| SECURED PROMISSORY AND CONVERTIBLE NOTES/PROMISSORY NOTES | NOTES PAYABLE On February 24, 2017 , the Company entered into an agreement with a vendor to convert the balance of their account into three notes payable in the aggregate amount of $765,784 . The notes bear interest of 6% per annum and matured on February 24, 2018 ; all outstanding principal and accrued interest is due and payable upon maturity. On June 5, 2018, the Company entered into another agreement with the same vendor to convert the balance of their account into a fourth note payable with a principal amount of $308,041 , this note also bears interest at a rate of 6% per annum, and matured on July 31, 2018. As of September 30, 2018 , the Company had not made any payments on these notes; the total outstanding principal and accrued interest were $1,073,825 and $ 80,415 , respectively, and the note is due upon demand. On March 23, 2017 , the Company entered into an agreement with a vendor to convert the balance of their account into a note payable in the amount of $ 356,742 . The note bears interest of 5% per annum and matured on March 31, 2018 ; all outstanding principal and accrued interest is due and payable upon maturity. As of September 30, 2018 , the note had been redeemed in stock; on July 25, 2018, the investor, elected to redeem the note, along with $23,897 in accrued interest, for 2,138,421 shares of common stock. The conversion rate was based on the average of the prior five trading days' closing price. On June 30, 2017, the Company entered into an agreement with a vendor to convert the balance of their account into a note payable in the amount of $ 250,000 . The note bears interest of 5% per annum and matured on February 28, 2018 ; all outstanding principal and accrued interest is due and payable upon maturity. As of September 30, 2018 , the Company had not made any payments on these notes, the accrued interest was $15,651 , and the note is due upon demand. On September 30, 2017, the Company entered into a settlement agreement with a customer to convert the credit balance of their account into a note payable in the amount of $ 215,234 . The note bears interest of 5% per annum and matures on September 30, 2018 . The Company has not made the monthly payments of $18,426 that were to commence on October 30, 2017; as of September 30, 2018 the company had paid principal of $22,529 and interest of $897 . The remaining principal and interest balances, as of September 30, 2018 , were $192,705 and $9,129 , respectively. SECURED PROMISSORY AND CONVERTIBLE NOTES Global Ichiban Secured Promissory Notes On November 30, 2017 , the Company, entered into a note purchase and exchange agreement with Global Ichiban Ltd., for the private placement of up to $2,000,000 of the Company’s secured convertible promissory notes in exchange for $2,000,000 of gross proceeds in several tranches through June 2018, The closing of each tranche is conditioned upon the Company having an average daily trading volume for its Common Stock of at least $50,000 for the 20 trading day period preceding such future tranche closing dates. Pursuant to the terms of the note purchase and exchange agreement, the Company and the investor also agreed to exchange certain outstanding securities held by the investor for additional notes. As of November 30, 2017 , the investor surrendered for cancellation (i) its outstanding promissory note dated September 13, 2017 ( $3,359,539 principal and accrued interest), (ii) its outstanding promissory note dated October 31, 2017 ( $252,466 principal and accrued interest), and (iii) its 400 shares of outstanding Series J Preferred Stock ( $445,222 of capital and accrued dividends). In exchange, the Company issued to the investor $4,057,227 aggregate principal amount of additional Notes. Please refer to Note 11 and Note 21 of the financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2017 for further discussion on the canceled promissory notes and the canceled Series J Preferred Stock shares. All principal and accrued interest on the notes are convertible at any time, in whole or in part, at the option of the investor into shares of common stock at a variable conversion price equal to the lowest of (i) 85% of the average VWAP for the shares over the prior 5 trading days, (ii) the closing bid price for the shares on the prior trading day, or (iii) $2.00 per share The notes may not be converted, and shares of common stock may not be issued pursuant to the notes, if, after giving effect to the conversion or issuance, the holder together with its affiliates would beneficially own in excess of 9.99% of the outstanding shares of common stock. Of the notes issued on November 30, 2017 , $3,359,539 aggregate principal amount will mature on December 15, 2020 . Principal and interest was originally to be payable in 36 equal monthly installments of $111,585 beginning January 15, 2018 . During the nine months ended September 30, 2018 , principal of $1,426,000 was converted into 3,486,276 shares of common stock, and during the nine months ended September 30, 2018 $140,355 of interest was converted to principal. The remaining note is payable in 30 equal monthly installments of $80,360 beginning July 15, 2018 . The following table summarizes the conversion activity of this note: Conversion Period Principal Converted Interest Converted Common Shares Issued Q1 2018 $ 1,250,000 $ — 2,450,981 Q2 2018 $ 176,000 $ — 1,035,295 $ 1,426,000 $ — 3,486,276 Of the notes issued on November 30, 2017 , $697,688 aggregate principal amount will mature on November 30, 2018 . Principal and interest will be payable upon maturity. The $2,000,000 aggregate principal amount of notes, issued in eight tranches, will mature on the first anniversary of the respective issuance date. Principal and interest will be payable upon maturity. As of September 30, 2018 , the closing dates, closing amounts, and maturity dates on completed note tranches are as follows: Closing Date Closing Amount Maturity Date 11/30/2017 $ 250,000 11/30/2018 12/28/2017 $ 250,000 12/28/2018 1/11/2018 $ 250,000 1/11/2019 1/25/2018 $ 250,000 1/25/2019 2/8/2018 $ 250,000 2/8/2019 2/21/2018 $ 250,000 2/21/2019 3/7/2018 $ 250,000 3/7/2019 3/21/2018 $ 250,000 3/21/2019 The notes will be secured by a security interest on substantially all of the Company’s assets, bear interest at a rate of 12% per annum and contain standard and customary events of default including but not limited to: (i) failure to make payments when due under the notes, and (ii) bankruptcy or insolvency of the Company. There are no registration rights applicable to the notes. On July 6, 2018, the Company issued a non-convertible promissory note to Global Ichiban Ltd., pursuant to the note purchase and exchange agreement dated November 30, 2017. In accordance with the agreement, the Company issued a note with a principal balance of $135,000 in exchange for gross proceeds of $120,000 . This note bears interest at a rate of 12% per annum and matures on July 6, 2019 . Principal and interest on this note are payable at maturity. The original issue discount of $15,000 will be allocated to interest expense, ratably, over the life of the note. As of September 30, 2018 , the aggregate principal and interest balance of the Notes were $4,906,582 and $331,758 , respectively. Pursuant to a number of factors outlined in ASC Topic 815, Derivatives and Hedging , the conversion option in the notes were deemed to include an embedded derivative that required bifurcation and separate accounting. As such, the Company ascertained the value of the conversion option as if separate from the convertible issuance and appropriately recorded that value as a derivative liability. The fair value measurements rely primarily on Company-specific inputs and the Company’s own assumptions. With the absence of observable inputs, the Company determined these recurring fair value measurements reside primarily within Level 3 of the fair value hierarchy. The derivative associated with the notes approximates management’s estimate of the fair value of the embedded derivative liability based on using a Monte Carlo simulation following a Geometric Brownian Motion with the following assumptions identified below. Due to the varying terms and varying issue dates, the tranches of this instrument were broken into four separate instruments for valuation purposes. 1) The first valuation was done on the November 30, 2017 note with term of three years. The derivative value of this note was $3,742,002 as of December 31, 2017 . 1) The second valuation was done on the group of notes dated November 30, 2017, that had a term of one year. The derivative value of this group of notes was $888,168 as of December 31, 2017 . 2) The third valuation was done on the note dated December 28, 2017, which had a term of one year. The derivative value of this note was $267,008 on December 31, 2017 . 3) For the notes dated in the first quarter of 2018 , we did a fourth valuation. Although the notes were entered into at various dates, we used a weighted average issuance date of February 15, 2018 for a combined valuation purpose. Management's analysis, using the following assumptions: annual volatility of 54% present value discount rate of 12% and a dividend yield of 0% , resulted in a fair value of the embedded derivative associated with these Notes of $1,151,162 as of February 15, 2018 . The value of the embedded derivative associated with these Notes was recorded as a debt discount. The derivative liability associated with the notes is subject to revaluation on a quarterly basis to reflect the market value change of the embedded conversion option. At September 30, 2018 , the Company conducted a fair value assessment of the embedded derivative associated with the three valuation groups discussed above. 1) For the November 30, 2017 3yr note: Management conducted a fair value assessment with the following assumptions: annual volatility of 65% present value discount rate of 12% and a dividend yield of 0% as of September 30, 2018 . As a result of the fair value assessment, the Company recorded a net gain of $2,440,427 as "Change in fair value of derivatives and gain/(loss) on extinguishment of liabilities, net" in the Consolidated Statements of Operations to properly reflect the fair value of the embedded derivative of $1,301,575 as of September 30, 2018 . 2) For the November 30, 2017 1yr notes: Management conducted a fair value assessment with the following assumptions: annual volatility of 104% present value discount rate of 12% and a dividend yield of 0% as of September 30, 2018 . As a result of the fair value assessment, the Company recorded a net gain of $436,920 as "Change in fair value of derivatives and gain/(loss) on extinguishment of liabilities, net" in the Consolidated Statements of Operations to properly reflect the fair value of the embedded derivative of $451,248 as of September 30, 2018 . 3) For the December 28, 2017 1yr note: Management conducted a fair value assessment with the following assumptions: annual volatility of 104% present value discount rate of 12% and a dividend yield of 0% as of September 30, 2018 . As a result of the fair value assessment, the Company recorded a net gain of $147,969 as "Change in fair value of derivatives and gain/(loss) on extinguishment of liabilities, net" in the Consolidated Statements of Operations to properly reflect the fair value of the embedded derivative of $119,039 as of September 30, 2018 . 4) For the first quarter 2018 1yr notes: Management conducted a fair value assessment with the following assumptions: annual volatility of 104% present value discount rate of 12% and a dividend yield of 0% as of September 30, 2018 . As a result of the fair value assessment, the Company recorded a net gain of $436,927 as "Change in fair value of derivatives and gain/(loss) on extinguishment of liabilities, net" in the Consolidated Statements of Operations to properly reflect the fair value of the embedded derivative of $714,235 as of September 30, 2018 . During the three months ended September 30, 2018 , a cumulative net gain of $2,676,943 was recorded as a change in fair value. The total cumulative net gain for the nine months ended September 30, 2018 was $3,462,243 to reflect a total derivative liability of $2,586,097 as of September 30, 2018 . Subsequent to the date of this report, the Company entered into another promissory note under this security agreement. Please refer to Note 16 for more information. St. George Secured Convertible Note On May 8, 2018, the Company, entered into a note purchase agreement with St. George Investments LLC, for the private placement of a $575,000 secured convertible promissory note. The Company received $500,000 in aggregate proceeds for the note in two tranches and recorded and original issue discount of $50,000 and debt financing costs of $25,000 . The original issue discount and the financing costs will be recognized as interest expense, ratably, over the life of the note. The note bears interest at a rate of 10% per annum and matures on May 9, 2019. All unredeemed principal and accrued interest is payable upon maturity. The note contains standard and customary events of default including but not limited to: (i) failure to make payments when due under the note, and (ii) bankruptcy or insolvency of the Company. In the event of default the interest rate increases to 22% per annum. The note is secured by a junior security interest on the Company's headquarters building, located in Thonrton, Colorado. There are no registration rights applicable to this agreement. As of September 30, 2018 , the aggregate principal and interest balance of the note were $575,000 and $22,842 , respectively. Beginning in early November 2018, St. George shall have the option to require the Company to redeem all or a portion of the amounts outstanding under the note. The Company may pay the requested redemption amounts in cash or in the form of shares of common stock (subject to certain specified equity conditions). Payments in the form of Common Stock shall be calculated using a variable conversion price equal to (i) 60% of the average of the two lowest closing bid prices for the shares over (ii) the prior ten day trading period immediately preceding the redemption. Shares of common stock may not be issued pursuant to the note if, after giving effect to the conversion or issuance, the holder together with its affiliates would beneficially own in excess of 4.99% of the outstanding shares of common stock. This ownership limitation will be automatically increased to 9.99% if the Company’s market capitalization is less than $10 million . The ownership limitation can also be increased at the option of the Investor (up to a maximum of 9.99% ) upon 61 days advance written notice. Pursuant to a number of factors outlined in ASC Topic 815, Derivatives and Hedging , the redemption option in the note was deemed to include an embedded derivative that required bifurcation and separate accounting. As such, the Company ascertained the value of the redemption option as if separate from the convertible issuance and appropriately recorded that value as a derivative liability. The fair value measurements rely primarily on company-specific inputs and the Company’s own assumptions. With the absence of observable inputs, the Company determined these recurring fair value measurements reside primarily within Level 3 of the fair value hierarchy. The derivative associated with the note approximates management’s estimate of the fair value of the embedded derivative liability based on using a Monte Carlo simulation following a Geometric Brownian Motion with the following assumptions: annual volatility of 50% , present value discount rate of 12% , and a dividend yield rate of 0% . These assumption resulted in the fair value of the embedded derivative of $862,439 , associated with this note at inception. The derivative liability associated with the note is subject to revaluation on a quarterly basis to reflect the market value change of the embedded conversion option. At September 30, 2018 , the Company conducted a fair value assessment of the embedded derivative associated with the note. As a result of the fair value assessment, the Company recorded a $339,078 gain as "Change in fair value of derivatives and gain/(loss) on extinguishment of liabilities, net" in the Condensed Consolidated Statements of Operations, to properly reflect the fair value of the embedded derivative of $523,361 as of September 30, 2018 . The fair value measurements rely primarily on Company-specific inputs and the Company’s own assumptions. With the absence of observable inputs, the Company determined these recurring fair value measurements reside primarily within Level 3 of the fair value hierarchy. The derivative associated with the note approximates management’s estimate of the fair value of the embedded derivative liability at September 30, 2018 based on using a Monte Carlo simulation following a Geometric Brownian Motion with the following assumptions: annual volatility of 86% , present value discount rate of 12% and dividend yield of 0% . PROMISSORY NOTES Offering of Unsecured, Non-Convertible Notes to Investor 1 During October 2016, the Company received $420,000 from a private investor "Investor 1". These funds, along with $250,000 of additional funding, were rolled into a promissory note, executed on January 17, 2017, in the amount of $700,000 issued with a discount of $30,000 which will be charged to interest expense ratably over the term of the note. The note bears interest at 12% per annum and matures on July 17, 2017 . Principal and interest on this note are payable at maturity. This note is not convertible into equity shares of the Company and is unsecured. On June 30, 2017, the Company and Investor 1 agreed to a 12 month payment plan on the balance of this promissory note. Interest will continue to accrue on this note at 12% per annum and payments of approximately $62,000 will be made monthly beginning in July 2017. The Company has not made all the payments according to this payment plan, and the note is payable upon demand. As of September 30, 2018 , $ 205,563 of principal and $ 45,414 of interest had been paid on this note. The outstanding principal and accrued interest balances on the note as of September 30, 2018 were $494,437 and $ 71,503 , respectively. Offering of Unsecured, Non-Convertible Notes to Investor 2 On November 16, 2017 , the Company initiated a non-convertible, unsecured promissory note with another private investor ("Investor 2") for $275,000 . The promissory note was issued with an original issue discount of $25,000 , resulting in proceeds to the company of $250,000 . The note does not have a stated interest rate and matured on December 18, 2017 . On July 25, 2018, the Company, entered into a new securities exchange agreement with Investor 2. Pursuant to the terms of the Exchange Agreement, Investor 2 agreed to surrender and exchange the promissory note with a principal balance of $275,000 in exchange for a convertible note. See Note 11 for further discussion on the new convertible note. Offering of Unsecured, Non-Convertible Notes to Investor 3 On January 31, 2018 , the Company initiated a non-convertible, unsecured promissory note with another private investor ("Investor 3") for an aggregate principal amount of $200,000 . The promissory note was issued with an original issue discount of $22,500 , which will be recorded as interest expense ratably over the term of the note, resulting in proceeds to the company of $177,500 , which was received in December 2017. The note bears interest at 12% per annum and matures on December 29, 2018 . All principal and interest is payable upon maturity. On September 7, 2018, the Company, entered into a new securities exchange agreement with Investor 3. Pursuant to the terms of the Exchange Agreement, Investor 3 agreed to surrender and exchange the promissory note with a principal balance of $200,000 , plus accrued interest of $16,800 , in exchange for a convertible note. See Note 11 for further discussion on the new convertible note. On June 6, 2018 , the Company initiated a non-convertible, unsecured promissory note with Investor 3 for an aggregate principal amount of $315,000 . The promissory note was issued with an original issue discount of $55,000 , which will be recorded as interest expense ratably over the term of the note, resulting in proceeds to the company of $260,000 , that was received in several tranches between February 2018 and April 2018. This note bears interest at 12% per annum and matures on June 6, 2019 . All principal and interest is payable upon maturity. As of September 30, 2018 , the remaining principal and interest on on this note were $315,000 and $17,430 , respectively. On July 24, 2018 , the Company initiated a non-convertible, unsecured promissory note with Investor 3 for an aggregate principal amount of $115,000 . The promissory note was issued with an original issue discount of $27,500 , which will be recorded as interest expense ratably over the term of the note, resulting in proceeds to the company of $87,500 , that was received in several tranches between May 2018 and June 2018. This note bears interest at 12% per annum and matures on January 24, 2019 . All principal and interest is payable upon maturity. As of September 30, 2018 , the remaining principal and interest on on this note were $115,000 and $4,397 , respectively. On September 10, 2018 , the Company initiated a non-convertible, unsecured promissory note with Investor 3 for an aggregate principal amount of $120,000 . The promissory note was issued with an original issue discount of $20,000 , which will be recorded as interest expense ratably over the term of the note, resulting in proceeds to the company of $100,000 , that was received in several tranches between June 2018 and September 2018. This note bears interest at 12% per annum and matures on March 10, 2019 . All principal and interest is payable upon maturity. As of September 30, 2018 , the remaining principal and interest on on this note were $120,000 and $1,349 , respectively. As of September 30, 2018 , the Company had also received undocumented proceeds of $70,000 from Investor 3. The Company has accrued interest on these proceeds at the rate of 12% per annum and had recorded $212 of accrued interest as of September 30, 2018 . CONVERTIBLE NOTES October 2016 Convertible Notes On October 5, 2016, the Company entered into a securities purchase agreement with a private investor for the private placement of $330,000 principal amount of convertible notes. At Closing, the Company sold and issued $330,000 principal amount of convertible notes in exchange for $330,000 of gross proceeds. The convertible notes matured on December 31, 2017 and bear interest at a rate of 6 % per annum, subject to increase to 24% per annum upon the occurrence and continuance of an event of default. Principal and accrued interest on the convertible notes is payable upon demand. All principal and accrued interest on the convertible notes is convertible at any time, in whole or in part, at the option of the investor, into shares of common stock at a variable conversion price equal to 80% of the lowest closing bid price of the Company’s common stock for the fifteen consecutive trading day period prior to the conversion date. After the six month anniversary of the issuance of any convertible note, the conversion price for such note shall thereafter be equal to 50% of the lowest closing bid price of the Company’s common stock for the fifteen consecutive trading day period prior to the conversion date. The convertible notes contain standard and customary events of default including but not limited to: (i) failure to make payments when due under the convertible notes; and (ii) bankruptcy or insolvency of the Company. Outstanding principal and accrued interest on the convertible notes were $330,000 and $39,875 , respectively as of September 30, 2018 . Pursuant to a number of factors outlined in ASC Topic 815, Derivatives and Hedging , the conversion option in the convertible notes were deemed to include an embedded derivative that required bifurcation and separate accounting. As such, the Company ascertained the value of the conversion option as if separate from the convertible issuance and appropriately recorded that value as a derivative liability. At closing, a derivative liability and a corresponding debt discount in the amount of $330,000 was recorded. The fair value of the derivative was greater than the face value at issuance and the difference of $341,114 was charged to interest expense at issuance. The remaining debt discount will be charged to interest expense ratably over the life of the October 2016 Convertible Notes. As of December 31, 2017 , the fair value of the derivative liability was $572,643 . The derivative liability associated with the convertible notes is subject to revaluation on a quarterly basis to reflect the market value change of the embedded conversion option. At September 30, 2018 , the Company conducted a fair value assessment of the embedded derivative associated with the convertible notes. As a result of the fair value assessment, the Company recorded a $275,517 gain as "Change in fair value of derivatives and gain/(loss) on extinguishment of liabilities, net" in the Condensed Consolidated Statements of Operations for the three months ended September 30, 2018 . A total net gain of $137,666 was recorded for the nine months ended September 30, 2018 , to properly reflect the fair value of the embedded derivative of $434,977 as of September 30, 2018 . The fair value measurements rely primarily on company-specific inputs and the Company’s own assumptions. With the absence of observable inputs, the Company determined these recurring fair value measurements reside primarily within Level 3 of the fair value hierarchy. The derivative associated with the convertible notes approximates management’s estimate of the fair value of the embedded derivative liability at September 30, 2018 based on using a Monte Carlo simulation following a Geometric Brownian Motion with the following assumptions: annual volatility of 106% present value discount rate of 12% and dividend yield of 0% . St. George Convertible Note On September 8, 2017 , the Company entered into a securities purchase agreement with St. George Investments LLC for the private placement of $ 1,725,000 principal amount of the Company’s original issue discount convertible notes. On September 11, 2017 , the Company sold and issued a $ 1,725,000 principal convertible notes to St. George in exchange for $ 1,500,000 of gross proceeds, and paid $20,000 in financing costs. The original issue discount of $225,000 , and the financing costs, will be charged to interest expense, ratably, over the life of the note. Unless earlier converted or prepaid, the convertible notes will mature on March 11, 2019 . The note does not bear interest in the absence of an event of default. For the first six months after the issuance of the convertible note, the Company will make a monthly cash repayment on the note of approximately $96,000 . Thereafter, St. George may request that the Company make monthly partial redemptions of the note up to $150,000 per month. If St. George does not request the full $150,000 redemption amount in any one month, the unused portion of such monthly redemption amount can be added to future monthly redemption amounts; however, in no event, can the amount requested for any one month exceed $275,000 . Redemption amounts are payable by the Company in cash. Beginning ten months after the issuance of the convertible note, cash redemption payments by the Company will be subject to a 15% redemption premium. Beginning six months after the issuance of the convertible note, the Company also has the option (subject to customary equity conditions) to pay redemption amounts in the form of shares of common stock. Payments in the form of shares would be calculated using a variable conversion price equal to the lower of (i) 85% of the average VWAP for the shares over the prior five trading days or (ii) the closing bid price for the shares on the prior trading day. In lieu of making the December 2017 through March 2018 cash payments, the share reserve was increased by 5 million shares, and on May 1, 2018, effective as of April 3, 2018, the parties agreed to amend the variable conversion price formula outlined in the securities purchase agreement. As amended, payments in the form of shares would be calculated using a variable conversion price equal to the lower of (i) 60% of the lowest VWAP for the shares during the prior five trading days or (ii) the closing bid price for the shares on the prior trading day. All principal and accrued interest on the convertible note is convertible at any time, in whole or in part, at the option of St. George into shares of common stock at a fixed conversion price of $4 per share. The convertible note contains standard and customary events of default including but not limited to: (i) failure to make payments when due under the Note; and (ii) bankruptcy or insolvency of the Company. Upon the occurrence of an event of default, the convertible note will begin to bear interest at the rate of 22% per annum. In addition, upon the occurrence of an event of default, St. George has the option to increase the outstanding balance of the convertible note by 25% . In connection with the closing under the securities purchase agreement, the Company issued 37,500 unregistered shares of common stock to St. George as an origination fee. The closing stock price on the date of close was $1.7 resulting in an interest expense of $ 63,750 being recorded as of the date of close. The convertible note may not be converted, and shares of common stock may not be issued pursuant to the convertible note if, after giving effect to the conversion or issuance, the holder together with its affiliates would beneficially own in excess of 4.99% of the outstanding shares of common stock. As of September 30, 2018 , cash payments of $191,667 had been made on the convertible note, and $494,100 had been converted into 5,412,611 shares of the Company's common stock. The remaining balance on the note was $1,039,233 as of September 30, 2018 . The following table summarizes the conversion activity of this note: Conversion Period Principal Converted Common Shares Issued Q1 2018 $ 75,000 187,500 Q2 2018 $ 316,600 2,082,778 Q3 2018 $ 102,500 3,142,333 $ 494,100 $ 5,412,611 Pursuant to a number of factors outlined in ASC Topic 815, Derivatives and Hedging , the conversion option in the convertible note was deemed to include an embedded derivative that required bifurcation and separate accounting. As such, the Company ascertained the value of the conversion option as if separate from the convertible note issuance and appropriately recorded that value as a derivative liability. As of December 31, 2017 , the derivative liability was $394,280 . The derivative liability associated with the convertible note is subject to revaluation on a quarterly basis to reflect the market value change of the embedded conversion option. At September 30, 2018 , the Company conducted a fair value assessment of the embedded derivative associated with the convertible note. As a result of the fair value assessment, the Company recorded a $579,411 net gain as "Change in fair value of derivatives and gain/(loss) on extinguishment of liabilities, net" in the Condensed Consolidated Statements of Operations for the three months ended September 30, 2018 . The total net gain recorded for the nine months ended September 30, 2018 was $71,147 , to properly reflect the fair value of the embedded derivative of $323,133 as of September 30, 2018 . The fair value measurements rely primarily on company-specific inputs and the Company’s own assumptions. With the absence of observable inputs, the Company determined these recurring fair value measurements reside primarily within Level 3 of the fair value hierarchy. The derivative associated with the convertible note approximates management’s estimate of the fair value of the embedded derivative liability at September 30, 2018 based on using a Monte Carlo simulation following a Geometric Brownian Motion with the following assumptions: annual volatility of 86% present value discount rate of 12% and dividend yield of 0% . BayBridge Convertible Note On December 6, 2017 , the Company entered into a securities exchange agreement (“Exchange Ag |
