Note 17 - Subsequent Events

6 Months Ended

Jun. 30, 2019

17.	SUBSEQUENT EVENTS

August 8, 2019,

the Company issued

4,425

shares of common stock to its directors in payment of board fees.

July 1, 2019,

10,000

shares of common stock were issued in connection with the monthly commitment fee for the

April 4, 2019

convertible debenture.

Securities Purchase Agreement dated

July 10, 2019

July 10, 2019,

the Company issued a

$3,060,000

principal amount senior secured convertible note (the “Note”). At closing, a total of

$2,550,000

was funded. The principal amount due of the Note is due and payable as follows:

$918,000

is due

180

days after funding,

$1,071,000

is due

270

days after funding, and the remaining balance is due

months after the date of funding. Upon the occurrence of standard and customary events of default and expiration of any applicable cure periods, repayment of the outstanding principal amount due under the Note is subject to acceleration in the discretion of the Investor in which event, interest will accrue at the higher of

18%

per annum or the maximum amount permitted by applicable law and the Company will become obligated to pay an amount equal to

20%

of the then outstanding principal amount due under the Note.

The Note is secured by a lien on substantially all of our assets and properties and is convertible at the option of the Investor into shares of our common stock at a fixed conversion price of

$1.50

per share. The Company has the right to prepay the Note in full at any time without penalty in which event, the Investor will have the option of converting

25%

of the outstanding principal amount of the Note into shares of our common stock. .

In connection with the closing, the Company issued a

five

year warrant to the Investor to purchase

2,000,000

shares of common stock at a fixed exercise price of

$1.50

per share and paid a

$50,000

commitment fee, and issued

266,667

shares of common stock in payment of a

$400,000

due diligence fee.

Until the

second

anniversary of the closing, the Investor has the right to purchase up to

20%

of the securities we issue in any future private placement, subject to certain exceptions for, among other things, strategic investments.