Note 4. Balance Sheet Information

The following tables present details of our unaudited condensed consolidated financial statements:


	June 30,		December 31,
Prepaid expenses and other current assets	2019		2018
Prepaid expenses	$	2,960,148	$	1,659,783
VAT		425,694		424,167
	$	3,385,842	$	2,083,950


	June 30,		December 31,
Property and equipment, net	2019		2018
Furniture and fixtures	$	561,858	$	139,857
Computer, communications and network equipment		17,341,035		17,520,435
Software		4,911,585		4,716,816
Automobiles		324,534		10,744
Software development		3,589,731		1,656,739
Accumulated depreciation and amortization		(21,832,240)		(19,491,341)
	$	4,896,503	$	4,553,250


	June 30,		December 31,
Intangible Assets, net	2019		2018
Intangible assets:
Developed technology	$	27,687,821	$	20,600,000
Consumer relationships		32,300,000		16,800,000
Tradename		5,100,000		3,400,000
Accumulated amortization		(4,825,401)		(1,141,675)
	$	60,262,420	$	39,658,325


	June 30,		December 31,
Accrued expenses and other payables	2019		2018
Accrued selling, general and administrative expenses	$	3,987,888	$	2,396,941
Accrued restructuring & acquisition related costs		972,714		1,885,194
Accrued cost of service		5,765,483		1,070,099
Accrued taxes (including VAT)		2,980,801		2,283,999
Accrued interest payable		184,415		67,613
Other accrued expenses		145,344		248,534
	$	14,036,645	$	7,952,380

9% Unsecured Subordinated Convertible Promissory Note

(Matured between December 2018 and June 2019)


					Conversions
					(during
					2019)
	Outstanding		Regular		including		10% Early		Outstanding
	June 30,		Amortizations		accelerated		Repayment		December 31,
	2019		(during 2019)		amortization		Short Term		2018
Convertible Note Principal Amount	$	-	$	-	$	105,000	$	10,500	$	(115,500)
Debt Discounts & Financing Costs		-		(8,533)		-		-		8,533
Total 9% Unsecured Note	$	-	$	(8,533)	$	105,000	$	10,500	$	(106,967)

During the six months ended June 30, 2019, the conversion feature was exercised at a price of $1.75 per share, and a total of 84,220 shares were exercised.

Outstanding numbers of Dilutive Securities

The outstanding number of dilutive securities for the six months ended June 30, 2019, can be seen below:


Number of underlying shares for	Outstanding	Agreement		Outstanding
Warrants & Conversion Features	June 30, 2019	Amendments	Conversions	December 31, 2018
Fortress - iPass Loan Repayment Warrant	325,000	325,000	-	-
2017 Registered Public Offering	110,912	-	(359,058)	469,970
Investor Management Services	610,000	-	(100,000)	710,000
9% Convertible Note Warrants	492,506	-	(27,867)	520,373
2013 Convertible Notes	60,000	-	-	60,000
Other 9% Convertible Note Warrants	96,520	-	-	96,520
2017 Registered Public Offering Agent Warrants	21,500	-	(40,834)	62,334
9% Convertible Note 7% Agent Warrants	66,230	-	-	66,230
Nov-2017 Underwriter Agreement Agent Warrants	704,831	-	(205,756)	910,587
Oct-2017 Shelf Take Down Agent Warrants	843	-	-	843
May-2018 Public Offering Agent Warrants	6,700	-	(115,300)	122,000
Preferred Share Conversion Warrants	639,844	-	(91,954)	731,798
Preferred Share issuance 8% Agent Warrants	38,827	-	-	38,827
Total Outstanding Warrants	3,173,713	325,000	(940,769)	3,789,482

Cash and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Condensed Consolidated Balance Sheets to that sum to the total amounts shown in the Condensed Consolidated Statements of Cash Flows:


	June 30,		December 31,
	2019		2018
Cash and cash equivalents	$	3,377,556	$	6,051,709
Restricted Cash		1,104,757		430,655
Total cash, cash equivalents and restricted cash reported in the Condensed Consolidated Statement of Cash Flows	$	4,482,313	$	6,482,364

Notes Receivable

At June 30, 2019, and December 31, 2018, the Company had non-current notes receivable of $2,819,200 and $1,082,436, respectively, and the current portion amounted to $1,024,025 and $0 respectively.

The third quarter 2016 sale of ValidSoft for the price of $3,000,000 was completed and the Company received $2,000,000 in cash and a $1,000,000 promissory note, with an interest rate of 5% per annum. The maturity date of the note is September 30, 2019. At June 30, 2019, and December 31, 2018, the remaining outstanding principal amounts were $488,191 and $576,769, respectively.

On November 26, 2018, the Company executed a senior secured promissory note for $500,000 from Yonder Media Mobile (an unrelated entity), with interest accruing at a simple rate of 6% per annum with a maturity date of May 26, 2020. On January 9, 2019, February 12, 2019 and February 28, 2019, the Company issued additional notes of $500,000, $200,000, and $2,000,000, respectively (the “2019 Notes”). The 2019 Notes each bear an interest rate of 12% per annum and mature 18 months following the issuance date. All principal and interest are due on the maturity date. At June 30, 2019 and December 31, 2018, the remaining outstanding principal amounts were $3,355,034 and $505,667, respectively.

Related Party Loan

As of June 30, 2019 and December 31, 2018, there remained an outstanding related party loan to Comsys, a wholly-owned subsidiary of Artilium BV, from Comsystems (a company owned by Gerard Derenbos). Prior to the acquisition by Pareteum, Gerard Derenbos was a shareholder of Artilium PLC, with approximately 15% of the total shares of Artilium PLC, and a board member of Artilium PLC.

The total outstanding balance as of June 30, 2019 and December 31, 2018 was $342,000 and $341,998, respectively. The loan carries an 8% interest rate and a maturity date of December 31, 2021. All principal and interest are due on the maturity date.