferred Stock		2,302		1,418,822		-		-
Series G Convertible Preferred Stock		1,000		842,950		-		-
Total		3,402		2,337,867		3,450		1,971,333

Series B Preferred Stock

During the

three

-month and

six

-month periods ended

June

30,

2019

and

2018,

there were

conversions or other transactions involving our Series B Convertible Preferred Stock (“Series B Preferred Stock”). As of

June 30, 2019,

there are

100

shares of our Series B Convertible Preferred Stock outstanding. The Series B Preferred Stock

may

be converted at any time at the option of the holder into shares of our common stock at a conversion price of

$175

per share.

Series

Preferred Stock

During

January

and

February 2019,

587

shares of our Series C Convertible Preferred Stock (“Series C Preferred Stock”) were converted into

78,280

shares of our common stock. During

February 2019,

all remaining shares of Series C Preferred Stock (

1,563

shares) were exchanged for Series F Preferred Stock. During the

three

-month and

six

-month periods ended

June

30,

2018,

there were

conversions or other transactions involving our Series C Preferred Stock.

Series

Preferred Stock

During the

three

-month and

six

-month periods ending

June 30, 2018,

345

and

795

shares, respectively, of our Series D Convertible Preferred Stock (“Series D Preferred Stock”) were converted into

46,000

and

106,000

shares, respectively, of our common stock. As of

June 30, 2019,

there are

shares of our Series D Preferred Stock outstanding.

Series

Preferred Stock

March 2018,

we issued

600

shares of our Series E Convertible Preferred Stock (“Series E Preferred Stock”), for net proceeds of

$590,000.

September 2018,

we issued an additional

600

shares of Series E Preferred Stock for net proceeds of

$600,000.

During

February 2019,

all outstanding shares of Series E Preferred Stock (

1,200

shares) were exchanged for Series F Preferred Stock.

Series F Preferred Stock

February 18, 2019,

we entered into Exchange Agreements with holders of our Series C and Series E Preferred Stock, pursuant to which the holders exchanged all shares of Series C and Series E Preferred Stock held by them for an aggregate of

2,763

shares of Series F Convertible Preferred Stock (“Series F Preferred Stock”). Each share of Series F Preferred Stock is entitled to a liquidation preference equal to its

$1,000

stated value, has

voting rights, and is

not

entitled to a dividend. The Series F Preferred Stock is convertible at any time at the option of the holders into shares of our common stock, at a conversion price equal to the lesser of (i)

$7.50

per share and (ii)

90%

of the volume weighted average price of the common stock immediately preceding the delivery of a notice of conversion. The Series F Preferred Stock contains price adjustment provisions, which

may,

under certain circumstances reduce the conversion price to match if we sell or grant options to purchase, including rights to reprice, our common stock or common stock equivalents at a price lower than the then conversion price of the Series F Preferred Stock. During the

three

-month and

six

-month periods ending

June 30, 2019,

281

and

461

shares, respectively, of Series F Preferred Stock were converted into

253,300

and

293,300

shares, respectively, of our common stock. As of

June 30, 2019,

there are

2,302

shares of our Series F Preferred Stock outstanding.

Series G Preferred Stock

February 25, 2019,

we entered into a Securities Purchase Agreement with the purchasers identified therein (the “Purchasers”) providing for sale to the Purchasers of an aggregate of up to

1,000

shares of our Series G Convertible Preferred Stock (“Series G Preferred Stock”) and related warrants for gross proceeds of up to

$1.0

million, to be funded at up to

three

different closings. Each share of Series G Preferred Stock is entitled to a liquidation preference equal to its

$1,000

stated value, has

voting rights, and is

not

entitled to a dividend. The Series G Preferred Stock is convertible at any time at the option of the holders into shares of our common stock, at a conversion price equal to the lesser of (i)

$7.50

per share and (ii)

90%

of the volume weighted average price of the common stock immediately preceding the delivery of a notice of conversion. The Series G Preferred Stock contains price adjustment provisions, which

may,

At the

first

closing, which occurred on

February 26, 2019,

we issued

500

shares of Series G Preferred Stock in exchange for the payment by the Purchasers of

$250,000

in the aggregate, plus the cancellation of Term Notes held by the Purchasers (see Note

) in the amount of

$250,000.

At the

first

closing we also issued the warrants to purchase an aggregate of

33,334

shares of our common stock. The warrants have an exercise price of

$7.50

per share, are exercisable

six

months from the issuance date, and have a term of exercise equal to

five

years from the date they

first

become exercisable. The warrants contain anti-dilution and price adjustment provisions, which

may,

under certain circumstances reduce the exercise price to match if we sell or grant options to purchase, including rights to reprice, our common stock or common stock equivalents at a price lower than the then exercise price of the warrants; in the event of such adjustment, the number of shares subject to the warrants will also increase so that the aggregate exercise price remains the same for each warrant. At the

second

and

third

closings, which occurred on

April 26

and

June 19, 2019,

we issued an aggregate of

500

additional shares of Series G Preferred Stock in exchange for the payment by the Purchasers of a total of

$500,000

We also issued the Purchasers warrants to purchase an aggregate of

66,668

shares of our common stock. As of

June 30, 2019,

there are

1,000

shares of our Series G Preferred Stock outstanding.