Debt Disclosure [Text Block] | Note 4 Debt The Company has various debt arrangements with third September 30, 2019 December 31, 2018, (A) Series A and B Convertible Notes Payable, Convertible Notes Payable Related Parties and Warrants Series A and B Debt In May 2019, 10% not $6,029,275. $650,000. fifty 50% 12% In connection with the Series B round, the Company recognized gross proceeds of $3,062,427. $99,645 $2,962,782. Series A and B Warrants In connection with the Series A and B rounds, debt holders also received fully vested, non-forfeitable warrants. The Company issued a total of 9,499,600 6 3,045,600 6,454,000 2,548,200 5,421,400 Under Series A and B, the warrants are exercisable for three 3 $1/share April 1, 2020, $0.50 April 1, 2020. No April 1, 2020, All relative fair values for warrants issued in connection with Series A and B are treated as a debt discount, computed based on a Black-Scholes option pricing model. The inputs used to compute the fair value of the warrants of which the relative fair values are based were as follows: Exercise price $0.50 - $1 Expected term (in years) 3 Expected volatility 103 % Expected dividends 0 % Risk free interest rate 2.30 % Series A Debt Summary: Series A, 10% Series A, 10% Convertible Notes Convertible Notes Terms Related Parties Third Parties Issuance dates of notes May 2019 May 2019 Term (in years) 3 3 Maturity dates May 2022 May 2022 Interest rate 10% 10% Collateral (Series A is subordinated to Series B) All assets All assets Conversion price $2 $2 Prepayment penalty (P&I) None None Note Date May 2019 May 2019 Total Principal $ 2,548,200 $ 621,300 $ 3,169,500 Quantity of warrants 2,548,200 497,400 3,045,600 Warrants/Fees - debt discount (Black-Scholes) $ 1,510,487 $ 298,561 $ 1,809,048 Balance - December 31, 2018 $ - $ - $ - Conversion from prior debt into Series A 4,889,001 850,000 5,739,001 Conversion of accrued interest into Series A 127,480 162,794 290,274 Conversion of deferred revenue into Series A 206,800 - 206,800 Conversion from Series A into Series B (2,675,079 ) (391,494 ) (3,066,573 ) Warrant debt discount recorded for new notes (1,510,487 ) (298,561 ) (1,809,048 ) Amortization of debt discount 205,777 41,457 247,234 Balance - September 30, 2019 $ 1,243,492 $ 364,196 $ 1,607,688 Series B Debt Summary: Series B, 12% Series B, 12% Convertible Notes Convertible Notes Terms Related Parties Third Parties Issuance dates of notes May 2019 May 2019 Term (in years) 3 3 Maturity dates May 2022 May 2022 Interest rate 12% 12% Collateral (Series A is subordinated to Series B) All assets All assets Conversion price $1 $1 Prepayment penalty (P&I) None None Note Date May 2019 May 2019 Total Principal $ 5,096,400 $ 1,032,600 $ 6,129,000 Quantity of warrants 5,421,400 1,032,600 6,454,000 Warrants/Fees - debt discount (Black-Scholes) $ 3,184,793 $ 645,289 $ 3,830,082 Balance - December 31, 2018 $ - $ - $ - Proceeds 2,299,927 762,500 3,062,427 Conversion from Series A into Series B 2,675,079 391,494 3,066,573 Warrant and BCF debt discount recorded for new notes (5,096,400 ) (1,032,600 ) (6,129,000 ) Amortization of debt discount 815,689 21,376 837,065 Balance - September 30, 2019 $ 694,295 $ 142,770 $ 837,065 (B) Notes Payable Terms Note Payable Note Payable Note Payable Issuance dates of notes December 2017 January 2018 March 2019 Term (in years) 2 2 None Maturity dates December 2019 January 2020 Due on Demand Interest rate 10% 10% None Collateral Unsecured Unsecured Unsecured Note Date December 2017 January 2018 March 2019 Total Principal $ 200,000 $ 100,000 $ 100,000 $ 400,000 Quantity of warrants 50,000 10,000 - 60,000 Warrants/Fees - debt discount (Black-Scholes) $ 18,652 $ 7,124 $ - $ 25,776 Balance - December 31, 2017 $ 181,348 $ - $ - $ 181,348 Proceeds - 100,000 - 100,000 Debt discount recorded for new notes - (7,124 ) - (7,124 ) Amortization of debt discount 9,760 3,387 - 13,147 Balance - December 31, 2018 191,108 96,263 - 287,371 Proceeds - - 50,000 50,000 Repayments - - (50,000 ) (50,000 ) Amortization of debt discount 8,892 3,737 - 12,629 Conversion to Series A, 10%, convertible notes payable (200,000 ) (100,000 ) - (300,000 ) Balance - September 30, 2019 $ - $ - $ - $ - (C) Notes Payable Related Parties Notes Payable Notes Payable Notes Payable Terms Related Parties Related Parties Related Parties Issuance dates notes August 2017 - October 2017 January 2018 - May 2018 April 2019 Term (in years) 2 2 None Maturity dates July 2020 March 2018 - May 2020 Due on Demand Interest rate 10% 10% None Collateral Unsecured Unsecured Unsecured Note Date August 2017 - October 2017 January 2018 - May 2018 April 2019 Total Principal $ 1,100,000 $ 1,300,001 $ 789,000 $ 3,189,001 Quantity of warrants 110,000 75,000 325,000 510,000 Warrants/Fees - debt discount (Black-Scholes) $ 112,830 $ 125,433 $ 185,629 $ 423,892 Balance - December 31, 2017 $ 1,002,204 $ - $ - $ 1,002,204 Proceeds - 1,300,001 - 1,300,001 Debt discount recorded for new notes - (125,433 ) - (125,433 ) Amortization of debt discount 56,417 69,053 - 125,470 Repayments (300,000 ) - (300,000 ) Balance - December 31, 2018 1,058,621 943,621 - 2,002,242 Proceeds - - 789,000 789,000 Warrant debt discount recorded for new notes - - (185,629 ) (185,629 ) Amortization of debt discount 41,379 56,380 185,629 283,388 Conversion to Series A, 10%, convertible notes payable (1,000,000 ) (1,000,001 ) (789,000 ) (2,789,001 ) Repayments (100,000 )* - - (100,000 ) Balance - September 30, 2019 $ - $ - $ - $ - * Amount was repaid in August 2019. (D) Convertible Notes Payable and Derivative Liability Convertible Convertible Note Convertible Note Terms Notes (Derivative Liability) (Derivative Liability) Issuance dates of notes July 2018 December 2018 January 2019 Term 2 years 9 months 8 months Maturity dates July 2020 September 2019 September 2019 Interest rate 10% 8% 8% Collateral Unsecured Unsecured Unsecured Conversion price $3 Lower of $3 or Lower of $3 or 65% of market price 65% of market price Note Date July 2018 December 2018 January 2019 Total Principal $ 550,000 $ 136,000 $ 104,500 $ 790,500 Quantity of warrants 550,000 100,000 100,000 750,000 Warrants/Fees - debt discount (Black-Scholes) $ 244,549 $ 136,000 $ 94,500 $ 475,049 Balance - December 31, 2017 $ - $ - $ - $ - Proceeds 550,000 136,000 - 686,000 Debt discount recorded for new notes (244,549 ) (136,000 ) - (380,549 ) Amortization of debt discount 51,343 8,947 - 60,290 Balance - December 31, 2018 356,794 8,947 - 365,741 Proceeds - - 94,500 94,500 Debt discount recorded for new notes - - (94,500 ) (94,500 ) Amortization of debt discount 193,206 127,053 94,500 414,759 Conversion to Series A, 10%, convertible notes payable (550,000 ) - - (550,000 ) Repayments - (136,000 )* - (136,000 ) Balance - September 30, 2019 $ - $ - $ 94,500 ** $ 94,500 Penalty classified as additional interest expense $ - $ - $ 10,000 $ 10,000 Total $ - $ - $ 104,500 $ 104,500 * Amount was repaid in September 2019. ** Amount was repaid in October 2019. Derivative Liability The above convertible notes for December 2018 January 2019 The Company used the Monte Carlo simulation to estimate the fair value of its embedded conversion option liabilities with the following inputs: Commitment Date Remeasurement Date Remeasurement Date Convertible Note Date December 11, 2018 December 31, 2018 September 10, 2019 Maturity date August 11, 2019 August 11, 2019 In-default Expected term (years) 0.67 0.61 0.25 Expected volatility 117 % 149 % 196 % Expected dividends 0 % 0 % 0 % Risk free interest rate 2.56 % 2.63 % 1.95 % Fair value $ 125,000 $ 114,000 $ 156,000 Commitment Date Remeasurement Date Convertible Note Date January 14, 2019 September 30, 2019 Maturity date October 14, 2019 October 14, 2019 Expected term (years) 0.75 0.25 Expected volatility 130 % 195 % Expected dividends 0 % 0 % Risk free interest rate 2.55 % 1.88 % Fair value $ 89,000 $ 111,000 The following is a summary of the Company's derivative liabilities for the nine September 30, 2019 December 31, 2018: Convertible Note Date December 11, 2018 January 14, 2019 Total Derivative liability - December 31, 2017 $ - $ - $ - Fair value at commitment date 125,000 - 125,000 Fair value mark to market adjustment (11,000 ) - (11,000 ) Derivative liability - December 31, 2018 114,000 - 114,000 Fair value at commitment date - 89,000 89,000 Fair value mark to market adjustment 42,000 22,000 64,000 Reclassification to gain on debt extinguishment (156,000 )* - (156,000 ) Balance - September 30, 2019 $ - $ 111,000 $ 111,000 * The note expired on August 11, 2019 ( September 10, 2019. The Company evaluates its financial assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level in which to classify them for each reporting period. This determination requires significant judgments to be made. Liabilities measured at fair value on a recurring basis consisted of the following at September 30, 2019 December 31, 2018: Quoted Prices in Significant Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs September 30, 2019 (Level 1) (Level 2) (Level 3) Derivative liabilities $ 111,000 $ - $ - $ 111,000 Quoted Prices in Significant Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs December 31, 2018 (Level 1) (Level 2) (Level 3) Derivative liabilities $ 114,000 $ - $ - $ 114,000 A reconciliation of the beginning and ending balances for the derivative liability measured at fair value on a recurring basis using significant unobservable inputs (Level 3 nine September 30, 2019 December 31, 2018. Changes in fair value of derivative liabilities are included in other income (expense) in the accompanying Consolidated Statements of Operations. (E) Convertible Notes Payable Related Parties Convertible Convertible Note Payable Notes Payable Terms Related Party Related Parties Issuance dates of notes July 2015 June 2018 - December 2018 Term (in years) 2 2 Maturity dates July 2019 June 2020 - December 2020 Interest rate 8.5% 10% - 12% Collateral Unsecured Unsecured Conversion price $1.25 $3 Note Date July 2015 June 2018 - December 2018 Total Principal $ 500,000 $ 1,600,000 $ 2,100,000 Quantity of warrants 350,000 1,500,000 1,850,000 Warrants/Fees - debt discount (Black-Scholes) $ 227,258 $ 666,638 $ 893,896 Balance - December 31, 2017 $ 500,000 $ - $ 500,000 Proceeds - 1,600,000 1,600,000 Debt discount recorded for new notes - (666,638 ) (666,638 ) Amortization of debt discount - 165,287 165,287 Balance - December 31, 2018 500,000 1,098,649 1,598,649 Amortization of debt discount - 501,351 501,351 Conversion to Series A, 10%, convertible notes payable (500,000 ) (1,600,000 ) (2,100,000 ) Balance - September 30, 2019 $ - $ - $ - (F) Insurance Financing Liability The Company has an outstanding note payable for financing corporate insurance premiums. The note carries a rate of interest of 8.75% November 2019. eleven $21,254. September 30, 2019 December 31, 2018 $41,178 $223,482, |