| Stockholders' Equity | The Company’s Certificate
of Incorporation, as amended, authorizes the issuance of two classes of stock to be designated “common stock” and “preferred
stock”. At
December 31, 2019, the total number of shares of stock which the Company has authority to issue was 50,000,000 shares of common stock,
par value $0.001 per share and 5,000,000 shares of preferred stock, par value $0.001 per share, of which (i) 161,135 shares was designated
as Series A preferred stock (ii) 1,052,631 was designated as Series B preferred stock, (iii) 700,000 was designated as Series C preferred
stock, and (iv) 650,000 was designated as Series D preferred stock. The Company’s common
stock is traded on the OTC Pink Market operated by OTC Markets under the symbol “YGYI”. From June 2017 until November 2020,
the Company’s common stock was traded on Nasdaq Capital Market under the symbol “YGYI.” From June 2013 until June 2017,
the Company’s common stock was traded on the OTCQX Marketplace operated by OTC Markets under the symbol “YGYI”. Previously,
the common stock was quoted on the OTC Markets OTC Pink market system under the symbol “JCOF”. The Company’s 9.75%
Series D Cumulative Redeemable Perpetual Preferred Stock, $0.001 par value is traded on OTC Pink market operated by OTC Markets Group
under the symbol “YGYIP”. Shelf Registration In May 2018, the SEC
declared the Company’s shelf registration statement on Form S-3 effective to register shares of the Company’s common stock
for sale of up to $75,000,000 giving the Company the opportunity to raise funding when considered appropriate at prices and on terms
to be determined at the time of any such offerings. The Company’s ability to sell securities registered on its registration statement
on Form S-3 (the “Shelf”) was limited until such time the market value of its voting securities held by non-affiliates is
$75 million or more. During the year ended December 31, 2019, the Company raised net proceeds under the Shelf in the aggregate of approximately
$12,371,000 from the issuance of the Company’s preferred stock series D offering and the ATM noted below. During the year ended
December 31, 2018, the Company did not use the Shelf. The Company is no longer eligible to use the Shelf. Common Stock At December 31, 2019
and 2018 there were 30,274,601 and 25,760,708 shares of common stock outstanding, respectively. The holders of the common stock are entitled
to one vote for each share held at all meetings of stockholders (and written actions in lieu of meetings). Stock Offerings 2019 Share Purchase Agreements In June 2019, the Company entered into a securities
purchase agreement with one accredited investor that had a substantial pre-existing relationship with the Company pursuant to which the
Company sold 250,000 shares of common stock at an offering price of $5.50 per share. The Company received gross proceeds of $1,375,000. In February 2019, the Company entered into a purchase
agreement with one accredited investor that had a substantial pre-existing relationship with the Company pursuant to which the Company
sold 250,000 shares of common stock at an offering price of $7.00 per share. Pursuant to the purchase agreement, the Company also issued
to the investor a three-year warrant to purchase 250,000 shares of common stock at an exercise price of $7.00. The Company received gross
proceeds of $1,750,000. Consulting fees to the placement agent for arranging the purchase agreement included the issuance of 5,000 shares
of restricted shares of the Company’s common stock with a fair value of $7.00 per share, and three-year warrants to purchase 100,000
shares of common stock expiring in February 2022 priced at $10.00. The Company used the Black-Scholes option-pricing model to estimate
the fair value of the warrants issued to the selling agent to be $324,000 at the time of issuance as direct issuance costs and recorded
in equity. No cash commissions were paid. 2019 Promissory Notes In March 2019, the Company entered into a two-year
secured promissory note with two accredited investors that the Company had a substantial pre-existing relationship with and from whom
the Company raised cash proceeds in the aggregate of $2,000,000. The promissory notes are secured by all equity in KII. In consideration
of the promissory notes, the Company issued 20,000 shares of common stock and five-year warrants to purchase 20,000 shares of common stock
at a price per share of $6.00 for each $1,000,000 invested. The promissory notes pay interest at a rate of 8.00% per annum and interest
is paid quarterly in arrears with all principal and unpaid interest due at maturity on March 18, 2021. The Company issued in the aggregate
40,000 shares of common stock and 40,000 warrants with the Notes. The Company used the Black-Scholes option-pricing model to estimate
the aggregate fair value of the warrants issued to be $138,000 at the time of issuance as direct issuance costs and recorded as a debt
discount and is being amortized as expense over the life of the promissory notes. The aggregate fair value of the shares issued was based
on the closing price of the Company’s common stock on the closing date was approximately $212,000 was recorded as a debt discount
and is being amortized as expense over the life of the promissory notes. 2019 Private Placement - Convertible Notes Between February and July 2019, the Company closed
five tranches related to the 2019 January private placement debt offering, pursuant to which the Company offered the 2019 PIPE Notes,
with each investor receiving in addition to a 2019 PIPE Notes, 2,000 shares of common stock for each $100,000 invested. The Company issued
an aggregate of 61,800 shares of common stock as a result of the 2019 private placement. The placement agent received 15,450 shares of
common stock for the closed tranches. The 2019 PIPE Notes are secured by all equity in KII. The aggregate fair value of the shares issued
was based on the closing price of the Company’s common stock on the closing date was approximately $451,000 was recorded as a debt
discount and is being amortized as expense over the life of the promissory notes. (See Note 14). 2018 Private Placement Between August 2018 and
October 2018, the Company completed its 2018 private placement and entered into securities purchase agreements with nine investors with
whom the Company had a substantial pre-existing relationship pursuant to which the Company sold an aggregate of 630,526 shares of common
stock at an offering price of $4.75 per share. In addition, the Company issued the investors an aggregate of 150,000 additional shares
of common stock as an advisory fee and issued the investors three-year warrants to purchase an aggregate of 630,526 shares of common
stock at an exercise price of $4.75 per share. The fair value of the warrants as issuance was approximately $1,689,000. The Company adopted ASU
No. 2017-11 effective January 1, 2019 and determined that the 2018 warrants were to no longer be classified as a derivative, as a result
of the adoption and subsequent change in classification of the 2018 warrants, the Company reclassed approximately $1,494,000 of warrant
derivative liability to equity. (See Note 8) At December 31, 2019 and 2018, 448,420 and 630,526 warrants, respectively, were outstanding. The purchase agreement
requires the Company to issue the investor additional shares of the Company’s common stock in the event that the average of the
15 lowest closing prices for the Company’s common stock during the period beginning on August 31, 2018 and ending on the date 90
days from the effective date of the registration statement (the “subsequent pricing period”) is less than $4.75 per share.
The additional common shares to be issued are calculated as the difference between the common stock that would have been issued using
the average price of such lowest 15 closing prices during the subsequent pricing period less shares of common stock already issued pursuant
to the 2018 private placement. Notwithstanding the foregoing, in no event may the aggregate number of shares issued by the Company, including
shares of common stock issued, shares of common stock underlying the warrants, the shares of common stock issued as advisory shares and
true-up shares exceed 2.9% of the Company’s issued and outstanding common stock at August 31, 2018 for each $1,000,000 invested
in the Company. The true-up share feature
was considered to be embedded in the specific common shares purchased by each investor, by way of the purchase agreement. As the economic
characteristics and risks of the true-up share feature are clearly and closely related to the common stock host contract, the true-up
share feature was not separately recognized in the private placement transaction. The aggregate gross proceeds
of approximately $2,995,000 from the aggregate closings of the 2018 private placement were first allocated to the investor warrants,
with an aggregate initial fair value of approximately $1,689,000, with the residual amount allocated to the common stock issued in the
offering, including the common stock issued to each investor as an advisory fee. The net cash proceeds to the Company from the 2018 private
placement were approximately $2,962,000 after deducting advisory fees, closing and issuance costs. 2015 Convertible Note In October 2018, Mr.
Grover, an investor in the Company’s 2014 and 2015 private placements, exercised his right to convert all amounts owed under the
note issued to him in the 2015 private placement in the principal amount of $3,000,000 which matured in October 2018, into 428,571 shares
of common stock (at a conversion rate of $7.00 per share), in accordance with its stated terms. (See Note 7) 2014 Convertible Note
– Debt Exchange In October 2018, the
Company entered into an agreement with Mr. Grover to exchange all amounts owed under the 2014 Note held by him in the principal amount
of $4,000,000 which matured in July 2019, for 747,664 shares of the Company’s common stock, at a conversion price of $5.35 per
share and a four-year warrant to purchase 631,579 shares of common stock at an exercise price of $4.75 per share. The warrant to purchase
747,664 shares of common stock remained outstanding at both December 31, 2019 and 2018. The agreement was subject to shareholder approval
which was received on December 5, 2018. A FINRA broker dealer
acted as the Company’s advisor in connection with the debt exchange. Upon the closing of the debt exchange, the Company subsequently
received shareholder approval to issue the broker dealer 30,000 shares of common stock, a four-year warrant to purchase 80,000 shares
of common stock at an exercise price of $5.35 per share and a four-year warrant to purchase 70,000 shares of common stock at an exercise
price of $4.75 per share. The warrants to purchase an aggregate 150,000 shares remained outstanding at both December 31, 2019 and 2018. 2018 Note
Payable In December 2018, CLR
entered into a credit agreement with Mr. Grover pursuant to which CLR borrowed $5,000,000 from Mr. Grover and in exchange issued to him
a $5,000,000 credit note. In addition, CLR’s subsidiary Siles, as guarantor, executed a separate Guaranty Agreement (“Guaranty”).
In connection with the credit agreement, the Company issued to Mr. Grover a four-year warrant to purchase 250,000 shares of its common
stock, exercisable at $6.82 per share and a four-year warrant to purchase 250,000 shares of its common stock, exercisable at $7.82 per
share, pursuant to a warrant purchase agreement with Mr. Grover. The Company also entered into an advisory agreement with Ascendant,
a third party not affiliated with Mr. Grover, in connection with the credit agreement, pursuant to which the Company agreed to pay to
Ascendant a 3.00% fee on the transaction with Mr. Grover and issued to Ascendant a four-year warrant to purchase 50,000 shares of its
common stock, exercisable at $6.33 per share. 2019
At-the-Market Equity Offering Program In January 2019,
the Company entered into the “ATM agreement with the Benchmark Company LLC (“Benchmark”) pursuant to which the
Company may sell from time to time, at the Company’s option, shares of its common stock through Benchmark as sales agent, for the
sale of up to $60,000,000 of shares of the Company’s common stock. The Company is not obligated to make any sales of common stock
under the ATM agreement and the Company cannot provide any assurances that it will continue to issue any shares pursuant to the ATM agreement.
During the year ended December 31, 2019, the Company sold 17,524 shares of common stock under the ATM agreement and received net proceeds
of approximately $102,000. The Company paid the Benchmark 3.0% commission of the gross sales proceeds. The Company is not currently eligible
to register the offer and sale of the Company’s securities using a registration statement on Form S-3 and therefore cannot make
sales under the ATM agreement until such time that the Company once again becomes S-3 eligible. Preferred Stock Series A Preferred
Stock The Company has 161,135
shares of Series A preferred stock outstanding at December 31, 2019, and December 31, 2018 and accrued dividends of approximately $150,000
and $137,000, respectively. The holders of the Series A preferred stock are entitled to receive a cumulative dividend at a rate of 8.00%
per year, payable annually either in cash or shares of the Company's common stock at the Company's election. Each share of
Series A preferred stock is convertible into common stock at a conversion rate of one-tenth of a share. The holders of Series A preferred
stock are entitled to receive payments upon liquidation, dissolution or winding up of the Company before any amount is paid to the holders
of common stock. The holders of Series A preferred stock have no voting rights, except as required by law. Series B Preferred
Stock In March 2018, the Company
completed the Series B offering, pursuant to which the Company sold 381,173 shares of Series B preferred stock at an offering price of
$9.50 per share. Each share of Series B preferred stock is initially convertible at any time, in whole or in part, at the option of the
holders, at a conversion price of $4.75 per share, into 2 shares of common stock and automatically converts into 2 shares of common stock
on its two-year anniversary of issuance. In connection with the
Series B offering, the Company issued the placement agent 38,117 warrants as compensation, exercisable at $5.70 per share and expire
in February 2023. The Company determined that the warrants should be classified as equity instruments and used Black-Scholes to estimate
the fair value of the warrants issued to the placement agent of $75,000 at the issuance date March 30, 2018. At December 31, 2019 and
2018, 6,098 warrants issued to the placement agent remain outstanding. The Company received
gross proceeds in aggregate of $3,621,000. The net proceeds to the Company from the Series B offering were $3,289,000 after deducting
commissions, closing and issuance costs. The Company has 129,332 and 129,437 shares of Series
B preferred stock outstanding at December 31, 2019 and 2018, respectively. During the year ended December 31, 2019, the Company received
notice of conversion for 105 shares of Series B preferred stock which converted to 210 shares of common stock. During the year ended December
31, 2018, the Company received notice of conversion for 251,736 shares of Series B preferred stock which converted to 503,472 shares of
common stock. The shares of Series
B preferred stock issued in the Series B offering were sold pursuant to the Company’s registration statement, which was declared
effective on February 13, 2018. Upon the receipt of the proceeds of the Series B offering, the 2017 PIPE Notes in the principal amount
of approximately $7,254,000 automatically converted into 1,577,033 shares of common stock. Upon liquidation, dissolution
or winding up of the Company, each holder of Series B preferred stock shall be entitled to receive a distribution, to be paid in an amount
equal to $9.50 for each and every share of Series B preferred stock held by the holders of Series B preferred stock, plus all accrued
and unpaid dividends in preference to any distribution or payments made or any asset distributed to the holders of common stock, the
Series A preferred stock, or any other class or series of stock ranking junior to the Series B preferred stock. Pursuant to the certificate
of designation, the Company has agreed to pay cumulative dividends on the Series B preferred stock from the date of original issue at
a rate of 5.0% per annum payable quarterly in arrears on or about the last day of March, June, September and December of each year,
beginning June 30, 2018. At December 31, 2019
and 2018, accrued dividends were approximately $15,000 and $11,000, respectively. During the years ended December 31, 2019 and 2018,
a total of approximately $51,000 and $77,000, respectively, of dividends was paid to the holders of the Series B preferred stock. The
Series B preferred stock ranks senior to the Company’s outstanding Series A preferred stock and the common stock with respect to
dividend rights and rights upon liquidation, dissolution or winding up. Holders of the Series B preferred stock have no voting rights. Series C Preferred
Stock Between August and October
2018, the Company closed three tranches of its Series C offering, pursuant to which the Company sold 697,363 shares of Series C preferred
stock at an offering price of $9.50 per share and agreed to issue two-year warrants to purchase up to 1,394,726 shares of the Company’s
common stock at an exercise price of $4.75 per share to Series C preferred holders that voluntary convert their shares of Series C preferred
stock to the Company’s common stock within two-years from the issuance date. Each share of Series C preferred stock was initially
convertible at any time, in whole or in part, at the option of the holders, at an initial conversion price of $4.75 per share, into 2
shares of common stock and automatically converts into 2 shares of common stock on its two-year anniversary of issuance. The Series C preferred
stock was automatically redeemable at a price equal to its original purchase price plus all accrued but unpaid dividends in the event
the average of the daily volume weighted average price of the Company’s common stock for the 30 days preceding the two-year anniversary
date of issuance is less than $6.00 per share. As redemption was outside of the Company’s control, the Series C preferred
stock was classified in temporary equity at issuance. At December 31, 2018, all of the shares of Series C preferred stock were converted
to common stock and the Company issued 1,394,726 warrants. At December 31, 2018, no shares of Series C preferred stock remained outstanding. In connection with the
Series C offering, the Company issued the placement agent 116,867 warrants as compensation, exercisable at $4.75 per share and expire
in December 2020. The Company determined that the warrants should be classified as equity instruments and used Black-Scholes to estimate
the fair value of the warrants issued to the placement agent of $458,000 at the issuance date in December 2018. At December 31, 2019
and 2018, 17,724 and 116,867, respectively, of warrants issued to the placement agent remained outstanding. The Company received
aggregate gross proceeds totaling approximately $6,625,000. The net proceeds to the Company from the Series C offering were approximately
$6,236,000 after deducting commissions, closing and issuance costs. The Company paid cumulative
dividends on the Series C preferred stock from the date of original issue at a rate of 6.00% per annum payable quarterly in arrears
on or about the last day of March, June, September and December of each year, beginning September 30, 2018. During the year ended December
31, 2018, approximately $51,000 of dividends was paid to the holders of the Series C preferred stock. The contingent obligation
to issue warrants was considered an outstanding equity-linked financial instrument and therefore was recognized as equity-classified
warrants, initially measured at relative fair value of approximately $3,727,000, resulting in an initial discount to the carrying value
of the Series C preferred stock. Due to the reduction
of allocated proceeds to the contingently issuable common stock warrants and Series C preferred stock, the effective conversion price
of the Series C preferred stock was less than the Company’s common stock price on each commitment date, resulting in an aggregate
beneficial conversion feature of approximately $3,276,000, which reduced the carrying value of the Series C preferred stock. Since the
conversion option of the Series C preferred stock was immediately exercisable, the beneficial conversion feature was immediately accreted
as a deemed dividend, resulting in an increase in the carrying value of the Series C preferred stock of approximately $3,276,000. Series D Preferred
Stock In September and
December 2019, the Company closed two tranches of its Series D offering (the “Series D Offering”), pursuant to which the
Company issued and sold a total of 578,898 shares of its 9.75% Series D cumulative preferred stock at a weighted average price to
the public of $24.05 per share, less underwriting discounts and commissions, pursuant to the terms of the underwriting agreements
that the Company entered into with Benchmark, as representative of the several underwriters. The 578,898 shares of Series D
preferred stock that were sold included 43,500 shares sold pursuant to the overallotment option that the Company granted to the
underwriters. At December 31, 2019, 36,809 overallotment shares were unissued and available for purchase by the underwriters within
45 days from December 17, 2019. In January 2020 the Company issued an additional 11,375 shares of Series D preferred stock upon the
partial exercise by the underwriters of the overallotment option granted to such underwriters. (See Note 14) The Series D preferred
stock was approved for listing on the Nasdaq Capital Market under the symbol “YGYIP,” and trading the Series D preferred
stock on Nasdaq commenced on September 20, 2019. The net proceeds to the Company from the Series D Offering were approximately
$12,269,000 after deducting underwriting discounts and commissions and expenses which were paid by the Company. At December 31, 2019,
a total of 650,000 shares of the preferred stock was designated as Series D preferred stock. At December 31, 2019, the Company has available
for issuance an additional 71,102 shares of Series D preferred stock. The Series D preferred stock does not have a stated maturity date
and is not subject to any sinking fund or mandatory redemption provisions. The holders of the Series D preferred stock are entitled to
cumulative dividends from the first day of the calendar month in which the Series D preferred stock is issued and payable on the fifteenth
day of each calendar month, when, as and if declared by the Company's board of directors. The Company’s board of directors has
declared an annual cash dividend of $2.4375 per share, or a monthly dividend of $0.203125 per share, on the Series D preferred stock.
During the year ended December 31, 2019, the Company paid $203,000 in cash dividends to holders
of Series D preferred stock. Upon liquidation, dissolution
or winding up of the Company, each holder of Series D preferred stock would be entitled to receive a distribution, to be paid in an amount
equal to $25.00 per share held by the holders of Series D preferred stock, plus all accrued and unpaid dividends in preference to any
distribution or payments made or any asset distributed to the holders of common stock, the Series A preferred stock, the Series B preferred
stock, the Series C preferred stock or any other class or series of stock ranking junior to the Series D preferred stock. The Series D preferred
stock is not redeemable by the Company prior to September 23, 2022, except upon a change of control (as defined in the certificate of
designations). On and after such date, the Company may, at its option, redeem the Series D preferred stock, in whole or in part, at any
time or from time to time, for cash at a redemption price equal to $25.00 per share, plus any accumulated and unpaid dividends to, but
not including, the redemption date. Upon the occurrence of a change of control, the Company may, at its option, redeem the Series D preferred
stock, in whole or in part, within 120 days after the first date on which such change of control occurred, for cash at a redemption price
of $25.00 per share, plus any accumulated and unpaid dividends to, but not including, the redemption date. Holders of the Series
D preferred stock generally have no voting rights. The Company has 578,898 shares of Series D preferred stock outstanding at December
31, 2019. Advisory Agreements The Company records the
fair value of common stock issued in conjunction with advisory service agreements based on the closing stock price of the Company’s
common stock on the measurement date. The fair value of the stock issued was recorded through equity and prepaid advisory fees included
in prepaid expenses and other current assets on the Company’s consolidated balance sheets and amortized over the life of the service
agreement. The stock issuance expense associated with the amortization of advisory fees was recorded as stock issuance expense and was
included in general and administrative expense on the Company’s consolidated statements of operations for the years ended December
31, 2019 and 2018. Capital Market Solutions,
LLC In July 2018, the Company
entered into an agreement with Capital Market Solutions, LLC (“Capital Market”), pursuant to which Capital Market agreed
to provide investor relations services for a period of 18 months in exchange for 100,000 shares of restricted common stock which were
issued in advance of the service period. In addition, the Company agreed to pay a cash base fee of $300,000 of which $50,000 was
paid in August 2018 and the remaining balance was to be paid monthly in the amount of $25,000. The Company subsequently extended the
term of the Capital Market agreement for an additional 24 months through December 31, 2021. The Company also issued an additional 100,000
shares of restricted common stock to Capital Market in advance of the service period and paid $125,000 for additional fees. The fair
value of the shares issued was approximately $1,226,000. In January 2019,
the Capital Market agreement was amended pursuant to which the aggregate base fee increased to $525,000 and the Company issued an additional
75,000 of restricted common stock, with a fair value of $417,000. In addition, the Company issued to Capital Market a four-year warrant
to purchase 925,000 shares of the Company’s common stock at $6.00 per share, vesting 50% at issuance, 25% vesting in January 2020
and 25% vesting in January 2021. During the years ended
December 31, 2019 and 2018, the Company recorded expense of $100,000 and $425,000, respectively, in connection with the base
fee. During the years ended December 31, 2019 and 2018, the Company recorded expense of approximately $514,000 and $102,000,
respectively, in connection with amortization of the stock issuance expense. During the year ended December 31, 2019, the Company recorded
expense of approximately $2, 466 ,000 in connection with amortization of equity issuance expense related to fair value of the vested portion of
the warrant. Corinthian Partners,
LLC In August 2019, the Company
issued 600 shares of restricted common stock to Corinthian Partners, LLC, the initial placement agent for the issuance of the 2018 warrants
which represented 10% of the shares issued to certain investors. The fair value of the shares issued of approximately $3,000 was fully
expensed in 2019. Greentree Financial
Group, Inc. In March 2018, the Company
entered into an agreement with Greentree Financial Group, Inc. (“Greentree”), pursuant to which Greentree agreed
to provide investor relations services for a period of 21 months in exchange for 75,000 shares of restricted common stock which were
issued in advance of the service period. The fair value of the shares issued was approximately $311,000. During the years ended
December 31, 2019 and 2018, the Company recorded expense of approximately $178,000 and $133,000, respectively, in connection
with amortization of the stock issuance. I-Bankers Securities
Incorporated In April 2019, the Company
entered into an agreement with I-Bankers Securities Incorporated (“I-Bankers”), pursuant to which I-Bankers agreed to
provide financial advisory services for a period of twelve months in exchange for 100,000 shares of restricted common stock which were
issued in advance of the service period. The fair value of the shares issued was approximately $571,000. During the year ended
December 31, 2019, the Company recorded expense of approximately $428,000 in connection with amortization of the stock issuance
expense. In addition, the Company agreed to pay in cash a base fee for debt arrangements and equity offerings in conjunction with any
transactions I-Bankers closes with the Company in accordance with the agreement. During the year ended December 31, 2019, the Company
did not engage in any financing activity with I-Bankers. Ignition Capital,
LLC In April 2018, the Company
entered into an agreement with Ignition Capital, LLC (“Ignition”), pursuant to which Ignition agreed to provide
investor relations services for a period of 21 months in exchange for 50,000 shares of restricted common stock which were issued in advance
of the service period. The fair value of the shares issued was approximately $208,000. During the years ended December 31,
2019 and 2018, the Company recorded expense of approximately $119,000 and $89,000, respectively, in connection with amortization
of the stock issuance. In March 2019, the Ignition agreement was amended to
provide additional compensation of 55,000 shares of the Company’s common stock for advisory fees and additionally 5,000 shares of
the Company’s common stock were issued in conjunction with one of the Company’s equity transactions. Under the amended Ignition
agreement, the Company also issued a warrant convertible upon exercise of 100,000 shares of the Company’s common stock exercisable
at $10.00 per share for a period of three years for services provided by Ignition at the amendment date. The fair value of the shares
issued was approximately $384,000 and the fair value of the warrant issued was approximately $414,000 and was fully expensed as equity
issuance cost and recorded as equity in 2019. ProActive Capital Resources Group, LLC The Company entered into an agreement with ProActive
Capital During the year ended December 31, 2018, the Company issued
15,000 shares of restricted common stock under this agreement and recorded equity issuance expense in general and administrative expenses
in the Company’s consolidated statement of operations of approximately $31,000 in connection with amortization of the stock issuance. The Benchmark Company,
LLC In August 2019, the board
of directors approved the issuance of 20,000 shares of restricted common stock to Benchmark for investment banking services provided
to the Company. The fair value of shares issued was approximately $91,000 and was fully expensed in 2019. Warrants At December 31, 2019 and 2018, warrants to purchase
6,238,182 and 5,876,980 shares, respectively, of the Company's common stock at prices ranging from $2.00 to $10.00 were outstanding.
At December 31, 2019, 6,006,932 warrants are exercisable and expire at various dates through March 2024 and have a weighted average remaining
term of approximately 1.8 years, a weighted average exercise price of $4.65, and are included in the table below at December 31, 2019. The Company uses a combination
of option-pricing models to estimate the fair value of the warrants including the Monte Carlo, Lattice and Black-Scholes. A summary of the warrant
activity is presented in the following table:
Balance at December 31, 2017 2,710,066
Issued 3,511,815
Expired / cancelled (120,606 )
Exercised (224,295 )
Balance at December 31, 2018 5,876,980
Issued 1,415,000
Expired / cancelled –
Exercised (1,053,798 )
Balance at December 31, 2019 6,238,182 Warrant Modification
– loss on modification of warrants In July 2019, Mr. Grover, a beneficial owner of in
excess of five percent of the Company’s outstanding common shares, acquired 600,242 shares of common stock, upon the partial exercise
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