Note 13

Warrants:

The Company accounts for warrants that require net cash settlement upon change of control of the Company and warrants that have a “down round” provision in the warrant agreements (prior to the adoption of ASU 2017-11) as liabilities instead of equity. Currently there are 403,090 of such warrants with an exercise price of $3.75 per share and they expired on February 5, 2019 and April 30, 2019.

The Company recognizes these liabilities at the fair value on each reporting date. The Company computed the value of the warrants using the binomial and Black-Scholes methods. A summary of quantitative information with respect to the valuation methodology and significant unobservable inputs used for the Company’s warrant liability that is categorized within Level 3 of the fair value hierarchy as of December 31, 2018 and 2017 is as follows:

	December 31, 2018			December 31, 2017 (as restated)

Number of shares underlying the warrants		403,090			1,860,790
Stock price	$	2.60		$	1.23
Volatility		56.97	%		48.60%-52.5	%
Risk-free interest rate		2.63	%		1.76%-1.91	%
Expected dividend yield		0	%		0	%
Expected warrant life	0.12 – .35 years			1.12 – 2.49 years

The Company’s recurring level 3 fair value measurements at December 31, 2018 and 2017 are as follows:

Fair Value as of

December 31, 2018

Quoted Prices in

Active Markets for

Identical Assets

(Level 1)

Significant other

Observable Inputs

(Level 2)

Significant

Unobservable Inputs

(Level 3)

Liabilities:

Warrant liability

	Fair Value as of December 31, 2017 (as restated)		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3) (as restated)
Liabilities:
Warrant liability	$	67	$	-	$	-	$	67

Recrring level 3 Activity and Recalculation

The table below provides a reconciliation of the beginning and ending balance for the liability measured at fair value using significant unobservable inputs (Level 3). The Company adopted ASU 2017-11 on October 1, 2018, and reclassified the value of the warrants with down round provisions to equity on January 1, 2018. There were no gains or losses in fair value during the year ended December 31, 2018.

Issuance Date	December 31, 2016 (as restated)		Decrease in Fair Value (as restated)			December 31, 2017 (as restated)

October 31, 2013	$	39	$	(37	)	$	2
February 5, 2014		66		(65	)		1
July 24, 2014		265		(246	)		19
June 22, 2015		292		(247	)		45
	$	662	$	(595	)	$	67

Number of Warrants Subject to Remeasurement:

	December 31, 2018	December 31, 2017 (as restated)

October 31, 2013	137,143	137,143
February 5, 2014	265,947	265,947
July 24, 2014	-	857,700
June 22, 2015	-	600,000
Total	403,090	1,860,790