Convertible Notes Payable and Convertible Notes Payable to Related Parties (Tables)

3 Months Ended

Mar. 31, 2019

Debt Disclosure [Abstract]

Schedule of Convertible Notes Payable

At March 31, 2019 and December 31, 2018, the carrying amounts of the convertible notes including the remaining principal balance plus the fair value of the derivative liabilities associated with the variable share settlement feature and unamortized discounts is as follows (in thousands):

	Issuance Date	Stated Interest Rate			Maturity Date	Principal		Unamortized Discount			Variable Share Settlement Feature at Fair Value		Carrying Amount
Convertible notes
Birchwood Capital (2)	11/6/18		10	%	5/6/19	$	50	$	(10	)	$	-	$	40
Power Up (3)	11/26/18		8	%	11/26/19		128		(84	)		97		141
Adar Bays - Alef (4)	11/28/18		10	%	11/28/19		193		(127	)		224		290
Total						$	371	$	(221	)	$	321	$	471
Convertible notes- Related Parties
Chairman (5) in default	10/12/15		22	%	8/1/17	$	265	$	(1	)	$	569	$	833
Shareholder (6) in default	12/28/16		3	%	3/24/17		50		-			-		50
Total						$	314	$	-		$	569	$	883
Balance at March 31, 2019						$	685	$	(222	)	$	890	$	1,354

	Issuance Date	Stated Interest Rate			Maturity Date	Principal		Unamortized Discount			Variable Share Settlement Feature at Fair Value		Carrying Amount
Convertible notes
Power Up (1*)	8/24/18		8	%	8/24/19	$	203	$	(131	)	$	152	$	224
Birchwood Capital (2)	11/6/18		10	%	5/6/19		50		(35	)		-		15
Power Up (3)	11/26/18		8	%	11/26/19		128		(115	)		96		109
Adar Bays - Alef (4)	11/28/18		10	%	11/28/19		193		(175	)		221		239
Total						$	574	$	(456	)	$	469	$	587
Convertible notes- Related Parties
Chairman (5) in default	10/12/15		22	%	8/1/17	$	265		-		$	549		814
Shareholder (6) in default	12/28/16		3	%	3/24/17		50		-			-		50
Total						$	315		-		$	549	$	864
Balance at December 31, 2018						$	889	$	(456	)	$	1,018	$	1,451

* The (#) references the notes described below

(1)	On February 20, 2019, the Company settled the August 24, 2018, convertible promissory note issued to Power Up, repaying the principal balance of $202,500 and $66,369 for interest and penalties.
(2)	On November 6, 2018, the Company issued a convertible promissory note to Birchwood Capital, LLC in the amount of $50,000. The note is due on May 6, 2019 and bears interest at 10% per annum. The loan and any accrued interest may be converted into shares of the Company’s common stock at a rate of $3.0 per share. The Company recorded a beneficial conversion feature discount of $50,000 on this note as of December 31, 2018.
(3)	On November 26, 2018, the Company issued a convertible promissory note to Power Up Lending Group, LLC in the amount of $128,000. The note is due on November 26, 2019 and bears interest at 8% per annum. The loan and any accrued interest may be converted into shares of the Company’s common stock at a rate of 61% multiplied by the average for the three lowest traded prices during the previous ten (10) day trading period ending on the latest complete trading day prior to the conversion date.

(4) On November 28, 2018, the Company issued a convertible promissory note to Adar Bays - Alef, LLC in the amount of $192,500. The note is due on November 28, 2019 and bears interest at 6% per annum. The loan and any accrued interest may be converted into shares of the Company’s common stock at a rate of 53% multiplied by the lowest trading price during the previous twenty (20) day trading period ending on the latest complete trading day prior to the conversion date.

Related Party Convertible Notes

(5)	In July 2015, the Company issued convertible promissory notes to Mr. Bafer, Chairman, in exchange for the cancellation of previously issued promissory notes in the aggregate of $530,000 and accrued interest of $13,000 for a total of $543,000. The notes are unsecured, bear interest of 5% per annum, matured on October 1, 2015 and are convertible into shares of common stock at a conversion price equal to the lowest closing stock price during the 20 trading days prior to conversion with a 50% discount.
	In October 2015, the notes matured and became past due. As a result, the stated interest of 5% increased to 22% pursuant to the term of the notes. In July 2016, the Company and Mr. Bafer agreed to extend the maturity date of these notes to August 1, 2017 to cure the default. There were no other terms changed and no additional consideration was paid.
6)	On December 28, 2016, the Company issued an unsecured convertible promissory note in the principal amount of $50,000 to a shareholder. The note bears interest at 3% per annum, was due on March 24, 2017, and is convertible into shares of common stock at a conversion price of $4,000 per share. The note is currently past due. Accrued interest was approximately $3,000 as of March 31, 2019 and December 31, 2018, respectively.

Schedule of Derivative Liabilities Valuation Using Binomial Lattice Model Assumptions

The fair value of the derivative liabilities was estimated using a Binomial Lattice model on the dates that the notes were issued and were subsequently revalued at December 31, 2018 and March 31, 2019, using the Monte Carlo simulation model with the following weighted average assumptions:

	March 31, 2019			December 31, 2018
Stock Price	$	9.99		$	6.75
Risk Free Interest Rate		2.41-2.43	%		2.61	%
Expected life (years)		.34-.66			0.73
Expected dividend yield		0	%		0	%
Expected volatility		93.1-94.3	%		92.8	%
Fair Value - Note Variable Share Settlement Feature	$	890		$	1,018