12.	STOCKHOLDERS’ EQUITY

Preferred Stock

Within the limits and restrictions provided in the Company’s Certificate of Incorporation, the Board of Directors has the authority, without further action by the shareholders, to issue up to

5,000,000

shares of preferred stock,

$.0001

par value per share, in

one

or more series, and to fix, as to any such series, any dividend rate, redemption price, preference on liquidation or dissolution, sinking fund terms, conversion rights, voting rights, and any other preference or special rights and qualifications. As of

March 31, 2019,

100,000

shares of preferred stock have been designated as Series A-

Convertible Preferred Stock, of which

90,000

were issued in

2015

and

remain outstanding, and

105,000

shares of preferred stock have been designated as Series B-

Convertible Preferred Stock, of which

105,000

were issued in

2015

and

remain outstanding.

Series A-

Convertible Preferred Stock

October 22

and

29,

2015,

the Company issued

84,500

shares of Series A-

Convertible Preferred Stock at a purchase price of

$100.00

per share, for aggregate gross proceeds of

$8,450,000.

November 11, 2015,

5,500

additional shares of Series A-

Convertible Preferred Stock were issued at a purchase price of

$100.00

per share, for gross cash proceeds of

$550,000.

Between

September 22, 2017

and

May 31, 2018,

the holder of the Series A-

Stock converted all shares of Series A-

Stock into an aggregate of

2,500,000

shares of common stock and purchased an aggregate of

248,893

shares of common stock in consideration of the conversion of

$896,015

of accrued dividends payable on the Series A-

Stock

As a result of the forgoing conversions, there are

longer any issued and outstanding shares of Series A-

Stock as of

March 31, 2019.

Overall balances and conversion of Series A-

shares and accrued dividends into common stock has been as follows:

	Series A-1			Accrued Dividends

Balance – January 1, 2017		90,000		$	270,000
Accrual of dividends – Q1 2017		-			135,000
Accrual of dividends – Q2 2017		-			135,000
Accrual of dividends – Q3 2017		-			135,000
Conversion into common stock – September 2017		-			(540,000	)
Conversion into common stock – October 2017		(27,404	)		-
Accrual of dividends – Q4 2017					101,658
Balance – December 31, 2017		62,596		$	236,658
Accrual of dividends – Q1 2018		-			93,894
Conversion into common stock – April 2018		(39,088	)		(330,552	)
Accrual of dividends – Q2 2018 (until final conversion)		-			25,463
Conversion into common stock – May 2018		(23,508	)		(25,463	)
Balance – December 31, 2018		-		$	-

Series B-

Convertible Preferred Stock

November 11, 2015,

the Company issued

105,000

shares of Series B-

Convertible Preferred Stock at a purchase price of

$100.00

per share, for gross proceeds of

$10,500,000.

Between

March 23, 2018

and

May 23, 2018,

holders of shares of Series B-

Stock converted all shares of Series B-

Stock into an aggregate of

2,916,668

shares of common stock and purchased an aggregate of

131,229

shares of common stock in consideration of the conversion of

$472,426

of accrued dividends payable on the Series B-

Stock.

As a result of the forgoing conversions, there are

longer any issued and outstanding shares of Series B-

Stock as of

March 31, 2019.

Overall balances and conversion of Series B-

shares and accrued dividends into common stock has been as follows:

	Series B-1			Accrued Dividends

Balance – January 1, 2017		105,000		$	131,250
Accrual of dividends – Q1 2017		-			65,625
Accrual of dividends – Q2 2017		-			65,625
Accrual of dividends – Q3 2017		-			65,625
Accrual of dividends – Q4 2017		-			65,625
Balance – December 31, 2017		105,000			393,750
Conversion into common stock – March 2018		(60,420	)		(417,084	)
Accrual of dividends – Q1 2018		-			62,268
Accrual of dividends – Q2 2018 (until final conversion)		-			16,408
Conversion into common stock – May 2018		(44,580	)		(55,342	)
Balance – December 31, 2018		-		$	-

Common Stock

March 21

and

28,

2019,

the Company issued

13,820

shares of common stock to its directors in payment of board and board committee fees valued at

$16,506.

Securities Purchase Agreement dated

November 13, 2014

Pursuant to a Securities Purchase Agreement, dated

November 13, 2014,

by and between the Company and a number of private and institutional investors, the Company issued to certain private investors

664,584

shares of common stock and warrants to purchase an additional

996,877

shares of common stock for aggregate gross proceeds of

$1,595,000.

The warrants have a term of

five

years and an initial exercise price of

$3.60

per share, and have been fully exercisable since

February 2015.

The warrants have customary anti-dilution protections including a “full ratchet” anti-dilution adjustment provision which are triggered in the event the Company sells or grants any additional shares of common stock, options, warrants or other securities that are convertible into common stock at a price lower than

$3.60

per share, The anti-dilution adjustment provision is

not

triggered by certain “exempt issuances” which among other issuances, includes the issuance of shares of common stock, options or other securities to officers, employees, directors, consultants or service providers.

Pursuant to the Underwriting Agreement with Maxim Group, on

August 24, 2018

the Company issued Common Stock and Warrants to investors at a purchase price of

$1.50

per unit which triggered the anti-dilution protection provision under this Securities Purchase Agreement. Due to this provision, the total number of outstanding and fully vested warrants was increased from

996,877

2,392,502,

and the exercise price was reduced from

$3.60

$1.50

per share. The Company recognized a non-cash deemed dividend of

$1,288,139

in connection with these adjustments.

Securities Purchase Agreement dated

September 23, 2015

September 23, 2015,

the Company issued a warrant to purchase

69,445

shares of common stock in connection with the issuance of a promissory note. The warrants are immediately exercisable at an initial exercise price of

$3.60

per share and have a term of

five

years.

The warrants have customary anti-dilution protections including a "full ratchet" anti-dilution adjustment provision which are triggered in the event the Company sells or

grants any additional shares of common stock, options, warrants or other securities that are convertible into common stock at a price lower than

$3.60

per share. The anti-dilution adjustment provision is

not

triggered by certain "exempt issuances" which among other issuances, includes the issuance of shares of common stock, options or other securities to officers, employees, directors, consultants or service providers.

Pursuant to the Underwriting Agreement with Maxim Group, on

August 24, 2018

the Company issued Common Stock and Warrants to the investors at a purchase price of

$1.50

69,445

166,668,

and the exercise price was reduced from

$3.60

$1.50

per share. The Company recognized a non-cash deemed dividend of

$140,827

in connection with these adjustments.

Issuances of Stock Options

March 21, 2019,

the Company issued options to purchase

235,334

shares of common stock to certain officers, employees, and contractors. The options have a

three

year vesting period,

seven

year term, and exercise price of

$1.18.

The fair value of the options issued during the

three

months ended

March 31, 2019

was estimated on the date of grant at

$243,643

using the Black-Scholes option-pricing model with the following assumptions: risk free interest rate:

2.35%,

expected life of options in years:

4.5,

expected dividends:

volatility of stock price:

143%.