| STOCKHOLDERS' EQUITY | 24.
STOCKHOLDERS’ EQUITY Preferred
Stock The
Company is authorized to issue 25,000,000 shares of Preferred Stock $0.001 par value. The Board of Directors has designated 1,000,000
shares as Series A Convertible Preferred Stock (the “Series A Preferred Stock”), 500,000 shares as Series B Convertible
Preferred Stock (the “Series B Preferred Stock”). On February 27, 2019, subsequent to December 31, 2018, the Board
of Directors designated 2,500 shares as Series C Convertible Redeemable Preferred Stock and the Company filed a Certificate of
Designations of Rights and Preferences of Series C Convertible Redeemable Preferred Stock with the Secretary of State of the State
of Delaware. On
December 21, 2018, the Company filed with the Delaware Secretary of State a Certificate of Elimination eliminating its previous
Series C Preferred Stock, Series D Preferred Stock and Series E Preferred Stock (collectively, the “Preferred Shares”)
and returning them to authorized but undesignated shares of the Company’s preferred stock. None of the Preferred Shares
was outstanding. The rights, preferences, privileges and restrictions on the remaining authorized 23,497,500 shares of Preferred
Stock have not been determined. The Company’s Board of Directors is authorized to create a new series of preferred shares
and determine the number of shares, as well as the rights, preferences, privileges and restrictions granted to or imposed upon
any series of preferred shares. As of December 31, 2018, there were 125,000 shares of Series
B Preferred Stock and no other shares of Preferred Stock issued or outstanding. Series
A Preferred Stock On
September 13, 2018, the Company filed a Certificate of Designations of Rights and Preferences (the “Certificate of Designations”)
to its Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to establish the
preferences, limitations and relative rights of the 10% Series A Cumulative Redeemable Perpetual Preferred Stock (the “Series
A Preferred Stock”). Dividends
on the Series A Preferred Stock shall accrue daily and be cumulative from, and including, the date of original issue and shall
be payable monthly on the last day of each calendar month, subject to the terms and conditions set forth in the Certificate of
Designations. Dividends accrue at the annual rate of 10%, which is equivalent to $2.50 per annum per share, based on the $25.00
liquidation preference from, and including, the date of original issuance to, but not including, September 30, 2023, or such other
date fixed for redemption. On
and after September 30, 2023, the Company may, at its option, upon not less than thirty (30) days nor more than sixty (60) days’
written notice, redeem the Series A Preferred Stock, in whole or in part, at any time or from time to time, for cash at a redemption
price of $25.00 per share of Series A Preferred Stock, plus any accumulated and unpaid dividends thereon to, but not including,
the date fixed for redemption. In addition, upon the occurrence of a change of control, subject to certain restrictions, the Company
may, at its option, upon not less than thirty (30) days’ nor more than sixty (60) days’ written notice,
redeem the Series A Preferred Stock, in whole or in part, within one hundred twenty (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 thereon
to, but not including, the date fixed for redemption. There is no mandatory redemption of the Series A Preferred Stock. Holders
of the Series A Preferred Stock generally have no voting rights except as set forth in the Certificate of Designations or as otherwise
required by law. The holders of Series A Preferred Stock, together with the holders of shares of every other series of Parity
Stock upon which like voting rights have been conferred and are exercisable, voting together as a single class regardless of series,
shall be entitled to elect two directors to the Company’s board of directors at any annual meeting of stockholders or special
meeting held in place thereof. When the Series A Preferred Stock is entitled to vote, such shares are entitled to one vote per
share. In any matter in which the Series A Preferred Stock may vote as a single class with any other series of Preferred Stock
(as may be required by law), each share of Series A Preferred Stock shall be entitled to one vote per $25.00 of stated liquidation
preference. Series
B Preferred Stock On
March 9, 2017, the Company entered into a Preferred Stock Purchase Agreement with Philou, a related party. Pursuant to the terms
of the Preferred Stock Purchase Agreement, Philou may invest up to $5,000,000 in the Company through the purchase of Series B
Preferred Stock over the term of 36 months. Each
share of Series B Preferred Stock has a stated value of $10.00 per share. Each share of Series B Preferred Stock may be convertible
at the holder’s option into shares of common stock of the Company at a conversion rate of $14.00 per share, upon the earlier
to occur of: (i) 60 months from the closing date, or (ii) upon the filing by the Company of one or more periodic reports that,
singly or collectively, evidence that the Company’s gross revenues have reached no less than $10 million in the aggregate,
on a consolidated reporting basis, over four consecutive quarters in accordance with U.S. GAAP. The conversion price will be subject
to standard anti-dilution provisions in connection with any stock split, stock dividend, subdivision or similar reclassification
of the common stock. Each
share of Series B Preferred Stock shall have the right to receive dividends equal to one ten millionth (0.0000001) of earnings
before interest, taxes, depreciation, amortization and stock-based compensation (“EBITDAS”) calculated for a particular
calendar year. Assuming the purchase of the entire $5,000,000 of shares of Preferred Stock, the holders thereof will be entitled
to receive dividends equal to five percent (5%) in the aggregate of EBITDAS. Payment of dividends shall be calculated for a calendar
year, payable on a quarterly basis, with payments to occur no later than 90 days in arrears from each reporting period subject
to a year-end reconciliation. EBITDAS shall mean earnings before interest, taxes, depreciation, amortization, and stock-based
compensation. At
such time as (i) all shares of common stock issuable upon conversion of all outstanding shares of Series B Preferred Stock (the
“Conversion Shares”) shall have been registered for resale pursuant to an effective Registration Statement covering
such Conversion Shares, (ii) but no earlier than the twenty-fifth (25th) anniversary of the effective date, the shares of Series
B Preferred Stock shall be subject to redemption in cash at the option of the Company in an amount per share equal to 120% of
the greater of (a) the stated value plus all accrued and unpaid dividends, if any and (b) the fair market value of such shares
of Series B Preferred Stock. In
addition, for each share of Series B Preferred Stock purchased, Philou will receive warrants to purchase shares of common stock
in a number equal to the stated value of each share of Series B Preferred Stock purchased divided by $0.70, at an exercise price
equal to $14.00 per share of common stock. The warrants do not require a net cash-settlement or provide the holder with a choice
of net-cash settlement. The warrants also do not contain a variable settlement provision. Accordingly, any warrants issued to
Philou pursuant to the terms of the Preferred Stock Purchase Agreement shall be classified as equity instruments. Further,
Philou shall have the right to participate in the Company’s future financings under substantially the same terms and conditions
as other investors in those respective financings in order to maintain its then percentage ownership interest in the Company.
Philou’s right to participate in such financings shall accrue and accumulate provided that it still owns at least 100,000
shares of Series B Preferred Stock. Between
March 24, 2017 and June 2, 2017, Philou purchased 100,000 shares of Series B Preferred Stock pursuant to the Preferred Stock Purchase
Agreement in consideration of the cancellation of the Company debt due to Philou in the aggregate amount of $500,000 and cash
of $500,000. In addition, Philou received warrants to purchase 102,041 shares of common stock at an exercise price of $14.00 per
share of common stock, which have been classified as equity instruments. The Company determined that the estimated relative fair
value of these warrants, which are classified as equity, was $401,399 using the Black-Scholes option pricing model. Since the
warrants were classified as equity securities, the Company allocated the $1,000,000 purchase price based on the relative fair
values of the Series B Preferred Stock and the warrants following the guidance in ASC No. 470, Debt On
April 24, 2018, pursuant to the terms of the Preferred Stock Purchase Agreement, Philou purchased an additional 25,000 shares
of Series B Preferred Stock in consideration of the cancellation of short-term advances due to Philou in the aggregate amount
of $250,000. In addition, Philou received warrants to purchase 25,510 shares of common stock at an exercise price of $14.00 per
share of common stock. The Company determined that the estimated relative fair value of these warrants, which are classified as
equity, was $141,951 using the Black-Scholes option pricing model. Since the warrants were classified as equity securities, the
Company allocated the $250,000 purchase price based on the relative fair values of the Series B Preferred Stock and the warrants. The
Series B Convertible Preferred Stock is convertible at any time, in whole or in part, at the option of Philou, into shares of
common stock at a fixed conversion price, which is subject to adjustment for stock splits, stock dividends, combinations or similar
events, of $14.00 per share. As the effective conversion price of the Series B Convertible Preferred Stock on a converted basis
was below the market price of the Company’s common stock on the date of issuance, it was determined that these discounts
represent beneficial conversion features. During the years ended December 31, 2018 and 2017, the Company valued the BCF at $108,049
and 265,054, respectively, based on the difference between the effective conversion price and the market price of the Company’s
common stock on the date of issuance. These features are analogous to preference dividends and are recorded as a non-cash return
to preferred stockholders through accumulated deficit. Series
C Preferred Stock Between
May 24, 2017 and June 19, 2017, the Company entered into subscription agreements (the “Series C Subscription Agreement”)
with approximately twenty accredited investors (the “Series C Investors”) in connection with the sale of twenty-one
Units at a purchase price of $52,000 per Unit raising in the aggregate $1,092,000 with each Unit consisting of 21,667 shares of
Series C Preferred Stock and Warrants to purchase 4,333 shares of common stock. Divine acted as the Company’s placement
agent. Each
share of Series C Preferred Stock had a stated value of $2.40 per share. Five shares of Series C Preferred Stock were convertible
at the holder’s option into one share of Common Stock of the Company. As the effective conversion price of the Series C
Convertible Preferred Stock on a converted basis was below the market price of the Company’s common stock on the date of
issuance, it was determined that these discounts represent beneficial conversion features, which were valued at $319,128 and recognized
as a deemed dividend, based on the difference between the effective conversion price and the market price of the Company’s
common stock on the date of issuance. Each
share of Series C Preferred Stock had the right to receive dividends equal $0.24 per share per annum as declared by the Company’s
Board of Directors. The dividends were payable on a quarterly basis on the 20th day following each calendar quarter. During
December 2017, pursuant to the conversion terms of the Series C Preferred Stock, all of the Series C Investors elected to convert
their 455,002 shares of Series C Preferred Stock into 91,000 shares of the Company’s common stock. Additionally, of the
91,000 warrants that were issued in conjunction with the Series C Subscription Agreements, the Company issued 80,167 shares of
its common stock upon cash-based exercises that resulted in gross proceeds to the Company of $1,603,000 and issued 3,545 shares
of its common stock upon the cashless exercise of a warrant to purchase 4,333 shares of common stock. Series
D Preferred Stock On
June 2, 2017, pursuant to the terms of the Share Exchange Agreement, the Company acquired 1,603,434 shares of the issued and outstanding
common stock of Microphase Common Stock in exchange for the issuance by the Company of 92,122 shares of the Company’s Common
Stock, 378,776 shares of the Company’s Series D Preferred Stock and warrants to purchase an aggregate of 50,000 shares of
the Company’s Common Stock. In
the event the Company shall liquidate, dissolve or wind up, the holders of Series D Preferred Stock shall be entitled to receive,
prior and in preference to any distribution of any of the assets of the Company to the holders of the Common Stock, the Company’s
Series A Preferred Stock, or to the holders of any other junior series of preferred stock, by reason of their ownership thereof
and subject to the rights of the Company’s Series B Preferred Stock, Series C Preferred Stock and any other class or series
of Company stock subsequently issued that ranks senior to the Series D Preferred Stock, an amount per share in cash or equivalent
value in securities or other consideration equal to its Stated Value of $0.01 per share. The
holders of Series D Preferred Stock shall not be entitled to receive dividends and shall have no voting rights except as otherwise
required by law. Upon the stockholders of DPW Common Stock approving the conversion of the Series D Preferred Stock into shares
of DPW Common Stock in connection with the acquisition of MPC Common Stock and for purposes of compliance with Rule 713 of the
NYSE American, then each share of Series D Preferred Stock shall automatically be converted into 37,878 shares of DPW Common Stock. Series
E Preferred Stock On
June 2, 2017, pursuant to the terms of the Share Exchange Agreement and in consideration of legal services, Microphase issued
a $450,000 8% promissory note with a maturity date of November 25, 2017 to an unsecured creditor, Lucosky Brookman, LLP (the “Lucosky
Note”). In conjunction with the issuance of the Lucosky Note, the Company issued Lucosky Brookman 10,000 shares of Series
E Preferred Stock with a stated value equal to forty-five dollars ($45.00) per share. The Company, at its option, may redeem for
cash, in whole or in part, at any time and from time to time, the shares of Series E Preferred Stock at the time outstanding,
upon written notice to the holder of the shares, at a cash redemption price equal to $45 multiplied by the number of shares being
redeemed. Any such optional redemption by the Company shall be credited against the Lucosky Note. In
the event the Company shall liquidate, dissolve or wind up, the holders of Series E Preferred Stock shall be entitled to receive,
prior and in preference to any distribution of any of the assets of the Company to the holders of the DPW Common Stock, the Company’s
Series A Preferred Stock, or to the holders of any other junior series of preferred stock, by reason of their ownership thereof
and subject to the rights of the Company’s Series B Preferred Stock, Series C Preferred Stock and any other class or series
of Company stock subsequently issued that ranks senior to the Series E Preferred Stock an amount per share in cash or equivalent
value in securities or other consideration equal to $0.01 per share. The holders of Series E Preferred Stock shall not be entitled
to receive dividends and shall have no voting rights except as otherwise required by law. Subject to the stockholders of DPW Common
Stock of the Company approving the conversion of the Series E Preferred Stock into shares of Common Stock in connection with the
acquisition of MPC Common Stock and for purposes of compliance with Rule 713 of the NYSE American, then each share of Series E
Preferred Stock may be converted into sixty (60) shares of DPW Common Stock, for an aggregate of 30,000 shares of DPW Common Stock.
On December 29, 2017, the Lucosky Note was satisfied through the conversion of the 10,000 shares of Series E Preferred Stock into
30,000 shares of the Company’s common stock. Common
Stock Common
stock confers upon the holders the rights to receive notice to participate and vote in the general meeting of stockholders of
the Company, to receive dividends, if and when declared, and to participate in a distribution of surplus of assets upon liquidation
of the Company. The Class B common stock carries the voting power of 10 shares of Class A common stock. 2018
Issuances Issuance
of Common Stock pursuant to the At the Market Offering On
February 27, 2018, the Company entered into a sales agreement with H.C. Wainwright & Co., LLC (“HCW”) to sell
shares of the Company’s common stock, having an aggregate offering price of up to $50 million from time to time, through
an “at the market offering” program (the “HCW ATM Offering”) under which HCW acts as sales agent. Between
February 27, 2018 and December 31, 2018, the Company had received gross proceeds of $19,022,416 through the sale of 1,062,096
shares of the Company’s common stock through the HCW ATM Offering. The offer and sale of the shares through the HCW ATM
Offering were made pursuant to the Company’s effective “shelf” registration statement on Form S-3 and an
accompanying base prospectus contained therein (Registration Statement No. 333-222132) filed with the SEC on December 18,
2017, amended on January 8, 2018, and declared effective by the SEC on January 11, 2018, and a prospectus supplement related to
the HCW ATM Offering, dated February 27, 2018. The HCW ATM Offering was terminated effective September 23, 2018. In
connection with the termination of the HCW ATM Offering, HCW released DPW from the right of first refusal provisions set forth
in the sales agreement. In consideration for the release, the Company issued HCW 25,000 shares of its common stock, which have
been recorded in additional paid in capital, and to pay HCW a fee until February 28, 2020 of three percent fee of aggregate gross
proceeds received on future financings by the Company and a one percent fee of aggregate gross proceeds received on future financings
by the Company’s subsidiaries. On
October 10, 2018, the Company entered into an At-The-Market Issuance Sales Agreement (the “Sales Agreement”) with
Wilson-Davis & Co., Inc., as sales agent (the “Agent”) to sell shares of its Common Stock, having an aggregate
offering price of up to $25,000,000 (the “Shares”) from time to time, through an “at the market offering”
program (the “WDCO ATM Offering”). Through December 31, 2018, we had received gross proceeds of $1,637,054 through
the sale of 372,109 shares of our common stock through the WDCO ATM Offering. The offer and sale of the shares through the WDCO
ATM Offering were made pursuant to our then effective “shelf” registration statement on Form S-3 and an accompanying
base prospectus contained therein (Registration Statement No. 333-222132) filed with the SEC on December 18, 2017, amended
on January 8, 2018, and declared effective by the SEC on January 11, 2018, and a prospectus supplement related to the WDCO ATM
Offering, dated October 15, 2018. Issuance
of Common Stock for Services During
the year ended December 31, 2018, the Company issued to its consultants a total 184,153 shares of its common stock with an aggregate
value of $3,740,888, an average of $20.31 per share for services rendered. Issuance
of common stock for conversion of debt On
January 3, 2018, accrued interest of $23,250 on the 10% Convertible Notes was satisfied through the issuance of 1,938 shares of
the Company’s common stock. On
January 10, 2018, principal and accrued interest of $202,000 and $5,723, respectively, on the 12% Convertible Note was satisfied
through the issuance of 18,884 shares of the Company’s common stock (See Note 22c). On
January 12, 2018, principal and accrued interest of $550,000 and $2,987, respectively, on the 5% Convertible Note was satisfied
through the issuance of 46,082 shares of the Company’s common stock (See Note 22b). On
February 9, 2018, principal and accrued interest of $1,250,000 and $133,884, respectively, on the January 2018 10% Convertible
Note was satisfied through the issuance of 34,597 shares of the Company’s common stock (See Note 22e). During
December 2018, principal and accrued interest of $18,865 and $259,408, respectively, on the 10% Convertible Note was satisfied
through the issuance of 109,724 shares of the Company’s common stock (See Note 22a). Issuances
of Common Stock upon Exercise of Stock Options During
January 2018, the Company issued a total of 3,000 shares of its common stock upon the cash exercise of options. These options
were issued pursuant to the Company’s Plans. The Company received cash of $97,800 as a result of these option exercises. Issuances
of Common Stock upon Exercise of Warrants During
January 2018, the Company issued a total of 93,324 shares of its common stock upon the cash and cashless exercise of warrants
to purchase an aggregate of 109,382 shares of its common stock. These warrants were issued between August 2017 and December 2017
in conjunction with various common stock and debt financings. The Company received cash of $867,166 as a result of these warrant
exercises. On
May 8, 2018, the Company issued 13,958 shares of common stock pursuant a cashless exercise of warrants issued to Divine Capital
Markets, LLC, its Placement Agent (the “Placement Agent”) for the 2017 private placement of the Series C Preferred
Stock and warrants. For its services, the Placement Agent received, a warrant to purchase 9,100 shares of the Company’s
common stock at $14.40 per share and a second warrant to purchase 9,100 shares of the Company’s common stock at $20.00 per
share. Issuances
of common stock in connection with convertible notes On
February 9, 2018, in conjunction with the securities purchase agreement to sell the January 2018 10% Convertible Note in the principal
amount of $1,250,000 the Company issued 27,174 shares of restricted common stock to the institutional investor (See Note 22b). On
April 16, 2018, in conjunction with the securities purchase agreements to sell the 12% April 2018 Convertible Note in the principal
amount of $1,722,222, the Company issued 10,046 shares of restricted common stock to the institutional investor (See Note 22d). On
May 15, 2018, in conjunction with the securities purchase agreement to sell the 10% Convertible Note in the principal amount of
$6,000,000 the Company issued 17,241 shares of restricted common stock to the institutional investor (See Note 22a). On August
10, 2018, pursuant to an amendment to the 10% Convertible Note entered into on July 2, 2018, the Company is required to issue
an additional 31,000 shares of restricted common stock to the holder of the note. On
July 2, 2018, in conjunction with the securities purchase agreement to sell the Second 10% Convertible Note in the principal amount
of $1,000,000 the Company issued 20,000 shares of restricted common stock to the institutional investor (See Note 22a). On
August 16, 2018, in conjunction with the securities purchase agreements to sell secured promissory notes in the aggregate principal
face amount of $1,272,600, the Company issued 20,000 shares of restricted common stock to the institutional investors (See Note
20h). During
September 2018, in conjunction with the securities purchase agreements to sell secured promissory notes in the aggregate principal
face amount of $789,473, the Company issued 22,500 shares of restricted common stock to the institutional investors (See Note
20i). On
October 11, 2018, in conjunction with the securities purchase agreements to secured promissory note in the aggregate principal
face amount of $565,000, the Company issued 20,000 shares of restricted common stock to the institutional investor (See Note 20j). Issuances
of Common Stock upon Conversion of Series D Preferred Stock During
the year ended December 31, 2018, pursuant to the conversion terms of the Series D Preferred Stock, 378,776 shares of the Series
D Preferred Stock were converted into 37,878 shares of the Company’s common stock. Issuances
of Common Stock for cash and cancellation of short-term advances On
October 5, 2017, Ault & Company purchased 3,750 shares of the Company’s common stock at $12.00 per share and a warrant
to purchase up to 3,750 shares of the Company’s common stock at $12.00 per share for an aggregate purchase price of $45,000.
The shares and warrants were issued by the Company on May 8, 2018. Ault & Company is controlled by Mr. Milton Ault,
the Company’s Chairman and Chief Executive Officer. On
May 15, 2018, the Company entered into securities purchase agreements with certain investors in which the Company sold an aggregate
of 384,589 shares of its common stock, 206,730 for cash and 177,858 for the cancellation of short-term advances, and five-year
warrants to purchase such number of shares of common stock equal to the shares of common stock purchased by the investors. The
Company received aggregate consideration of $5,999,584, consisting of cash and the cancellation of short-term advances of $3,225,000
and $2,774,584, respectively. These securities were issued pursuant to our registration statement filed with the Securities and
Exchange Commission (File No. 333-222132) which became effective on January 11, 2018. Treasury
Stock The
Company utilizes the cost method of accounting for treasury stock. The cost of reissued shares is determined under the last-in,
first-out method. The Company purchased 2,750 shares for $57,748 during the year ended December 31, 2018. 2017
Issuances Issuances
of Common Stock for Cash or a Combination of Cash and Cancellation of Debt On
March 15, 2017, Company entered into a subscription agreement with a related party for the sale of 25,000 shares of common stock
at $12.00 per share for the aggregate purchase price of $300,000. On
July 24, 2017, we entered into subscription agreements with six investors, and on July 25, 2017 we entered into a securities purchase
agreement with an institutional investor, under which we agreed to issue and sell in the aggregate 42,568 shares of
common stock to the investors at $11.00 per share for an aggregate purchase price of $468,250. Of the aggregate purchase price
of $468,250, $445,250 was paid in cash and $23,000, which represented 2,091 of the total shares of common stock sold, was in consideration
for the cancellation of debt of the Company. The company granted warrants to purchase 5,455 shares of common stock to two
of the investors that entered into the subscription agreements at $15.00 per share. In a concurrent private placement, we sold
to the institutional investor warrants to purchase an aggregate of 8,182 shares of the Company’s common stock at an
exercise price equal to $11.00 per share. On October
18, 2017, the Company entered into subscription agreements with five investors, under which we agreed to issue and sell in
the aggregate 22,612 shares of common stock to the investors at $13.40 per share for an aggregate purchase price of $303,000.
$210,000 of the purchase price was paid in cash and $93,000, which represented 6,940 of the total shares of common stock
sold, was paid through the cancellation of debt incurred by the Company. On November
7, 2017, the Company entered into subscription agreements with investors under which the Company agreed to issue and sell in the
aggregate 36,250 shares of common stock to the investors at $12.00 per share for an aggregate purchase price of $435,000. $280,000
of the aggregate purchase price was paid in cash and $155,000, which represented 12,917 of the total shares of common stock sold,
was paid through the cancellation of debt incurred by the Company. On December
5, 2017, the Company entered into subscription agreements with investors for the sale of 32,000 shares of common stock at $25.00
per share for the aggregate purchase price of $800,000. The direct offering closed December 13, 2017. In
aggregate, the above transactions resulted in the issuance of 136,482 shares of common stock for cash proceeds, net of $72,769
in financing costs, of $1,962,481 and the issuance of 21,498 shares of common stock for the cancellation of $271,000 in debt incurred
by the Company. Issuances
of Common Stock for Services On
March 8, 2017, the Company issued an aggregate of 12,547 shares of its common stock as payment for services to a consultant. The
shares were valued at $10, an average of $0.80 per share. Between
May 9, 2017 and June 18, 2017, the Company issued an aggregate of 47,808 shares of its common stock as payment for services to
its consultant. The shares were valued at $498,769, an average of $10.40 per share. Between
August 21, 2017 and September 5, 2017, the Company issued an aggregate of 29,032 shares of its common stock as payment for services
to its consultants. The shares were valued at $363,613, an average of $12.40 per share. Between
October 3, 2017 and December 28, 2017, the Company issued an aggregate of 30,600 shares of its common stock as payment for services
to its consultants. The shares were valued at $790,320, an average of $25.80 per share. In
aggregate, during the year ended December 31, 2017, the Company issued a total of 108,067 shares of its common stock, with a value
of $1,662,702, to its consultants for services. Issuance
of common stock for conversion of debt Between
February 16, 2017 and February 23, 2017, the Company issued 33,333 shares of its common stock, an extinguishment price of $12.00
per share, for the cancellation of $400,000 in demand promissory notes. On
April 5, 2017, the Company issued 18,000 shares of its common stock, at a price of $15.00 per share, for the cancellation of $270,000
in demand promissory notes. On
June 28, 2017, the Company issued 9,455 shares of its common stock, at a price of $11.00 per share, for the cancellation of a
7% convertible promissory note in the principal amount of $104,000. On
June 28, 2017, the holders of $55,000 of in short-term loans agreed to cancel their notes for the purchase of 5,000 shares of
the Company’s common stock at a price of $11.00 per share. On
July 28, 2017, an institutional investor agreed to cancel two promissory notes in the aggregate amount of $145,000 for the issuance
of 13,180 shares of the Company’s common stock at a price of $11.00 per share. During
the period from November 27, 2017 to December 6, 2017, the entire $530,000 of principal on the Convertible Note was satisfied
through the issuance of 48,182 shares of the Company’s common stock (See Note 20). On
December 13, 2017 and December 14, 2017, the entire $1,111,000 of principal on the November 5% Convertible Note was satisfied
through the issuance of 92,583 shares of the Company’s common stock (See Note 22f). On
December 28, 2017, principal and accrued interest of $198,000 and $4,818, respectively, on the 12% Convertible Note was satisfied
through the issuance of 18,438 shares of the Company’s common stock (See Note 22c). During
December 2017, the entire principal and accrued interest of $880,000 and $54,452, respectively, on the 10% Convertible Notes was
satisfied through the issuance of 77,871 shares of the Company’s common stock (See Note 22g). Issuances
of Common Stock upon Exercise of Stock Options Between
December 4, 2017 and December 22, 2017, the Company issued a total of 361,458 shares of its common stock upon the cash and cashless
exercise of options to purchase an aggregate of 363,500 shares of its common stock. These options were issued pursuant to the
Company’s Plans. The Company received cash of $557,360 as a result of these option exercises. Issuances
of Common Stock upon Exercise of Warrants Between
November 27, 2017 and December 28, 2017, the Company issued a total of 93,593 shares of its common stock upon the cash and cashless
exercise of warrants to purchase an aggregate of 105,673 shares of its common stock. These warrants were issued b |
